Question 7:
Following are the balances extracted from the books of Narain on 31st March, 2022:
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Particulars |
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Particulars |
(`) |
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Narain's Capital |
3,00,000 |
Sales |
15,00,000 |
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Narain's Drawings |
50,000 |
Sales
Return |
20,000 |
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Furniture
and Fittings |
26,000 |
Discounts
(Dr.) |
16,000 |
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Bank
Overdraft |
42,000 |
Discounts
(Cr.) |
20,000 |
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Creditors |
1,38,000 |
Insurance |
20,000 |
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Business
Premises |
2,00,000 |
General
Expenses |
40,000 |
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Stock
on 1st April, 2018 |
2,20,000 |
Salaries |
90,000 |
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Debtors |
1,80,000 |
Commission
(Dr.) |
22,000 |
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Rent
from Tenants |
10,000 |
Carriage
on Purchases |
18,000 |
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Purchases |
11,00,000 |
Bad
Debts Written off |
8,000 |
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Additional Information:
(i) Closing Stock as on 31st March, 2022 was ` 2,00,600, whereas
its Net Realisable Value (Market Value) was ` 2,05,000.
(ii) Depreciate: Business Premises by
` 3,000 and Furniture and Fittings by
` 2,500.
(iii) Make a provision of 5% on debtors for doubtful debts.
(iv) Carry forward
` 2,000 for unexpired insurance.
(v) Outstanding salary was
` 15,000.
Prepare Trading and Profit and Loss Account for the year and Balance Sheet as
at that date.
Answer:
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Trading Account for the year ended March
31, 2022 |
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Dr. |
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Cr. |
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Particulars |
(`) |
Particulars |
(`) |
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Opening
Stock |
2,20,000 |
Sales |
15,00,000 |
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Purchases |
11,00,000 |
Less:
Returns |
20,000 |
14,80,000 |
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Carriage
on Purchases |
18,000 |
Closing
Stock |
2,00,600 |
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Gross
Profit |
3,42,600 |
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16,80,600 |
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16,80,600 |
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Note:
As
per the prudence concept, closing stock is taken to be at the market value or
the book value whichever is less.
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Profit & Loss Account for the year ended March
31, 2022 |
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Dr. |
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Cr. |
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Particulars |
(`) |
Particulars |
(`) |
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Commission
|
22,000 |
Gross
Profit |
3,42,600 |
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Insurance
Premium |
20,000 |
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Discount
|
20,000 |
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Less:
Prepaid |
2,000 |
18,000 |
Rent
from Tenants |
10,000 |
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Salaries
|
90,000 |
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Add:
Outstanding Salaries |
15,000 |
1,05,000 |
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Bad
Debts Written Off |
8,000 |
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Provision
for Doubtful Debts |
9,000 |
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Discount
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16,000 |
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General
Expenses |
40,000 |
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Depreciation
on: |
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Furniture |
2,500 |
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Business Premises |
3,000 |
5,500 |
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Net
Profit |
1,49,100 |
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3,72,600 |
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3,72,600 |
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Balance Sheet as on March 31, 2022 |
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Dr. |
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Cr. |
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Liabilities |
(`) |
Assets |
(`) |
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Bank
Overdraft |
42,000 |
Furniture
& Fittings |
26,000 |
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Creditors |
1,38,000 |
Less:
Depreciation |
2,500 |
23,500 |
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Outstanding
Salaries |
15,000 |
Business
Premises |
2,00,000 |
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Capital |
3,00,000 |
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Less:
Depreciation |
3,000 |
1,97,000 |
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Less:
Drawings |
50,000 |
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Debtors |
1,80,000 |
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Add: Net
Profit |
1,49,100 |
3,99,100 |
Less:
Provision |
9,000 |
1,71,000 |
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Closing
Stock |
2,00,600 |
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Prepaid
Insurance |
2,000 |
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5,94,100 |
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5,94,100 |
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Question 8:
Following balances are taken from the books of Niranjan.
