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Adjustment for Outstanding Expenses

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Question

From the following Trial Balance of Mr. Kapil, you are required to prepare Trading Profit & Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2010

Particulars

Debit

Amount

Rs

Credit

Amount

Rs

Opening Stock

58,000

Wages and Salary

6,500

Carriage

2,500

Purchases and Sales

63,000

1,26,000

Bills Receivable and Bills Payable

600

1,000

Rent

3,500

R.D.D.

800

Sundry Debtors and Sundry Creditors

15,000

16,000

Returns

1,000

500

Machinery

12,000

Travelling expenses

3,000

Cash at Bank

1,000

Buildings

25,000

Office expenses

2,700

Advertisement (For 3 Years)

3,000

Drawings

2,500

Capital

30,000

Insurance

600

General Reserve

25,600

Total

1,99,900

1,99,900

Adjustment:

1) Closing stock cost Rs 25,000 Market value at Rs 30,000.

2) Prepaid insurance Rs 100.

3) Goods of Rs 3,000 taken over by Kapil for personal use.

4) Provide depreciation on Machinery by 10% and Building by 20% p.a.

5) Outstanding expenses Rent Rs 500.

6) Provide Reserve for doubtful debts at 5% on Sundry Debtors.

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Solution

Financial Statements of Mr. Kapil

Trading Account

for the year ended 31st March, 2010

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

58,000

Sales

1,26,000

Purchases

63,000

Less: Return Inwards

(1,000)

1,25,000

Less: Drawings

(3,000)

Closing Stock

25,000

Less: Return Outwards

(500)

59,500

Carriage

2,500

Wages& Salary

6,500

Gross Profit (Balancing Figure)

23,500

1,50,000

1,50,000

Profit and Loss Account

for the year ended March 31, 2010

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Insurance

600

Gross Profit

23,500

Less:Prepaid

(100)

500

Old R.D.D

800

Travelling Expenses

3,000

Less: New R.D.D

(750)

50

Rent

3,500

Add: Outstanding

500

4,000

Office Expenses

2,700

Advertisement

3,000

Less:Prepaid

(2,000)

1,000

Depreciation on:

Machinery

1,200

Building

5,000

6,200

Net Profit (Balancing Figure)

6,150

23,550

23,550

Balance Sheet

as on March 31, 2010

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Capital

30,000

Fixed Assets

Less:Drawings

(5,500)

Machinery

12,000

Add: Net Profit

6,150

30,650

Less:Depreciation @ 10%

(1,200)

10,800

General Reserve

25,600

Building

25,000

Less:Depreciation @ 20%

(5,000)

20,000

Current Liabilities

Outstanding Rent

500

Current Assets

Creditors

16,000

Debtors

15,000

Bills Payables

1,000

Less:R.D.D

(750)

14,250

Bills Receivables

600

Cash at Bank

1,000

Closing Stock

25,000

Prepaid Advertisement

2,000

Prepaid Insurance

100

73,750

73,750

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Similar questions

Following is the Trial Balance of M/s Duppar, you are required to prepare Trading Profit & Loss Account for the year ending 31st March, 2011 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2011
Particulars	Debit Amount Rs	Credit Amount Rs
Opening Stock	40,000
Purchases and Sales	1,20,000	2,00,000
Wages	12,000
Carriage inward	2,500
Salaries	10,000
Printing and stationery	3,500
Machinery	40,000
Carriage outward	2,000
Office expenses	4,500
Land and Buildings	35,000
Furniture	10,000
Bank balance	5,500
Sundry Debtors and Creditors	20,000	18,000
Bad Debts	500
Rent and Taxes	1,500
Advertisement	1,000
Capital		70,000
Commission received		2,000
Bills Payable		5,000
10% Bank Loan (Taken on 1-10-2010)		20,000
Drawings	7,000
Total	3,15,000	3,15,000

Adjustment:

1) On 31st March 2011 Stock was valued at Rs 25,000.

2) Outstanding Salaries Rs 2,500 and Wages Rs 2,000.

3) Goods worth Rs 1,500 distributed as free sample.

4) Provide Reserve for bad debts at 5% on Sundry debtors.

5) Wages included Rs 10,000 paid for fixation of machinery on 1-4-2010

6) Depreciate Machinery at 10% p.a. and Furniture by 15% p.a.

Following is the Trial Balance of M/s Shetty Traders, as on 31st March 2011 Prepare Trading Profit and Loss Account for the year ended 31st March, 2011 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2011
Particulars	Debit Amount Rs	Credit Amount Rs
Land and Buildings	50,000
Machinery	40,000
Salaries	21,000
Cash in Bank	50,000
Cash in hand	1,100
Office expenses	1,000
Motor Van	18,000
Capital		1,70,000
Carriage	5,000
Purchases and Sales	2,20,000	2,88,000
Returns	2,000	5,500
Bad debts	1,000
Sundry Debtors and Creditors	32,800	35,000
Rent	1,100
Printing and Stationery	1,500
Bills payable		32,000
R.D.D.		1,000
Travelling expenses	5,500
Opening stock	30,000
Insurance	1,500
Discount	6,000
Advertisement	14,000
Furniture	30,000
Total	5,31,500	5,31,500

Adjustment:

1) Closing stock was valued Rs 41,000.

2) Goods of Rs 5,000 withdrawn for personal use but not recorded.

3) Goods of Rs 1,000 distributed as free sample.

