Question No 29 Chapter No 18 – USHA Publication 11 Class

Question No 29 Chapter No 18

Question No 29 Chapter No 18

Bad debts and provision

29.From the following trial balance extracted from the books of Sharma & Sons, prepare trading and profit & loss account of the year ended 31st March 2018 and a balance sheet as on date.

Ledger balances (Dr.)Rs (Cr.)Rs
Purchase & Sale 25,000 50,500
Debtors & Creditor 10,000 4,000
Drawings 5,500
Sales return & purchases return 300 250
Discount 760
Insurance premium 300
Cash  2,800
Stock(1st April 2017) 1,400
Bad debts 500
Bad debts reserve 1,540
Wages 2,800
Carriage 600
Machinery 22,000
Furniture 4,000
Salaries 3,000
Bank charges 500
Bill receivable & bills payable 5,500 5,000
Trade expenses 1,330
Capital account 29,000
Building 4,000
  90,290 90,290

Adjustments:

  1. Depreciation building @5% and Machinery@10%
  2. Trade expenses of Rs 220 and wages of Rs 200 have not yet been paid
  3. Allow interest on capital at 10% p.a.
  4. Make provision for doubtful debts at 12%
  5. Stock on 31st March 2018 was Rs 10,000
  6. Prepaid insurance premium is Rs 50.

The solution of Question No 29 Chapter No 18:-

 

Trading A/c
Particular
Amount Particular
Amount
To Opening Stock A/c   1,400 By Sale A/c 50,500  
To Purchases A/c 25,000   Less: Return 300 50,200
Less: return 250 24,250 By Closing Stock   10,000
To Wages A/c 2,800        
Add: outstanding wages 200 2,600      
To Carriage A/c   600      
To Gross Profit A/c   30,450      
    60,200     60,200

 

Profit/Loss A/c
Particular
Amount Particular
Amount
To Discount A/c   760 By Gross Profit A/c   30,450
By Insurance A/c 300        
Less: prepaid 50 250      
By Trade Exp. A/c 1,330        
Add: outstanding 220 1,550      
To Dep. On building   160      
To Dep. On Machinery   200      
To Provision for doubtful debts          
Bad debts 500        
Add: new provision 1,200        
Less: old Provision 1,540 160      
To Interest on capital   2,000      
To Salaries   3,000      
To Bank changes   500      
To Net profit A/c   18,930      
    30,450     30,450

 

Balance Sheet
Labilities
Amount Assets
Amount
Capital A/c 29,000   Debtors 10,000  
Add: Net Profit 18,930   Less: Provision for doubtful debts 1,200 8,800
Add: Interest on capital 2,900   Cash in hand   2,800
Less: Drawing 5,500 45,330 Bill Receivable   5,500
Creditor   4,000 Machinery 22,000  
Bill payable   5,000 Less: depreciation 2,200 19,800
Outstanding Trade exp.   220 Prepaid Insurance   50
Outstanding Wages   200 Furniture   4,000
      Building 4,000  
      Less: depreciation 200 3,800
      Closing Stock   10,000
    54,750     54,750

 

 

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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