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Final Accounts with

Adjustments
Adjustments
Adjustme Journal Entry Adjustment in Adjustment in
nts. Trading P&L A/c Balance Sheet
Closing St Closing Stock A/c Dr Posted at the credit side Shown at the asset
of trading a/c side
Depreciation To TradingA/c
Depreciation A/c Dr Posted at the debit side Shown as deducted
To Asset A/c of the P&L A/c from concerned asset
Outstanding Expenses A/c Dr. Added to the concerned Shown at the liabilities
Exp. exp at the debit side of side
To Outs. Exp A/c Tr/P&L A/c
Prepaid Prepaid Exp A/c Dr Deducted from the Shown at the asset
Expenses To Exp. A/c concerned exp at the side
debit side of P&L A/c
Accrued Accrued Inc A/c Dr Added to the concerned Shown at the asset
Income To Income A/c exp at the credit side of side
P&L A/c
Un earned Income A/c Dr Deducted from the Shown at the liabilities
Income To un earned Inc. concerned inc at the side
credit side of P&L A/c
Adjustme Journal Entry Adjustment in Adjustment in
nts. Trading P&L A/c Balance Sheet
Q1) From the following T/b and other additional information obtained
from the books of Mr. SKC, prepare trading profit & loss a/c for
the half year ended 30th Sept. 2001 and his b/s as on that date
Heads of A/c Dr. Cr. Heads of A/c Dr. Cr.
Capital 201500 Carriage Outwards 4550
Drawings 11700 Debtors & Creditors 62400 32500
Trade Exp 15600 B/R & B/P 28600 13650
Cash 975 Furniture & Fixtures 20020
Bank 29510 Bad Debts 1950
Freehold Premises 169000 Wages 32500
Stock as on 1.4.01 45500 Salaries 25805
Purchases & Sls 97500 325000 Advertisements 19500
Returns 3640 2600 Rent Rates &Taxes 4550
Carriage Inwards 1950 575250 575250

Additional Information: 1) Furniture valued at Rs. 6500 was purchased on 1/7/01


2) Stock valued at Rs.52,000 on 30/9/01 3) Salaries unpaid for the month of Sep
01 amounted to Rs. 1495 and rent for the month of Oct 01 amounted to Rs. 325
was paid on 20/9/01 4) Depreciation is to be provided for Freehold Premises,
Furnitures & Fixtures @ 10 p.a.
Dr. Trading P& L A/c for the half yr. ended 31st Sept. 2001 Cr.

Heads of A/c Rs. Rs. Heads of A/c Rs. Rs.


To Op. Stock 45500 By Sales 325000
To Purchases 97500 Less Returns 3640 321360
Less Returns 2600 94900 By Closing Stock 52000
To Carriage Inw 1950
To Wages 32500
To Gross Pr C/d 198510
373360 373360
To Trade Exp 15600 By GP B/d 198510
To Carriage Otw 4550
To Bad Debt 1950
To Salaries 25805
 Add Outst 1495 27300
To Advt 19500
To Rent,Rts, Tx 4550
 Less Prep Rnt 325 4225
Dr. Trading P& L A/c for the half yr. ended 31st Sept. 2001 Cr.
Heads of A/c Rs. Rs. Heads of A/c Rs. Rs.
To Depr on: By GP B/d 198510
 Fr.Prmises 8450
 Furn & Fix 839 9289 (20,020-6500@10%
for 6mts = 676 ) +
To NP (Trf to Cap (6500@10% for 3mts
116096 = 163)

A/c) 198510 198510


Liab Balance Sheet of Mr. SKC as at 30th Sept 2001 Asset
Cap A/c: Op Bal 201500 Freehold Prem 169000
Add Net Pr 116096  Less Depr 8450 160550
317596 Furniture & Fixt 20020
Less Drawings 11700 395896  Less Depr 839 19181
Creditors 32500  Closing Stock 52000
Outstanding Sal 1495 Debtors 62400
Bills Payable 13650 B/R 28600
Bank,Cash 30485
Prepaid Rent 325
Q2) From the following T/b of Mr.Yogesh as on 31st Dec 2001 prepare
Trading P&L a/c for the year ended 31st Dec 2001 and Balance Sheet
as on that date incorporating the adjustments given.
Heads of A/c Dr. Cr. Heads of A/c Dr. Cr.
Capital & Drawings 7000 50000 Goods (ret & pr adj) 9300 5500
Office Furniture 2600 Debtors & Creditors 45700 52000
Stock as on 1.1.01 48000 Cash & Bank 7900 1000
Bad Debts 2500 Wages 90800
Rent & Rates 6000 Goods traded in 203500 460000
Commission 3150 2500 Salaries 74000
Discount 6500 3700 B/R & B/P 17200 15600
Plant & Machinery 50000
Insurance 4150
Motor Vehicle 12000 590300 590300
Additional Information: 1) Closing Stock is valued at Rs.52000 2) Depreciation on
P&M is @ 5%; Furniture @ 10% & Vehicle @20% 3) Insurance includes a life
insurance policy of Mr.Yogesh for Rs.1200 covered upto march 02 4) Rent is
payable for Dec 2001 Rs.200, and rates Rs. 600 paid for the year ended
31st.March 02. 5 ) Sundry Debtors include an amount of Rs. 1000 due from Mr. S,
who has become insolvent.
Dr. Trading P& L A/c for the half yr. ended 31st Dec. 2001 Cr.

Heads of A/c Rs. Rs. Heads of A/c Rs. Rs.