4) Debtors of Rs 800 were bad and Provide R.D.D. at 5% on debtors and make a provison for discount on creditors at 2%.

5) Depreciate Machinery by 10% p.a. and Building by 5% p.a.

Prepare Trading Profit & Loss Account for the year ending 31st March, 2010 and Balance Sheet as on that date of M/s Sunit Kulkarni, Shahada from the following Trial Balance.

Trial Balance as on 31st March, 2010
Particulars	Debit Amount Rs	Credit Amount Rs
Opening Stock	25,000
Purchase and Sales	1,30,000	1,80,000
Returns	2,000	5,000
Sundry Debtors and Sundry Creditors	20,000	25,000
Wages	4,000
Furniture	11,000
Machinery	30,000
Advertisement (for 2 years)	4,000
Salaries	8,000
Investment	6,000
Insurance	500
Cash in hand	900
Cash at Bank	8,000
Postage and Telegram	1,000
Commission		500
Reserve Fund		4,000
Bills Payable		6,000
R.D.D.		500
Capital		31,000
Drawings	1,600
Total	2,52,000	2,52,000

Adjustment:

1) Closing stock was valued at Rs 23,000.

2) Depreciate Furniture by 20% and Machinery by 10% p.a.

3) Wages Rs 500 were unpaid and Insurance prepaid Rs 300,

4) Create R.D.D. at 5% on debtors.

5) Goods of Rs 1,400 taken over by Sunit Kulkarni for his personal use.

6) Commission Rs 200 due but not received.

From the following Trial Balance of Kalyani, you are required to prepare Trading Profit & Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2010
Particulars	Debit Amount Rs	Credit Amount Rs
Capital		90,000
Drawings	3,000
Stock on 1-4-2009	45,000
Octroi duty	800
Purchases & Sales	2,00,000	3,12,000
Returns	6,000	2,000
Salaries	10,000
Carriage outward	1,400
Wages	14,000
Insurance	2,000
Discount received		600
Postage	800
Debtors and Creditors	60,000	64,000
Furniture	35,000
Cash in hand	10,000
Machinery	80,000
Rent & Taxes	6,000
Printing & stationery	2,000
Bank Overdraft		7,400
Total	4,76,000	4,76,000

Adjustments:

1) Closing stock was valued at cost Rs 40,000 while its market price Rs 45,000.

2) Depreciate Machinery by 5% p.a.

3) Salary Rs 2,000 and wages Rs 1,000 were outstanding.

4) Insurance Rs 500 was prepaid.

From the following Trial Balance of M/s Bhagat Traders, you are required to prepare Trading Profit & Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2010
Particulars	Debit Amount Rs	Credit Amount Rs
Insurance	1,000
Discount	500	400
Postage and Telegram	1,500
Salaries	28,000
Debtors and Creditors	33,000	34,000
Wages	12,000
Opening stock	20,000
Carriage	4,500
Returns	2,800	4,600
Purchase and Sales	96,600	1,50,800
10% Bank Loan (Taken on 1-10-2009)		60,000
Plant and Machinery	20,000
Buildings	80,000
Drawings	4,000
Capital		50,000
Office rent	2,000
R.D.D.		1,000
Bad debts	600
Bank Overdraft		9,200
Cash	3,500
Total	3,10,000	3,10,000

Adjustment:

1) Stock on 31st March 2010 valued Rs 32,000

2) Depreciate Plant and Machinery at 10% Building at 5% p.a.

3) Wages include Rs 2,000 paid to worker as advance.

4) Salary Rs 2,000 and Office Rent Rs 400 were outstanding.

5) Creat R.D.D. on debtors Rs 1,400.

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Financial Statements of Mr. Kapil
Trading Account for the year ended 31st March, 2010
Dr.	Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Opening Stock			58,000	Sales	1,26,000
Purchases		63,000		Less: Return Inwards	(1,000)	1,25,000
Less: Drawings		(3,000)		Closing Stock		25,000
Less: Return Outwards		(500)	59,500
Carriage			2,500
Wages& Salary			6,500
Gross Profit (Balancing Figure)			23,500
			1,50,000			1,50,000

Profit and Loss Account for the year ended March 31, 2010
Dr.	Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Insurance		600		Gross Profit		23,500
Less:Prepaid		(100)	500	Old R.D.D	800
Travelling Expenses			3,000	Less: New R.D.D	(750)	50
Rent		3,500
Add: Outstanding		500	4,000
Office Expenses			2,700
Advertisement		3,000
Less:Prepaid		(2,000)	1,000
Depreciation on:
Machinery		1,200
Building		5,000	6,200
Net Profit (Balancing Figure)			6,150
			23,550			23,550

Balance Sheet as on March 31, 2010
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital	30,000		Fixed Assets
Less:Drawings	(5,500)		Machinery	12,000
Add: Net Profit	6,150	30,650	Less:Depreciation @ 10%	(1,200)	10,800
General Reserve		25,600	Building	25,000
			Less:Depreciation @ 20%	(5,000)	20,000
Current Liabilities
Outstanding Rent		500	Current Assets
Creditors		16,000	Debtors	15,000
Bills Payables		1,000	Less:R.D.D	(750)	14,250
			Bills Receivables		600
			Cash at Bank		1,000
			Closing Stock		25,000
			Prepaid Advertisement		2,000
			Prepaid Insurance		100
		73,750			73,750