Question 29.
Following is the Trial Balance of Atam Prakash as on 31st March, 2018:
Adjustments:
(i) Stock on 31st March, 2018 was valued at ₹ 5,30,000.
(ii) Salaries have been paid so far for 11 months only.
(iii) Unexpired insurance is ₹ 1,000.
(iv) Commission earned but not yet received amounting to ₹ 1,220 plus IGST @ 12% is to be recorded in books of account.
(v) Provision for Doubtful Debts is to be bought up 3% of Sundry Debtors.
(vi) Manager is to be allowed a commission of 10% on net profits after charging such commission.
(vii) Furniture is depreciated @ 10% p.a.
(viii) Only one-fourth of advertisement expenses are to be written off.
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as on that date.
Answers
Trading and P&L A/c with Balance Sheet as at 31.3.2018
Explanation:
In the Books of Atam Prakash
Trading and P&L A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
To Opening Stock 450000 By Sales 3100000
To Purchases 2600000 By Closing Stock 530000
To Freight 46000
To Gross Profit 534000
(bal. fig.)
To Insurance 3000 By Gross Profit 534000
(Less: Prepaid) By Comm. 14220
To Salaries 60,000 (Add: Accrued Comm.)
(Add: O/s Salary)
To Rent 24000
To Trade Expenses 5000
To Advt. Expenses 12500
To Discount 2000
To Bad debts 19000
(Add: Prov. for DD)
To Depreciation 10,000
To Manager Comm. 37520
To Net Profit 375200
(bal. fig.)
548220 548220
Balance Sheet
as at 31.3.2018
Notes to A/c Amount(Rs.)
Non-Current Assets:
Land and Building 2,00,000
Furniture 90,000
Current Assets:
Debtors 388000
(Less: Prov. for DD)
Closing Stock 530000
Prepaid Insurance 1000
Advt. Expenses 37500
Accrued Comm. 1366
Total(A) 1357866
Non-Current Liabilities:
Capital 8,00,000 1115200
Add:NP 375200
Less:Drawings (60,000)
Current Liabilities:
Creditors 200000
O/s Salaries 5000
Manager Comm. Payable 37520
Output IGST 146
Total(B) 1357866