Page 172 - DCOM101_FINANCIAL_ACCOUNTING_I

Financial Accounting-I

Notes (c) Stock valued at `10,000 was destroyed by fire but insurance company admitted a

claim of 8,500 only and the claim is not yet paid.
(d) Wages include `2,000 for installation of a new machinery on 1st Dec, 2005
(e) Depreciate the machinery at 10% per annum
10. SS Jain Bros for the year ended 31 December, 2003.
st
Particulars Debit ` Credit `
Capital 6,00,000
Drawings 12,000
Buildings 2,00,000
Furniture and fi ttings 30,000
Depreciation on Reserve
Buildings 10,000
Furniture 3,000
Depreciation for the year 13,000
Purchases 4,00,000
Sundry creditors 40,000
Sales 5,00,000
Debtors 1,20,000
Establishment charges 20,000
Electricity charges 6,575
Postage and telegram 1,284
Travelling and conveyance 3,816
Advance for sales commission 1,000
Insurance 2,500
Rent received 12,000
Motor van (purchased 1.1.03) 80,000
Motor van maintenance 23,425
Fixed deposit (1.9.2003) 1,00,000
Cash in hand 1,823
Cash at bank 1,47,977
Due to the difference in the trial balance, an examination of the goods was conducted which
reveals following errors.
(a) ` 25 paid to the conveyance was debited to motor van maintenance account.
(b) ` 2,000 drawn from bank towards for establishment charges was omitted to be posted
into ledger.
(c) Cash column in the cash book on the receipt side stands excess total by `400
Adjustment entries:
(a) Establishment of charges have been paid only up to November and provision of `
2,000 has to be made for December.
(b) Electricity charges are O/s `25
(c) (½) commission on total sales is payable to salesmen, towards which `1000 as paid in
advance.
(d) Fixed deposit earns interest at 9% per annum.
(e) Provide depreciation 20% per annum on motor car.
(f) Closing stock 31st December, 2003 ` 1,00,000

166 LOVELY PROFESSIONAL UNIVERSITY