Dissolution Of Partnership Firm

Step 1: Total Debtors after Provision.
The total amount of debtors as per the balance sheet is ₹4,00,000, less the provision of ₹15,000. Hence, the net amount of debtors is: Step 2: Bad Debts.
It is given that bad debts amount to ₹40,000. These bad debts will not be realised, so they are excluded from the amount to be realised.
Step 3: Realisation of Remaining Debtors.
The remaining debtors after bad debts are: The remaining debtors are realised at a 5% discount, meaning only 95% of the remaining debtors are realised. Hence, the amount realised from the remaining debtors is: Step 4: Total Amount Realised.
The total amount realised from debtors is the sum of the amount realised from the remaining debtors and the amount of bad debts (which were written off). Hence: Step 5: Conclusion.
The total amount realised from debtors is ₹3,67,750.