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Question
State whether the following statement is True or False with reasons.
Depreciation is not calculated on Current Assets.
Options
True
False
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Solution
Depreciation is not calculated on Current Assets. - True
Explanation:
Current Assets mean liquid assets having no fixed tenure therefore depreciation cannot be calculated on it. Depreciation is calculated and charged on fixed assets for their use, wear and tear, etc.
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RELATED QUESTIONS
Surekha and Sangita decided to undertake a venture jointly. They agreed to share profits and losses in the ratio of 3 : 2. Surekha supplied from her own stock goods worth Rs. 4,00,000 and paid Rs. 9,900 for freight and Rs. 2,400 for insurance. Sangita purchased goods of Rs. 3,90,000 for the venture and paid Rs 14,000 for selling expenses. Sangita accepted a bill for 3 months of Rs. 1,90,000 drawn by Surekha as an advance. The bill was discounted immediately by Surekha for Rs. 1,84,000 and the amount of discount was charged to Joint Venture Account. Sangita sold all the goods for Rs. 10,00,000. At end of the venture, the accounts were settled. Give journal entries in the books of Surekha.
Rokadimal of Rajkot and Gunjal of Pune, entered into a Joint Venture to purchase and sale goods and agreed to share profit and losses in the proportion of 4 : 1 respectively.
Rokadimal paid Rs 11,500 for carriage.
Rokadimal discounted this bill with the bank for Rs 92,000.
Gunjal paid Rs 13,500 got advertisement.
Gunjal paid Rs 7,000 for selling expenses and he is entitled for a commission on sales at 5% Co-venturers settled their accounts.
Write the word/phrase/term, which can substitute the following sentence.
Debit balance of trading account.
Write the word/phrase/term, which can substitute the following sentence.
Credit balance of Profit and Loss Account.
Sanjay and Sudhir are partners sharing profit and losses in the ratio 3: 2. The Trial Balance of the firm on 31st March, 2010 was follows:
| Trial Balance as on 31st March, 2010 | |||
| Particulars | Amount (Rs.) |
Particulars | Amount (Rs.) |
| Opening stock | 20,000 | Capital A/c's | |
| Purchases | 30,000 | Sanjay | 40,000 |
| Debtors | 12,000 | Sudhir | 30,000 |
| Wages | 5,000 | Sales | 70,000 |
| Salaries | 10,000 | Sundry Creditors | 21,000 |
| Land and building | 30,000 | Bills Payable | 20,000 |
| Plant and machinery | 25,000 | Discount | 5,000 |
| Furniture | 16,000 | Outstanding Rent | 1,500 |
| Advertisement (for 2 years) | 6,000 | ||
| Bills Receivable | 8,000 | ||
| Insurance | 2,000 | ||
| Drawings: | |||
| Sanjay | 2,000 | ||
| Sudhir | 3,000 | ||
| Cash in hand | 5,500 | ||
| Rent | 10,000 | ||
| Power and Fuel | 3,000 | ||
| 1,87,500 | 1,87,500 | ||
Adjustments:
1) Stock on hand on 31st March, 2010 was at Rs. 35,000.
2) Write off Rs. 2,000, for further Bad debts and maintain R.D.D. at 5% on debtors.
3) Depreciate Land and Building at 5% and Machinery at 10%.
4) Outstanding expenses were wages Rs 2,000 and salary Rs 1,000.
5) Credit purchases amounted to Rs 4,000 were not recorded in the books of accounts.
6) Provide interest on Partners Capital at 5% p.a.
From the above Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that data.
