The following is the trial balance on June 30, 2006 of the Modern Manufacturing Company Ltd.
Details |
Amount Rs |
Details |
Amount Rs |
Stock, 30th June, 2005 |
7,500 |
Dividend paid in, August, 2005 |
500 |
Sales |
35,000 |
Interim Dividend paid in Feb., 2006 |
400 |
Purchases |
24,500 |
Capital- 10,000 Rs 1 shares full Paid |
10,000 |
Productive wages |
5,000 |
Debtors |
3,750 |
Discounts (Dr.) |
700 |
Creditors |
1,750 |
Discounts (Cr.) |
500 |
Plant and machinery |
2,900 |
Salaries |
750 |
Cash in Bank |
1,620 |
Rent |
495 |
Reserve |
1,550 |
General expenses |
1,705 |
Loan to Managing Director |
325 |
Profit and loss account, |
1,503 |
Bad Debts |
158 |
30th June 2005 (Cr.) |
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Stock, on June 30, 2006 Rs 8,200. You are required to make out the trading account, and profit and loss account for the year ended June 30, 2006 and the balance sheet as on the date. You are also to make provision in respect of the following: (i) Depreciate machinery @ 10% per annum; (ii) Reserve 5% for discount on debtors; (iii) One month rent Rs 45 was due on 30th June; and (iv) Six month’s insurance, included in general expenses, was unexpired at Rs 75.
Modern Manufacturing Company Ltd.
Trading and Profit and Loss Account for the year ended June 30, 2006 |
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Dr. |
Cr. |
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Expenses/Losses |
Amount Rs |
Revenues/Gains |
Amount Rs |
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Opening Stock |
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7,500 |
Sales |
35,000 |
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Purchases |
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24,500 |
Closing Stock |
8,200 |
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Productive Wages |
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5,000 |
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Gross Profit c/d |
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6,200 |
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43,200 |
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43,200 |
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Salaries |
|
750 |
Gross Profit b/d |
6,200 |
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Discount |
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700 |
Discount |
500 |
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Rent |
495 |
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Add: Outstanding |
45 |
540 |
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General Expenses |
1,705 |
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Less: Prepaid Insurance |
(75) |
1,630 |
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Depreciation on Machinery |
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290 |
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Bad Debts |
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158 |
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Reserve for discount on Debtors |
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187.5 |
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Net Profit c/d |
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2,444.5 |
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6,700 |
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6,700 |
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Dividend paid in Aug. |
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500 |
Balance b/d |
1,503 |
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Interim Dividend |
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400 |
Net Profit for the Current year |
2,444.5 |
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Balance c/d |
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3,047.5 |
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3,947.5 |
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3,947.5 |
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Balance Sheet as on June 30, 2006
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Liabilities |
Amount Rs |
Assets |
Amount Rs |
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Share Capital |
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Fixed Assets |
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Authorised Capital: |
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….shares of Rs …. each |
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Plant and Machinery |
2,900 |
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Issued and Subscribed: |
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Less: Depreciation |
290 |
2,610 |
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10,000 shares of Rs 1 each |
10,000 |
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Reserves and Surplus |
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Current Assets, Loans and Advances |
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Reserve |
1,550 |
Debtors |
3,750 |
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Profit and Loss |
3,047.5 |
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Less: Reserve for Discount |
187.5 |
3,562.5 |
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Current Liabilities and Provision |
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Cash at Bank |
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1,620 |
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Current Liabilities: |
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Prepaid Insurance |
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75 |
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Creditors |
1,750 |
Stock |
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8,200 |
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Rent Outstanding |
45 |
Loan to Managing Director |
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325 |
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16,392.5 |
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16,392.5 |
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Note: It has been assumed that the Dividend Paid, August, 2005 of Rs 500 has been declared and paid in the same accounting period.