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Byju's Answer

Standard XII

Accountancy

Interest Coverage Ratio

Dinker and Ra...

Question

Dinker and Ravinder were partners sharing profits and losses in the ratio of 2:1. The following balances were extracted from the books of account, for the year ended December 31, 2017.

Account Name

Debit

Amount

Rs

Credit

Amount

Rs

Capital

Dinker

2,35,000

Ravinder

1,63,000

Drawings

Dinker

6,000

Ravinder

5,000

Opening Stock

35,100

Purchases and Sales

2,85,000

3,75,800

Carriage inward

2,200

Returns

3,000

2,200

Stationery

1,200

Wages

12,500

Bills receivables and Bills payables

45,000

32,000

Discount

900

400

Salaries

12,000

Rent and Taxes

18,000

Insurance premium

2,400

Postage

300

Sundry expenses

1,100

Commission

3,200

Debtors and creditors

95,000

40,000

Building

1,20,000

Plant and machinery

80,000

Investments

1,00,000

Furniture and Fixture

26,000

Bad Debts

2,000

Bad debts provision

4,600

Loan

35,000

Legal Expenses

200

Audit fee

1,800

Cash in Hand

13,500

Cash at Bank

23,000

8,91,200

8,91,200

Prepare final accounts for the year ended December 31,2017, with following adjustment:

(a) Stock on December 31,2017, was Rs 42,500.

(b) A Provision is to be made for bad debts at 5% on debtors

(c) Rent outstanding was Rs 1,600.

(d) Wages outstanding were Rs 1,200.

(e) Interest on capital to be allowed on capital @ 4% per annum and interest on drawings to be charged @ 6% per annum.

(f) Dinker and Ravinder are entitled to a Salary of Rs 2,000 per annum

(g) Ravinder is entitled to a commission Rs 1,500.

(h) Depreciation is to be charged on Building @ 4%, Plant and Machinery, 6%, and furniture and fixture, 5%.

(i) Outstanding interest on loan amounted to Rs 350.

Open in App

Solution

Financial Statement as on December 31, 2017

Trading Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Opening Stock

35,100

Sales

3,75,800

Purchases

2,85,000

Less: Sales Return

(3,000)

3,72,800

Less: Purchases Return

(2,200)

2,82,800

Closing Stock

42,500

Carriage Inwards

2,200

Wages

12,500

Add: Outstanding

1,200

13,700

Gross Profit

81,500

4,15,300

4,15,300

Profit and Loss Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Stationery

1,200

Gross Profit

81,500

Discount Allowed

900

Discount Received

400

Salaries

12,000

Commission

3,200

Rent & Taxes

18,000

Add: Outstanding

1,600

19,600

Insurance Premium

2,400

Postage

300

Sundry Expenses

1,100

Depreciation on

Building

4,800

Plant and Machinery

4,800

Fixtures and Fittings

1,300

Provision for Bad Debts

4750

Add: Bad Debt

2,000

6,750

Less: (Old) Provision for Bad Debt

(4,600)

2,150

Legal Expenses

200

Audit Fee

1,800

Outstanding Interest on Loan

350

Profit and Loss Appropriation

32,200

85,100

85,100

Profit and Loss Appropriation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital

Net Profit

32,200

Dinker

9,400

Interest on Drawings

Ravinder

6,520

15,920

Dinker

180

Ravinder

150

330

Partner’s Salaries

Dinker

2,000

Ravinder

2,000

4,000

Commission (Ravinder)

1,500

Profit transferred to

Dinker’s Capital

7,407

Ravinder’s Capital

3,703

11,110

32,530

32,530

Partners’ Capital Account

Dr.

Cr.

