From the following figures extracted out from the books of Shri Govind , you are required to prepare a trading and profit & loss account for the year ended 31st march 2012 and a balance sheet as on the date after making the necessary adjustments :
Shri govinds capital = 228800
Shri govinds drawings = 13200
plant and machinery = 99000
freehold property = 66000
purchases = 110000
returns outward = 1100
salaries = 13200
office expenses = 2750
office furniture = 5500
discount a/c ( Dr.) = 1320
sundry debtors = 29260
loan to Shri krishna @ 10% p.a. balance on 1.4.2011 = 44000
cash at bank = 29260
bill payable = 5500
stock on 1.4.2012 = 38500
wages = 35200
sundry creditors = 44000
postage and telegrams = 1540
insurance = 1760
gas and fuel = 2970
bad debts = 660
office rent = 2860
frieght = 9900
loose tools = 2200
factory lighting = 1100
provision for doubtful debts = 880
interest on loan to shri krishna = 1100
cash in hand = 2640
sales = 231440
ADJUSTMENTS :
a. stock on 31st march 2012 was valued at rs. 72600
b. a new machine was installed during the year costing Rs.15400 but it was not recorded in the books as no payment was made for it. Wages Rs.1100 paid for erection have been debited to wages account.
c. depreciation plant and machinery by 33-1/3 %
furniture by 10 %
freehold property by 5 %
d. loose tools were valued at rs.1760 on 31.3.2012
e. of the sundry debtors Rs.660 are bad and should be written off.
f. maintain a provision of 5% on the sundry debtors for doubtful debts.
g. the manager is entitled to a commission of 10% of the net pofits after charging such commision.
Trading Account | ||||||
Dr. |
| Cr. | ||||
Particulars | Amount Rs | Particulars | Amount Rs | |||
Opening Stock | 38,500 | Sales | 2,31,440 | |||
Purchases | 1,10,000 |
|
|
| ||
Less: Returns | 1,100 | 1,08,900 |
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Gas and Fuel | 2,970 | Closing Stock | 72,600 | |||
Freight | 9,900 |
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Wages | 35,200 |
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|
| ||
Less Machinery | 1,100 | 34,100 |
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Factory Lighting | 1,100 |
|
| |||
Gross Profit (Balancing Figure) | 1,08,570 |
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| |||
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|
|
| |||
| 3,04,040 |
| 3,04,040 | |||
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|
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Profit and Loss | |||||||
Dr. |
| Cr. | |||||
Particulars | Amount Rs | Particulars | Amount Rs | ||||
Depreciation on Plant and Machinery | 38,500 | Gross Profit | 1,08,570 | ||||
Depreciation on Office Furniture | 550 |
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Depreciation on Loose Tools | 440 |
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Depreciation on Freehold Property | 3,300 |
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Salaries | 13,200 |
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Office Expenses | 2,750 |
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Discount | 1,320 |
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Bad Debts | 660 |
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Add: Further Bad Debt | 660 |
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| |||
Add: New Provision | 1,430 |
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| |||
Less: Old Provision | 880 | 1,870 |
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Postage and Telegram | 1,540 |
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Insurance | 1,760 |
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Office Rent | 2,860 |
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Interest on Loan | 1,100 |
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| |||
Add: Outstanding | 3,300 | 4,400 |
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Managers' Commission | 3,280 |
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Net Profit (Balancing Figure) | 32,800 |
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|
|
| ||||
| 1,08,570 |
| 1,08,570 | ||||
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Balance Sheet | |||||
Liabilities | Amount Rs | Assets | Amount Rs | ||
Capital | 2,28,800 |
| Plant and Machinery | 99,000 |
|
Less: Drawings | 13,200 |
| Add Creditors | 15,400 |
|
Add: Net Profit | 2,15,60032,800 |
| Add wages | 1,100 |
|
|
| 2,48,400 |
| 1,15,500 |
|
|
|
| Less Depreciation | 38,500 | 77,000 |
|
|
|
|
|
|
Creditors for Plant and Machinery | 15,400 | Office Furniture | 5,500 |
| |
Loan from Krishan | 44,000 |
| Less: 10% Depreciation | 550 | 4,950 |
Add Outstanding Interest | 3,300 | 47,300 | Loose Tools | 2,200 |
|
|
| Less: Depreciation | 440 | 1,760 | |
|
|
|
|
| |
Bills Payable | 5,500 | Sundry Debtors | 29,260 |
| |
Manager's Commission Payable | 3,280 | Less: Bad Debt | 660 |
| |
|
|
| 28,600 |
| |
|
| Less: 5% Provision for Doubtful Debt | 1,430 | 27,170 | |
Creditors | 44,000 | Closing Stock |
| 72,600 | |
|
| Freehold Property | 66,000 |
| |
|
| Less: 5% Depreciation | 3,300 | 62,700 | |
|
| Suspense (Difference in Trial Balance) | 85,800 | ||
|
| Cash in Hand | 2,640 | ||
|
| Cash at Bank | 29,260 | ||
|
|
|
| ||
| 3,63,880 |
| 3,63,880 | ||
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Note: In this question, debit side of the Trial Balance is short by Rs 85,800. This difference will be shown in the Assets side of the Balance Sheet.
