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query on banking companies sum

Page 8.103 illustration 2. How did interest/discount come to 2297 can you please explain?

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Kumarjit Dey

Kumarjit Dey

CA Inter

4K+

18-May-20 23:12

15

Answers (5)

Best Answer

Why are we adding them back? Why is Rebate not added back?

We are adding tax provision, Provn. for doubtful debt and Loss on sale of investment back, as they do not affect the interest and discount a/c. They have incorrectly been recorder, by adding them back we are correcting the interest and discount a/c, Also, Rebate on bills discounted is an item of interest and discount account only, it has to be credited to interest and discount a/c


ruchi lahoti

ruchi lahoti

Moderator

19-May-20 23:00

If Sir would have also solved and explained Illustration 2 and 4 (pg 8.108) I would have had a much clearer concept clarity. Like for example point (c) in other information of Illus 4 I am having problems to comprehend.


Kumarjit Dey

Kumarjit Dey

CA Inter

4K+

19-May-20 00:00

In the additional information given below tax provision, provision for doubtful debts,loss on sale of investments are already adjusted with interest and discount. In order to get original interest and discount amount we have added it back


anamika vardhan

anamika vardhan

CA Inter

1K+

19-May-20 11:21