Dear students, here are the Illustrations Chapter 1 Accounts from Incomplete Records for your reference.
Illustration 1: From the following particulars ascertain profit or loss:
Solution:
Statement of profit or loss for the year ended 31st March, 2017
Rs. |
|
Capital at the beginning of the year (1st April, 2016) | 2,00,000 |
Capital at the end of the year (31st March, 2017) | 3,50,000 |
Additional capital introduced during the year | 70,000 |
Drawings during the year | 40,000 |
Particulars | Rs. |
---|---|
Closing capital (as on 31.3.2017) | 3,50,000 |
Add: Drawings during the year | 40,000 |
3,90,000 | |
Less: Additional capital introduced during the year | 70,000 |
Adjusted closing capital | 3,20,000 |
Less: Opening capital (as on 1.4.2016) | 2,00,000 |
Profit made during the year | 1,20,000 |
Illustration 2: From the following particulars ascertain profit or loss:
Capital as on 1st April 2018 | 1,60,000 |
Capital as on 31st March, 2019 | 1,50,000 |
Additional capital introduced during the year | 25,000 |
Drawings made during the year | 30,000 |
Solution:
Statement of profit or loss for the year ended 31st March, 2019
Particulars | Rs. |
---|---|
Closing capital (as on 31.3.2019) | 1,50,000 |
Add: Drawings during the year | 30,000 |
1,80,000 | |
Less: Additional capital introduced during the year | 25,000 |
Adjusted closing capital | 1,55,000 |
Less: Opening capital (as on 1.4.2018) | 1,60,000 |
Loss incurred during the year | (-) 5,000 |
Illustration 3: From the following details, calculate the missing figure.
Closing capital as on 31.3.2019 | 1,90,000 |
Additional capital introduced during the year | 50,000 |
Drawings during the year | 30,000 |
Opening capital on 1.4.2018 | ? |
Loss for the year ending 31.3.2019 | 40,000 |
Solution:
Statement of profit or loss for the year ended 31st March, 2019
Particulars | Rs. |
Closing capital (as on 31.3.2019) | 1,90,000 |
Add: Drawings during the year | 30,000 |
2,20,000 | |
Less: Additional capital introduced during the year | 50,000 |
Adjusted closing capital | 1,70,000 |
Less: Opening capital (as on 1.4.2018) (balancing figure) | 2,10,000 |
Loss for the year ending 31.3.2019 | (-) 40,000 |
Illustration 4: From the following details, calculate the capital as on 31st December 2018:
Capital as on 1st January, 2018 | 27,500 |
Goods taken for the personal use of the proprietor | 5,000 |
Additional capital introduced during the year | 2,500 |
Profit for the year | 10,000 |
Solution:
Statement of profit or loss for the year ended 31st December, 2018
Particulars | Rs. |
---|---|
Closing capital (as on 31.12.2018) (balancing figure) | 35,000 |
Add: Drawings during the year (goods taken for personal use) | 5,000 |
40,000 | |
Less: Additional capital introduced during the year | 2,500 |
Adjusted closing capital | 37,500 |
Less: Opening capital (as on 1.1.2018) | 27,500 |
Profit made during the year | 10,000 |
Illustration 4: From the following details, calculate the missing figure.
Capital as on 1st April, 2017 | 2,50,000 |
Capital as on 31st March, 2018 | 2,75,000 |
Additional capital introduced during the year | 30,000 |
Profit for the year | 15,000 |
Drawings during the year | ? |
Solution:
Statement of profit or loss for the year ended 31st March, 2018
Particulars | Rs. |
---|---|
Closing capital (as on 31.3.2018) | 2,75,000 |
Add: Drawings during the year (balancing figure) | 20,000 |
2,95,000 | |
Less: Additional capital introduced during the year | 30,000 |
Adjusted closing capital | 2,65,000 |
Less: Opening capital (as on 1.4.2017) | 2,50,000 |
Profit made during the year | 15,000 |
Illustration 6: Following are the balances of Shanthi as on 31st December 2018.
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
Bills receivable | 6,000 | Sundry creditors | 25,000 |
Bills payable | 4,000 | Stock | 45,000 |
Machinery | 60,000 | Debtors | 70,000 |
Furniture | 10,000 | Cash | 4,000 |
Prepare a statement of affairs as on 31st December 2018 and calculate capital as at that date.