To Op. Stock 48000 By Sales 460000
To Purchases 203500 Less Returns 9300 450700
Less Returns 5500 198000 By Closing Stock 52000
To Wages 90800
To Gross Pr C/d 165900
Treated 502700 502700
as
drawings To Disc Allowed 6500 By GP B/d 165900
To Insurance 4150 By Disc Received 3700
 Less L.I.Prm 1200 By Commsn. Rcv 2500
 Less Prep Ins 590 2360
4150-
1200=29 To Bad Debts 2500 Bad
50.  Add Further 1000 3500 debts
For
15mts To Rent & Rates 6000
calculate
d at 3  Add Otstd. 200 600 X
mts 3/12
2950/15
 Less Prepaid 150 6050
X3
Dr. Trading P& L A/c for the half yr. ended 31st Dec. 2001 Cr.

Heads of A/c Rs. Rs. Heads of A/c Rs. Rs.


To Commission 3150 7000+
1200
To Salaries 74000 (LIC)
To Depreciation
P&M 2500
Office Furnit 260
Vehicle 2400 5160
To Net Profit 71380
172100 172100
Liab Balance Sheet of Mr. Yogesh as at 30th Dec 2001 Asset
Cap A/c: Op Bal 50000 P&M 50000
Add Net Pr 71380  Less Depr 2500 47500
317596 Office Furnit 2600
Less Drawings 8200 113180  Less Dept 260 2340
Creditors 52000 Vehicle 12000
Outstanding rent 200  Less Depr 2400 9600
Bills Payable 15600 Closing Stock 52000
Liab Balance Sheet of Mr. Yogesh as at 30th Dec 2001 Asset
Debtors 45700
Less further BD 1000 44700
Bills Receivable 17200
Cash 7900
Prepaid Insurance 590
Prepaid Rates 150
181980 181980

Ins Prem of Rs.2950 (4150-1200)


paid for 15 mts. Prep ins =
2950/15X3=590
Q3) From the following figures extracted from the book of Mr.G. you are
required to prepare a Trading Profit & Loss A/c for the year ended 31st March
01 and a b/s as on that date after making the necessary adjustments.

Heads of A/c Heads of A/c


G’s Capital 228800 Return Outward 1100
G’s Drawing 13200 Salaries 13200
Plant & Machinery 99000 Office Exp 2750
Freehold Property 66000 Office Furniture 5500
Purchases 110000 Discounts (dr.) 1320
Stock as on 1/4/00 38500 Sundry Debtors 29260
Wages 35200 Loan to Krishna 44000
@10 % p.a. bal on
1.4.2000
Sundry Crs 44000 Cash at bank 29260
Postage & Telegr 1540 BP 5500
Insurance 1760 Sales 231440
Heads of A/c Additional Information:
Gas & Fuel 2970 1) Closing Stock 72,600
Bad Debts 660 2) A new machine was installed during
Office Rent 2860 the year costing Rs.15400 but it was not
Freight 9900 recorded in the books as no payment was
made for it. Wages Rs. 1100 paid for its
Loose Tools 2200 erection have been debited to wages a/c.
Factory Lighting 1100
3) Depreciate P&M by 33⅓; Furniture by
Provision for DD 880 10% and Freehold property by 5%
4) Loose Tools were valued at Rs.1760
Interest on loan to 1100 on 31.3.01
Krishna
5) Of the Sundry Debtors Rs.660 are bad
Cash in hand 2640 and should be written off.
6) Maintain a provision of 5% on Sundry
Debtors for doubtful debts.
7) The manager is entitled to a
commission of 10% of the net profit after
charging such commission.
Dr. Trading P& L A/c for the half yr. ended 31st March 2001 Cr.

Heads of A/c Rs. Rs. Heads of A/c Rs. Rs.


To Op. Stock 38500 By Sales 231440
To Purchases 110000 By Closing Stock 72600
Less Returns 1100 108900
To Wages 35200
Less wgs for 1100 34100

To machinery
Gas & Fuel 2970
To Freight 9900
To Factory lighting 1100
To Gross Pr C/d
304040 304040
To Salaries 13200 By GP B/d 108570
To Office Exp 2750 By Int (received) 1100
To Postage Telg 1540 Add Outst. 3300 4400
To Insurance 1760
To Office Rent 2860
Dr. Continued:… Cr.

Heads of A/c Rs. Rs. Heads of A/c Rs. Rs.


To Discount 1320
To Bad Debts 1320
To Prov. For DD 1540
New Prov 1430 660 in
T/b +
Less Old 880 550 660 in
adj 5
To Depreciation (29260
On Mch 38500 -660)X
.05)
On Furniture 550
On Freh Property 3300
On Loose tools 440 42790
To Mngr’s Com 4080
To Net Profit 40800
112970 112970
Liab Balance Sheet of G as at 31st March 2001 Asset
Capital 228800 Plant & Mch 99000
Add NP 40800 Add New Mch 16500
269600 Less Depr 38500 77000
Less Drawings 13200 256400 Freehold Prop 66000
Bills Payable 5500 Less Depr 3300 62700
Sundry Creditors 59400 Office Furniture 5500
( 44000+15400)
Manager’s Com 4080 Less Depr 550 4950
Sundry Drs
Loose Tools 2200
(-) BD given in 15400
adj Less Depr 440 1760
(-) Rsv for BD +1100
Closing Stock 72600
Sundry Debtors 28600
Profit before charging depr is Less Prov for Bad
44,880. Comm is payable & DD 1430 27170
@10% of NP after charging
Loan to Krishna 44000
such comm.
Let Commission = x Add outstanding 3300 47300
X = 10% (44800 – x) Cash at Bank 29260
Or, x = 4488 – 0.1 x
Or, 1.1 x = Rs.4488 Cash in hand 2640
Or, x = Rs. 4080 325380 325380