Page 186 - ISCDEBK-XI

Final Accounts—With Adjustments 20.19
Adjustments:

(i) Stock on 31st March, 2022 is valued at ` 30,000.
(ii) A new machine was installed on 1st April, 2021 for ` 3,000. No entry in this respect was
passed in the books. Wages ` 1,000 paid for installation of the machine were debited to
Wages Account.
(iii) Of the sundry debtors ` 200 are bad and to be written off. You are required to maintain a
provision for doubtful debts @ 5% on debtors and a provision for discount on debtors @ 2%.
(iv) Goods costing ` 2,000 were distributed as samples for publicity.
(v) Depreciate plant and machinery at 20% and furniture and fixtures at 10%.
(vi) Goods costing ` 1,000 were sent to a customer for ` 1,200 on 27th March, 2022 on sale or
return basis. This was recorded as actual sale.
Solution: TRADING AND PROFIT & LOSS ACCOUNT
Dr. for the year ended 31st March, 2022 Cr.
Particulars ` Particulars `
To Opening Stock 40,000 By Sales 2,64,000
To Purchases 1,70,000 Less: Goods Sent on
Less: Samples 2,000 1,68,000 Approval Basis 1,200 2,62,800
To Carriage Inwards 400 By Closing Stock 30,000
To Wages 30,000 Add: Stock with
Less: Installation charges 1,000 29,000 Customer at Cost 1,000 31,000
To Gross Profit c/d 56,400
2,93,800 2,93,800
To Salaries 14,800 By Gross Profit b/d 56,400
To Postage and Fax 3,000 By Discount Received 1,200
To Rent and Taxes 7,200
To Insurance 1,600
To Tranvelling Expenses 1,000
To Sundry Expenses 600
To Interest on Loan 300
Add: Accrued Interest 300 600
To Advertisement 2,000
(Samples)
To Bad Debts 800
Add: Further Bad Debts 200
1,000
Add: New Provision for
Doubtful Debts 950 1,950
To Provision for discount on Debtors 361
To Depreciation on:
Plant and Machinery:
Old 12,000
New 800
Furniture 800
Patents 4,000 17,600
To Net Profit transferred to Capital A/c 6,889
57,600 57,600