Rohan and Roshan are partners in ‘Shan Traders’ sharing profits and losses in the ratio of 2:1. From the following Trial Balance and adjustments prepare Trading and 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 | Amount (₹) | Particulars | Amount (₹) |
| Opening stock | 32,000 | Sales | 1,93,500 |
| Purchases | 64,000 | Sundry Creditors | 15,000 |
| Plant and Machinery | 30,000 | Unpaid Wages | 1,500 |
| Furniture | 18,500 | Return outward | 2,500 |
| Carriage | 1,500 | Capital A/c: | |
| Wages and Salaries | 35,000 | Rohan | 90,000 |
| Bills Receivable | 5,000 | Roshan | 50,000 |
| Sundry Debtors | 32,000 | ||
| Conveyance | 4,000 | ||
| Rent, Rates and Taxes | 2,000 | ||
| Return Inward | 3,500 | ||
| Cash in hand | 14,750 | ||
| Land and Building | 83,500 | ||
| Bad debts | 1,750 | ||
| Patents | 25,000 | ||
| 3,52,500 | 3,52,500 | ||
Adjustments:
- Closing stock: Cost price Rs 25,000 and market price Rs 30,000.
- An amount of Rs 3,500 spent for repairs to Building is debited to Building account.
- Depreciate plant and Machinery and Building at 5% p.a.
- Goods of Rs 750 taken by Roshan for this personal use.
- Included in wages advances given to workers Rs 3,000.
- Provide Rs 1,500 for bad and doubtful debts on Debtors.
From the following Trial Balance of M/s Mahesh and Umesh, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date. Profit sharing ratio of Mahesh and Umesh was 3/5th and 2/5th respectively.
| Trial Balance as on 31st March, 2013 | |||
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| Investments | 56,000 | Capital A/c: | |
| Carriage | 7,000 | Mahesh | 1,62,000 |
| Loose Tools | 17,000 | Umesh | 1,08,000 |
| Building | 1,50,000 | Current A/c: | |
| Salary | 13,000 | Mahesh | 16,200 |
| Audit fees | 8,500 | Umesh | 10,800 |
| Opening stock | 83,000 | Sundry Creditors | 99,000 |
| Wages | 7,500 | Sales | 4,20,000 |
| Purchases | 1,97,000 | Bank Overdraft | 56,400 |
| Motive Power | 15,000 | ||
| Bad Debts | 6,400 | ||
|
Printing and Stationery
|
4000 | ||
| Debtors | 96,000 | ||
| Cash at Bank | 52,000 | ||
| Machinery | 72,000 | ||
| Motor Van | 88,000 | ||
| 8,72,400 | 8,72,400 | ||
Adjustments:
1) Stock on hand on 31st March, 2013 was valued at Rs 76,000.
2) Interest on partner’s capital at 5% p.a. was allowed.
3) Goods worth Rs 2,000 and Rs 1,500 withdrawn by Mahesh and Umesh respectively for their personal use.
4) Mahesh is entitled to get salary of Rs 6,500 and Umesh is to be given 20% commission on sales.
5) Rs. 2,500 due from customer is not recoverable.
6) Depreciate Motor Van at 8% p.a. and Building at 7% p.a.
From the following Trial Balance of M/s Sanjay and Vijay, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date after taking into consideration the adjustments given below.
Trial Balance as on 31st March, 2013
| Debit Balance |
Amount
Rs
|
Credit Balance |
Amount
Rs
|
| Salaries and wages | 12000 | Sales | 110000 |
| Postage and Telegram | 1,750 | Sundry Creditors | 72700 |
| Opening Stock | 23,500 | Bills Payable | 40000 |
| Plant and Machinery | 70,000 | 10% Bank loan (Taken on 1st Oct 2012) | 60000 |
| Advertisement | 5,000 | Outstanding Audit fees | 5900 |
| Import duty | 2,100 | Capital A/c- | |
| Bad debts | 1000 | Sanjay | 45000 |
| Purchases | 98500 | Vijay | 45000 |
| Sundry Debtors | 45800 | ||
| Bills Receivable | 16700 | ||
| Carriage outward | 1800 | ||
| Wages and stationery (Note 2) | 14000 | ||
| Printing and stationery | 4600 | ||
| Cash in hand | 1850 | ||
| Leasehold Premises | 80000 | ||
| 378600 | 378600 |
Adjustments:
1) Closing stock was valued at Rs 30,000.