Particulars

Dinker

Ravinder

Particulars

Dinker

Ravinder

Drawings

6,000

5,000

Balance b/d

2,35,000

1,63,000

Interest on Drawings

180

150

Interest on Capital

9,400

6,520

Balance c/d

2,47,627

1,71,573

Partner’s Salaries

2,000

2,000

Profit & Loss Appropriation

7,407

3,703

Commission

1,500

2,53,807

1,75,223

2,53,807

1,75,223

Balance Sheet

Liabilities

Amount

Rs

Assets

Amount

Rs

Bills Payable

32,000

Bills Receivables

45,000

Creditors

40,000

Debtors

95,000

Loan

35,000

Less: 5% Provision for Bad Debts

(4,750)

90,250

Add: Outstanding Interest

350

35,350

Building

1,20,000

Rent Outstanding

1,600

Less: 4% Depreciation

(4,800)

1,15,200

Wages outstanding

1,200

Capital:

Plant and Machinery

80,000

Dinker

2,47,627

Less: 6% Depreciation

(4,800)

75,200

Ravinder

1,71,573

4,19,200

Investments

1,00,000

Furniture and Fixtures

26,000

Less: 5% Depreciation

(1,300)

24,700

Cash in Hand

13,500

Cash at Bank

23,000

Closing Stock

42,500

5,29,350

5,29,350

Suggest Corrections

Similar questions

Dinker and Ravinder were partners sharing profits and losses in the ratio of 2:1. The following balances were extracted from the books of account, for the year ended December 31, 2005.

$\begin{matrix} Account Name & Amt. (Dr) & Amt. (Cr) Capital Dinker & 2, 35, 000 Ravinder & 1, 63, 000 Drawings Dinker & 6, 000 Ravinder & 5, 000 Opening Stock & 35, 100 Purchase and Sales & 2, 85, 000 & 3, 75, 800 \end{matrix}$

$\begin{matrix} Account Name & Amt. (Dr) & Amt. (Cr) Carriage Inward & 2, 200 Returns & 3, 000 & 2, 200 Stationery & 1, 200 Wages & 12, 500 Bills Receivables and Bills & 45, 000 & 32, 000 Payables Discount & 900 & 400 Salaries & 12, 000 Rent and Taxes & 18, 000 Insurance Premium & 2, 400 Postage & 300 Sundry Expenses & 1, 100 Commission & 3, 200 Debtors and Creditors & 95, 000 & 40, 000 Building & 1, 20, 000 Plant and Machinery & 80, 000 Investments & 1, 00, 000 Furniture and Fixture & 26, 000 Bad Debts & 2, 000 Bad Debts Provision & 4, 600 Loan & 35, 000 Legal Expenses & 200 Audit Fee & 1, 800 Cash in Hand & 13, 500 Cash at Bank & 23, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 8, 91, 200 - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 8, 91, 200 - -------- - \end{matrix}$

Prepare final accounts for the year ended December 31, 2005, with following adjustment

(a) Stock on December 31, 2005 was Rs 42,500.

(b) A Provision is to be made for bad debts at 5% on debtors.

(d) Wages outstanding were Rs 1,200.

(e) Interest on capital to be allowed on capital @ 4% per annum and interest on drawings to be on charged @6% per annum.

(f) Dinker and Ravinder are entitled to a Salary of Rs 2,000 per annum.

(g) Ravinder is entitled to a commission Rs 1,500.

(h) Depreciation is to be charged on Building @ 4%, Plant and Machinery, 6%, and furniture and fixture, 5%.

(i) Outstanding interest on loan amounted to Rs 350.

Kajol and Sunny were partners sharing profits and losses in the ratio of 3:2. The following Balances were extracted from the books of account for the year ended March 31, 2015.

Account Name	Debit Amount Rs	Credit Amount Rs
Capital
Kajol		1,15,000
Sunny		91,000
Current accounts [on 1-04-2005*]
Kajol		4,500
Sunny	3,200
Drawings
Kajol	6,000
Sunny	3,000
Opening stock	22,700
Purchases and Sales	1,65,000	2,35,800
Freight inward	1,200
Returns	2,000	3,200
Printing and Stationery	900
Wages	5,500
Bills receivables and Bills payables	25,000	21,000
Discount	400	800
Salaries	6,000
Rent	7,200
Insurance premium	2,000
Traveling expenses	700
Sundry expenses	1,100
Commission		1,600
Debtors and Creditors	74,000	78,000
Building	85,000
Plant and Machinery	70,000
Motor car	60,000
Furniture and Fixtures	15,000
Bad debts	1,500
Provision for doubtful debts		2,200
Loan		25,000
Legal expenses	300
Audit fee	900
Cash in hand	7,500
Cash at bank	12,000
	5,78,100	5,78,100

Prepare final accounts for the year ended March 31,2015, with following adjustments:

(a) Stock on March 31,2015 was Rs37,500.

