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Final accounts-03

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20 views

Final accounts-03

Uploaded by

rajindere saini
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Final accounts with adjustments

Illustration 9

Prepare trading account from the following ledger balances presented by P. Sen as on 31 st March, 2016.

1. Additional information:
2. Stock on 31st March, 2016 Rs. 20,000
3. Outstanding wages amounted to Rs. 4,000
4. Gas and fuel was paid in advance for Rs. 1,000

Illustration 10
From the following particulars presented by Thilak for the year ended 31 st March, 2017, prepare
profit and loss account.
Adjustments:

1. Outstanding salaries amounted to Rs. 4,000


2. Rent paid for 11 months
3. Interest due but not received amounted to Rs. 2,000
4. Prepaid insurance amounted to Rs. 2,000
5. Depreciate buildings by 10%
6. Further bad debts amounted to Rs. 3,000 and make a provision for bad debts @ 5% on sundry debtors
7. Commission received in advance amounted to Rs. 2,000

Solution
Working Note:
Debtors : 40,000
Less: Further bad debts : 2,000, 38,000
Provision for bad and doubtful debts at 5% : 38,000 x 5% = Rs. 1,900
Illustration 11

From the following balances as on 31st December, 2017, prepare profit and loss account.

Adjustments:
Rent accrued but not yet received Rs. 500
Fire insurance premium prepaid to the extent of Rs. 1,500
Provide manager’s commission at 10% on profits before charging such commission.

Working note:

Net profit = 55,500 – (18,000 + 12,000 + 8,000 + 2,500 + 5,000) = Rs. 10,000
Illustration 12

From the following balances obtained from the books of Siva, prepare trading and profit and loss account.

Adjustments:
Closing stock on, 31st December, 2016 was Rs. 4,500
Manager is entitled to receive commission @ 5% of net profit after providing such commission.
Solution

Working notes:
Illustration 13

From the following particulars, prepare the balance sheet of Madhu, for the year ended 31st March, 2018.

The following adjustments were made at the time of preparing final accounts:
1. Outstanding liabilities: Salaries Rs. 10,000; Wages Rs. 20,000; Interest on Bank overdraft Rs. 3,000 and
Interest on bank loan Rs. 6,000
2. Provide interest on capital @ 10% p.a.
3. Bad debts amounted to Rs. 10,000 and make a provision for bad debts @ 10% on sundry debtors.
4. Closing stock amounted to Rs. 1,20,000
5. Depreciate vehicles @ 10% p.a.
Net profit for the year amounted to Rs. 96,000 after considering all the above adjustments.

Solution
Illustration 14

The following balances were extracted from the books of Thomas as on 31st March, 2018
Additional information:

1. Closing stock Rs. 9,000


2. Provide depreciation @ 10% on machinery
3. Interest accrued on investment Rs. 2,000
4. Prepare trading account, profit and loss account and balance sheet.
Solution
Illustration 15
Given below are the balances extracted from the books of Nagarajan as on 31st March, 2016.

Prepare the trading and profit and loss account for the year ended 31st March, 2016 and the balance
sheet as on that date after adjusting the following:
1. Commission received in advance Rs. 400
2. Advertisement paid in advance Rs. 150
3. Wages outstanding Rs. 200
4. Closing stock on 31st March 2016, Rs. 2,100
Solution
Illustration 16
Consider the following balances extracted from the books of Jain as on 31st December, 2016.
Prepare the final accounts.
Adjustments

1. Salaries outstanding for December, 2016 amounted to Rs. 600


2. Provide depreciation on furniture @ 10% p.a.
3. Provide interest on capital for the year @ 5% p.a.
4. Stock on 31st December, 2016 Rs. 14,000
Solution
Illustration 17
Edward’s books show the following balances. Prepare his trading and profit and loss A/c for the
year ended 31st December, 2016 and a balance sheet on at that date.

Adjustments:

1. Closing stock was Rs. 1,30,000 on 31st December, 2016.


2. Create 5% provision for bad and doubtful debts on sundry debtors
3. Create provision at 2% for discount on debtors
4. Interest on loan due for 9 months.
Solution
Illustration 18

Following is the trial balance of Brijesh. Prepare final accounts for the year ended on 31st March, 2016.
Adjustments:

1. Stock on 31st March, 2016 was valued at Rs. 4,00,000.


2. Depreciate furniture @ 10% p.a.
3. Insurance of Rs. 60,000 was paid in advance
4. Commission receivable Rs. 50,000.
Solution
Illustration 19

Given below are the balances of Pandian as on 31st March, 2016.

Adjustments:

1. The stock value at the end of the accounting period was Rs. 5,000
2. Interest on capital at 6% is to be provided
3. Interest on drawing at 5% is to be provided
4. Write off bad debts amounting to Rs. 2,000
5. Create provision for bad and doubtful debts on sundry debtors @ 10% vi.
6. Prepare final accounts for the year ended 31st March, 2016.
Solution
Illustration 20

From the trial balance of Ajith and the adjustments given below, prepare trading and profit and
loss A/c for the year ended 31st March, 2016 and the balance sheet as on that date.
Adjustments:

1. Stock at the end of the year was Rs. 8,000


2. Further bad debts amounted to Rs. 100
3. Create 2% provision for doubtful debts on sundry debtors
4. Create 1% provision for discount on sundry debtors
Illustration 21

The following trial balance has been extracted from the books of Rajesh on 31st December, 2016.

The following adjustments are to be made:


1. Stock on 31st December, 2016 was Rs. 28,000
2. Unexpired insurance was Rs. 15,000
3. Provision for doubtful debts is to be maintained at 5% on sundry debtors.
4. Depreciate plant and machinery at 20%.

You are required to prepare trading and profit and loss account for the year ended 31st December,
2016 and a balance sheet as on that date.
FINAL ACCOUNTS SOLUTION
Format of Trading Account
(Trading Account) for the Year Ended...
Particulars Amount Particulars Amount
Rs. Rs.
Opening Stock ------ Sales ---------

Purchases ------ Less: Returns Inwards -------


Less: Returns Outwards ------ ------ Or, Sales Returns ------- -------
Wages ------ Closing Stock -------
Wages and Salaries ------ Gross Loss -------
Carriage Inwards ------ (transferred to Profit & Loss Account)

Freight Inwards ------

Gas & Fuel ------

Power & Water ------

Factory Rent & Rates ------

Manufacturing Expenses ------

Dock and Clearing Expenses ------

Import and Customs Duty ------

Royalties ------

Packaging Expenses ------


Gross Profit (Transferred to Profit
&
Loss Account) ------

‐‐‐‐‐‐ ‐‐‐‐‐‐

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