Question 23 Chapter No 16 – Class 11 Unimax

(1) Stock on 31st December, 2019 ₹ 75,000.
(2) Depreciation machinery by 10% and Furniture by 20%.
(3) Wages ₹ 5,000 and salaries ₹ 1,200 are outstanding.
(4) Write off ₹ 500 as bad debts and create a reserve for bad and doubtful debts at 5% and reserve for discount on debtors at 2%.
(5) Investment is made on 1.4.2019 and no interest has been received so far.

The solution of Question 23 Chapter No 16 – Class 11 Unimax

Trading and Profit & Loss A/c SH.D. GOSWAMI For the year ended 31st Dec., 2019

Particulars		Amount	Particulars			Amount
To Opening stock		45,000	By sales		4,35,000
To purchases	2,95,000		Less: Returns inwards		7,000	4,28,000
Less: Returns	4,000	2,91,000	By closing stock			75,000
To Wages	40,000
Add; Outstanding Wages	5,000	45,000
To Gross Profit (transferred to P & L A/c)		1,22,000
		5,03,000				5,03,000
To Rent		5,000	By Gross Profit b/d			1,22,000
To Salaries	24,000		By Misc. Receipts			1,200
Add: O/S salaries	1,200	25,200	By Accrued interest on investment			2,250
To Bad debts	1,000		(₹50,000*6/100*9/12)
Add: Further bad debts	500
Add: Reserve for bad debts	1,975
Add: Reserve for discount on debts	750.5
Less: Old reserve	800	3,425.50
To Establishment		6,000
To Insurance		1,500
To Trade expenses		2,000
To Dep. on Machinery		2,400
To Dep. On Furniture		300
To Net Profit
(Transferred to capital)		79,624.50
		1,25,450				1,25,450

Balance Sheet of SH.D.GOSWAMI As on 31st Dec, 2019

Liabilities		Amount	Assets		Amount
Capital	1,20,000		Furniture	1,500
Add: Net Profit	79,624.50		Less: Depreciation	300	1,200
Less: Drawings	21,000	1,78,624.50	Sundry debtors	40,000
Sundry creditors		19,000	Less: Further bad debts	500
Outstanding wages		5,000	Less: New Reserve	1,975
Outstanding salaries		1,200	Less: Reserve for discount on debtors	750.50	36,774,50
			Closing stock		75,000
			Plant & Machinery	24,000	21,600
			Less: Depreciation	2,400
			Accrued interest on investment		2,250
			Patents		4,800
			Investment		50,000
			Cash		12,200
		2,03,824.50			2,03,824.50