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Final Accounts—With Adjustments 20.31
Illustration 15.
Following is the Trial Balance of Mahesh as on 31st March, 2022. Prepare Trading and
Profit & Loss Account for the year ending on 31st March, 2022 and a Balance Sheet as at
31st March, 2022 from it:
Debit Balances ` Credit Balances `
Opening Stock 75,000 Sales 6,30,000
Machinery (Purchased on 1.7.2021) 1,90,000 10% Bank Loan (taken on 1st July, 2021) 50,000
Furniture (Purchased on 1.7.2021) 1,00,000 Capital Account 5,19,000
Debtors 2,07,000 Creditors 90,000
Bills Receivable 10,000 Bills Payable 15,600
12% Investment (Purchased on 1.7.2021) 50,000 Purchases Return 5,000
Cash in Hand 10,000 Discount Received 1,000
Cash at Bank 5,000 Commission 3,750
Purchases 5,25,000 Interest Received 3,000
Sales Return 10,000 Bad Debts Recovered 2,500
Wages 18,500
Carriage Inwards 500
Carriage Outwards 350
Rent 3,000
Insurance 3,600
Salaries 11,200
Discount Allowed 2,000
Bad Debts 5,000
Interest on Bank Loan 2,500
Selling and Distribution Expenes 15,800
Income Tax Paid 1,000
Drawings 10,650
Loose Tools 3,750
Building 60,000
13,19,850 13,19,850
Additional Information:
(i) Rent is payable at the rate of ` 300 per month. Insurance Premium was paid for the year
ending on 30th June, 2022.
(ii) Remuneration of ` 2,000 paid to Ashok, a temporary employee, stands debited to his
Personal Account.
One-third of the commission received is in respect of work to be done next year.
(iii) Provide depreciation at 10% p.a. on Machinery and 10% on Furniture. Depreciate
Building by 5%.
(iv) Sundry Debtors include ` 5,000 which had become bad. Create provision for doubtful
debts @ 10% and create a provision for discount on debtors @ 2%.
(v) A fire occurred on 10th March, 2022 in the godown and stock of ` 10,000 was destroyed,
it was fully insured but the insurance company admitted the claim to the extent of
60% only.
(vi) Goods costing ` 20,000 were taken by Mahesh for his personal use but no entry has been
made in the books of account.
(vii) Goods costing ` 30,000 were distributed as samples but no entry has been made in the
books of account.
(viii) Manager is entitled to a commission of 10% on Net Profit before charging his commission.