Page 174 - ISCDEBK-XI

Final Accounts—With Adjustments 20.7
Adjustments:
(i) Value of Stock as on 31st March, 2022 is ` 39,300. This includes goods returned by
customers on 31st March, 2022 to the value of ` 1,500 of which no entry was passed.
(ii) Purchases include furniture purchased on 1st January, 2022 for ` 1,000.
(iii) Depreciation should be provided on furniture @ 13% p.a.
(iv) The Loan Account from Dena Bank in the books of Saurab was as follows:
2022 ` 2021 `
Mar. 31 To Balance c/d 10,000 April 1 By Balance b/d 5,000
2022
Mar. 31 By Bank A/c 5,000
10,000 10,000
(v) Sundry Debtors included ` 2,000 due from Rumant and Sundry Creditors included
` 1,000 due to him.
(vi) Interest paid included ` 300 paid to Dena Bank.
(vii) Interest received represents ` 100 from the Sundry Debtors and the balance on investments
and deposits.
(viii) Provide for interest payable to Dena Bank for interest receivable on investments and deposits.
(ix) Provide Provision for Doubtful Debts at 5% on the balance under “Sundry Debtors”. No
provision need to be created for the deposits. [CA (Foundation) Nov., 1994, Modified]

Solution: TRADING AND PROFIT & LOSS ACCOUNT
Dr. for the year ended 31st March, 2022 Cr.
Particulars ` Particulars `

To Opening Stock 23,400 By Sales 1,44,800
To Purchases 1,21,550 Less: Sales Return
Less: Purchase of Furniture 1,000 (` 4,300 + ` 1,500) 5,800 1,39,000
1,20,550 By Closing Stock 39,300
Less: Purchases Return 2,900 1,17,650
To Carriage Inwards 9,300
To Gross Profit c/d 27,950
1,78,300 1,78,300
To Rent 2,850 By Gross Profit b/d 27,950
To Salaries Paid 4,650 By Interest Received 725
To Interest Paid 450 Add: Interest Accrued 1,000 1,725
Add: Outstanding 300 750 By Discount Received 1,495
To Printing and Stationery 1,700
To Advertisements 5,600
To Discount Allowed 3,770
To General Expenses 1,960
To Audit Fees 350
To Fire Insurance Premium 300
To Travelling Expenses 1,165
To Postage and Telegrams 435
To Depreciation on Furniture @ 13% p.a.:
on ` 900 for 12 months 117
on ` 1,000 for 3 months 33 150
To Provision for Doubtful Debts 475
To Net Profit transferred to Capital A/c 7,015
31,170 31,170