
Question No 16 Chapter No 20 D.K Goal 11 Class
16 From the following Trial Balance of Ram Naresh, prepare a Trading and profit and loss account for the year ended on 31st March,2018 and a Balance sheet as at that date:
Dr. Balance | ₹ | Cr. Balance | ₹ |
Drawings | 35,000 | Capital | 4,50,000 |
Building | 60,000 | Creditors | 40,000 |
Debtors | 30,000 | Sales | 3,65,000 |
Purchases | 2,35,000 | Discount | 900 |
Sales return | 6,900 | Miscellaneous receipt | 5,500 |
Fire insurance | 2,800 | Bad debts provision | 10,000 |
Life insurance | 4,300 | B/P | 28,600 |
Cash in hand | 25,900 | ||
Cash at bank | 25,700 | ||
Stock (31-2-2018) | 35,000 | ||
Bad debts | 12,000 | ||
Carriage | 6,300 | ||
Wages | 27,700 | ||
Plant | 2,30,000 | ||
Furniture | 60,000 | ||
Salaries | 23,000 | ||
Bank charges | 200 | ||
Coal &Gas | 12,000 | ||
Rates &Taxes | 8,000 | ||
B/R | 60,000 | ||
Trade charges | 200 | ||
9,00,000 | 9,00,000 |
Adjustments:
- Carry forward the following unexpired amount:
- Fire insurance ₹ 700
- Rates and Taxes ₹ 2,000
- Depreciate: (1) Builiding@5%; (2) Furniture @10%.
- Wages include ₹2,000 spent on the installation of a new plant on 1-4-2017.
- Make a provision of 5%on Sundry debtors for Doubtful debts.
- Trade expenses 400 and Wages ₹1,500 have not yet been paid.
- Manager is entitles to a commission of 10% on net profit after charging such commission.
[Ans: G.P.₹77,600; N.P. ₹36,000; B/S Total ₹5,20,800.]
The Solution of Question No 16 Chapter No 20 D.K Goal 11 Class:
Trading Account |
|||||
Particular |
Amount | Particular |
Amount | ||
To Purchases A/c | 2,35,000 | By Sale A/c | 3,65,000 | ||
Add: Closing Stock(see WN1) | 35,000 | 2,70,000 | Less:- Returns | 6,900 | 3,58,100 |
To Carriage | 6,300 | ||||
To Wages A/c | 27,700 | ||||
Add: Outstanding wages | 1,500 | By closing stock A/c | 35,000 | ||
Less:- Installation of Machinery | 2,000 | 27,200 | |||
To Coal & Gas | 12,000 | ||||
To Gross Profit A/c | 77,600 | ||||
3,93,100 | 3,93,100 |
Profit & Loss Account |
|||||
Particular |
Amount | Particular |
Amount | ||
To Fire Insurance A/c | 2,800 | By Gross profit b/d | 77,600 | ||
Less: Unexpired Fire Insurance | 700 | 2,100 | By Discount received A/c | 900 | |
To Bad Debts A/c | 12,000 | By Miscellaneous Receipts A/c | 5,500 | ||
Add: New Prov. for D/Debts(WN2) | 1,500 | ||||
Less: Old Prov. for D/Debts | 10,000 | 3,500 | |||
To Salaries A/c | 23,000 | ||||
To Bank Charges A/c | 200 | ||||
To Rates & Taxes A/c | 8,000 | ||||
Less: Unexpired Rates & Taxes | 2,000 | 6,000 | |||
To Trade Expenses A/c | 200 | ||||
Add: Outstanding Trade Expenses | 400 | 600 | |||
To Depreciation on | |||||
-Building A/c | 3,000 | ||||
-Furniture A/c | 6,000 | 9,000 | |||
To Manager’s Commission A/c (WN4) | 3,600 | ||||
To Net Profit A/c | 36,000 | ||||
84,000 | 84,000 |
Balance sheet for the year ending 31st March,2018 |
|||||
Liabilities |
Amount | Assets |
Amount | ||
Capital | 4,50,000 | Building A/c | 60,000 | ||
Add: Net profit | 36,000 | Less: Depreciation | 3,000 | 57,000 | |
4,86,000 | Debtors A/c | 30,000 | |||
Less: Drawings A/c | 35,000 | 4,46,700 | Less: Prov. for D/Debts(WN2) | 1,500 | 28,500 |
Life Insurance | 4,300 | Cash in hand | 25,900 | ||
Creditors A/c | 40,000 | Cash at bank | 25,700 | ||
28,6 | 28,600 | Stock | 35,000 | ||
Outstanding Trade Expenses A/c | 400 | Plant | 2,30,000 | ||
Outstanding Wages A/c | 1,500 | Add: wage for installation | 2,000 | 2,32,000 | |
Outstanding Manager’s Commission A/c | 3,600 | Furniture | 60,000 | ||
Less: Depreciation | 6,000 | 54,000 | |||
Bills Receivable(B/R) | 60,000 | ||||
Unexpired Fire Insurance | 700 | ||||
Unexpired Rates & Taxes | 2,000 | ||||
5,20,800 | 5,20,800 |
Working Notes: –
WN1. Why to add closing stock in purchase?
Becasue closing stock is given in the trail balance. When closing stock is given in the trail balance then we have to add it in the purchase account.
The reason behind it that the amount of the closing stock is the part of purchase and opening stock which is left at the end of year if the closing stock is given in the trail balance it means the net amount of purchase(after deducting amount of closing stock) has given.
WN.2 Calculation of amount of New provision for Doubtful Debts
New Provision for D/Debts = Amount of Debtors X Rate of Provision for D/D
Advertisement
= 30,000 X 5/100
= 1,500/-
WN.3 Calculation of Closing balance of Debtors:
Amount of Debtors | 30,000 |
Less: Provision for Doubtful Debts (30,000*5%) | 1,500 |
28,500 | |
WN.4 Calculation of Manager’s Commission – After Charge
Net Profit Before Managaer’s Commission (Debit – Credit side total of P/L A/c) Profit/loss account (84,000-44,400) |
39,600 |
Managaer’s Commission | = | Net profit before charging such commission | X | Rate of Commission | ||
100 | + | Rate of Commission |
39,600 | X | 10 | ||||
100 | + | 10 |
39,600 | X | 10 | ||||
110 |
Managaer’s Commission | = | 3,600 |
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.
