Practical Problem 07

Practical Problem | Q 7 | Page 60

Satish and Pramod are Partners. Prepare Trading Account and Profit and Loss Account

for the year 31st March, 2019. You have to find out Gross Profit and Net Profit only

                                                                                               Trial Balance

Debit Balance

Credit Balance

Stock (1/4/218)

8,700

Sales

68,000

Purchases

18,300

Dividend

2,000

Wages

1,000

Purchases Return

500

Insurance

800

Sundry Creditors

13,000

Unproductive Wages

1,400

10% Bank Loan                      (w.e.f. 1/7/2018)

8,000

Warehouse Rent

600

Carriage Outward

1,200

Other Receipts

1,000

Sales Return

600

Export Duty

1,400

Customs Duty

800

Sundry Debtors

40,000

Investments

15,700

Factory Rent

1,600

Postage & Telegram

400

92,500

 

92,500

Adjustments :

1) The Closing Stock is valued at ₹ 15,400.

2) Outstanding Wages ₹ 500.

3) Create provision for Bad debts ` 800 and maintain R.D.D 3% on Sundry Debtors.

4) Goods of ₹1,800 distributed as a free sample.

5) Goods of ₹ 2,000 were sold and delivered on 31st March 2019 but no entry is

Passed in the Books of Account.

      

Solution :

                                                                                                                  In the books of Satish and Pramod

Dr                                                                 Trading and Profit and loss accounts for the year ended 31st March,2019 .                                                      Cr

Particular

Particular

To Opening Stock

 

8,700

By Sales

68,000

 

To Purchase

18,300

 

Less:  Return

-600

 

Less: Purchase Return

-500

17,800

 

67,400

 

To Wages

1,000

 

Add: unrecorded Sales

2,000

69,400

Add: Outstanding

500

1,500

By Goods Distributed as free sample

 

1,800

To Custom Duty

 

800

   

To Factory Rent

 

1,600

By Closing Stock

 

15,400

To Gross Profit C/d

 

56,200

   
  

86,600

 

 

86,600

   

By Gross Profit b/d

 

56,200

To Insurance

 

800

By Dividend

 

2,000

To Unproductive wages

 

1,400

By Other Receipt

 

1,000

To warehouse rent

 

600

   

To Carriage outward

 

1,200

   

To Export Duty

 

1,400

   

To Postage and Telegram

 

400

   

To New Bad debts

 

800

   

To New R.D.D

 

1,236

   

To Advertisement

 

1,800

   

To Interest on Loan

 

600

   

To Net Profit c/d

 

 

   

Satish Capital A/c

24,482

 

   

Pramod Capital A/c

24,482

48,964

   
      
  

59,200

 

 

59,200

Working :

                                                                                                          Balance Sheet as on 31st March,2019 .

Liabilities

Asset

   

Sundry Debtor

40,000

 
   

Add: Unrecorded Sales

2,000

 

Sundry Creditor

 

13,000

 

42,000

 

10% Bank loan w.e.f 01/7/2018

8,000

 

Less: New Bad Debts

-800

 

Add : Outstanding Interest

600

8,600

 

41,200

 
   

Less: New [email protected] 3%

-1,236

39,964

   

Investment

 

15,700