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11th | Adjustments in Preparation of Financial Statements | Question No. 19 | Ts Grewal Solution 2022-2023

Question 19:


From the following Trial Balance of Ramesh, prepare Trading, Profit and Loss Account for the year ending 31st March, 2022 and a Balance Sheet as on that date:

 

 

 

 

Heads of Accounts

Dr.
(`)

Cr.
(`)

Drawings

15,000

 

Capital

 

3,50,000

Plant and Machinery

2,05,000

 

Debtors

50,000

 

Creditors

 

28,000

Returns Inward

8,000

 

Returns Outward

 

7,000

Discount Allowed

7,000

 

Discount Received

 

6,000

Commission

15,000

 

Interest on Bank Loan

12,000

 

Furniture

55,000

 

Provision for Doubtful Debts

 

13,000

Wages

50,000

 

Salaries

45,000

 

Advertisement

15,000

 

Rent and Taxes

13,000

 

Purchases

2,60,000

 

Sales

 

4,00,000

Stock on 1st April, 2018

70,000

 

Carriage

5,000

 

Land and Building

98,000

 

Cash in Hand

8,000

 

Cash at Bank

20,000

 

10% Bank Loan as on 1st April, 2018

 

1,50,000

Input CGST

9,000

 

Input SGST

9,000

 

Output IGST

 

15,000

Total

9,69,000

9,69,000

 

 


Adjustments:
(i) Cost of stock on 31st March, 2022 was
` 37,000. However, its market value was ` 35,000.
(ii) Wages outstanding were 
` 6,000 and salaries outstanding were ` 5,000 on 31st March, 2022.
(iii) Depreciate Land and Building @ 212%, Plant and Machinery @ 10% p.a. and Furniture @ 15% p.a.
(iv) Purchase includes purchase of machinery for 
` 10,000 on 1st October, 2018.
(v) Debtors include bad debts of 
` 2,000. Maintain a provision for doubtful debts @ 10% on Debtors.

Answer:


Trading Account

for the year ended March 31, 2022

Dr.

 

 

Cr.

Particulars

Amount

(`)

Particulars

Amount

(`)

Opening Stock

70,000

Sales

4,00,000

 

Purchases

2,60,000

 

  Less: Returns

8,000

3,92,000

  Less: Machinery

10,000

 

Closing Stock

35,000

  Less: Returns

7,000

2,43,000

 

 

Carriage

5,000

 

 

Wages

50,000

 

 

 

  Add: Outstanding

6,000

56,000

 

 

Gross Profit

53,000

 

 

 

4,27,000

 

4,27,000

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2022

Dr.

 

 

Cr.

Particulars

Amount

(`)

Particulars

Amount

(`)

Interest on Bank Loan

12,000

 

Gross Profit

     53,000

  Add: Outstanding

3,000

15,000

Discount Received

6,000

Salaries

45,000

 

Old Provision for DD

13,000

 

  Add: Outstanding

5,000

50,000

  Less: Provision for DD

4,800

8,200

Advertisement

15,000

Net Loss

81,500

Commission

15,000

 

 

Discount Allowed

7,000

 

 

Further Bad Debts

2,000

 

 

Rent and Taxes

13,000

 

 

Depreciation on:

 

 

 

Land & Building

2,450

 

 

 

Plant & Machinery

21,000

 

 

 

Furniture

8,250

31,700

 

 

 

1,48,700

 

1,48,700

 

 

 

 

 

Balance Sheet

as on March 31, 2022

Dr.

 

 

Cr.

Liabilities

Amount

(`)

Assets

Amount

(`)

Creditors

28,000

Plant &Machinery

2,05,000

 

Wages Outstanding

6,000

  Add: Purchases

10,000

 

Capital

3,50,000

 

  Less: Depreciation

21,000

1,94,000

  Less: Drawings

15,000

 

Furniture

55,000

 

  Less: Net Loss

81,500

2,53,500

  Less: Depreciation

8,250

46,750

Outstanding Salaries

5,000

Debtors

50,000

 

Bank Loan

1,50,000

 

  Less: FBD

2,000

 

Add: Outstanding Interest

3,000

1,53,000

  Less: Provision

4,800

43,200

 

 

Closing Stock

35,000

 

 

Cash at Bank

20,000

 

 

Land &Building

98,000

 

 

 

  Less: Depreciation

2,450

95,550

 

 

Input SGST

3,000

 

 

Cash in Hand

8,000

 

4,45,500

 

4,45,500

 

 

 

 

 

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