Page 199 - ISCDEBK-XI

20.32 Double Entry Book Keeping—ISC XI

(ix) Wages include a sum of ` 4,000 spent on the erection of a cycle shed for employees and
visitors. Wages ` 10,000 paid for erection of machinery have been debited to Wages Account.
(x) Stock on 31st March, 2022 was valued at ` 93,600. Loose tools are valued at ` 1,250.
Solution: TRADING AND PROFIT & LOSS ACCOUNT
Dr. for the year ended 31st March, 2022 Cr.
Particulars ` Particulars `
To Opening Stock 75,000 By Sales 6,30,000
To Purchases 5,25,000 Less: Sales Return 10,000 6,20,000
Less: Purchases Return 5,000 By Closing Stock 93,600
5,20,000
Less: Loss of Stock by Fire 10,000
5,10,000
Less: Goods taken for
Personal Use 20,000
4,90,000
Less: Goods distributed
as samples 30,000 4,60,000
To Wages 18,500
Less: Cost of Erection of a Cycle
Shed (Building) 4,000
14,500
For Erection of Machinery 10,000 4,500
To Carriage Inwards 500
To Gross Profit c/d 1,73,600
7,13,600 7,13,600
To Carriage Outwards 350
To Rent Paid 3,000 By Gross Pofit b/d 1,73,600
Add: Outstanding 600 3,600 By Discount Received 1,000
To Insurance Paid 3,600 By Bad Debts Recovered 2,500
Less: Prepaid 900 2,700 By Interest Received 3,000
To Salaries 11,200 Add: Accrued Interest 1,500 4,500
Add: Salary to Ashok 2,000 13,200 [(` 50,000 × 12/100 × 9/12)
To Discount Allowed 2,000 – ` 3,000]
To Bad Debts 5,000 By Commission 3,750
Add: Further Bad Debts 5,000 10,000 Less: Received in Advance 1,250 2,500
To Interest on Bank Loan Paid 2,500
Add: Outstanding 1,250 3,750
To Selling and Distribution Expenses 15,800
To Provision for Doubtful Debts 20,000
To Provision for Discount on Debtors 3,600
To Depreciation on:
Machinery 15,000
(` 2,00,000 × 10/100 × 9/12)
Furniture (` 1,00,000 × 10/100) 10,000
Building (` 64,000 × 5/100) 3,200 28,200
To Loss on Revaluation of Loose Tools 2,500
To Loss of Stock by Fire (` 10,000 – ` 6,000) 4,000
To Sales Promotion Expenses (Samples) 30,000
To Manager’s Commission (10/100 × ` 44,400) 4,440
To Net Profit transferred to Capital A/c 39,960
1,84,100 1,84,100