Solution:
In the books of Shanthi
Statement of affairs as on 31st December, 2018
Liabilities | Rs. | Assets | Rs. |
---|---|---|---|
Sundry creditors | 25,000 | Cash | 4,000 |
Bills payable | 4,000 | Stock | 45,000 |
Capital (balancing figure) | 1,66,000 | Debtors | 70,000 |
Bills receivable | 6,000 | ||
Machinery | 60,000 | ||
Furniture | 10,000 | ||
Total | 1,95,000 | Total | 1,95,000 |
Illustration 7: On 1st April 2017, Ganesh started his business with a capital of Rs. 75,000. He did not maintain proper book of accounts. Following particulars are available from his books as on 31.03.2018.
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
Cash | 5,000 | Debtors | 16,000 |
Stock of goods | 18,000 | Creditors | 9,000 |
Bills receivable | 7,000 | Cash at bank | 24,000 |
Furniture | 3,000 | Bills payable | 6,000 |
Land and buildings | 30,000 |
During the year he withdrew Rs. 15, 000
for his personal use during the year. He introduced further capital of Rs. 20,000 during the year. Calculate his profit or loss.
Solution:
Statement of affairs of Ganesh as on 31st March, 2018
Liabilities | Rs. | Assets | Rs. |
---|---|---|---|
Creditors | 9,000 | Cash | 5,000 |
Bills payable | 6,000 | Cash at bank | 24,000 |
Capital (balancing figure) | 88,000 | Stock of goods | 18,000 |
Debtors | 16,000 | ||
Bills receivable | 7,000 | ||
Land and buildings | 30,000 | ||
Furniture | 3,000 | ||
Total | 1,03,000 | Total | 1,03,000 |
Statement of profit or loss for the year ending 31st March, 2018
Particulars | Rs. |
---|---|
Closing capital as on 31.03.2018 | 88,000 |
Add: Drawings during the year | 15,000 |
1,03,000 | |
Less: Additional capital introduced during the year | 20,000 |
Adjusted closing capital | 83,000 |
Less: Opening capital as on 01.04.2017 | 75,000 |
Profit made during the year ending 31.03.2018 | 8,000 |
Illustration 8: David does not keep proper books of accounts. Following details are given from his records.
Particulars | 1.4.2018 (Rs) | 31.3.2019 (Rs) |
---|---|---|
Cash | 43,000 | 29,000 |
Stock of goods | 1,20,000 | 1,30,000 |
Sundry debtors | 84,000 | 1,10,000 |
Sundry creditors | 1,05,000 | 1,02,000 |
Loan | 25,000 | 20,000 |
Business premises | 2,50,000 | 2,50,000 |
Furniture | 33,000 | 45,000 |
During the year he introduced further capital of Rs. 45,000 and withdrew Rs.2500 per month from the business for his personal use. Prepare statement of profit or loss with the above information.
Solution:
To calculate opening capital:
In the books of David
Statement of affairs as on 1st April, 2018
Liabilities | Rs | Assets | Rs. |
---|---|---|---|
Sundry creditors | 1,05,000 | Cash | 43,000 |
Loan | 25,000 | Stock of goods | 1,20,000 |
Capital (balancing figure) | 4,00,000 | Sundry debtors | 84,000 |
Business premises | 2,50,000 | ||
Furniture | 33,000 | ||
Total | 5,30,000 | Total | 5,30,000 |
Calculation of closing capital:
Statement of affairs as on 31st March, 2019
Liabilities | Rs | Assets | Rs. |
---|---|---|---|
Sundry creditors | 1,02,000 | Cash | 29,000 |
Loan | 20,000 | Stock of goods | 1,30,000 |
Capital (balancing figure) | 4,42,000 | Sundry debtors | 1,10,000 |
Business premises | 2,50,000 | ||
Furniture | 45,000 | ||
Total | 5,64,000 | Total | 5,64,000 |
Statement of profit or loss for the year ending 31st March, 2019
Particulars | Rs. |
---|---|
Closing capital as on 31.3.2019 | 4,42,000 |
Add: Drawings during the year (2,500 x 12) | 30,000 |
4,72,000 | |
Less: Additional capital introduced during the year | 45,000 |
Adjusted closing capital | 4,27,000 |
Less: Opening capital as on 1.4.2018 | 4,00,000 |
Profit made during the year ending 31.3.2019 | 27,000 |
Illustration 9: Ahmed does not keep proper books of accounts. Find the profit or loss made by him for the year ending 31st March, 2018.