Prepare Trading and Profit and Loss Account and Balance Sheet for the year
ended 31st March, 2022:
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Particulars |
` |
Particulars |
` |
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Capital |
12,00,000 |
Drawings |
2,10,000 |
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Opening
Stock |
4,50,000 |
Plant
and Machinery |
2,40,000 |
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Furniture |
15,000 |
Purchases |
29,50,000 |
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Sales |
43,50,000 |
Insurances |
15,000 |
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Purchases
Return |
40,000 |
Sales
Return |
70,000 |
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Rent |
50,000 |
Trade
Expenses |
20,000 |
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Salaries |
2,40,000 |
Wages |
4,00,000 |
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Bad
Debts |
10,000 |
6%
Investments |
5,00,000 |
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Sundry
Debtors |
4,00,000 |
Sundry
Creditors |
1,90,000 |
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Bills
Payable |
8,000 |
Cash |
1,22,000 |
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Advertisement
Expenses |
60,000 |
Miscellaneous
Income |
12,000 |
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Patents |
48,000 |
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Adjustments:
(i) Closing Stock ` 7,50,000.
(ii) Depreciate Machinery by 10% and Furniture by 20%.
(iii) Wages ` 50,000 and salaries ` 20,000 are outstanding.
(iv) Write
off `
50,000 as further Bad Debts and create 5% Provision for Doubtful Debts. Also,
create a reserve for discount on Debtors @ 2%.
(v) Investments
were made on 1st July, 2021 and no interest has been received so far.
Answer:
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Financial statements of Mr. Niranjan |
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Trading Account for
the year ended March 31, 2022 |
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Dr. |
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Cr. |
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Particulars |
(`) |
Particulars |
(`) |
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Opening Stock |
4,50,000 |
Sales |
43,50,000 |
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Purchases |
29,50,000 |
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Less: Sales Return |
(70,000) |
42,80,000 |
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Less: Purchases Return |
(40,000) |
29,10,000 |
Closing Stock |
7,50,000 |
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Wages |
4,00,000 |
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Add: Outstanding wages |
50,000 |
4,50,000 |
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Gross Profit (Balancing Figure) |
12,20,000 |
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50,30,000 |
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50,30,000 |
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Profit and Loss Account for
the year ended March 31, 2022 |
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Dr. |
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Cr. |
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Particulars |
(`) |
Particulars |
(`) |
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Rent |
50,000 |
Gross Profit |
12,20,000 |
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Salaries |
2,40,000 |
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Add: Outstanding Salaries |
20,000 |
2,60,000 |
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Bad Debts |
10,000 |
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Interest Accrued on Investment |
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Add: Further Bad Debts |
50,000 |
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(5,00,000 × 6% × 9/12) |
22,500 |
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Add: Provision for Doubtful Debts |
17,500 |
77,500 |
Miscellaneous Receipts |
12,000 |
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Advertisement expenses |
60,000 |
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Provision for discount on debtors |
6,650 |
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Insurances |
15,000 |
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Trade Expenses |
20,000 |
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Depreciation on: |
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Machinery |
24,000 |
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Furniture |
3000 |
27,000 |
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Net Profit (Balancing Figure) |
7,38,350 |
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12,54,500 |
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12,54,500 |
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Balance Sheet as
on March 31, 2022 |
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Liabilities |
Amount (`) |
Assets |
Amount (`) |
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Capital |
12,00,000 |
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Fixed Assets |
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Less: Drawings |
(2,10,000) |
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Patents |
48,000 |
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Add: Net Profit |
7,38,350 |
17,28,350 |
Plant and Machinery |
2,40,000 |
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Current Liabilities |
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Less: 10% Depreciation |
(24,000) |
2,16,000 |
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Sundry Creditors |
1,90,000 |
Furniture |
15,000 |
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Wages Outstanding |
50,000 |
Less: 20% Depreciation |
(3,000) |
12,000 |
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Salaries Outstanding |
20,000 |
6% Investment |
5,00,000 |
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Bills Payable |
8000 |
Add: Accrued Interest |
22,500 |
5,22,500 |
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Current Assets |
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Closing Stock |
7,50,000 |
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Debtors |
4,00,000 |
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Less: Further Bad Debts |
(50,000) |
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Less: Provision for Doubtful Debts |
(17,500) |
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3,32,500 |
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Less: Provision for Discount |
(6,650) |
3,25,850 |
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Cash |
1,22,000 |
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19,96,350 |
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19,96,350 |
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Class 11th
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