Question No 39 Chapter No 18 – USHA Publication 11 Class

Question No 39 Chapter No 18

Question No 39 Chapter No 18

Mutual indebtedness

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

Debit balancesRsDebit balancesRs
Rates & taxes700Advertising10,716
Unexpired rates & taxes70Salaries3,862
General expenses1,766Sale return683
Purchases33,437Cash in hand 100
Carriage inwards952Insurance326
Wages9,675Credit balance 
Depreciation on furniture60Kissinger’s capital30,000
Furniture & fitting1,140General reserve500
Opening stock7,834Loan (secured)6%5,000
Land & building12,000Creditor10,733
Debtors17,860Bank overdraft543

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:

  1. Closing stock was valued at RS 8,931
  2. Reserve for doubtful debts is required at 5% of sundry debtors
  3. Depreciation is to be provided on machinery 10% p.a.
  4. Wages were paid on the proprietor’s account Rs 375 and no entry was made
  5. 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
  6. Advertising is to be written off over three year


The solution of Question No 39 Chapter No 18:-

Trading A/c
To Opening Stock A/c 7,834`By Sale A/c61,725 
To Purchases A/c 33,437Less: return683 
To Wages A/c9,675 Less: furniture sale70060,342
Less: personal payment3759,300By 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
To rates & taxes 700By Gross Profit A/c 17,750
To General exp. 1,766   
To Dep. On furniture 60   
To Dep. On machinery 482   
To Advertisement10,716    
Less:2/3 prepaid7,1443,572   
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
Capital A/c30,000 Debtors 17,860 
Add: Net Profit5,739 Less: provision89316,967
Less: Drawing2,500 Cash in hand 100
Less: personal wages37532,864Closing stock 8,931
Creditor 10,733Land & building 12,000
Bank overdraft 543Machinery4,820 
Loan 5,000Less: depreciation482 
General reserve 500Furniture & fitting1,140 
Outstanding interest on loan 300Less: sale of furniture750340
   Prepaid advertising 7,144
   Unexpired rates & taxes 8,406
  49,950  49,950


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)

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