Particulars | 1.4.2017 (Rs.) | 31.3.2018 (Rs.) |
---|---|---|
Bank balance | 14,000 (Cr.) | 18,000 (Dr.) |
Cash in hand | 800 | 1,500 |
Stock | 12,000 | 16,000 |
Debtors | 34,000 | 30,000 |
Plant | 80,000 | 80,000 |
Furniture | 40,000 | 40,000 |
Creditors | 60,000 | 72,000 |
Ahmed had withdrawn Rs. 40,000 for his personal use. He had introduced Rs. 16,000 as capital for expansion of his business. A provision of 5% on debtors is to be made. Plant is to be depreciated at 10%.
Solution:
Calculation of opening capital:
In the books of Ahmed
Statement of affairs as on 31st March, 2017
Liabilities | Rs. | Assets | Rs. |
---|---|---|---|
Bank overdraft | 14,000 | Cash in hand | 800 |
Creditors | 60,000 | Stock | 12,000 |
Capital (balancing figure) | 92,800 | Debtors | 34,000 |
Plant | 80,000 | ||
Furniture | 40,000 | ||
Total | 1,66,800 | Total | 1,66,800 |
Calculation of closing capital:
Liabilities | Rs. | Assets | Rs. | |
---|---|---|---|---|
Creditors | 72,000 | Bank balance | 18,000 | |
Capital (balancing figure) | 1,04,000 | Cash in hand | 1,500 | |
Stock | 16,000 | |||
Debtors | 30,000 | |||
Less: Provision for doubtful debts @ 5% | 1,500 | 28,500 | ||
Plant | 80,000 | |||
Less: Depreciation | 8,000 | 72,000 | ||
Furniture | 40,000 | |||
Total | 1,76,000 | Total | 1,76,000 |
Statement of profit or loss for the year ending 31st March, 2018
Particulars | Rs. |
---|---|
Closing capital as on 31.3.2018 | 1,04,000 |
Add: Drawings during the year | 40,000 |
1,44,000 | |
Less: Additional capital introduced during the year | 16,000 |
Adjusted closing capital | 1,28,000 |
Less: Opening capital as on 31.3.2017 | 92,800 |
Profit for the year ending 31.3.2018 | 35,200 |
Illustration 10: Find out credit sales from the following information:
Debtors on 1st January 2018 | 40,000 |
Cash received from debtors | 1,00,000 |
Discount allowed | 5,000 |
Sales returns | 2,000 |
Debtors on 31st December 2018 | 60,000 |
Solution:
Total debtors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 40,000 | By Cash A/c (received) | 1,00,000 |
To Sales A/c (credit) (balancing figure) | 1,27,000 | By Discount allowed A/c | 5,000 |
By Sales returns A/c | 2,000 | ||
By Balance c/d | 60,000 | ||
Total | 1,67,000 | Total | 1,67,000 |
Illustration 11: From the following details find out total sales made during the year.
Debtors on 1st April 2018 | 50,000 |
Cash received from debtors during the year | 1,50,000 |
Returns inward | 15,000 |
Bad debts | 5,000 |
Debtors on 31st March 2019 | 70,000 |
Cash Sales | 1,40,000 |
Solution:
Total debtors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 50,000 | By Cash A/c | 1,50,000 |
To Sales A/c (credit) (balancing figure) | 1,90,000 | By Returns inward A/c | 15,000 |
By Bad debts A/c | 5,000 | ||
By Balance c/d | 70,000 | ||
Total | 2,40,000 | Total | 2,40,000 |
Total Sales = Cash Sales + Credit Sales
=Rs.1,40,000+Rs. 1,90,000
=Rs.3,30,000
Illustration 12: From the following particulars, prepare bills receivable account and compute the bills received from the debtors.
Particulars | Rs. |
---|---|
Opening bills receivable | 20,000 |
Closing bills receivable | 30,000 |
Cash received for bills receivable | 60,000 |
Bills receivable dishonoured | 5,000 |
Solution:
Bills receivable account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 20,000 | By Cash A/c | 60,000 |
To Debtors A/c | 75,000 | By Debtors A/c | 5,000 |
(Bills received during the year – balancing figure) | (Bills receivable dishonoured) | ||
By Balance c/d | 30,000 | ||
Total | 95,000 | Total | 95,000 |
Illustration 13: From the following particulars, calculate total sales.
