Following is the Trial Balance of Mr. Gautam as at 31st March, 2023: Goodwill ₹ 30,000 Land & Buildings ₹ 60,000
Following is the Trial Balance of Mr. Gautam as at 31st March, 2023:
You are required to prepare Final Accounts after taking into account the following adjustments:
(a) Closing Stock on 31st March, 2023 was ₹ 60,000.
(b) Depreciate Plant and Machinery at 5%, Loose Tools at 15% and Furniture and fixtures at 5%.
(c) Provide 21/2% for discount on Sundry Debtors and also provide 5% for Bad and Doubtful Debts on Sundry Debtors.
(d) Only three quarter’s rent has been paid, the last quarter’s rent being outstanding.
(e) Interest earned but not received ₹ 600.
(f) Write off 1/4th of Advertisement expenses.
[Ans. Gross Profit ₹ 57,850; Net P
| Particulars | ₹ | Particulars | ₹ |
| Goodwill | 30,000 | Purchase Returns | 2,650 |
| Land & Buildings | 60,000 | Capital A/c | 2,03,000 |
| Plant & Machinery | 40,000 | Bills Payable | 13,800 |
| Loose Tools | 3,000 | Sundry Creditors | 30,000 |
| Bills Receivable | 2,000 | Sales | 1,15,000 |
| Opening Stock | 40,000 | ||
| Purchases | 51,000 | ||
| Wages | 20,000 | ||
| Carriage Inwards | 1,200 | ||
| Coal & Gas | 5,600 | ||
| Salaries | 4,000 | ||
| Rent | 2,700 | ||
| Discount allowed | 1,500 | ||
| Cash at Bank | 25,000 | ||
| Cash in Hand | 1,400 | ||
| Sundry Debtors | 45,000 | ||
| Repairs | 1,800 | ||
| Printing & Stationery | 600 | ||
| Bad-debts | 1,200 | ||
| Advertisements | 3,500 | ||
| Furniture and Fixtures | 1,200 | ||
| General Expenses | 250 | ||
| Investments | 5,000 | ||
| Drawings | 15,000 | ||
| Carriage Outwards | 1,500 | ||
| Sales Returns | 2,000 | ||
| 3,64,450 | 3,64,450 |
Anurag Pathak Answered question
Solution:-
Hints:
(1) Rent shown in the Trial Balance is for 3 quarters or for 9 months. As such Rent Outstanding for the remaining 3 months will be 2,700/9 x 3 = ₹ 900.
(2) First, provision for Doubtful Debts will be created on debtors and then provision for discount will be calculated on debtors remaining after deducting the provision for Doubtful Debts.
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