Question No 39 Chapter No 18 - USHA Publication 11 Class

Question No 39 Chapter No 18

Table of Contents

The solution of Question No 39 Chapter No 18:-

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

Mutual indebtedness

39. From the following figures extracted from the books of Mr. Kissinger for the year ending 31stmarch 2019

Debit balances	Rs	Debit balances	Rs
Rates & taxes	700	Advertising	10,716
Unexpired rates & taxes	70	Salaries	3,862
General expenses	1,766	Sale return	683
Purchases	33,437	Cash in hand	100
Carriage inwards	952	Insurance	326
Wages	9,675	Credit balance
Depreciation on furniture	60	Kissinger’s capital	30,000
Furniture & fitting	1,140	General reserve	500
Opening stock	7,834	Loan (secured)6%	5,000
Machinery	4,820	Sales	61,725
Land & building	12,000	Creditor	10,733
Debtors	17,860	Bank overdraft	543
Drawings	2,500

You are required to prepare a trading and profit & loss account fir the year ended 31st March 2019 and a balance sheet as at that date taking account the following matters:

Closing stock was valued at RS 8,931
Reserve for doubtful debts is required at 5% of sundry debtors
Depreciation is to be provided on machinery 10% p.a.
Wages were paid on the proprietor’s account Rs 375 and no entry was made
Sale includes the sale of furniture on 31st Match 2019 for the Rs 700 the book value of furniture sold on the date was Rs 750
Advertising is to be written off over three year

The solution of Question No 39 Chapter No 18:-

Trading A/c
Particular		Amount	Particular		Amount
To Opening Stock A/c		7,834`	By Sale A/c	61,725
To Purchases A/c		33,437	Less: return	683
To Wages A/c	9,675		Less: furniture sale	700	60,342
Less: personal payment	375	9,300	By Closing Stock A/c		8,931
To Power Expenses A/c		952
To Gross Profit A/c		17,750
		69,273			69,273

Profit/Loss A/c
Particular		Amount	Particular	Amount
To rates & taxes		700	By Gross Profit A/c	17,750
To General exp.		1,766
To Dep. On furniture		60
To Dep. On machinery		482
To Advertisement	10,716
Less:2/3 prepaid	7,144	3,572
To salaries		3,862
To Insurance		326
To interest on loan		300
To reserve for doubtful debts		893
To loss on sale of furniture		50

To Net profit A/c		5,739
		17,750		17,750

Balance Sheet
Labilities		Amount	Assets		Amount
Capital A/c	30,000		Debtors	17,860
Add: Net Profit	5,739		Less: provision	893	16,967
Less: Drawing	2,500		Cash in hand		100
Less: personal wages	375	32,864	Closing stock		8,931
Creditor		10,733	Land & building		12,000
Bank overdraft		543	Machinery	4,820
Loan		5,000	Less: depreciation	482
General reserve		500	Furniture & fitting	1,140
Outstanding interest on loan		300	Less: sale of furniture	750	340
			Prepaid advertising		7,144
			Unexpired rates & taxes		8,406
		49,950			49,950