Particulars | Rs. |
---|---|
Debtors on 1st April 2017 | 1,50,000 |
Bills receivable on 1st April 2017 | 40,000 |
Cash received from debtors | 3,90,000 |
Cash received for bills receivable | 90,000 |
Bills receivable dishonoured | 10,000 |
Sales return | 40,000 |
Bills receivable on 31st March, 2018 | 30,000 |
Sundry debtors on 31st March, 2018 | 1,30,000 |
Cash sales | 2,00,000 |
Solution:
Bills receivable account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 40,000 | By Cash A/c | 90,000 |
To Debtors A/c* | 90,000 | By Debtors A/c | 10,000 |
(Bills received during the year – balancing figure) | (Bills receivable dishonoured) | ||
By Balance c/d | 30,000 | ||
Total | 1,30,000 | Total | 1,30,000 |
Total debtors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 1,50,000 | By Cash A/c | 3,90,000 |
To Bills receivable A/c (dishonoured) | 10,000 | By Sales returns A/c | 40,000 |
To Sales A/c (credit) (balancing figure) | 4,90,000 | By Bills receivable A/c* | 90,000 |
(bills received) | |||
By Balance c/d | 1,30,000 | ||
Total | 6,50,000 | Total | 6,50,000 |
Total Sales = Cash Sales + Credit Sales
= Rs.2,00,000+4,90,000
=Rs. 6,90,000
Illustration 14: From the following details, calculate credit purchases.
Particulars | Rs. |
---|---|
Creditors on 1st April, 2018 | 50,000 |
Returns outward | 6,000 |
Cash paid to creditors | 1,60,000 |
Creditors on 31st March, 2019 | 70,000 |
Solution:
Total creditors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Cash A/c (paid) | 1,60,000 | By Balance b/d | 50,000 |
To Returns outward A/c | 6,000 | By Purchases A/c (Credit) | 1,86,000 |
To Balance c/d | 70,000 | (balancing figure) | |
Total | 2,36,000 | Total | 2,36,000 |
Illustration 15: From the following particulars calculate total purchases.
Particulars | Rs. |
---|---|
Sundry creditors on 1st April, 2017 | 75,000 |
Bills payable on 1st April, 2017 | 60,000 |
Paid cash to creditors | 3,70,000 |
Paid for bills payable | 1,00,000 |
Purchases returns | 15,000 |
Cash purchases | 3,20,000 |
Creditors on 31st March, 2018 | 50,000 |
Bills payable on 31st March, 2018 | 80,000 |
Solution:
Bills payable account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Cash A/c (bills paid) | 1,00,000 | By Balance b/d | 60,000 |
To Balance c/d | 80,000 | By Sundry creditors A/c | 1,20,000 |
(Bills accepted -balancing figure) | |||
Total | 1,80,000 | Total | 1,80,000 |
Total creditors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Cash A/c (paid) | 3,70,000 | By Balance b/d | 75,000 |
To Purchases return A/c | 15,000 | By Purchases A/c (credit) | 4,80,000 |
To Bills payable A/c | 1,20,000 | (balancing figure) | |
(bills accepted) | |||
To Balance c/d | 50,000 | ||
Total | 5,55,000 | Total | 5,55,000 |
Total purchases = Cash purchases + Credit purchases
=Rs. 3,20,000+4,80,000
=Rs.8,00,000
Illustration 16: From the following details you are required to calculate credit sales and credit purchases by preparing total debtors account, total creditors account, bills receivable account and bills payable account.
