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 –

1. manager’s commission is 10% of net profit before charring such commission
2. 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 66,0000 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 66,0000 110 = 6,000

 Balance Sheet Labilities Amount Assets Amount Manager commission due 6,000

Final Accounts: Definition and Explanation

Profit and Loss Account: Meaning, Format & Examples

Balance Sheet: Meaning, Format & Examples

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## 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)