Question

Following is the Trial Balance of Shri Paras on 31^st March, 2018:

Particulars	Dr. ₹	Particulars	Cr. ₹
Sundry Debtors	1,45,000	Sundry Creditors	63,000
Drawings	52,450	Capital A/c	7,10,000
Insurancne	6,000	Returns Outward	5,000
Rent	10,000	Sales	10,00,000
General Expenses	20,000	Output CGST	20,000
Salaries	1,50,000	Output SGST	20,000
Patents and Patterns	75,000
Machinery	2,00,000
Freehold Land	1,00,000
Building	3,00,000
Stock (1st April, 2017)	57,600
Cash at Bank	26,300
Freight on Purchases	20,400
Carriage on Sales	32,000
Fuel and Power	47,300
Wages	1,04,800
Returns Inward	19,000
Purchases	4,06,750
Cash in Hand	5,400
Input IGST	40,000
	18,18,000		18,18,000

Following adjustments are made:
(a) Stock on 31st March, 2018 was valued at ₹ 68,000.
(b) Provision for Doubtful Debts is to be made to the extent of 5% on Sundry Debtors.
(c) Depreciate Machinery by 10%, Patents 20% and Building 5%.
(d) Wages include a sum of ₹ 20,000 spent on constructiion of a cycle shed.
(e) Salaries for the months of February and March, 2018 were not paid.
(f) Insurance includes a premium of ₹ 1,700 on a policy expiring on 30th September, 2018.
(g) General Manager is entitled to a commission of 10% on the net profit after charging his commission.
You are required to prepare Final Accounts after giving effects to the adjustments.

Answer 1

Financial Statements of Shri Paras Trading Account for the year ended March 31, 2018
Dr.					Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Opening Stock		57,600	Sales	9,87,800
Purchases	4,06,750		Less: Return Inwards	(6,800)	9,81,000
Less: Return Outwards	(5,000)	4,01,750	Closing Stock		68,000
Carriage on Purchases		20,400
Fuel and Power		47,300
Wages	1,04,800
Less: Building	(20,000)	84,800
Gross Profit (Balancing Figure)		4,37,150
		10,49,000			10,49,000

Profit and Loss Account for the year ended March 31, 2018
Dr.						Cr.
Particulars				Amount (₹)	Particulars	Amount (₹)
Insurance			6,000		Gross Profit	4,37,150
Less: Prepaid Insurance (1,700 × 1/2)			(850)	5,150
General Expenses				30,000
Salaries	1,50,000
Add: Salaries Outstanding (1,50,000 × 2/10)	30,000			1,80,000
Depreciation on:
Machinery		20,000
Patents		15,000
Building		16,000		51,000
Carriage on Sales				32,000
Provision for Bad and Doubtful Debts				7,250
Manager’s Commission				11,977
Net Profit (Balancing Figure)				1,19,773
				4,37,150		4,37,150

Balance Sheet as on March 31, 2018
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital	7,10,000
Add: Net Profit	1,19,773		Freehold Land		1,00,000
Less: Drawings	(52,450)	7,77,323	Building	3,00,000
Sundry Creditors		63,000	Add: Wages	20,000
Salaries Outstanding		30,000		3,20,000
Manager’s Commission Payable		11,977	Less: 5% Depreciation	(16,000)	3,04,000
			Patents	75,000
			Less: 20% Depreciation	(15,000)	60,000
			Machinery	2,00,000
			Less: 10% Depreciation	(20,000)	1,80,000
			Closing Stock		68,000
			Sundry Debtors	1,45,000
			Less: Provision for Doubtful Debts	(7,250)	1,37,750
			Prepaid Insurance		850
			Cash at Bank		26,300
			Cash in Hand		5,400
		8,82,300			8,82,300

Working Notes:

(1) Calculation of Manager’s Commission:

(2) GST Set Off:

GST Payable/(Receivable)=Output CGST+Output SGST-Input IGST=20,000+20,000-40,000=Nil

Hence, there will be no effect of GST on the Balance Sheet.