Explanation:

Let’s break down the calculation and options:

- Bad debts already in Trial Balance: Rs 40,000

- Additional bad debts for the year: Rs 2,00,000

- Trade receivables after all bad debts are written off:

= Rs 25,00,000 (original) - Rs 2,00,000 (additional bad debts)

= Rs 23,00,000

- Required provision (10% of receivables as per policy):

= 10% of Rs 23,00,000 = Rs 2,30,000

- Existing provision (per Trial Balance): Rs 1,40,000

- Increment in provision:

= Rs 2,30,000 (required) - Rs 1,40,000 (existing)

= Rs 90,000

- Total to be charged to P&L:

= Bad debts (Rs 2,00,000 + Rs 40,000) + Increase in provision (Rs 90,000)

= Rs 2,40,000 + Rs 90,000

= Rs 3,30,000

Statement of options:

- Option 1: Rs 2,50,000 – Incorrect, ignores increase in provision OR bad debts error.

- Option 2: Rs 1,30,000 – Incorrect for the same reason.

- Option 3: Rs 90,000 – Incorrect, shows only increase in provision, not total charge.

- Option 4: Rs 3,30,000 – Correct. Considers all bad debts and increased provision.