Page 204 - ISCDEBK-XI

Final Accounts—With Adjustments 20.37
To Printing and Stationery 2,700 By Gross Profit b/d 1,52,200
To Audit fees 1,500 By Commission and Discounts 2,750
To Commission 6,000
To Legal charges 5,300
To Bank interest 7,200
To Carriage Outwards 6,500
To Advertisement expenses 15,000
To Other expenses (` 45,000 + ` 3,500) 48,500
To Depreciation 45,000
To Goods Lost by Fire (` 5,000 – ` 3,000) 2,000
To Net Profit transferred to Capital A/c 15,250
1,54,950 1,54,950

BALANCE SHEET
as at 31st March, 2022
Liabilities ` Assets `
Capital Fixed Assets
Balance as on 1st April, 2021 3,30,000 Cost 4,50,000
Add: Net Profit 15,250 Less: Depreciation 45,000 4,05,000
3,45,250 Current Assets
Less: Drawings (` 24,450 + ` 4,000) 28,450 3,16,800 Stock-in-Trade (Cost ` 65,000) (Note 1) 60,000
General Reserve 58,000 Debtors 85,000
Non-current Liabilities Insurance claim 3,000
Bank Loan 1,50,000 Legal charges (Advance) 5,300
Current Liabilities Cash and Bank 19,000
Bank Overdraft 7,500
Creditors 42,000
Outstanding Expenses: Advertisement (Note 2) 3,000
5,77,300 5,77,300

Notes:
1. As per Prudence Concept or Convention of Conservatism, Closing Stock is valued at cost or net realisable
value (market value), whichever is less. Thus, Closing Stock is taken at net realisable value (market value), it
being lower than cost price.
2. Outstanding Advertisement Expenses of ` 3,000 appears in Trial Balance. It means that adjustment
entry for Outstanding Advertisement Expenses has already been passed in the books of account. At
the time of preparation of Final Accounts, Outstanding Advertisement Expenses will be shown as liability
in the Balance Sheet.