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Question No 26 Chapter No 18 - USHA Publication 11 Class

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Question No 26 Chapter No 18

Bad debts and provision

26. From the following trial balance of Alka & sons, prepare the trading and Profit & loss account for the year ending on 31st March 2019 and the balance sheet as of that date:

Ledger balances	(Dr.)Rs	(Cr.)Rs
Purchases	210,750	-
Discount allowed	1,300	-
Wages	6,500	-
Salaries	2,000	-
Sales	-	35,000
Travelling expenses	400	-
Commission	425	-
Carriage outwards	275	-
Administration expenses	105	-
Trade expenses	600	-
Interest	250	-
Building	5,000	-
Furniture	200	-
Debtors	4,250	-
Capital	-	13,000
Cash	7,045	-
Creditor	-	2,100
	50,100	50,100

Stock on 31st March 2019 was Rs 6,000. depreciation building by 20%. Create a provision for bad debts at 10% on debtors, outstanding wages Rs 475

The solution of Question No 26 Chapter No 18:-

Trading A/c

Particular		Amount	Particular	Amount
To Purchases A/c		21,750	By Sale A/c	35,000
To Wages A/c	6,500
Add: outstanding wages	475	6,975	By Closing Stock	6,000
To Carriage Inwards A/c		275
To Gross Profit A/c		12,000
		41,000		41,000

Profit/Loss A/c

Particular	Amount	Particular	Amount
To discount allowed A/c	1,300	By Gross Profit A/c	12,000
To Salaries A/c	2,000
To Travelling Exp.	400
To commission	425
To Administrative Exp.	105
To Trade Exp.	600
To Interest	250
To Dep. On building	1,000
To Provision for doubtful debts	425
To Net profit A/c	5,495
	12,000		12,000

Balance Sheet

Labilities		Amount	Assets		Amount
Capital A/c	13,000		Debtors	4,250
Add: Net Profit	5,495	18,495	Less: provision for doubtful debts	425	3,825
Creditor		2,100	Closing Stock		6,000
Outstanding Wages		475	Cash		7,045
			Furniture		200
			Building	5,000
			Less: depreciation	1,000	4,000
		21,070			21,070