Question 17.
Following balances were extracted from the books of Modern Traders on 31st March, 2018:
Prepare Final Accounts for the year ended 31st March, 2018 after taking into account the following:
(a) Stock on 31st March, 2018 was valued at ₹ 1,50,000.
(b) Outstanding Wages ₹ 5,000.
(c) Provision for Doubtful Debts is to be maintaind at 5% of the Sundry Debtors.
(d) Prepaid Insurance was ₹ 1,000.
(e) An advance paid by the proprietor from his personal bank account of ₹ 50,000 for purchase of a machine on 1st April, 2017 was not recorded in the books. Plant and Machinery was not debited in the books by the amount paid from firm.
(f) Provide Depreciation on Plant and Machinery @ 10% on cost and on Furniture @ 5%.
Answers
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Trading and P&L A/c with Balance Sheet as at 31.3.2018
Explanation:
In the Books of Modern Traders
Trading and P&L A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
To Opening stock 150000 By Sales 1200000
To Purchases 820000 By Closing Stock 150000
To Wages 18000
(+5000)
To Freight Inwards 20000
To Gross Profit 342000
(bal. fig.)
To Postage 8000 By Gross Profit 342000
To Bad debts 6300 By Disct. Received 4000
(+10300-8000) By Rent Revenue 12000
To Insurance 6000
(-1000)
To Rent,Rates and 46000
Taxes
To Carriage 5000
To Salaries 200000
To Printing and 8000
Stationary
To Depreciation:
Machinery 45000
Furniture 2500
To Net Profit 31200
(bal. fig.)
Balance Sheet
as at 31.3.2018
Notes to A/c Amount(Rs.)
Non-Current Assets:
P&M 315000
Furniture 47500
Current Assets:
Closing Stock 150000
Debtors 195700
(-10300)
Prepaid Insurance 1000
Cash at Bank 255000
Cash in Hand 62000
Total(A) 1026000
Non-Current Liabilities:
Capital(+31200-50000) 881200
Reserve Fund 50000
Current Liabilities:
Creditors 90000
O/s Wages 5000
Total(B) 1026000