(b) Bad debts Rs3,000; Provision for bad debts is to be made at 5% on debtors

(d) Wages outstanding were Rs 2,200.

(e) Interest on capital to be allowed on capital at 6% per annum and interest on drawings to be charged @ 5% per annum.

(f) Kajol is entitled to a Salary of Rs 1,500 per annum.

(g) Prepaid insurance was Rs 500.

(h) Depreciation was charged on Building, @ 4%; Plant and Machinery, @ 5%; Motor car, @ 10% and furniture and fixture, @ 5%.

(i) Goods worth Rs 7,000 were destroyed by fire on January 20,2015. The Insurance company agreed to pay Rs 5,000 in full settlement of the claim.

*As per the question, this year should be 01-04-2014

The following is the Trial Balance of Mr. Deepak as on March 31, 2017. You are required to prepare trading account, profit and loss account and a balance sheet as on date:

Account title	Debit Amount Rs	Account title	Credit Amount Rs
Drawings	36,000	Capital	2,50,000
Insurance	3,000	Bills payable	3,600
General expenses	29,000	Creditors	50,000
Rent and taxes	14,400	Discount received	10,400
Lighting (factory)	2,800	Purchases return	8,000
Travelling expenses	7,400	Sales	4,40,000
Cash in hand	12,600
Bills receivable	5,000
Sundry debtors	1,04,000
Furniture	16,000
Plant and Machinery	1,80,000
Opening stock	40,000
Purchases	1,60,000
Sales return	6,000
Carriage inwards	7,200
Carriage outwards	1,600
Wages	84,000
Salaries	53,000

Closing stock Rs 35,000.

Prepare a trading and profit and loss account for the year ending December 31, 2017. from the balances extracted of M/s Rahul Sons. Also prepare a balance sheet at the end of the year.

Account Title	Amount Rs	Account Title	Amount Rs
Stock	50,000	Sales	1,80,000
Wages	3,000	Purchases return	2,000
Salary	8,000	Discount received	500
Purchases	1,75,000	Provision for doubtful debts	2,500
Sales return	3,000	Capital	3,00,000
Sundry Debtors	82,000	Bills payable	22,000
Discount allowed	1,000	Commission received	4,000
Insurance	3,200	Rent	6,000
Rent Rates and Taxes	4,300	Loan	34,800
Fixtures and fittings	20,000
Trade expenses	1,500
Bad debts	2,000
Drawings	32,000
Repair and renewals	1,600
Travelling expenses	4,200
Postage	300
Telegram expenses	200
Legal fees	500
Bills receivable	50,000
Building	1,10,000
	5,51,800		5,51,800

Adjustments

1. Commission received in advance Rs 1,000.

2. Rent receivable Rs 2,000.

3. Salary outstanding Rs 1,000 and insurance prepaid Rs 800.

4. Further bad debts Rs 1,000 and provision for doubtful debts @ 5% on debtors and discount on debtors @ 2%.

5. Closing stock Rs 32,000.

6. Depreciation on building @ 6% p.a.

From the following balances of M/s Nilu Sarees as on March 31, 2017. Prepare trading and profit and loss account and balance sheet as on date.

Account Title	Debit Amount Rs	Account Title	Credit Amount Rs
Opening stock	10,000	Sales	2,28,000
Purchases	78,000	Capital	70,000
Carriage inwards	2,500	Interest	7,000
Salaries	30,000	Commission	8,000
Commission	10,000	Creditors	28,000
Wages	11,000	Bills payable	2,370
Rent and taxes	2,800
Repairs	5,000
Telephone expenses	1,400
Legal charges	1,500
Sundry expenses	2,500
cash in hand	12,000
Debtors	30,000
Machinery	60,000
Investments	90,000
Drawings	18,000

Closing stock, as on March 31, 2017 Rs 22,000.

