write:Illustration: 4The following extracts from the trial balance as on 31st March 2015 are givenParticularsDr. `Cr. `Sundry debtors42 000Bad debts3 500Provision for bad debts3 800Adju

0002Profit and Loss Account ……Dr. To Provision for bad debts Account(Being 6% provision for bad debts on ` 40
000 i.e.
42
000-2
000)2
4002
400Profit and loss AccountFor the year ending 31st March
2015Particulars`Particulars`To Bad debts (as given in trial balance) 3
500Add: Additional bad debts 2
000Add: provision for bad debts 2
4007
900Balance SheetAs on 31st March
2015Liabilities`Assets`Sundry debtors 42
000Less: Additional Bad debts 2
40
000Less: provision for Bad debts 2
40037
600The provision for bad debts created is carried forward to the next accounting years. The bad debts that will arise in the next year will be met out of this provision. In other words
bad debts when written off will be debited to provision for bad debts where such a provision exists.Illustration: 4The following extracts from the trial balance as on 31st March
2015 are givenParticularsDr. `Cr. `Sundry debtors42
000Bad debts3
500Provision for bad debts3
800Adjustments:1. Additional bad debts ` 2
0002. Maintain the provision for bad debts at 10% of debtors.Show the relevant entries in the profit and Loss Account and Balance Sheet as on 31st March
2015