2) Postage stamps of Rs 250 and stationery of Rs 400 are unused.
3) Goods of Rs 2,500 distributed as free samples.
4) Leasehold property is to be run for 10 years w.e.f. 1st October, 2012.
5) Depreciate Plant and Machinery at 10% p.a.
6) Mr. Rajan, our customer become insolvent and could not pay his debts of Rs 1,500.
Following is the Balance sheet of Harsha and Versha’s firm on 31st March, 2016. They share profit and losses in the ratio of 3 : 2.
| Balance sheet as on 31st March, 2016 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capital A/c: | Land & building | 2,00,000 | |
| Harsha | 2,80,000 | Furniture | 76,000 |
| Varsha | 2,80,000 | Sundry debtors | 3,00,000 |
| Sundry creditors | 4,00,000 | Stock | 1,60,000 |
| Cash at bank | 2,24,000 | ||
| 9,60,000 | 9,60,000 | ||
They decided to admit Asha on 1st April, 2016, into partnership on the following terms:
- Asha should bring Rs. 80,000 as her share of goodwill, which is to be retained in the business.
- She should bring Rs. 1,00,000 as her capital for 1/4th share in future profits.
- land and building to be valued at Rs. 2,40,000 and furniture be reduced by 10%.
- A provision of 5% on debtors to be made for doubtful debts.
- The stock is to be taken at a value of Rs. 2,00,000.
- The excess of capital of Harsha and Varsha over their due proportion of sharing profits in the firm is to be transferred to their respective loan accounts.
Prepare:
Profit and Loss Adjustment Account, Partner’s Capital Account and new Balance Sheet of the firm.
Dhiraj and Suraj are partners sharing profits and losses in the ratio of 2 : 1. From the following Trial Balance and adjustments, prepare Trading and Profit and Loss account for the year ended 31st March, 2013 and balance sheet as on that date :
Trial Balance as on 31.03.2013
|
Particulars
|
Amount
Rs.
|
Particulars
|
Amount
Rs.
|
| Opening Stock | 32,000 | Sales | 1,93,500 |
| Purchases | 64,000 | Sundry Creditors | 16,500 |
| Plant and Machinery | 30,000 | Return Outward | 2,500 |
| Furniture | 18,500 | Capital Accounts | |
| Carriage | 1,500 | Dhiraj | 90,000 |
| Wages | 30,000 | Suraj | 50,000 |
| Bills Receivable | 5,000 | ||
| Sundry Debtors | 32,000 | ||
| Conveyance | 4,000 | ||
|
Salaries
|
10,500 | ||
| Cash in hand | 14,750 | ||
| Land and Building | 83,500 | ||
| Bad debts | 1,750 | ||
| Patents | 25,000 | ||
| 352,500 | 352,500 |
Anita, Sunita and Kavita were partners sharing profits and losses in the ratio 3:3:2. Their Balance Sheet as on 31st March 2013 is as below:
| Balance Sheet as on 31st March, 2013. | |||
|
Liabilities
|
Amount
(₹)
|
Assets
|
Amount
(₹)
|
|
Capital Accounts
|
11,000 |
Building
|
10,000
|
|
Anita
|
15,000
|
Machinery
|
10,700
|
|
Sunita
|
8,000
|
Furniture
|
10,000
|
|
Kavita
|
10,000
|
Debtors
|
5,000
|
|
Creditors
|
10,900
|
Stock
|
6,600
|
|
Reserve fund
|
4,000
|
Cash
|
6,600
|
- Goodwill of the firm is to be valued at ₹4,000, however, only Kavita’s share in it is to be raised in the books and written off immediately.
- Assets to be revalued as under:
Stock ₹6,300; Machinery ₹10,000; Furniture ₹10,200. - R.D.D. to be maintained at 10% on debtors.
