Question No 05 Chapter No 20

Question No 05 Chapter No 20

05. From the following figures prepare the Trading and Profit and Loss Account for the year ended 31st March, 2019 and the Balance Sheet as at that date:-

ParticularRsParticularRs
Stock 1stApril, 201875,000Sundry Debtors82,000
Purchases8,00,000Loan from X10,000
Sales12,00,000Interest on X Loan1,500
Motor Car1,50,000Furniture20,000
Car Expenses42,000Land and Building2,00,000
Rent5,500Capital2,50,000
Salaries35,200Sundry Creditors91,300
Bad Debts1,500Returns Inward7,500
Provision for bad debts8,100Returns Outward6,000
Commission Cr4,600Cash in hand 16,400
Wages1,25,000  
Insurance8,400  

Adjustments:-
i Commission include 1,600 being commission received in advance.
ii Write off 2,000 as further Bad-debts and maintain Bad-debts provision at 5% on debtors.
iii Expenses paid in advance are: Wages 5,000 and Insurance 1,200.
iv Rent and Salaries have been paid for 11 months.
v Loan from X has been taken at 18% p.a. interest.
vi Depreciate furniture by 15% p.a. and Motor Car by 20% p.a.
vii Closing Stock was valued at 60,000

The solution of Question No 05 Chapter No 20: –

Trading Account
Particular
AmountParticular
Amount
To Opening Stock A/c 75,000By Sales12,00,000 
To Purchases A/c8,00,000 Less: return7,50011,92,500
Less: Return6,0007,94,000   
To Wages A/c1,25,000 By Closing Stock 60,000
Less: Prepaid5,0004,730   
      
To Gross Profit 2,63,500   
  12,52,500  12,52,500
Profit & Loss Account
Particular
AmountParticular
Amount
Depreciation on Furniture (WN)  By Gross Profit 2,63,500
Furniture3,000 By Commission4,600 
Motor Car30,00033,000Less: Comm. received in advance1,6003,000
To Salaries35,200 By Old Provision for Doubtful Debts8,100 
Add: Outstanding3,20038,400Less: New Provision (WN3)4,0004,100
To Rent5,500    
Add: Outstanding5006,000   
To Insurance8,400    
Less: Prepaid1,2007,200   
To Insurance1,500    
Add: Outstanding Taxes3001,800   
To Old Bad Debt1,500    
Add: Further Bad Debts2,0003,500   
To Car Expenses 42,000   
To Net Profit A/c 1,38,700   
  2,70,600  2,70,600
Balance Sheet
Liabilities
AmountAssets
Amount
Capital2,50,000 Furniture20,000 
Add : Net Profit1,38,7003,88,700Less: Depreciation3,00017,000
Loan from X10,000 Motor Car1,50,000 
Add: Outstanding Interest on Loan30010,300Less: Depreciation30,0001,20,000
Creditors 91,300Closing Stock 60,000
Outstanding Salaries 3,200Land & Building 2,00,000
Outstanding Rent 500Debtors82,000 
Commission received in advance 1,600Less: Further Bad Debts2,000 
   Less: Provision for Bad Debts4,00076,000
   Prepaid Wages 5,000
   Prepaid Insurance 1,200
   Cash in Hand 16,400
      
  4,95,600  4,95,600

Working Note: –

Calculation of Depreciation

Depreciation on Furniture=15X20,000
100
 =Rs 3,000  
Depreciation on Motor Car=20X1,50,000
100
 =Rs 30,000  

Calculation of Outstanding Expenses

1. Salaries for 11 months = 35, 200

Salary for 1 month=35,200X1
11
 =3, 200 (Salary Outstanding)  

2. Rent for 11 months = 5, 500

Rent for 1 month=5,500X1
11
 =500 (Rent Outstanding)  
3. Interest on Loan=18X10,000
100
 =Rs 1,800  

Interest paid = 1, 500
∴ Interest Outstanding = 300(1, 800 −1, 500)

Calculation of Provision for Doubtful Debts

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

Provision for Doubtful Debts=5X(82,000 – 2,000)
100
 =Rs 4,000  

Trading Account: Meaning, Format and Examples

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 05 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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