Question No 12 Chapter No 20 – D.K Goal 11 Class

Question No 12 Chapter No 20

12. Following is the Trial Balance of Mr. Gautam as at 31st March, 2017:

Dr. Balances		Cr. Balances
Goodwill	30,000	Purchase Returns	2,650
Land & Buildings	60,000	Capital A/c	2,03,000
Plant & Machinery	40,000	Bills Payable	13,800
Loose Tools	3,000	Sundry Creditors	30,000
Bills Receivable	2,000	Sales	1,15,000
Stock 1st April, 2016	40,000
Purchases	51,000
Wages	20,000
Carriage Inwards	1,200
Coal & Gas	5,600
Salaries	4,000
Rent	2,700
Discount allowed	1,500
Cash at Bank	25,000
Cash in hand	1,400
Sundry Debtors	45,000
Repairs	1,800
Printing & Stationery	600
Bad-debts	1,200
Advertisements	3,500
Furniture and Fixtures	1,200
General Expenses	250
Investments	5,000
Drawings	15,000
Carriage Outwards	1,500
Sales Returns	2,000
	3,64,450		3,64,450

You are required to prepare Final Accounts after taking into account the following adjustments: a Closing Stock on 31st March, 2017 was 60,000. b Depreciate Plant and Machinery at 5%, Loose Tools at 15% and Furniture and fixtures at 5%. c Provide 2 1 2 % for discount on Sundry Debtors and also provide 5% for Bad and Doubtful Debts on Sundry Debtors. d Only three quarter’s rent has been paid, the last quarter’s rent being outstanding. e Interest earned but not received 600. f Write off 1 4th of Advertisement expenses.

The solution of Question No 12 Chapter No 20: –

Trading Account
Particular		Amount	Particular		Amount
To Opening Stock A/c		40,000	By Sales	1,15,000
To Purchases A/c	51,000		Less: return	2,000	1,13,000
Less: Purchases Return	48,350	48,350
To Wages		20,000	By Closing Stock		60,000
To Carriage Inwards		1,200
To Coal and Gas		5,600
To Gross Profit A/c		57,850
		1,73,000			1,73,000

Profit & Loss Account
Particular		Amount	Particular		Amount
To Discount Allowed		1,500	By Gross Profit		57,850
To Salaries		4,000	By Accrued Interest		600
To Rent	2,700
Add: Outstanding Rent (WN2)	900	3,600
To Bad Debts	1,200
Add: New Provision (WN3)	2,250	3,450
To Depreciation: (WN1)
Plant & Machinery	2,000
Loose Tools	450
Furniture	60	2,510
To Provision for Discount on Debtors		1,069
To Repairs		1,800
To Printing & Stationery		600
To General Expenses		10,000
To Carriage Outwards		3,200
To Net Profit A/c		37,296
		58,450			58,450

Balance Sheet
Liabilities		Amount	Assets		Amount
Capital	2,03,000		Plant & Machinery	40,000
Less: Net Loss	37,296		Less: Depreciation	2,000	38,000
Less: Drawings 12, 000 +150	15,000	2,25,296	Loose Tools	3,000
Creditors		30,000	Less: Depreciation	450	2,550
Bills Payable		13,800	Furniture & Fixtures	1,200
Outstanding Rent		900	Less: Depreciation	60	1,140
			Investments		5,000
			Land & Building		60,000
			Goodwill		30,000
			Closing Stock		60,000
			Accrued Interest		600
			Advertisement Expenditure		2,625
			Bills Receivable		2,000
			Cash at Bank		25,000
			Cash in Hand		1,400
			Debtors	45,000
			Less: Provision for Bad Debt	2,250
			Less: Provision for Discount	1,069	41,681
		2,69,996			2,69,996

Working Note: –

Calculation of Depreciation

Depreciation on Plant & Machinery	=	5	X	40,000
		100
	=	Rs 2,000

Depreciation on Furniture & Fixtures	=	5	X	1,200
		100
	=	Rs 60

Depreciation on Loose Tools	=	15	X	3,000
		100
	=	Rs 450

Calculation of Outstanding Rent

Prepaid Insurance	=	9	X	1,200
		12
	=	Rs 900

Calculation of Outstanding Rent

Rent paid for 3 quarters = 2, 700

Rent per quarte	=	2,700
		3
	=	Rs 900 Outstanding Rent

Calculation of Provision for Doubtful Debts

Provision for Doubtful Debts = Sundry Debtors −Further Bad Debts × Rate 100

Provision for Doubtful Debts	=	5	X	45,000
		100
	=	Rs 2,250

Calculation of Provision for Discount on Debtors

Provision for Discount on Debtors = (Sundry Debtors −Provision for Bad Debts)× Rate 100

Provision for Doubtful Debts	=	2.5	X	(45,000 – 2,000)
		100
	=	Rs 1,069

Also, Check out the solved question of all Chapters: –

D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

• Chapter 1 Evolution of Accounting & Basic Accounting Terms
• Chapter 2 Accounting Equations
• Chapter 3 Meaning and Objectives of Accounting
• Chapter 4 Double Entry System
• Chapter 5 Books of Original Entry – Journal 
• Chapter 6 Accounting for Goods and Service Tax (GST) (Coming soon)
• Chapter 7 Books of Original Entry – Cash Book (Coming soon)
• Chapter 8 Books of Original Entry – Special Purpose Subsidiary Books (Coming soon)
• Chapter 9 Ledger (Coming soon)
• Chapter 10 Trial Balance and Errors (Coming soon)
• Chapter 11 Bank Reconciliation Statement (Coming soon)
• Chapter 12 Depreciation (Coming soon)
• Chapter 13 Bills of Exchange (Coming soon)
• Chapter 14 Generally Accepted Accounting Principles(GAAP) 
• Chapter 15 Bases of Accounting
• Chapter 16 Accounting Standards and International Financial Reporting Standard(IFRS) (Coming soon)
• Chapter 17 Capital and Revenue 
• Chapter 18 Provisions and Reserves 
• Chapter 19 Final Accounts (Coming soon)
• Chapter 20 Final Accounts – With Adjustments (Coming soon)
• Chapter 21 Errors and their Rectification (Coming soon)
• Chapter 22 Accounts from Incomplete Records – Single Entry System (Coming soon)
• Chapter 23 Accounts of Not-for-Profit Organisations (Coming soon)
• Chapter 24 Computerised Accounting System (Coming soon)
• Chapter 25 Introduction to Accounting Information System (Coming soon)

Check out the Accountancy Class +1 by D.K. Goal (Arya Publication) from their official Site.