- ₹100 to be written off from creditors.
- The amount payable to Mrs. Kavita is to be transferred to her loan account.
- Profit and loss adjustment account.
- Partner’s capital account, and
- Balance Sheet of new firm as on 01.04.2013.
Write the word/phrase/term, which can substitute the following sentence.
The account to which all adjustments are made when capital is fixed.
Write the word/phrase/term, which can substitute the following sentence.
The accounts that are prepared at the end of each accounting year.
Write the word/phrase/term, which can substitute the following sentence.
An asset which can be converted into cash easily.
State whether the following statement is True or False with reasons.
Prepaid expenses are treated as liabilities.
State whether the following statement is True or False with reasons.
Wages paid for the installation of Machinery is a Revenue expenditure.
State whether the following statement is True or False with reasons.
R.D.D. is created on Creditors.
State whether the following statement is True or False with reasons.
Indirect expenses are debited to Trading Account.
State whether the following statement is True or False with reasons.
Net profit is a debit balance of Profit and Loss Account.
Find odd one.
Find odd one.
The withdrawal by partner for personal use from the firm is ________ to his account.
Answer in one sentence only.
As per which principle of accounting, closing stock is valued at cost price or at market price whichever is less?
Answer in one sentence only.
Why is Balance Sheet prepared?
Archana and Prerana are partners, sharing Profits and Losses in the ratio 2: 1 with the help of following Trial Balance and Adjustments given below. You are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as on that date.
Trial Balance as on 31st March 2019
|
Debit Balance |
Amount ₹ |
Credit Balance |
Amount ₹ |
|
Stock (1/4/2018) |
8,560 |
Capital: |
|
|
Patents |
2,000 |
Archana |
40,000 |
|
Sundry Debtors |
18,500 |
Prerana |
20,000 |
|
Stock of Stationary |
3,000 |
Other Loans |
3,000 |
|
Trade Mark |
2,000 |
Reserve fund |
1,000 |
|
Bills Receivable |
6,300 |
Sundry Creditors |
17,500 |
|
Electricity charges |
1,450 |
Bills Payable |
5,000 |
|
Wages |
950 |
Purchase Return |
1,000 |
|
Heating & Lighting |
1,000 |
R.D.D |
500 |
|
Trade Expenses |
850 |
Sales |
30,200 |
|
Sales Return |
400 |
Interest |
310 |
|
Land & Building |
22,000 |
||
|
Furniture |
13,000 |
||
|
Cash at Bank |
5,000 |
||
|
Investments |
7,500 |
||
|
Drawings : |
|||
|
Archana |
1,200 |
||
|
Prerana |
900 |
||
|
Bad debts |
200 |
||
|
Purchases |
23,700 |
||
|
1,18,510 |
1,18,510 |
Adjustments:
1) Stock on 31st March 2019 is valued at Cost Price ₹ 12,000 and Market Price ₹ 17,000.
2) Our customer Mr. Shekhar failed to pay his dues of ₹ 800.
3) 1/8th of Patents are to be written off.
4) A part of Furniture ₹ 5,000 is purchased on 1st Oct 2018.
5) Depreciation on Land & Building 10% and on Furniture 5%.
6) Outstanding Expenses Wages ₹ 300 and Electricity Charges ₹ 200.
7) Allow Interest on Capital 3%.
Satish and Pramod are Partners. Prepare Trading Account and Profit and Loss Account for the year 31st March 2019. You have to find out Gross Profit and Net Profit only.
