Question

Following is the trial balance extracted from the books of Foster Company Ltd.
Debit Rs. Credit Rs.
Stock on 1.1.86
Purchases
Wages

Carriages
Buildings
Motor Vehicles
Sundry Debtors
Salaries
Bank interest & Charges
Travelling Expenses
Machinery
Discount Allowed
Cash in hand & at Bank
Printing & Stationery
Repairs & Renewals
Directors Remuneration
Audit fees
Calls-in-arrear
Interim Dividend 7,000
30,000
8,000

2,000
50,000
37,000
9,600
15,000
400
4,000
80,000
1,500
1,000
2,000
1,500
2,500
500
3,000
5,000 Authorised Capital:
2,000 equity shares of Rs. 100 each


Issued Share Capital
Rent Received
Sales
Sundry Creditors
Bank Overdraft
Profit & loss A/c

2,00,000
======

1,00,000
3,500
1,05,000
16,800
12,200
22,500




2,60,000 2,60,000

Adjustments:
(i) Closing stock on 31.12.86 was Rs. 6,000.
(ii) Outstanding wages were Rs.1,000.
(iii) Depreciation machinery by Rs.2,000, Building by Rs.7,000 and Motor vehicles by Rs.620.
(iv) Directors declared a finally dividend at 20% on paid up capital.
(v) Creates provision for bad debts 5% on debtors.
(vi) There is a contingent liability of Rs.2,000 for the compensation claim against the company pending in the court.
(vii) Provide for corporate dividend tax @17% on interims dividend and proposed dividend.
you are required to prepare Profit & Loss account for the year ended 31.12.86 and Balance sheet as on that date.

Answer 1

Explanation:

books of Foster Company Ltd. Debit Rs. Credit Rs. Stock on… ... Bank interest & Charges Travelling Expenses ... Building by Rs.7,000 and Motor vehicles by Rs .620.