Q. 3 (A). Prepare a Trial Balance from the following balances as at 31st March
2017 :
8
Stock on 1-4-2016
Purchases
Sales
Wages
Salaries
Repair Charges
Commission Received
Sundry Debtors
Sundry Creditors
Capital
Drawings
28,800 Returns Inwards
82,000 Returns Outwards
1,60,000 Carriage Inwards
16,160 Carriage Outwards
6.400 Furniture
500 Motor Car
800 Cash in Hand
24,200 Bank Overdraft
7,300 Investments
90,000 Interest on Investments
4,400
7,500
5,600
1,640
3,200
12,000
80,000
4,700
25.400
20.000
2,400
[Ans. Total of Trial balance 2,91,500.]
Hints :- (I) As investments are assets, it will be shown on the debit side.
(II) As 'Interest on Investment is an item of income, it will be shown on the credit side.
Answers
Explanation:
Account Title Amt. (Rs) Account Title Amt. (Rs)
Drawings 20,000 Capital 2,00,000
Sundry Debtors 80,000 Return Outwards 2,000
Bad Debts 1,000 Bank Overdraft 12,000
Trade Expenses 2,400 Provision for Bad Debts 4,000
Printing and Stationaery 2,000 Sundry Creditors 60,000
Rent, Rates and Taxes 5,000 Bills Payable 15,400
Freight 4,000 Sales 2,76,000
Return Inwards 7,000
Opening Stock 25,000
Purchase 1,80,000
Furniture and Fixture 20,000
Plant and Machinery 1,00,000
Bills Receivable 14,000
Wages 10,000
Cash in Hand 6,000
Discount Allowed 2,000
Investments 40,000
Motor Car 51,000
5,69,400 5,69,400
Adjustments
1. Closing stock was Rs. 45,000.
2. Provision for bad debts is to be maintained @ 2% on debtors.
3. Depreciation charged on furniture and fixture @ 5%, plant and machinery @ 6% and motor car @ 10%
4. A machine of Rs. 30,000 was purchased on July 1, 2011.
5. The manager is entitled to a commission of @ 10% of the net profit after charging such commission.
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ANSWER
Trading and Profit and Loss Account
as on 31st December,2011
Dr Cr
Particulars Amt. (Rs.) Particular Amt. (Rs.)
To Opening Stock 25,000 By Sales 2,76,000
To Purchase 1,80,000 (-) Return Inwards 7,000
2,69,000
(-) Return Outwards 2,000
1,78,000 By Closing Stock 45,000
To Wages 10,000
To Gross Profit c/d 1,01,000
3,14,000 3,14,000
To Bad Debts 1,000 By Gross Profit b/d 1,01,000
To Trade Expenses 2,400 By Provision for Bad Debts 4,000
To Printing and Stationery 2,000 By Interest 2,000
To Rent, Rates and Taxes 5,000 (-) New Provision 1,600
2,400
To Freight
4,000
To Discount Allowed 2,000
To Depreciation on Furniture and Fixture
1,000
To Depreciation on Plant Machinery
(4,200 + 900)
5,100
To Depreciation on Motor Car
5,100
To Manager's Commission
6,891
To Net Profit c/d
68,909
1,03,400 1,03,400
Working Note
1. Depreciation on Plant and Machinery Rs. 30,000 Machinery was purchased on 1 July, 2011. Hence, Dep on 70,000 (1,00,000 - 30,000) @ 6% = 4,200 and Dep on 36,000 @ 6% for six months = 900 = Rs.15,100
2. Profit Before Manager's Commission = (1,03,400 27,600) = 75,800
Manager is entitled to a commission @10% on the new profit after charging such commission = [75,800×
11
10
]=Rs.6,891
Balance Sheet
as on 31st December, 2011
Liabilities Amt. (Rs.) Assets Amt. (Rs.)
Capital 2,00,000 Sundry Debtors 80,000
(+) Net Profit
(-) Drawings 68,909
2,68,909
20,000
2,48,909 (-) Provisions for Bad Debts 1,600
78,400
Bank Overdraft
Creditors 12,000
60,000 Furniture and Fixture
20,000
Bills Payable 15,400 (-) Depreciation @ 5% 1,000
19,000
Manager's Commission Outstanding 6,891 Plants and Machinery 1,00,000
(-) Depreciation @ 6% (4,200 + 900) 51,000
94,900
Motor Car 51,000
(-) Depreciation @ 10 % 5,100
45,900
Cash in Hand 6,000
Bills Receivable 14,000
Investments 40,000
Closing Stock 45,000
3,43,200
3,43,200
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