Trial Balance as on 31st March 2019
|
Debit Balance |
Amount ₹ |
Credit Balance |
Amount ₹ |
|
Stock (1/4/2018) |
8,700 |
Sales |
68,000 |
|
Purchases |
18,300 |
Dividend |
2,000 |
|
Wages |
1,000 |
Purchases Return |
500 |
|
Insurance |
800 |
Sundry Creditors |
13,000 |
|
Unproductive Wages |
1,400 |
10% Bank Loan (w.e.f. 1/7/2018) |
8,000 |
|
Warehouse Rent |
600 |
||
|
Carriage Outward |
1,200 |
Other Receipts |
1,000 |
|
Sales Return |
600 |
||
|
Export Duty |
1,400 |
||
|
Customs Duty |
800 |
||
|
Sundry Debtors |
40,000 |
||
|
Investments |
15,700 |
||
|
Factory Rent |
1,600 |
||
|
Postage & Telegram |
400 |
||
|
92,500 |
92,500 |
Adjustments:
- The Closing Stock is valued at ₹ 15,400.
- Outstanding Wages ₹ 500.
- Create provision for Bad debts ₹ 800 and maintain R.D.D. 3% on Sundry Debtors.
- Goods of ₹ 1,800 distributed as a free sample.
- Goods of ₹ 2,000 were sold and delivered on 31st March 2019 but no entry is passed in the Books of Account.
Nana and Nani are Partners in Partnership Firm sharing Profits and Losses equally. You are required to give effects of Adjustments in Profit & Loss A/c and Balance Sheet with the help of the following information.
Trial Balance as on 31st March 2019
| Debit Balance | Amount ₹ | Credit Balance | Amount ₹ |
| Insurance | 15,000 | Capital A/c | |
| Land and building | 50,000 | Nana | 50,000 |
| (Addition of 20,000 w.e.f 1st July 2018) | Nani | 50,000 | |
| Salaries | 5,000 | 10% Bank loan taken on 1st Oct. 2018 | 30,000 |
| Export Duty | 2,500 | Interest | 1,500 |
| Interest | 1,000 | Bills Payable | 8,000 |
| Furniture | 40,000 | ||
| Debtors | 26,000 | ||
| 1,39,500 | 1,39,500 |
Adjustments :
1) Gross profit amounted to ₹ 34,500.
2) Insurance Paid for 15 months w.e.f. 1. 4. 2018.
3) Depreciate Land and Building at 10% p.a. and Furniture at 5% p.a.
4) Write off ₹ 1,000 for Bad Debts and maintain R.D.D at 5% on Sundry Debtors.
5) Closing Stock is valued at ₹ 34,500.
Sun and Moon are Partners in Partnership Firm sharing Profits and Losses equally. You are required to give the effects of Adjustments with the help of the following information.
Trial Balance as on 31st March 2019
|
Debit Balance |
Amount ₹ |
Credit Balance |
Amount ₹ |
|
Land & Building |
40,000 |
Capital A/C |
|
|
Furniture |
18,000 |
Sun |
33,500 |
|
Machinery |
40,000 |
Moon |
33,500 |
|
(Purchased on 1/7/18) |
Current A/c: Sun |
6,000 |
|
|
Goodwill |
2,000 |
Sundry Creditors |
25,000 |
|
Wages |
2,000 |
Bank Overdraft |
10,000 |
|
Current A/c: Moon |
4,000 |
Reserve Fund |
5,000 |
|
8% Debentures |
8,000 |
Providend Fund |
5,000 |
|
(Purchased on 1/10/18) |
|||
|
Providend Fund Investment |
3,500 |
||
|
Stock of Postal stamps |
500 |
||
|
1,18,000 |
1,18,000 |
Adjustments:
1) Partners are entitled to get salary ₹ 6,000 p.a. in addition to their profit & loss sharing.
2) Depreciation on Land & Building, Furniture & Machinery @10%, 5% and 3% respectively.
3) Interest on Capital 5% p.a.
4) Closing Stock ₹ 60,743.
5) Wages included ₹ 1,000 as advance is given to workers.
6) Interest due but not paid ₹ 800.
7) Total Net Profit amounted to ₹ 38,113.
