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Account Problem

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Published in: Accountancy
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Account Problem and Explanation. 

Rohit K / Kolkata

3 years of teaching experience

Qualification: B.Tech/B.E. (WEST BENGAL UNIVERSITY OF TECHNOLOGY - 2017)

Teaches: Chemistry, Computer Science, IT & Computer Subjects, Mathematics, All Subjects, Physics

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  1. From the following Trial Balance prepare Trading and Profit and Loss Account for the year ended 31st December, 2009 and Balance Sheet as on the date: Drawings Stock as on 1-1-2009 Purchase and Purchase returns Cash in hand Bankbalance Freehold Premises Trade expenses Printing, Stationery and advertising Professional charges Commission received Investment as on 1st Jan. @IO% Interest on Deposits Sundry debtors and creditors Wages Salaries Rent Rates and Insurance Capital Income Tax Discount allowed and received Sales Returns and Sales Bills Receivables and Bills Payables Office Furniture Bad Debts Provision Adjustments: 1. Provide for wages Rs.5000. Dr. (Rs.) 10000 46000 150000 3400 22660 38600 1640 280 4000 36000 25000 14000 4000 1600 6300 500 3200 3050 371070 Cr (Rs.) 3300 200 29000 114700 4600 208000 10000 670 371070 2. Write off 5% depreciation on freehold premises and 10% on office furniture. 3. Insurance to the extent of Rs.200 belongs to 2010. 4. Closing stock as on 31.3.2010 is Rs.52000. 5. Charge interest on capital @ 5%.
  2. Trading and Profit and Loss A/c for the year ending 31st Dec., 2009 Dr. Particulars Opening Stock Purchases Rupees 46,000 149400 30000 34100 259,500 840 1640 280 14000 6300 3800 5735 1930 305 7570 42400 Particulars Sales Less Sales Returns Closing Stock Balance b/f 208000 150000 Less Purchase Returns 600 Wages A/c 25000 Add Outstanding Wages 5000 Gross Profit c/f Trade Expenses Painting, Stationery & Advt. Professional Charges Salaries Discount Rent, Rates & Insurance 4000 Commission Received Intereston Deposit Add Accrued Interest Discount received Less Prepaid Interest on Capital Depreciation on Premises Depreciation on Furniture 200 Net Profit Particulars Capital Add Profit IBalance Sheet as on 31st December, 2009 114700 7570 Add Interest on Capital 5735 Less Drawings Less Income Tax Sundry Creditors Bills Payable Outstanding Wages 128005 10000 1600 Rupees 116405 29000 10000 5000 160405 Particulars Freehold Premises Less Depreciation Office Furniture Less Depreciation Closing Stock Debtors Less Prov. for Debtors Bills Receivables Investments Add accrued interest Prepaid Insurance Bank Cash 500 200 200 38600 1930 3050 305 36000 670 4000 200 Cr. Rupees 207500 52000 259,500 34100 3300 400 4600 42400 Rupees 36670 2745 52000 35330 3200 4200 200 22660 3400 160405 Notes: 1. Income Tax payment is the personal responsibility of the proprietor, hence treated as drawings.
  3. 2. Implied adjustment. In the Trial Balance investments of Rs.4000 is given on which interest is receivable @ 10% p.a. Interest for the whole year comes to Rs.400 and there is only Rs.200 received during the year. It means Rs.200 is still receivable on account of interest (accrued interest).

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