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Account Name	Debit Amount Rs	Credit Amount Rs
Capital
Dinker		2,35,000
Ravinder		1,63,000
Drawings
Dinker	6,000
Ravinder	5,000
Opening Stock	35,100
Purchases and Sales	2,85,000	3,75,800
Carriage inward	2,200
Returns	3,000	2,200
Stationery	1,200
Wages	12,500
Bills receivables and Bills payables	45,000	32,000
Discount	900	400
Salaries	12,000
Rent and Taxes	18,000
Insurance premium	2,400
Postage	300
Sundry expenses	1,100
Commission		3,200
Debtors and creditors	95,000	40,000
Building	1,20,000
Plant and machinery	80,000
Investments	1,00,000
Furniture and Fixture	26,000
Bad Debts	2,000
Bad debts provision		4,600
Loan		35,000
Legal Expenses	200
Audit fee	1,800
Cash in Hand	13,500
Cash at Bank	23,000
	8,91,200	8,91,200

Financial Statement as on December 31, 2017 Trading Account
Dr.						Cr.
Particulars			Amount Rs	Particulars		Amount Rs
Opening Stock			35,100	Sales	3,75,800
Purchases	2,85,000			Less: Sales Return	(3,000)	3,72,800
Less: Purchases Return	(2,200)		2,82,800
				Closing Stock		42,500
Carriage Inwards			2,200
Wages		12,500
Add: Outstanding		1,200	13,700

Gross Profit			81,500

			4,15,300			4,15,300

Profit and Loss Account
Dr.				Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Stationery		1,200	Gross Profit	81,500
Discount Allowed		900	Discount Received	400
Salaries		12,000	Commission	3,200
Rent & Taxes	18,000
Add: Outstanding	1,600	19,600

Insurance Premium		2,400
Postage		300
Sundry Expenses		1,100
Depreciation on
Building		4,800
Plant and Machinery		4,800
Fixtures and Fittings		1,300

Provision for Bad Debts	4750
Add: Bad Debt	2,000
	6,750
Less: (Old) Provision for Bad Debt	(4,600)	2,150

Legal Expenses		200
Audit Fee		1,800
Outstanding Interest on Loan		350
Profit and Loss Appropriation		32,200

		85,100		85,100

Profit and Loss Appropriation Account
Dr.					Cr.
Particulars		Amount Rs	Particulars		Amount Rs
Interest on Capital			Net Profit		32,200
Dinker	9,400		Interest on Drawings
Ravinder	6,520	15,920	Dinker	180
			Ravinder	150	330
Partner’s Salaries
Dinker	2,000
Ravinder	2,000	4,000

Commission (Ravinder)		1,500
Profit transferred to
Dinker’s Capital	7,407
Ravinder’s Capital	3,703	11,110

		32,530			32,530

Partners’ Capital Account
Dr.						Cr.
Particulars	Dinker	Ravinder	Particulars	Dinker	Ravinder
Drawings	6,000	5,000	Balance b/d	2,35,000	1,63,000
Interest on Drawings	180	150	Interest on Capital	9,400	6,520
Balance c/d	2,47,627	1,71,573	Partner’s Salaries	2,000	2,000
			Profit & Loss Appropriation	7,407	3,703
			Commission		1,500
	2,53,807	1,75,223		2,53,807	1,75,223

Balance Sheet
Liabilities			Amount Rs	Assets		Amount Rs
Bills Payable			32,000	Bills Receivables		45,000
Creditors			40,000	Debtors	95,000
Loan		35,000		Less: 5% Provision for Bad Debts	(4,750)	90,250
Add: Outstanding Interest		350	35,350
				Building	1,20,000
Rent Outstanding			1,600	Less: 4% Depreciation	(4,800)	1,15,200
Wages outstanding			1,200
Capital:				Plant and Machinery	80,000
Dinker	2,47,627			Less: 6% Depreciation	(4,800)	75,200
Ravinder	1,71,573		4,19,200
				Investments		1,00,000
				Furniture and Fixtures	26,000
				Less: 5% Depreciation	(1,300)	24,700
				Cash in Hand		13,500
				Cash at Bank		23,000
				Closing Stock		42,500
			5,29,350			5,29,350