Particulars | Opening (Rs.) | Closing (Rs.) |
---|---|---|
Debtors | 60,000 | 55,000 |
Bills receivable | 5,000 | 1,000 |
Creditors | 25,000 | 28,000 |
Bills payable | 2,000 | 3,000 |
Other information: | ||
Cash received from debtors | 1,30,000 | |
Discount allowed to customers | 5,500 | |
Cash paid to creditors | 70,000 | |
Discount allowed by suppliers | 3,500 | |
Payments against bill payable | 7,000 | |
Cash received for bills receivable | 14,000 | |
Bills receivable dishonoured | 1,200 | |
Bad debts | 3,500 |
Solution:
Bills receivable account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 5,000 | By Cash A/c | 14,000 |
To Debtors A/c | 11,200 | By Debtors A/c | 1,200 |
Bills received - balancing figure ) | (bills receivable dishonoured) | ||
By Balance c/d | 1,000 | ||
Total | 16,200 | Total | 16,200 |
Total debtors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 60,000 | By Cash A/c (received) | 1,30,000 |
To Bills receivable A/c (dishonoured) | 1,200 | By Discount allowed A/ | 5,500 |
To Sales A/c (credit) | 1,44,000 | By Bad debts A/c | 3,500 |
(balancing figure) | By Bills receivable A/c | 11,200 | |
(bills received) | |||
By Balance c/d | 55,000 | ||
Total | 2,05,200 | Total | 2,05,200 |
Bills payable account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Cash A/c (bills paid) | 7,000 | By Balance b/d | 2,000 |
To Balance c/d | 3,000 | By Sundry creditors A/c | 8,000 |
(bills accepted – balancing figure) | |||
Total | 10,000 | Total | 10,000 |
Total creditors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Cash A/c (paid ) | 70,000 | By Balance b/d | 25,000 |
To Discount received A/c | 3,500 | By Purchases A/c (credit) | 84,500 |
To Bills payable A/c (bills accepted) | 8,000 | (balancing figure) | |
To balance c/d | 28,000 | ||
Total | 1,09,500 | Total | 1,09,500 |
Illustration 17: From the following details of Abdul who maintains incomplete records, prepare Trading and Profit and Loss account for the year ended 31st March, 2018 and a Balance Sheet as on the date.
Particulars | 1.4.2017 (Rs.) | 31.3.2018 (Rs.) |
---|---|---|
Stock | 1,00,000 | 50,000 |
Sundry debtors | 2,50,000 | 3,50,000 |
Cash | 25,000 | 40,000 |
Furniture | 10,000 | 10,000 |
Sundry creditors | 1,50,000 | 1,75,000 |
Solution:
Total debtors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 2,50,000 | By Cash A/c (received) | 5,35,000 |
To Sales A/c (credit) (balancing figure) | 6,60,000 | By Discount allowed A/c | 25,000 |
By Balance c/d | 3,50,000 | ||
Total | 9,10,000 | Total | 9,10,000 |
Total creditors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Cash A/c (paid) | 4,50,000 | By Balance b/d | 1,50,000 |
To Discount received A/c | 20,000 | By Purchases A/c (credit) | 4,95,000 |
To Balance c/d | 1,75,000 | (balancing figure) | |
Total | 6,45,000 | Total | 6,45,000 |
In the books of Abdul
Trading and Profit and loss account for the year ended 31st March, 2018
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Opening stock | 1,00,000 | By Sales | 6,60,000 |
To Purchases | 4,95,000 | By Closing stock | 50,000 |
To Gross profit c/d | 1,15,000 | ||
7,10,000 | 7,10,000 | ||
To Discount allowed | 25,000 | By Gross profit b/d | 1,15,000 |
To Sundry expenses | 30,000 | By Discount received | 20,000 |
To Net profit (transferred to capital account) | 80,000 | ||
1,35,000 | 1,35,000 |
Balance Sheet as on 31st March, 2018
Liabilites | Rs. | Rs. | Assets | Rs. |
---|---|---|---|---|
Sundry creditors | 1,75,000 | Cash | 40,000 | |
Capital | 2,35,000 | Furniture | 10,000 | |
Add: Net profit | 80,000 | Stock | 50,000 | |
3,15,000 | Debtors | 3,50,000 | ||
Less: Drawings | 40,000 | 2,75,000 | ||
Total | 4,50,000 | 4,50,000 |
Illustration 18: Bharathi does not maintain her books of accounts under double entry system. From the following details prepare trading and profit and loss account for the year ending 31st March, 2019 and a balance sheet as on that date.
