Question No 27 Chapter No 18

Question No 27 Chapter No 18

Bad debts and provision

27. From the following trial balance of Kabul Singh prepare Trading and Profit & Loss account for the year ended 31st march 2019 and balance sheet as of that date:

Debit balancesRsCredit balancesRs
Cash in hand 540Sales98,780
Cash at bank2,630Return outwards500
Purchases account40,675Capital account62,000
Returns inwards680Sundry creditor6,300
Wages account8,480Rent9,000
Fuel & power4,730  
Carriage on sales3,200  
Carriage on purchases2,040  
Stock (1.42017)5,760  
Building account32,000  
Freehold land10,000  
General expenses3,000  
Sundry debtors14,500  
 1,76,580 1,76,580

Prepare trading and profit & loss account and a balance sheet as on 31st march 2010 after taking into account the following adjustments:

  1. Stock on hand 31st Match 2018 id Rs 6,800
  2. Plant and machinery is to be depreciated at 10% and patents at 20%
  3. Salaries for the month of march 2018 amounting to Rs 1,500 were unpaid
  4. Insurance includes a premium of RS 170 a policy expiring on 31st Sept 2018
  5. Further bad debts are Rs 725
  6. Rent receivable Rs 1,000

The solution of Question No 27 Chapter No 18:-


Trading A/c
To Opening Stock A/c 5,760By Sale A/c98,780 
To Purchases A/c40,675 Less: Return68098,100
Less: Return50040,175By Closing Stock 6,800
To Wages A/c 8,480   
To Fuel & power A/c 4,730   
To Carriage on purchases A/c 2,040   
To Gross Profit A/c 43,715   
  1,04,900  1,04,900


Profit/Loss A/c
To carriage on sale A/c 3,200By Gross Profit A/c 43,715
To Salaries A/c15,000 By Rent A/c9,000 
Add: outstanding salaries1,50016,500Add: Rent receivable1,00010,000
To General Exp. 3,000   
To Insurance A/c600    
less: prepaid insurance85515   
To Bad debts 725   
To Dep. On Plant & machinery 2,000   
To Dep. On patents 1,500   
To Net profit A/c 26,275   
  53,715  53,715


Balance Sheet
Capital A/c62,000 Debtors14,500 
Add: Net Profit26,275 Less: provision for doubtful debts72513,775
less: Drawing5,24583,030Cash in hand 540
Creditor 6,300Cash at bank 2,630
Outstanding salaries 1,500Rent receivable 1,000
   Insurance premium prepaid 85
   Closing Stock 6,800
   Freehold land 10,000
   Building 32,000
   Less: depreciation1,5006,000
   Less: depreciation2,00018,000
  90,830  90,830



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 all Chapters: –

Usha Publication – Elements of Book-Keeping PSEB (Class 11) – Solution

Chapter No. 1 – Introduction

Chapter No. 2 – Theory Base of Accounting 

Chapter No. 3 – Origin of Transactions

Chapter No. 4 – Vouchers and transactions

Chapter No. 5 – Journal

Chapter No. 6 – Accounting for Goods and Services Tax(GST)

Chapter No. 7 – Ledger

Chapter No. 8 – Cash Book

Chapter No. 9 – Other Subsidiary Books

Chapter No. 10 – Journal Proper

Chapter No. 11 – Trial Balance

Chapter No. 12 – Bank Reconciliation Statement

Chapter No. 13 – Depreciation

Chapter No. 14 – Provisions and Reserves 

Chapter No. 15 – Bills of Exchange

Chapter No. 16 – Rectification of Errors 

Chapter No. 17 – Financial Statements – (Without Adjustments)

Chapter No. 18 – Financial Statements – (With Adjustments)

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