Question No 36 Chapter No 18
Mutual indebtedness
36.The following balances have been extracted from the books of Miss Mehak as on 31st March 2018
| Ledger Account | (Dr. Rs) | (Cr. Rs) |
| Trading A/c Balance | – | 80,000 |
| Office expenses | 6,000 | – |
| Selling expenses | 8,000 | – |
Adjustments
- manager’s commission is 10% of net profit before charring such commission
- Manager’s commission is 10% of net profit after charging such commission
Calculate the amount of the manager’s commission under both the alternative and also show how to commission payable will be shown in the balance sheet
The solution of Question No 36 Chapter No 18:-
Calculation of net profit before the commission
| Gross Profit | = | 80,000 |
| Less: office expenses | = | 6,000 |
| Less: selling expenses | = | 8,000 |
| Net profit before commission | = | 66,000 |
(i) manager’s commission is 10% of net profit before charring such commission
| = | 10 | X | 66,000 | |
| 100 | ||||
| = | 6,600 |
| Balance Sheet | |||||
| Labilities |
Amount | Assets |
Amount | ||
| Manager commission due | 6,600 | ||||
(ii) manager’s commission is 10% of net profit after charring such commission
| = | 10 | X | 66,000 | |
| 110 | ||||
| = | 6,000 |
| Balance Sheet | |||||
| Labilities |
Amount | Assets |
Amount | ||
| Manager commission due | 6,000 | ||||
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Usha Publication – Elements of Book-Keeping PSEB (Class 11) – Solution
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Chapter No. 2 – Theory Base of Accounting
Chapter No. 3 – Origin of Transactions
Chapter No. 4 – Vouchers and transactions
Chapter No. 6 – Accounting for Goods and Services Tax(GST)
Chapter No. 9 – Other Subsidiary Books
Chapter No. 10 – Journal Proper
Chapter No. 11 – Trial Balance
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Chapter No. 12 – Bank Reconciliation Statement
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)