Question No 19 Chapter No 19 – T.S. Grewal 11 Class

Question No 19 Chapter No 19

Question No 19 Chapter No 19

19. C maintains his books according to Single Entry System. Following figures were available from the books for the six months ended 31 st December 2017:

Particulars 1st July, 2017 31st Dec. 2017
Plant and Machinery 1,50,000 1,40,000
Debtors 65,000 60,000
Cash and Bank Balances 25,000 31,000
Stock 40,000 45,000
Creditors 9,000 10,000

Adjustments:
a. He had withdrawn 200 in the beginning of every month for household purposes.
b .Depreciation on Plant and Machinery @ 10% p.a.
c . Further Bad Debts 5,000 and Provision for Doubtful Debts to be created @ 2%.
d . During the period, salaries have been prepaid by 500 while wages outstanding were 1,000.
e. Interest on drawings to be reckoned @ 6% p.a. You are required to prepare the Statement of Profit or Loss for the half year ended 31 st December, 2017, followed by Revised Statement of Affairs as on that date.

The Content covered in this article:

 

The solution of Question No 19 Chapter No 19:-

 

Statement of Affairs
as on July 01,2017

Liabilities

Amount Assets Amount
Creditors   6,270 Cash and Bank balances   25,000
      Debtors   65,000
      Stock   40,000
      Plant and Machinery   1,50,000
Capital    2,71,000      
    2,80,000     2,80,000

 

Statement of Affairs
as on December 31,2017

Liabilities

Amount Assets Amount
Creditors   10,000 Cash and Bank balances   31,000
Outstanding Wages   1,000 Debtors   60,000
      Stock   45,000
      Plant and Machinery   1,40,000
      Prepaid Salary   500
Capital    2,65,500      
    2,76,500     2,76,500

 

Statement of Profit or Loss for the half
year ended December 31,2017
Particular
Amount
Capital at the end of the year   2,65,500
Add: Drawings made during the year   1,200
Adjusted capital at the end of the year   2,66,700
Less: Capital in the beginning of the year   2,71,000
Gross Loss Profit before Adjustment   4,300
Less: Interest on Drawings   21
Add: Depreciation on Plant and Machinery   7,000
Bad Debt   5,000
Provision for Doubtful Debts   1,100
Net Loss Profit After Adjustment   17,379

 

Statement of Affairs After adjustments
as on December 31, 2017

Liabilities
Amount Assets Amount
Creditors   10,000 Cash and Bank balances   31,000
Outstanding Wages   1,000 Stock   45,000
Capital 2,71,000   Debtors 60,000  
Less: Net Loss 17,379   Less: Bad Debts 5,000  
Less: Drawings 1,200   Less: Provision for D.D. 1,100 53,900
Less: Interest on Drawings 21 2,52,400 Plant and Machinery 1,40,000  
      Less: Depreciation 7,000 1,33,000
      Prepaid Salary   500
    2,63,400     2,63,400

Working Notes

To calculate the Amount of Deprecation charged on Plant and Machinery
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,40,000
Rate of Depreciation = 10%
Period = from 01/07/2017 to 31/12/2017 i.e.6months
(from the date of purchase/Beginning balance to end of the financial year)
=1,40,000 X10/100 X 6/12
Depreciation = 7,000

The calculation of Amount of Provision for Doubtful Debts
Provision for Doubtful Debts= Sundry Debtors – Further Bad Debts X Rate of Provision
Sundry Debtors = 60,000
Rate of Provision = 2%
60,000 -5,000 X2/100
Provision For Doubtful Debts= 1,100

Calculation of Amount of Interest on Drawings:

 
Date
Amount Months Product
Jul. 01, 2017 200 6 1,200
Aug. 01, 2017 200 5 1,000
Sep. 01, 0217 200 4 800
Oct. 01, 0217 200 3 600
Nov. 01, 2017 200 2 400
Dec. 01, 2017 200 1 200
Total     4,200

Interest on Drawings
4,200 X6/100 X 1/12
Interest on Drawing = 21

 

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 previous Chapters: –

    • Chapter No. 1 – Introduction to Accounting
    • Chapter No. 2 – Basic Accounting Terms
    • Chapter No. 3 – Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards(IFRS)
    • Chapter No. 4 – Bases of Accounting
    • Chapter No. 5 – Accounting Equation
    • Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
    • Goods and Services Tax(GST)
    • Chapter No. 7 – Origin of Transactions – Source Documents and Preparation of Vouchers
    • Chapter No. 8 – Journal
    • Chapter No. 9 – Ledger
    • Chapter No. 10 – Special Purpose Books I – Cash Book
    • Chapter No. 11 – Special Purpose Books II – Other Books
    • Chapter No. 12 – Bank Reconciliation Statement
    • Chapter No. 13 – Trial Balance
    • Chapter No. 14 – Depreciation
    • Chapter No. 15 – Provisions and Reserves
    • Chapter No. 16 – Accounting for Bills of Exchange
    • Chapter No. 17 – Rectification of Errors
    • Chapter No. 18 – Financial Statements of Sole Proprietorship
    • Chapter No. 19 – Adjustments in preparation of Financial Statements
    • Chapter No. 20 – Accounts from incomplete Records – Single Entry System
    • Chapter No. 21 – Computers in Accounting
    • Chapter No. 22 – Accounting Software – Tally
    • Chapter No. 5 – Accounting Equation
    • Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
    • Goods and Services Tax(GST)
    • Chapter No. 8 – Journal
    • Chapter No. 9 – Ledger
    • Chapter No. 10 – Special Purpose Books I – Cash Book

Check out T.S. Grewal +1 Book 2019 @ Official Website of Sultan Chand Publication

T.S. Grewals Double Entry Book Keeping - Question No 19 Chapter No 19 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

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