Page 357 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes Solution:
Journal Entries
Dr. Cr.
S. No. Particulars LF.
1. Profit and loss Appropriation a/c Dr. 2,000
To Provision for tax a/c 2,000
Additional provision made
2. Provision for tax a/c Dr. 22,000
To Advance Tax paid a/c 2005-06 18,000
“ Bank a/c 4,000
Balance Tax paid
3. Profit and Loss a/c Dr. 14,000
To Provision for tax a/c 14,000
Additional provision for tax @ 35% on 40,000 = 14,000
Balance Sheet as on 31.03.2007

Liabilities Assets
Reserves & Surplus Loan & Advances
Profit & Loss a/c 20,000 Advance Tax Paid 10,000
– Prov. for Tax 2,000 Tax deducted at source 1,000
+ Current year’s Profit 18,000
40,000
– Provision for tax 14,000 26,000
Current Liabilities & Provision
Provision for Tax 14,000

Illustration 9:
The following are the balances of Modern Dress Bhandar Ltd. as on 31st March, 2007.

Credit Debit
Share Capital 40,00,000 Premises 30,72,000
12% Debentures 30,00,000 Plant 33,00,000
Profit and Loss a/c 2,62,500 Stock 7,50,000
Bills Payable 3,70,000 Debtors 8,70,000
Creditors 4,00,000 Goodwill 2,50,000
Sales 41,50,000 Cash and Bank 4,06,500
General Reserve 2,50,000 Calls in Arrear 75,000
Provision for Bad debt 35,000 Interim Dividend paid 3,92,500
as on 1.4.06 Purchases 18,50,000
Preliminary Expenses 50,000
Wages 9,79,800
General Expenses 68,350
Salaries 2,02,250
Bad debts 21,100
Debenture Interest paid 1,80,000
1,24,67,500 1,24,67,500

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