Kshipra and Manisha are Partners sharing Profit and Loss in their Capital Ratio. You are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as on that date.
| Trial Balance as on 31st March 2019 | |||
|
Debit Balance |
Amount (₹) |
Credit Balance |
Amount (₹) |
|
Sundry Debtors |
28,000 |
Sales |
1,20,000 |
|
Purchases |
55,000 |
Rent |
1,800 |
|
Furniture |
38,500 |
Sundry Creditors |
38,500 |
|
Plant & Machinery |
60,000 |
Purchase Return |
1,000 |
|
Wages |
800 |
Discount |
500 |
|
Salaries |
3,500 |
Bills Payable |
9,000 |
|
Discount |
800 |
Capital A/c: |
|
|
Bills Receivable |
14,400 |
Kshipra |
90,000 |
|
Carriage Outward |
1,000 |
Manisha |
30,000 |
|
Postage |
500 |
Current A/c: |
|
|
Sales Return |
500 |
Kshipra |
5,000 |
|
Cash in Hand |
4,000 |
Manisha |
3,000 |
|
Cash at Bank |
47,000 |
||
|
Insurance |
2,000 |
||
|
Opening Stock |
17,800 |
||
|
Trade Expenses |
1,500 |
||
|
Warehouse Rent |
2,500 |
||
|
Advertisement |
1,000 |
||
|
Building |
20,000 |
||
|
2,98,800 |
2,98,800 |
||
Adjustments:
- Stock on 31st March 2019 was at ₹37,000.
- Sales include the sale of machinery of ₹ 2,000, which is sold on 1st April 2018.
- Depreciation on fixed assets @ 5%.
- Each Partners is entitled to get Commission at 1% of Gross Profit and Interest on Capital 5% p.a.
- Outstanding Expenses Wages ₹ 200 & Salaries ₹ 500.
- Create provision for doubtful debts @ 3% on Sundry Debtors.
The insurance premium is paid for the year ending 1st September 2019 amounted to ₹ 1,500. Calculate prepaid insurance assuming that the year ending is 31st March 2019.
Find out Gross profit/Gross loss Purchases ₹ 30,000, Sales ₹ 15,000, Carriage Inward ₹ 2,400, Opening Stock ₹ 10,000, Purchase Returns ₹ 1,000, Closing Stock ₹ 36,000.
Sun and Moon are partners sharing profits and losses equally. From the following trial balance and additional information prepare trading and Profit and Loss Account for the year ended 31st march 2020 and balance sheet as on that date.
| Trial Balance as on 31st March, 2020 | |||
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| Stock (1/4/2019) | 65,000 | General Reserve | 14,500 |
| Bills Receivable | 28,000 | Capital: | |
| Wages and Salaries | 9,000 | Sun | 1,60,000 |
| Sundry Debtors | 1,32,500 | Moon | 1,20,000 |
| Bad-debts | 1,000 | Creditors | 98,000 |
| Purchases | 1,48,000 | R.D.D. | 1,800 |
| Motor car | 68,000 | Sales | 2,85,500 |
| Machinery | 1,14,800 | Outstanding Wages | 700 |
| Audit Fees | 1,200 | Purchases Returns | 4,000 |
| Sales Return | 2,000 | Discount | 1,800 |
| Discount | 2,300 | ||
| Building | 75,000 | ||
| Cash at Bank | 12,000 | ||
| 10% Investment | 20,000 | ||
| Advertisement (Paid for 9 months) | 4,500 | ||
| Royalties | 3,000 | ||
| 6,86,300 | 6,86,300 | ||
Adjustment and Additional Information:
- Closing Stock ₹ 40,000.
- Depreciate Building and Machinery @ 5% and 3% respectively.
- Bills Receivable included dishonoured bill of ₹ 3000.
- Goods worth ₹ 1000 taken by sun for personal use was not entered in the books of accounts.
- Write off ₹ 1800 as Bad debts and maintain R.D.D. at 5% on Sundry Debtors.
- Goods of ₹ 6000 were sold but no entry was made in the books of accounts.
To find out the Net Profit or Net Loss of the business ______ account is prepared.
