Question No 13 Chapter No 20 – D.K Goal 11 Class

Question No 13 Chapter No 20

13.The following balances were extracted from the books of Shri Krishan Kumar as at 31st March, 2017:

	Dr.(Rs)	Cr.(Rs)
Capital		24,500
Drawings	2,000
General Expenses	2,500
Buildings	11,000
Machinery	9,340
Stock 1 −4 −2017	16,200
Power	2,240
Taxes and Insurance	1,315
Wages	7,200
Sundry Debtors	6,280
Sundry Creditors		2,500
Charity	105
Bad-debts	550
Bank Overdraft		11,180
Sales		65,360
Purchases	47,000
Scooter	2,000
Scooter Expenses	500
Bad-debts Provision		900
Commission		1,320
Trade Expenses	1,280
Bills Payable		3,850
Cash	100
	1,09,610	1,09,610

Adjustments:-
i Stock on 31st March, 2017 was valued at 23,500.
ii 1/5th of general expenses and taxes & insurance to be charged to factory and the balance to the office.
iii Write off a further Bad-debts of 160 and maintain the provision for Bad-debts at 5% on Debtors.
iv Depreciate Machinery at 10% and Scooter by 240.
v Provide 700 for outstanding interest on Bank Overdraft.
vi Prepaid Insurance is to the extent of 50.
vii Provide for Manager’s Commission at 10% on the Net Profit after charging such Commission.

Prepare final accounts for the year ended 31st March, 2017 after giving effect to the above adjustments.

The solution of Question No 13 Chapter No 20: –

Trading Account
Particular		Amount	Particular		Amount
To Opening Stock A/c		16,200	By Sales		65,360
To Purchases A/c		47,000
To Wages		7,200
To General Expenses (1/5th)		500	By Closing Stock		23,500
To Taxes and Insurance (1/5th)		253
To Power		2,240
To Gross Profit A/c		15,467
		88,860			88,860

Profit & Loss Account
Particular		Amount	Particular		Amount
To Depreciation: (WN1)			By Gross Profit		15,467
Machinery	934		By Commission Received		1,320
Scooter	240	1,174
To Old Bad Debts	550
Add: Further Bad Debts	160
Add: New Provision (WN2)	306	116
To Outstanding Interest on Bank		700
Taxes & Insurance	1,315
Less: Pre-paid	50
Less: T/f to Trading A/c	253	1,012
To Charity		1,800
To Scooter Expenses		600
To Trade Expenses		10,000
To Outstanding Manager’s		3,200
To Commission (WN3)		900
General Expenses	2,500
Less: T/f to Trading A/c	500	2,000
To Net Profit A/c		9,000
		16,787			16,787

Balance Sheet
Liabilities		Amount	Assets		Amount
Capital	24,500		Machinery	9,340
Less: Net Loss	9,000		Less: Depreciation	934	8,406
Less: Drawings 12, 000 +150	2,000	31,500	Scooter	2,000
Creditors		2,500	Less: Depreciation	240	1,760
Outstanding Manager’s Commission		900	Building		11,000
Bills Payable		3,850	Closing Stock		23,500
Outstanding Interest on Bank Overdraft		700	Prepaid Insurance		50
Bank Overdraft		11,180	Cash in Hand		100
			Debtors	6,280
			Less: Provision for Bad Debt	160
			Less: Provision for Discount	306	5,814
		50,630			50,630

Working Note: –

Calculation of Depreciation

Depreciation on Machinery	=	10	X	6,340
		100
	=	Rs 934

Calculation of Outstanding Rent

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

Calculation of Provision for Doubtful Debts

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

Provision for Doubtful Debts	=	5	X	(6,280 – 160)
		100
	=	Rs 306

Calculation of Manager’s Commission
Profit before Manager’s Commission = Rs 9, 900 (16, 787 −6, 887)

Manager’s Commission	=	10	X	9,900
		100
	=	Rs 900

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.