Question No 03 Chapter No 18

Question No 03 Chapter No 18

Outstanding expenses

03. The following balances are extracted from the books of Chandigarh Medical stores for the year ending 31st March 2019:

ParticularAmountParticularAmount
Cash 6,000Sales30,000
Opening stock9,000Office expenses4,000
Legal charges800Bill payable 7,000
Purchases12,000Interest paid 850
Bank charges100Commission earned1,150
Carriage500Salaries1,750
Octroi400Rent 1,500
Insurance600Stationery680
Lighting900Postage20
Debtors8,800Publicity500
Creditor6,100Discount allowed200
Bad debts550General expenses100
Capital14,000Furniture9,000

You are required to prepare Trading and Profit & Loss and balance sheet as on 31st March 2019 after considering the following adjustments:

  1. The closing stock was valued at Rs 9,500
  2. salaries outstanding are Rs 700
  3. Prepaid insurance is Rs 150
  4. Stationery bill outstanding is Rs 120

The Content covered in this article:

 

The solution of Question No 03 Chapter No 18:-

Trading Account
Particular
AmountParticular
Amount
To Opening Stock A/c 9,000By Sale A/c 30,000
To Purchases A/c 12,000   
To carriage A/c 500By Closing Stock 9,500
To Octroi A/c 400   
To Gross Profit A/c 17,600   
  39,500  39,500

 

Profit/Loss Account
Particular
AmountParticular
Amount
To Bank Charges A/c 100By Gross Profit A/c 17,600
To Insurance A/c600 By Commission earned A/c 1,150
Less: prepaid Insurance150450   
To Light A/c 900   
To Bad debts A/c 550   
To Office Expenses A/c 4,000   
To Interest paid A/c 850   
To Salaries A/c1,750    
Add: outstanding salaries7002,450   
To Rent A/c 1,500   
To Stationery A/c680    
Add: outstanding Stationery120800   
To Postage A/c 20   
To Publicity A/c 500   
To Discount allowed A/c 200   
To General Expenses A/c 100   
To Legal Charges A/c 800   
To Net Profit A/c 5,530   
  18,750  18,750

 

Balance Sheet
Labilities
AmountAssets
Amount
Capital A/c14,000 Debtors 7,000
Add : Net Profit5,53019,530Furniture 3,000
Creditors 6,100Closing Stock  
Bills Payable 7,000Cash  
Outstanding Salaries 700Prepaid Insurance  
Outstanding Stationery 120   
  33,450  33,450

 

Final Accounts: Definition and Explanation

 

Profit and Loss Account: Meaning, Format & Examples

 

Balance Sheet: Meaning, Format & Examples

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Also, Check out the solved question of all Chapters: –

 

Usha Publication – Elements of Book-Keeping PSEB (Class 11) – Solution

Chapter No. 1 – Introduction

Chapter No. 2 – Theory Base of Accounting 

Chapter No. 3 – Origin of Transactions

Chapter No. 4 – Vouchers and transactions

Chapter No. 5 – Journal

Chapter No. 6 – Accounting for Goods and Services Tax(GST)

Chapter No. 7 – Ledger

Chapter No. 8 – Cash Book

Chapter No. 9 – Other Subsidiary Books

Chapter No. 10 – Journal Proper

Chapter No. 11 – Trial Balance

Chapter No. 12 – Bank Reconciliation Statement

Chapter No. 13 – Depreciation

Chapter No. 14 – Provisions and Reserves 

Chapter No. 15 – Bills of Exchange

Chapter No. 16 – Rectification of Errors 

Chapter No. 17 – Financial Statements – (Without Adjustments)

Chapter No. 18 – Financial Statements – (With Adjustments)

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