Receipts | Rs. | Payments | Rs. |
---|---|---|---|
To balance b/d | 32,000 | By Purchases A/c | 56,000 |
To Sales A/c | 1,60,000 | By Creditors A/c | 80,000 |
To Debtors A/c | 1,20,000 | By General expenses A/c | 24,000 |
By Wages A/c | 10,000 | ||
By Balance c/d | 1,42,000 | ||
Total | 3,12,000 | 3,12,000 | |
Other information: | |||
Particulars | 1.4.2018 (Rs.) | 31.3.2019 (Rs.) | |
Stock of goods | 40,000 | 60,000 | |
Debtors | 38,000 | ? | |
Creditors | 58,000 | 52,000 | |
Machinery | 1,70,000 | 1,70,000 |
Solution:
In the books of Bharathi
Total debtors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Balance b/d | 38,000 | By Cash A/c (received) | 1,20,000 |
To Sales A/c (credit) | 1,40,000 | By Balance c/d (balancing figure) | 58,000 |
Total | 1,78,000 | 1,78,000 | |
To Balance b/d | 58,000 |
Trading and Profit and Loss Account for the year ended 31st March, 2019
Particulars | Rs. | Rs. | Particulars | Rs. | Rs. |
---|---|---|---|---|---|
To Opening stock | 40,000 | By Sales | |||
To Purchases | Cash | 1,60,000 | |||
Cash | 56,000 | Credit | 1,40,000 | 3,00,000 | |
Credit | 74,000 | 1,30,000 | By Closing stock | 60,000 | |
To Wages | 10,000 | ||||
To Gross profit c/d | 1,80,000 | ||||
Total | 3,60,000 | Total | 3,60,000 | ||
To General expenses | 24,000 | By Gross profit b/d | 1,80,000 | ||
To Depreciation on machinery | 17,000 | ||||
To Net profit transferred to capital a/c | 1,39,000 | ||||
Total | 1,80,000 | Total | 1,80,000 |
Balance Sheet as on 31st March, 2019
Liabilities | Rs. | Rs. | Assets | Rs. | Rs. |
---|---|---|---|---|---|
Capital | 2,22,000 | Cash | 1,42,000 | ||
Add: Net profit | 1,39,000 | 3,61,000 | Stock of goods | 60,000 | |
Creditors | 52,000 | Debtors | 58,000 | ||
Machinery | 1,70,000 | ||||
Less: Depreciation | 17,000 | 1,53,000 | |||
Total | 4,13,000 | Total | 4,13,000 |
Illustration 19: Arjun carries on grocery business and does not keep his books on double entry basis. The following particulars have been extracted from his books:
Particulars | 1-4-2018 (Rs.) | 31-3-2019 (Rs.) |
---|---|---|
Plant and machinery | 20,000 | 20,000 |
Stock | 9,000 | 16,000 |
Sundry debtors | 2,000 | 5,300 |
Sundry creditors | 5,000 | 4,000 |
Cash at bank | 4,000 | 6,000 |
Other information for the year ending 31-3-2019 showed the following: | ||
Rs. | ||
Advertising | 4,700 | |
Carriage inwards | 8,000 | |
Cash paid to creditors | 64,000 | |
Drawings | 2,000 |
Total sales during the year were Rs. 85,000. Purchases returns during the year were Rs. 2,000 and sales returns were Rs. 1,000. Depreciate plant and machinery by 5%. Provide Rs. 300 for doubtful debts. Prepare trading and profit and loss account for the year ending 31st March, 2019 and a balance sheet as on the date.
Solution:
In the books of Arjun
Statement of affairs as on 1st April, 2018
Liabilities | Rs. | Assets | Rs. |
---|---|---|---|
Creditors | 5,000 | Cash at bank | 4,000 |
Opening capital | 30,000 | Stock | 9,000 |
(balancing figure) | Sundry debtors | 2,000 | |
Plant and machinery | 20,000 | ||
Total | 35,000 | Total | 35,000 |
Total creditors account
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Cash A/c (paid) | 64,000 | By Balance b/d | 5,000 |
To Purchases returns | 2,000 | By Purchases A/c (credit) | 65,000 |
To Balance c/d | 4,000 | (balancing figure) | |
Total | 70,000 | Total | 70,000 |
Trading and Profit and Loss Account for the year ended 31st March, 2019
Particulars | Rs. | Rs. | Particulars | Rs. | |
---|---|---|---|---|---|
To Opening stock | 9,000 | By Sales | 85,000 | ||
To Purchases | Less Returns | 1,000 | 84,000 | ||
Credit | 65,000 | By Closing stock | 16,000 | ||
Less Returns | 2,000 | 63,000 | |||
To Carriage inwards | 8,000 | ||||
To Gross profit c/d | 20,000 | ||||
Total | 1,00,000 | 1,00,000 | |||
To Advertising | 4,700 | By Gross Profit b/d | 20,000 | ||
To Depreciation on machinery | 1,000 | ||||
To Provision for doubtful debts | 300 | ||||
To Net profit transferred to capital a/c | 14,000 | ||||
Total | 20,000 | Total | 20,000 |
Balance Sheet as on 31st March, 2019
Liabilities | Rs. | Rs. | Assets | Rs. | Rs. |
---|---|---|---|---|---|
Capital | 30,000 | Cash at bank | 6,000 | ||
Add: Net profit | 14,000 | Stock | 16,000 | ||
Less: Drawings | 44,000 | 42,000 | Sundry debtors | 5,300 | |
2,000 | Less: Provision | 300 | 5,000 | ||
Sundry creditors | 4,000 | Plant and Machinery | 20,000 | ||
Less: Depreciation | 1,000 | 19,000 | |||
Total | 46,000 | Total | 46,000 |
Illustration 20: Pandian does not keep his books under double entry system. From the following information prepare trading and profit and loss account and balance sheet as on 31-12-2018.
