Page 149 - debkxi

Adjustments in Preparation of Financial Statements 19.9

To Salaries 13,500 By Gross Profit b/d 68,000
Add: Outstanding 600 14,100 By Interest on Investment 800
To Rent and Insurance 7,750 By Cash Discount 4,500
Add: Outstanding Rent 500
8,250
Less: Prepaid Ins. on 31.3.2023 650
7,600
Add: Prepaid Ins. on 1.4.2022 625 8,225
To Bad Debts 600
Add: Further Bad Debts 500
Provision (New) 1,850
2,950
Less: Provision (Old) 2,500 450
To Provision for Discount on Debtors 703
To Depreciation:
on Plant and Machinery 5,500
on Furniture 1,050 6,550
To Net Profit transferred to Capital A/c 43,272
73,300 73,300
* Depreciation on Plant = ` 5,000 (i.e., ` 50,000 × 10/100) + ` 500 (i.e., ` 10,000 × 10/100 × 6/12) = ` 5,500.

BALANCE SHEET
as at 31st March, 2024
Liabilities ` Assets `
Current Liabilities Current Assets
Creditors 18,750 Cash 14,500
Supplier (Plant) 10,000 Accrued Interest 800
Bank Overdraft 24,400 Stock 20,500
Outstanding Expenses: Wages 900 Prepaid Insurance 650
Rent 500 Debtors 37,500
Salaries 600 2,000 Less: Bad Debts 500
Capital 37,000
Opening Balance 71,175 Less: Provision for Doubtful Debts 1,850
Add: Net Profit 43,272 35,150
1,14,447 Less: Provision for Discount on Debtors 703 34,447
Less: Drawings 2,750 Investment 10,000
1,11,697 Fixed Assets
Less: Income Tax (Note) 22,000 89,697 Furniture 10,500
Less: Depreciation 1,050 9,450
Plant and Machinery 60,000
(` 50,000 + ` 10,000)
Less: Depreciation 5,500 54,500
1,44,847 1,44,847

Note: Income Tax to be taken as drawings.