Question No 15 Chapter No 18

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)
Capital1,00,000
Building15,000
Drawings18,000
Furniture & fittings7,500
Motor Van25,000
Loan from Mr. A @12% interest 15,000
Interest paid on loan 900
Sales1,00,000
Purchases75,000
Opening Stock25,000
Establishment expenses15,000
Wages2,000
Insurance1,000
Commission 7,500
Sundry Debtors and Creditor28,10010,000
Bank balance20,000 
 2,32,5002,32,500

Adjustment:

  1. The value of the closing stock on 31st March 2019 was Rs 32,000
  2. Outstanding wages Rs 500
  3. Prepaid insurance Rs 300
  4. The commission received in advance Rs 800
  5. Paid rent Rs 500 in advance
  6. Depreciation building by 2.5%, furniture and fittings by 10% and motor van by 10%
  7. Charge interest on drawings Rs 500
  8. 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
AmountParticular
Amount
To Opening Stock A/c 25,000By Sale A/c 1,00,000
To Purchases A/c 75,000   
To Wages A/c2,000 By Closing Stock 32,000
Add: outstanding wages5002,500   
To Gross Profit A/c 29,500   
  1,32,000  1,32,000

 

Profit/Loss Account
Particular
AmountParticular
Amount
To Establishment Exp. A/c 15,000By Gross Profit A/c 29,500
To Interest on loan A/c900 By Commission A/c7,500 
Add: Interest Due9001,800Less: commission received in advance8006,700
To Interest on capital 10,000By Interest on drawing A/c 500
To Insurance A/c1,000    
Less: Prepaid insurance300700   
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
AmountAssets
Amount
Capital A/c1,00,00 Building15,000 
Add: Interest on capital10,000 Less: Depreciation37514,625
Add: net Profit5,575 Sundry debtors 28,100
Less: Drawing18,000 Bank Balance 20,000
Less: interest on drawing50097,075Closing Stock 32,000
Laon from Mr. A 15,000Furniture & fitting7,500 
Interest on loan due 900Less: Depreciation7506,750
Sundry Creditor 10,000Motor Van25,000 
Wages due 500Less: Depreciation2,50022,500
Commission received in advance 800Prepaid insurance 300
  1,24,275  1,24,275

 

Final Accounts: Definition and Explanation

 

Profit and Loss Account: Meaning, Format & Examples

 

Balance Sheet: Meaning, Format & Examples

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Comment if you have any question.

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

Chapter No. 1 – Introduction

Chapter No. 2 – Theory Base of Accounting 

Chapter No. 3 – Vouchers and transactions

Chapter No. 4 – Journal

Chapter No. 5 – Ledger

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)

Chapter No. 16 – Financial Statements – (With Adjustments)

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