Page 208 - ISCDEBK-XI

Final Accounts—With Adjustments 20.41
(d) Bank intimation of customer’s cheque of ` 10,000 being dishonoured is not recorded
in the books.
(e) Travelling expenses of ` 5,000 paid to sales person was wrongly debited to his Personal
Account and was included in debtors.
(f) Amount of ` 6,000 received from Ronit was credited to his account and was included
in creditors. This amount was written off as bad debt in previous year.
(g) Drawings included an amount of ` 2,000 being amount drawn in cash. It was used by
Mohan for purchase of stationery used in business.
Solution:
Dr. TRADING AND PROFIT & LOSS ACCOUNT for the year ended 31st March, 2022 Cr.
Particulars ` Particulars `
To Opening Stock 68,000 By Sales 11,00,000
To Purchases 6,60,000 Less: Sales Return 80,000 10,20,000
Less: Purchases Return 15,000 6,45,000 By Closing Stock 70,000
To Carriage Inwards 30,000
To Gross Profit c/d 3,47,000
10,90,000 10,90,000
To General Expenses 34,000 By Gross Profit b/d 3,47,000
To Advertising 35,000 By Rent Received 3,000
To Rent and Insurance 30,000 By Discount Received 5,000
To Salaries 90,000 By Bad Debts Recovered 6,000
To Carriage Outwards 25,000 By Provision for Doubtful Debts (Written Back) 2,000
To Interest on Loan 3,000 (` 7,000 – ` 5,000)
To Stationery 2,000
To Travelling Expenses 5,000
To Depreciation on Motor Vehicles 20,000
To Net Profit transferred to Capital A/c 1,19,000
3,63,000 3,63,000

BALANCE SHEET as at 31st March, 2022
Liabilities ` Assets `
Capital 3,00,000 Debtors 2,00,000
Less: Drawings (` 50,000 – ` 2,000) 48,000 Less: Travelling Expenses
2,52,000 to Sales Person 5,000
Add: Net Profit 1,19,000 3,71,000 1,95,000
Loan 95,000 Add: Customer’s cheque Dishonoured 10,000 2,05,000
Creditors 1,00,000 Bank (` 35,000 – ` 10,000) 25,000
Less: Amount of Bad Debts Recovered 6,000 94,000 Cash 20,000
Bills Payable 20,000 Motor Vehicles 1,00,000
Less: Depreciation 20,000 80,000
Land and Building 1,20,000
Bills Receivable 60,000
Closing Stock 70,000
5,80,000 5,80,000