Page 358 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 14: Preparation of Final Accounts

Additional Information: Notes
1. Depreciate plant by 15%
2. Write off 5,000 from Preliminary Expenses.
3. Half year’s Debenture Interest Due.

4. Create 5% Provision on Debtors for doubtful debts.
5. Provide for income tax @ 50%.
6. Stock on 31st March, 07 was 9,50,000.
Prepare Final Accounts of the company.

Solution:
Profit and Loss Account
for the year ended on 31 March, 07
st
Particulars Particulars
To Stock 7,50,000 By Sales 41,50,000
“ Purchases 18,50,000 “ Stock 950,000
“ Wages 9,79,800
“ Preliminary Expenses 5,000
“ General Expenses 68,350
“ Salaries 2,02,250
Paid 1,80,000
+ due 1,80,000 3,60,000
“ Bad debts 21,100
“ Provision for doubtful debts 8,500
“ Depreciation on plant 4,95,000
“ Provision for tax 180,000
“ Profit & Loss Appropriation a/c
(Net profit) 1,80,000
51,00,000 51,00,000
Profit and Loss Appropriation Account

Particulars Particulars
To Interim Dividend 3,92,500 By Balance b/d 2,62,500
“ Balance c/d 50,000 “ Profit & Loss a/c 1,80,000
(Net profit)
4,42,500 4,42,500
Balance Sheet
as on 31.3.2007
Liabilities Assets
Share Capital Fixed Assets
Called up Capital Goodwill 2,50,000
40,00,000 Premises 30,72,000
Less calls in arrear 75,000 39,25,000 Plant 33,00,000
Reserves & Surplus Less: Provision 4,95,000 28,05,000
General Reserve 2,50,000 Current Assets, Loans and Advances Contd...

Profit & Loss a/c 50,000
Secured Loans Current Assets:
LOVELY PROFESSIONAL UNIVERSITY 351
12% Debentures 30,00,000 Stock 9,50,000
O/s Interest 1,80,000 31,80,000 Debtors 8,70,000
Current liabilities and Provisions Provision 43,500 8,26,500
Cash & Bank 4,06,500
Current Liabilities Miscellaneous Expenditure:
Creditors 4,00,000 Preliminary Expenses 45,000
Bills Payable 3,70,000
Provision
Provision for tax 1,80,000
83,55,000 83,55,000