Question No 40 Chapter No 18 - USHA Publication 11 Class

Question No 40 Chapter No 18

Table of Contents

The solution of Question No 40 Chapter No 18:-

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

Mutual indebtedness

40. The following trial balance was extracted from the books of Ram Pratap as of 31st March 2018

Debit balances	Rs	Debit balances	Rs
Drawings account	7,000	Cash at bank	12,400
Purchases	82,210	Cash in hand	2,210
Sale return	1,820	Office furniture	3,500
Stock on April 1, 2017	11m460	Traveller’s salaries	9,870
Salaries	6,280	Bad debts	1,000
Wages	8,560	Carriage outwards	3,240
Leasehold premises	25,000	Credit balance
Rent rates & Insurance	6,940	Capital account	90,000
Carriage inwards	2,310	Purchases return	4,240
Office expenses	9,520	Sales	1,49,840
Plant & machinery	24,000	Bad debts provision on April 1, 2017	4,240
Light & water	7,950	Discount	180
Bills receivable	1,240	Sundry creditor	16,980
Sundry debtors	38,970

You are required to prepare a trading ad Profit & loss account for the year ending 31st March 2018 and a balance sheet as on that date after taking into account the following

Depreciation is to be written off as follows: leasehold premises 5% plant & machinery 10%
Write off further Rs 500 as bad debts and make the provision for doubtful debts equal to Rs 5,000
The value of stock on 31st March 2018 was Rs 14,920
Three days wages(amounting to Rs 570) have become due but not paid
Unexpired premium amounting to Rs 680 is to be carried due not paid

The solution of Question No 40 Chapter No 18:-

Trading A/c
Particular		Amount	Particular		Amount
To Opening Stock A/c		11,460	By Sale A/c	1,49,840
To Purchases A/c	82,210		Less: return	1,820	1,48,020
Less: return	4,240	77,970
To Wages A/c	8,560		By Closing Stock A/c		14,920
Add: outstanding	570	952
To carriage inwards A/c		2,310
To Light & power A/c		7,950
To Gross Profit A/c		54,120
		1,62,940			1,62,940

Profit/Loss A/c
Particular		Amount	Particular	Amount
To Salaries		6,280	By Gross Profit A/c	54,120
To rent, rates & insurance.	6,940		By Discount A/c	180
Less: unexpired insurance	680	6,260
To office expenses		9,520
To Bad debts w/off during the year	1,000
Add: w/off now	500
Add: new provision	1,000
Less: old provision	500	2,260
To office expenses		9,520
To traveller salaries		9,870
To carriage outwards		3,240
To dep. On leasehold premises		1,250
To dep. On plant & machinery		2,400
To Net profit A/c		13,220
		54,300		54,300

Balance Sheet
Labilities		Amount	Assets		Amount
Capital A/c	90,000		Debtors	38,970
Add: Net Profit	13,220		Less: bad debts	500
Less: Drawing	7,000	96,220	Less: provision	5,000	33,470
Creditor		16,980	Cash in hand		2,120
Outstanding wages		570	Cash at bank		12,400
			Bill receivable		1,240
			Plant & machinery	24,000
			Less: depreciation	2,400	21,600
			Leasehold premises	25,000
			Less: depreciation	1,250	23,750
			Closing stock		14,920
			Office furniture		3,500
			Unexpired premium		680
		1,13,770			1,13,770