Question

Mr. Sultan Raza a business school graduate from US came back to India with a
thought to open a retail outlet on a small scale with an initial capital investment of
Rs. 500000/- for selling packaged and frozen foods in Mumbai as people in Mumbai
are quite busy and don’t have account with HDFC bank, in which be deposited Rs.
350000/-.
He selected a suitable place for the store purchased furniture of Rs. 100000/- and
paid the amount by cheque.
The other transaction during the year were:-
Cash purchases 80000
Credit purchase from Ajay 200000
Cash Sales 100000
Credit sales to Vijay 140000
Travelling Expenses in cash 30000
Paid salary 20000
Received from debtor
Vijay in full settlement by cheque 130000
Deposited into Bank 50000
Paid to Ajay by cheque in full settlement 195000
You are required to
1). Journalise these transactions after considering the following information.
a) Value of goods unsold on 31/03/2020 valued at Rs. 170000/-.
b) Depreciate furniture @2%
c) Telephone bill for the month of March not yet paid Rs. 15000/-.
2). Open ledger accounts and prepare trial balace.
3). Prepare final account.

Answer 1

Answer:

(1) Journalise these transactions after considering the following information.

(a) Value Of goods unsold on 31st March, 2015, valued at cost Rs. 1,70,000

(b) Depreciate furniture @ 2%.

(c) Telephone bill for the month of Marc 2015, not yet paid 15,000.

(ii) Open ledger accounts and prepare tr

balance.

(iii) Prepare financial statements for the year ended 31st March, 2015 and also calculate the profitability ratios i.e. gross profit ratio, net profit ratio and also comment on the profitability of the company, comparing its performance with the industry standards. Industry standard being 50% and 20% respectively for gross profit and net profit.

Explanation:

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