# Calculate the Following

1. Undervaluation of Closing Stock by 10%. Closing Stock was ` 30,000 find out the value of Closing Stock

Solution :

Stock are undervalued by 10%

∴ Revised Value = Book value ÷ (100 – % of Undervaluation) x 100

= 30,000 ÷ (100 – 10) x 100

= Rs 33,333

∴ Valuation of Closing Stock = Rs 33,333.

2. Calculate 12.5% P. A. depreciation on Furniture –

a) on Rs 220,000 for 1 year

b) on Rs 10,000 for 6 months

Solution :

Depreciation = Amount of Asset x Period x Depreciation Percentage

(a) = 2,20,000 x 1 x 12.5%

= Rs 27,500

(b) = 10,000 x (6/12) x 12.5%

= Rs 625

3. Insurance Premium is paid for the year ending 1st September 2019 Amounted to Rs 1,500. Calculate prepaid insurance assuming that the year ending is 31st March 2019.

Solution :

Insurance is Pre-Paid for 5 Month i.e From 1st April to 31st August.

∴ Prepaid Insurance = (15,000/12) x 5 = Rs 625

Thus Prepaid Insurance Premium Amount = Rs 625.

4. Find out Gross profit / Gross Loss Purchases Rs 30,000, Sales Rs 15,000, Carriage Inward Rs 2,400, Opening Stock Rs 10,000, Purchase Returns Rs 1,000, Closing Stock Rs 36,000.

Solution :

Gross Profit/Gross Loss = Sales + Closing Stock – Opening Stock – [Purchase – Purchase Return] – Carriage Inward

= 15,000 +36,000 – 10,000 -[30,000 – 1,000] – 2,400

= Rs 9,600

5. Borrowed Loan from Bank of Maharashtra Rs 2,00,000 on 1st October 2019 at rate of 15% p.a. Calculate Interest on Bank Loan for the year 2019-20 assuming that the financial year ends on 31st March, every year.

Solution :

∵ Interest is to be calculated for 6 Month i.e from 1st Oct to 31st March

∴ Interset = Loan Amount x Rate x Period

= 2,00,000 x 15% x (6/12)

= Rs 15,000

∴ Interest on loan Rs 2,00,000 for 6 Month = Rs 15,000