Page 185 - ISCDEBK-XI

20.18 Double Entry Book Keeping—ISC XI

Working Notes:
1. Accidental Insurance and rental value of building occupied by workers are part of wages.
2. Calculation of depreciation on furniture and loss on sale of furniture: `
(i) Furniture sold: Book Value at the beginning 300
Less: Depreciation for 6 months (` 300 × 20/100 × 6/12) 30
Book Value of the Furniture at the time of Sale 270
Less: Selling Price 200
Loss on Sale of Furniture 70
(ii) Furniture in Hand [` 8,000 – ` 300 (Book Value of Furniture Sold)] 7,700
Depreciation 20% of ` 7,700 1,540
Add: 6 months depreciation on furniture sold [WN 2 (i)] 30
Total Depreciation on Furniture 1,570
3. Calculation of Manager’s Commission:
Net Profit before dividend income
= ` (38,650 + 600 + 500 – 150 – 500 – 250 – 600 – 100 – 70 – 3,070) = ` 35,010
Manager’s commission = ` 35,010 × 20/120 = ` 5,835.
Illustration 9.
From the following Trial Balance of Sachin as on 31st March, 2022, prepare Trading and Profit
& Loss Account for the year ended 31st March, 2022 and a Balance Sheet as on that date, after
making the necessary adjustments as given hereunder:
Particulars Dr. (`) Cr. (`)
Sachin’s Capital Account ............................................................................................................................................ ... 1,60,000
Sachin’s Drawings ......................................................................................................................................................... 24,000 ...
Furniture and Fixtures................................................................................................................................................. 8,000 ...
Plant and Machinery ................................................................................................................................................... 60,000 ...
Patents (Expected Life 10 years from 01.04.2021) ............................................................................................ 40,000 ...
Stock on 01.04.2021 .................................................................................................................................................... 40,000 ...
Purchases ........................................................................................................................................................................ 1,70,000 ...
Salaries ............................................................................................................................................................................. 14,800 ...
Wages ............................................................................................................................................................................... 30,000 ...
Sundry Debtors ............................................................................................................................................................. 20,400 ...
Sales .................................................................................................................................................................................. ... 2,64,000
Cash in Hand .................................................................................................................................................................. 13,250 ...
Land................................................................................................................................................................................... 28,350 ...
Loan from Kapil (@ 6% on 01.10.2021) ................................................................................................................. ... 20,000
Postage and Fax ............................................................................................................................................................ 3,000 ...
Rent ................................................................................................................................................................................... 7,200 ...
Bad Debts ........................................................................................................................................................................ 800 ...
Sundry Creditors ........................................................................................................................................................... ... 24,000
Discount ........................................................................................................................................................................... ... 1,200
Carriage Inwards ........................................................................................................................................................... 400 ...
Interest on Loan ............................................................................................................................................................ 300 ...
Insurance ......................................................................................................................................................................... 1,600 ...
Travelling Expenses ..................................................................................................................................................... 1,000 ...
Sundry Expenses .......................................................................................................................................................... 600 ...
Cash at Bank ................................................................................................................................................................... 20,500 ...
Bank Overdraft .............................................................................................................................................................. ... 15,000
Total 4,84,200 4,84,200