Practical Problem 01
SOLUTION:
In the books of Amitbhai and Narendrabhai
Dr Trading and Profit and loss accounts for the year ended 31st March, 2019. Cr | |||||
Particular | ₹ | ₹ | Particular | ₹ | ₹ |
To Opening Stock | —— | By Sales | 1,80,000 | ||
To Purchases | 85,500 | Less: Sales Return | -2,200 | 1,77,800 | |
Less Return | -2,000 | 83,500 | By loss by thief | 8,000 | |
To Import Duty | 1,800 | By Cl. Stock | 43,000 | ||
To Motive Power | 12,000 | ||||
To Gross Profit c/d | 1,31,500 | ||||
2,28,800 | 2,28,800 | ||||
By Gross Profit b/d | 1,31,500 | ||||
To Legal Charges | 2,000 | By Discount | 1,200 | ||
To Warehouse Rent | 1,800 | ||||
To Advertisement | 10,000 | By old RDD | 2700 | ||
(for 2 years, w.e.f 1st Jan 2019) | Less: Old Bad debts | -500 | |||
Less: Prepaid | -8,750 | 1250 | Less: New Bad Debts | -500 | |
To Salaries | 3800 | Less: New RDD | -564 | 1136 | |
Add Outstanding | 300 | 4,100 | |||
To Rent | 1,500 | By Interest Receivable | 2,000 | ||
Add: Outstanding | 800 | 2,300 | |||
To Loss by thief | 8,000 | ||||
To Depreciation | |||||
Factory Building | 2,500 | ||||
Furniture | 1,800 | 4,300 | |||
To Net Profit C/d | |||||
Amitbhai | 56,043 | ||||
Narendrabhai | 56,043 | 1,12,086 | |||
1,35,836 | 1,35,836 | ||||
Dr Partners Capital A/c Cr | |||||
Particular | Amitbhai | Narendra bhai | Particular | Amitbhai | Narendra bhai |
To Drawings | 2,400 | 3,200 | By bal B/d | 350000 | 3,00,000 |
By Net Profit b/d | 56,043 | 56,043 | |||
To Bal c/d | 4,03,643 | 3,52,843 | |||
406,43 | 3,56,043 | 4,06,043 | 3,56,043 | ||
BalanceSheet as on 31st March, 2019. | |||||
Liabilities | ₹ | ₹ | Asset | ₹ | ₹ |
Capital A/c | Plant & Machinery | 2,80,000 | |||
Amitbhai | 4,03,643 | Factory Building | 75,000 | ||
Narendrabhai | 3,52,843 | 7,56,486 | Less: Depreciation | -2,500 | 72,500 |
Sundry Debtors | 28,700 | ||||
Bills Payable | 8,500 | Less: Bad Debts | -500 | ||
Creditors | 38,500 | 28,200 | |||
Bank Loan | 15,000 | Less: RDD @ 2% | -564 | 27,636 | |
Outstanding Expenses | 10% Govt. Bond | 40,000 | |||
Salaries | 300 | (Purchased on 1st Oct, 2018) | |||
Rent | 800 | 1,100 | Add: interset receivable | 2000 | 42,000 |
Cash in Hand | 20000 | ||||
Cash at Bank | 70000 | ||||
Furniture | 1,95,800 | ||||
Less: Depreciation | -1,800 | 1,94,000 | |||
Bills Receivable | 20700 | ||||
Free hold Property | 41,000 | ||||
Cl. Stock | 43,000 | ||||
Prepaid Advance | 8,750 | ||||
8,19,586 | 8,19,586 | ||||
Notes :
(1) Import duty, Motive power, and Depreciation on Factory building are recorded in the Trading A/c.
(2) 10 % govt. bond is an investment. It was purchased on 1 – 10 – 2018.
Interest is calculated for six months.
Interest on Govt. Bond = ₹ 40,000 X (6/12) X 10% =₹ 2,000
(3) Adv. exp. paid for 2 years from 01 – 01 – 2019. Up to 31 – 3 – 2019, 3 months adv. exp. is written off to Profit and Loss A/c. It is calculated as below : 10000 X (3/24) = ₹1250
Prepaid adv. exp. 10,000 – 1,250 = ₹ 8,750