Question No 04 B Chapter No 20

Question No 04 B Chapter No 20

04 B. the following are the balance of Messrs Gupta & Co. as at 31st March 2018:-

Cash in hand540Patents7,500
Cash at Bank2,630Salaries25,000
Purchases40,675General Expenses22,790
Return Inwards680Insurance600
Fuel & Power4,730Sundry Debtors14,500
Bad debts210Sales98,440
Bad debts provision340Return outwards500
Carriage on sale3,200Capital92,000
Carriage on purchases2,040S. Creditor6,300
Stock (1-4-2017)5,760Rent Cr.9,000
Freehold Land10,000  

Prepare trading and Profit & loss A/c and a balance Sheet as at 31st March 2018 after taking into account the following adjustments:-
i Stock on hand as on 31st March 2018 is Rs 6,800
ii Machinery is to be depreciated at 10% and Patents at 20%
iii Salaries for the month of March 2018 amounting to Rs 1,500 were unpaid
iv Insurance includes a premium of Rs 170 on a policy expiring on 30th September 2018
v Write of Rs 500 as bad debts and Create a provision for doubtful Debts at 5% on Sundry Debtors
vi Rent receivable Rs 1,000

The solution of Question No 04 B Chapter No 20: –

Trading Account
To Opening Stock A/c 5,760By Sales98,440 
To Purchases A/c40,675 Less: return68097,760
Less: Return50040,175   
To Carriage on purchases A/c 2,040By Closing Stock 6,800
To Fuel & Power A/c 4,730   
To Wages A/c 8,480   
To Gross Profit 43,375   
  1,04,560  1,04,560
Profit & Loss Account
Depreciation on Furniture (WN)  By Gross Profit 43,375
Machinery2,000 By Rent9,000 
Patents1,5003,500Add: Rent accrued1,00010,000
To Salaries25,000    
Add: Outstanding1,50026,500   
Old Bad Debts210    
Add: New Bad Debts500    
Add: New Provision (WN2)700    
Less: Old Provision3401,070   
To Insurance600    
Add: Outstanding Taxes85515   
To Carriage on Sale 3,200   
To General Expenses 22,790   
   By Net Loss A/c 4,200
  57,575  57,575
Balance Sheet
Capital92,000 Patents7,500 
Less: Net Loss4,200 Less: Depreciation1,5006,000
Less: Drawings5,24582,555Machinery20,000 
Creditors 6,300Less: Depreciation2,00018,000
Outstanding Salaries 1,500Building 32,000
   Freehold Land 10,000
   Less: Further Bad Debts500 
   Less: Provision for Bad Debts70013,300
   Closing Stock 6,800
   Prepaid Insurance 85
   Cash in Hand 540
   Cash At Bank 2,630
   Cash At Bank 1,000
  90,355  90,355

Working Note: –

Calculation of Depreciation

Depreciation on Machinery=10X20,000
 =Rs 2,000  
Depreciation on Patents=20X7,500
 =Rs 1,500  

Calculation of Provision for Doubtful Debts

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

Provision for Doubtful Debts=5X14,500 – 500
 =Rs 700

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

D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

Check out the Accountancy Class +1 by D.K. Goal (Arya Publication) from their official Site.

ISC Accounts 11 20 Image min 197x300 - Question No 04 B Chapter No 20 - D.K Goal 11 Class
D K Goel accountancy +1 – ISC_Accounts_11_20_ImageQuestion No 42 Chapter No 11 – D.K Goal 11 Class

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