Question No 06 Chapter No 20 – D.K Goal 11 Class

Question No 06 Chapter No 20

06. Prepare a Trading and Profit & Loss account for the year ending March 31, 2018, from the balances extracted of M/s Rahul Sons. Also prepare a balance sheet as at that date.

Debit Balances		Credit Balances
Stock	50,000	Sales	1,80,000
Wages	3,000	Purchase return	2,000
Salary	8,000	Discount received	500
Purchases	1,75,000	Provision for bad debts	2,500
Sales Return	3,000	Capital	2,90,000
S. Debtors	82,000	Bills Payable	22,000
Discount allowed	1,000	Commission received	4,000
Insurance	3,200	Rent	6,000
Rent, rates and taxes	4,300	Loan	34,800
Fixtures and fittings	20,000	Output CGST	15,000
Trade Expenses	1,500	Output SGST	15,000
Bad debts	2,000
Drawings	32,000
Repair and renewals	1,600
Travelling expenses	4,200
Postage	500
Legal fees	500
Bills Receivable	50,000
Building	1,10,000
Input CGST	10,000
Input SGST	10,000
	5,71,800		5,71,800

Adjustments :-
i Commission received in advance 1,000.
ii Rent receivable 2,000, subject to levy of CGST and SGST @ 9% each.
iii Salary outstanding 1,000 and insurance prepaid 800.
iv Further Bad-debts 1,000 and provision for Bad-debts @ 5% on debtors and provision for discount on debtors @ 2%. v Closing Stock 32,000.
vi Depreciation on Building @ 6% p.a.

The solution of Question No 06 Chapter No 20: –

Trading Account
Particular		Amount	Particular		Amount
To Opening Stock A/c		50,000	By Sales	1,80,000
To Purchases A/c	1,75,000		Less: return	3,000	1,77,000
Less: Return	2,000	1,73,000
To Wages A/c	1,25,000		By Closing Stock		60,000
Less: Prepaid	5,000	3,000
			By Gross Loss A/c		17,000
		2,36,000			2,36,000

Profit & Loss Account
Particular		Amount	Particular		Amount
To Gross Loss		17,000	By Commission	4,000
Depreciation on Furniture (WN)		6,600	Less: Unearned	1,000	3,000
To Salaries	8,000		By Rent received	6,000
Add: Outstanding	1,000	9,000	Add: Accrued	2,000	8,000
To Insurance	3,200		By Discount Received		500
Add: Outstanding	800	2,400
To Old Bad Debts	2,000
Add: New Bad Debts	1,000
Add: New Provision (WN2)	4,050
Less: Old Provision	2,500	4,550
To Provision for Discount on Debtors		1,539
To Discount Allowed		1,000
To Rent, Rates and Taxes		4,300
To Trade Expenses		1,500
To Repairs & Renewable		1,600
To Travelling Expenses		4,200
To Postage		300
To Telegram Expenses		200
To Legal Fees		500
			By Net Loss A/c		43,189
		54,689			54,689

Balance Sheet
Liabilities		Amount	Assets		Amount
Capital	2,90,000		Building	1,10,000
Less: Net Loss	43,189		Less: Depreciation	1,10,000	1,03,400
Less: Drawings	32,000	2,14,811	Fixture and Fittings		20,000
Loan		34,800	Less: Depreciation		32,000
Bills Payable		91,300	Closing Stock		800
Outstanding Salaries		3,200	Land & Building		50,000
Commission received in advance		500	Debtors	82,000
Output CGST	15,180		Less: Further Bad Debts	1,000
Less: Input CGST	10,000	5,180	Less: Provision for Bad Debts	4,000
Output SGST	15,180		Less: Provision for Discount on Debtors	1,539	75,461
Less: Input SGST	10,000	5,180	Accrued Rent*		2,360
		2,83,971			2,83,971

Working Note: –

Calculation of Depreciation

Depreciation on Building	=	6	X	1, 10, 000
		100
	=	Rs 6,600

Calculation of Provision for Doubtful Debts

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

Salary for 1 month	=	2	X	(82, 000 −1, 000 −4, 050)
		100
	=	Rs 1,539

Calculation of Provision for Discount on Debtors

Provision for Discounton Debtors = (Debtors −Further Bad Debts −Provision for Doubtful Debts)× Rate 100

Provision for Doubtful Debts	=	2	X	(82, 000 −1, 000 −4, 050)
		100
	=	Rs 1,539

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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)

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