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