Question No 15 Chapter No 18
Interest on Drawings
15. The following is the trial balance of M/s Kasturi Agencies as on 31st March 2019 prepare trading and profit & loss account for the yea ending 31st March 2019 and a balance sheet as on that date
| Ledger Account | (Dr. Rs) | (Cr. Rs) |
| Capital | – | 1,00,000 |
| Building | 15,000 | – |
| Drawings | 18,000 | – |
| Furniture & fittings | 7,500 | – |
| Motor Van | 25,000 | – |
| Loan from Mr. A @12% interest | – | 15,000 |
| Interest paid on loan | 900 | – |
| Sales | – | 1,00,000 |
| Purchases | 75,000 | – |
| Opening Stock | 25,000 | – |
| Establishment expenses | 15,000 | – |
| Wages | 2,000 | – |
| Insurance | 1,000 | – |
| Commission | – | 7,500 |
| Sundry Debtors and Creditor | 28,100 | 10,000 |
| Bank balance | 20,000 | |
| 2,32,500 | 2,32,500 |
Adjustment:
- The value of the closing stock on 31st March 2019 was Rs 32,000
- Outstanding wages Rs 500
- Prepaid insurance Rs 300
- The commission received in advance Rs 800
- Paid rent Rs 500 in advance
- Depreciation building by 2.5%, furniture and fittings by 10% and motor van by 10%
- Charge interest on drawings Rs 500
- Balance of interest due on the loan is also to be provided for
The solution of Question No 15 Chapter No 18:-
| Trading Account |
|||||
| Particular |
Amount | Particular |
Amount | ||
| To Opening Stock A/c | 25,000 | By Sale A/c | 1,00,000 | ||
| To Purchases A/c | 75,000 | ||||
| To Wages A/c | 2,000 | By Closing Stock | 32,000 | ||
| Add: outstanding wages | 500 | 2,500 | |||
| To Gross Profit A/c | 29,500 | ||||
| 1,32,000 | 1,32,000 | ||||
| Profit/Loss Account |
|||||
| Particular |
Amount | Particular |
Amount | ||
| To Establishment Exp. A/c | 15,000 | By Gross Profit A/c | 29,500 | ||
| To Interest on loan A/c | 900 | By Commission A/c | 7,500 | ||
| Add: Interest Due | 900 | 1,800 | Less: commission received in advance | 800 | 6,700 |
| To Interest on capital | 10,000 | By Interest on drawing A/c | 500 | ||
| To Insurance A/c | 1,000 | ||||
| Less: Prepaid insurance | 300 | 700 | |||
| To Dep. On Building | 375 | ||||
| To Dep. On furniture & fitting | 750 | ||||
| To Dep. On Motor van | 2,500 | ||||
| To Net Profit A/c | 5,575 | ||||
| 36,700 | 36,700 | ||||
| Balance Sheet | |||||
| Labilities |
Amount | Assets |
Amount | ||
| Capital A/c | 1,00,00 | Building | 15,000 | ||
| Add: Interest on capital | 10,000 | Less: Depreciation | 375 | 14,625 | |
| Add: net Profit | 5,575 | Sundry debtors | 28,100 | ||
| Less: Drawing | 18,000 | Bank Balance | 20,000 | ||
| Less: interest on drawing | 500 | 97,075 | Closing Stock | 32,000 | |
| Laon from Mr. A | 15,000 | Furniture & fitting | 7,500 | ||
| Interest on loan due | 900 | Less: Depreciation | 750 | 6,750 | |
| Sundry Creditor | 10,000 | Motor Van | 25,000 | ||
| Wages due | 500 | Less: Depreciation | 2,500 | 22,500 | |
| Commission received in advance | 800 | Prepaid insurance | 300 | ||
| 1,24,275 | 1,24,275 | ||||
Final Accounts: Meaning, Definition and Explanation
Profit and Loss Account: Meaning, Format & Examples
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Balance Sheet: Meaning, Format & Examples
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Also, Check out the solved question of all Chapters: –
Chapter No. 2 – Theory Base of Accounting
Chapter No. 3 – Vouchers and transactions
Chapter No. 4 – Journal
Chapter No. 5 – Ledger
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Chapter No. 6 – Cash Book
Chapter No. 7 – Other Subsidiary Books
Chapter No. 8 – Journal Proper
Chapter No. 9 – Trial Balance
Chapter No. 10 – Bank Reconciliation Statement
Chapter No. 11 – Depreciation
Chapter No. 12 – Provisions and Reserves
Chapter No. 13 – Bills of Exchange
Chapter No. 14 – Rectification of Errors
Chapter No. 15 – Financial Statements – (Without Adjustments)
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Chapter No. 16 – Financial Statements – (With Adjustments)