Page 188 - ISCDEBK-XI

Final Accounts—With Adjustments 20.21
Additional Information:
(i) Value of Closing Stock on 31st March, 2022 was ` 27,300.
(ii) Fire occurred on 23rd March, 2022 and general goods of ` 10,000 were destroyed. The
insurance company accepted claim for ` 6,000 only and paid the claim money on 10th
April, 2022.
(iii) Bad debts amounting to ` 400 are to be written off. Provision for doubtful debts is to be
made at 5% and for discount at 2% on debtors.
(iv) Received ` 6,000 worth of goods on 27th March, 2022 but the Invoice of purchases was
not recorded in Purchases Book.
(v) Ajit took away goods worth ` 2,000 for personal use but no record was made thereof.
(vi) Charge depreciation at 2% on Land and Building, 20% on plant and machinery and 5%
on furniture.
(vii) Insurance prepaid amounts to ` 200.

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

To Opening Stock 21,300 By Sales 1,40,000
To Purchases 80,000 Less: Returns Inward 5,000 1,35,000
Less: Returns Outward 6,000 By Loss of Stock by Fire 10,000
74,000 By Closing Stock 27,300
Add: Omitted Purchases 6,000
80,000
Less: Drawings 2,000 78,000
To Carriage 10,000
To Gross Profit c/d 63,000
1,72,300 1,72,300
To Sundry Expenses 600 By Gross Profit b/d 63,000
To Printing and Stationery 500 By Provision for Discount on Debtors 380
To Insurance Expenses 1,000 Less: Provision Required 342 38
Less: Prepaid 200 800
To Bad Debts 400
Add: Additional 400
Add: New Provision 5/100 of
(` 18,400 – ` 400) 900
1,700
Less: Old Provision 1,000 700
To Salaries and Wages 18,500
To Trade Expenses 800
To Loss of Stock by fire 4,000
To Interest on Loan 1,350
(` 30,000 × 6/100 × 9/12)
To Depreciation:
Land and Building 1,800
Plant and Machinery 4,000
Furniture 250 6,050
To Net Profit transferred to Capital A/c 29,738
63,038 63,038