Page 195 - ISCDEBK-XI

20.28 Double Entry Book Keeping—ISC XI

BALANCE SHEET
as at 31st March, 2022
Liabilities ` Assets `

Capital: Fixed Assets:
Opening Balance 1,60,000 Plant and Machinery 1,10,000
Add: Net Profit 79,000 Less: Depreciation 11,000 99,000
Additional Capital 10,000 Investments 50,000
2,49,000 Current Assets:
Less: Drawings 10,000 2,39,000 Debtors 2,15,000
Loan 50,000 Less: Goods sent for approval 10,000 2,05,000
Current Liabilities: Bills Receivable 10,000
Creditors 2,02,000 Loan 20,000
Bills Payable 5,600 Closing Stock:
Bank Overdraft at Canara Bank 20,000 Stock in Hand 61,500
Manager’s Commission Outstanding 3,950 With Customers for Approval 8,000
In transit 10,500 80,000
Insurance Co. (Claim due) 6,000
Cash in Hand 5,000
Cash at Dena Bank 45,550
5,20,550 5,20,550

Notes:

1. Closing Stock is valued at (market price) i.e., ` 61,500 as per Prudence Concept that Closing Stock is valued
at cost or net realisable value (market price), whichever is lower.
2. Goods with customers (not yet approved as sales) are treated as unsold and included in closing stock at cost
` 8,000.

3. Received credit purchase invoice of ` 10,500 on 27th March, 2022 and recorded in the books but the goods
were not received till the end of accounting year. Hence, the same are treated as part of Closing Stock
(Goods-in-Transit).
4. Manager’s commission may be calculated as follows:
Let total commission payable be X

X = 5/100 (Profit before commission – commission)
X = 1/20 (` 82,950 – X)
20X = ` 82,950 – X

21X = ` 82,950
X = ` 82,950/21 = ` 3,950.