Particulars | 1-1-2018 | 31-12-2018 | |
---|---|---|---|
Furniture | 30,000 | 30,000 | |
Cash in hand | 10,000 | 17,000 | |
Debtors | 40,000 | 60,000 | |
Stock | 28,000 | 11,000 | |
Bills receivable | 12,000 | 35,100 | |
Bank loan | 25,000 | 25,000 | |
Creditors | 15,000 | 16,000 | |
Additional info: | |||
Rs. | Rs. | ||
Cash sales | 11,200 | Credit sales | 88,800 |
Cash purchases | 4,250 | Credit purchases | 35,750 |
Carriage on purchases | 3,000 | Carriage on sales | 700 |
Commission received | 600 | Interest on bank loan | 2,500 |
Drawings | 8,000 | Additional capital | 14,000 |
Salaries | 8,900 | Office rent | 2,400 |
Adjustments: | |||
Write off depreciation of 5% on furniture. | |||
Create a provision of 1% on debtors for doubtful debts. |
Solution:
In the books of Pandian
Statement of affairs as on 1st January, 2018
Liabilities | Rs. | Assets | Rs. |
---|---|---|---|
Creditors | 15,000 | Cash in hand | 10,000 |
Bank loan | 25,000 | Stock | 28,000 |
Opening capital | 80,000 | Debtors | 40,000 |
(balancing figure) | Bills receivable | 12,000 | |
Furniture | 30,000 | ||
Total | 1,20,000 | Total | 1,20,000 |
Trading and Profit and Loss Account for the year ended 31st December, 2018
Particulars | Rs. | Rs. | Particulars | Rs. | Rs. |
---|---|---|---|---|---|
To Opening stock | 28,000 | By Sales | |||
To Purchases | Cash | 11,200 | |||
Cash | 4,250 | Credit | 88,800 | 1,00,000 | |
Credit | 35,750 | 40,000 | By Closing stock | 11,000 | |
To Carriage on purchases | 3,000 | ||||
To Gross profit c/d | 40,000 | ||||
Total | 1,11,000 | Total | 1,11,000 | ||
To Salaries | 8,900 | By Gross Profit b/d | 40,000 | ||
To Carriage on sales | 700 | By Commission received | 600 | ||
To Office rent | 2,400 | ||||
To Interest on bank loan | 2,500 | ||||
To Depreciation on furniture | 1,500 | ||||
To Provision for doubtful debts | 600 | ||||
To Net profit transferred to capital a/c | 24,000 | ||||
Total | 40,600 | Total | 40,600 |
Balance Sheet as on 31st December, 2018
Liabilities | Rs. | Rs. | Assets | Rs. | Rs. |
---|---|---|---|---|---|
Capital | 80,000 | Cash in hand | 17,000 | ||
Add: Net profit | 24,000 | Stock | 11,000 | ||
1,04,000 | Debtors | 60,000 | |||
Add: Additional capital | 14,000 | Less: Provision for doubtful debts | 600 | 59,400 | |
1,18,000 | Bills receivable | 35,100 | |||
Less: Drawings | 8,000 | 1,10,000 | Furniture | 30,000 | |
Bank loan | 25,000 | Less: Depreciation | 1,500 | 28,500 | |
Creditors | 16,000 | ||||
Total | 1,51,000 | Total | 1,51,000 |
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