Page 199 - DMGT104_FINANCIAL_ACCOUNTING

Debit Balances ( ) Credit Balances ( )
Drawings 45,000 Capital Account 6,09,000
Goodwill 90,000 Bills Payable 41,400
Land and Building 1,80,000 Sundry Creditors 91,500
Unit 8: Financial Statements
Plant and Machinery 1,20,000 Purchase Returns 7,950
Loose tools 9,000 Sales 3,45,000
Bills Receivable 6,000
Notes
Stock 1.1.2007 1,20,000
Purchase 1,53,000
Wages 60,000
Carriage Inwards 3,600
Carriage Outwards 4,500
Coal and Gas 16,800
Salaries 12,000
Rent, Rates and Taxes 8,400
Discount allowed 4,500
Cash at Bank 75,000
Cash in Hand 4,200
Sundry Debtors 1,35,000
Repairs 5,400
Printing and Stationery 1,500
Bad Debts 3,600
Advertisments 10,500
Sales Returns 6,000
Furniture and Fittings 3,600
General Expenses 15,750

Adjustments

(a) Closing stock on 31st December, 2007 was 1,80,000.
(b) Depreciate Plant and Machinery at 5%, Loose Tools at 15% and Furniture and Fittings
at 5%.

(c) Provide 2½% for Discount on Sundry Debtors and Creditors and 5% for Bad and Doubtful
Debts.
(d) Outstanding Wages 4,500 and Rent and Taxes 2,550.

Solution:
In the Book of Mr. Ankit
Trading and Profit & Loss Account
(for the year ending on 31st December, 2007)

Particulars Amount Particulars Amount
( ) ( )
To Opening Stock 1,20,000
To Purchases Less Returns By Sales Less Returns 3,39,000
( 1,53,000 – 7,950) 1,45,050 ( 3,45,000 – 6,000) 1,80,000
Wages 60,000 By Closing Stock
+ O/s Wages 4,500 64,500
To Carriage Inwards 3,600
To Coal and Gas 16,800
To Gross Profit C/d 1,69,050
5,19,000 5,19,000
To Carriage Outwards 4,500 By Gross Profit b/d 1,69,050

To Salaries 12,000 By Reserve for Discount on Creditors Contd...
To Rent, Rates & Taxes 8,400 @ 2 1 /2% 2,250
+ Outstanding 2,550 10,950
To Discount Allowed 4,500
To Repairs 5,400 193
LOVELY PROFESSIONAL UNIVERSITY
To Printing & Stationary 1,500
To Bad Debts 3,600
+ New Provision (D/D) 6,750
10,350
+ Provision for Discount 3,206 13,556
To Advertisement 10,500
To General Expenses 15,750
To Depreciation on:
Plant & Machinery 6,000
Loose tools 1,350
Furniture & Fittings 180 7,530
To Net Profit
(transferred to Capital A/c) 85,114
1,71,300 1,71,300