Question

The following is the trial balance of Miss H. Seattle as on 31st December, 2018. 

	Dr. (₹)	Cr. (₹)
Salaries	5,500
Wages	33,000
Returns Accounted	10,000	8,000
Carriage Inwards	12,000
Carriage Outwards	10,000
Rent	3,300
Insurance	7,000
Stock on 1.1.2018	15,000
Rates and Taxes	2,700
Power and Fuel	8,000
Plant and Machinery	1,00,000
Furniture and Fixtures	10,000
Purchases	1,20,000
Sales		2,05,000
Investments (long-term basis)	80,000
Income from Investments		10,000
Commission Receipts		12,000
Discount to Customers and from Creditors	4,000	6,000
Bad Debts Written off	2,000
Cash in Bank	25,000
Cash in Hand	500
Capital		2,20,000
Debtors' and Creditors' Personal Accounts	52,000	39,000
	5,00,000	5,00,000

Compile the final accounts for the owner, after attending to the adjustment given below.

1. Closing stock is evaluated at the lower market price ₹ 42,000 ignoring the cost price, which is higher by ₹ 4,000.

Answer 1

In the Books of Mr. H. Seattle
Dr.	Trading and Profit and Loss A/c for the year ended 31.12.2018				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Opening Stock	-	15,000	By Sales	2,05,000	1,95,000
To Purchases	1,20,000	1,12,000	Less: Returns	(10,000)
Less: Returns	(8,000)		By Closing Stock	-	42,000
To Carriage Inward	-	12,000
To Wages	-	33,000
To Power and Fuel	-	8,000
To Gross Profit	-	57,000
		2,37,000			2,37,000
To Carriage Outwards	-	10,000	By Gross Profit	-	57,000
To Rent	-	3,300	By Discount Received	-	6,000
To Salaries	-	5,500	By Income From investments	-	10,000
To Rates and Taxes	-	2,700	By Income from Investments	-	12,000
To Insurance	-	7,000
To Bad Debt W/off	-	2,000
To Discount	-	4,000
To Net Profit	-	50,500
		85,000			85,000

 

Balance Sheet as on 31.12.2018
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Capital	2,20,000	2,70,500	Plant & Machinery	1,00,000
Add: Net Profit	50,500		Furniture & Fixtures	10,000
Sundry Creditors	-	39,000	Investments	80,000
			Cash at bank	25,000
			Cash in hand	500
			Sundry Debtors	52,000
			Closing Stock	42,000
		3,09,500		3,09,500