A ______ is an Intangible Asset.
Find odd one
Find odd one
Asha and Nirasha are partners sharing profits and losses in the ratio of 1 : 1. From the following Trial Balance and additional information, prepare Trading and Profit and Loss account for the year ended 31st March, 2023 and Balance Sheet as on that date.
| Trial Balance as on 31st March, 2023 | |||
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| Stock (1/4/2022) | 1,30,000 | General Reserve | 29,000 |
| Bills Receivable | 56,000 | Capital: | |
| Wages and Salaries | 18,000 | Asha | 3,20,000 |
| Sundry Debtors | 2,65,000 | Nirasha | 2,40,000 |
| Bad Debts | 2,000 | Creditors | 1,96,000 |
| Purchases | 2,96,000 | R.D.D. | 3,600 |
| Motor Car | 1,36,000 | Sales | 5,71,000 |
| Machinery | 2,29,600 | Outstanding Wages | 1,400 |
| Audit Fees | 2,400 | Purchases Returns | 8,000 |
| Sales Return | 4,000 | Discount | 3,600 |
| Discount | 4,600 | ||
| Building | 1,50,000 | ||
| Cash at Bank | 24,000 | ||
| 10% Investment | 40,000 | ||
| Advertisement (Paid for 9 months) | 9,000 | ||
| Royalties | 6,000 | ||
| 13,72,600 | 13,72,60 | ||
Adjustment and Additional Information:
(1) Closing Stock ₹ 80,000.
(2) Depreciation Building and Machinery @ 5% and 3% respectively.
(3) Bills Receivable included dishonoured bill of ₹ 6,000.
(4) Goods worth ₹ 2,000 taken by Asha for personal use was not entered in the books of accounts.
(5) Write off ₹ 3,600 as Bad debts and maintain R.D.D. at 5% on Sundry Debtors.
(6) Goods of ₹ 12,000 were sold but no entry was made in the books of accounts.
From the following Trial Balance and Adjustments of Rushabh and Yesha, you are required to prepare final accounts as on 31st March, 2023. Profit and Loss sharing ratio of partners is their capital ratio.
| Trial Balance as on 31st March, 2023 | ||
| Particulars (Name of Accounts) | Debit (₹) | Credit (₹) |
| Capital and Drawings : | ||
| Rushabh | 40,000 | 2,00,000 |
| Yesha | 28,000 | 1,00,000 |
| Purchases and Sales | 2,80,000 | 5,21,000 |
| Debtors and Creditors | 1,80,000 | 1,20,000 |
| Sales Return and Purchase Return | 4,000 | 6,000 |
| Bills Receivable and Bills Payable | 30,000 | 41,600 |
| Cash Balance and Bank Overdraft | 2,000 | 28,000 |
| Bad Debts and Provision for Doubtful Debts | 800 | 2,600 |
| Wages and Outstanding Wages | 70,000 | 4,000 |
| Machinery | 80,000 | |
| Furniture | 24,000 | |
| Opening Stock of Goods | 92,200 | |
| Prepaid Insurance | 400 | |
| Salaries | 46,000 | |
| Insurance Premium | 4,000 | |
| Rent -Taxes | 24,000 | |
| Advertisement Expenses | 5,800 | |
| Goodwill | 1,44,000 | |
| Leasehold Building | 28,000 | |
| 8 % Loan (From 1111/22) | 60,000 | |
| 10,83,200 | 10,83,200 | |
Adjustments :
(1) Closing stock is of ₹ 2,20,000. Its market value is 20 % more than its value.
(2) Calculate interest on capital @ 6 % p.a.
(3) Interest on drawings to be charged from partners: Rushabh ₹ 1,800, Yesha ₹ 1,200
(4) Provision for doubtful debts is to be kept at 5 %.
(5) Outstanding expenses at the end of the year: Rent ₹ 600, Salary ₹ 1,900.
(6) Provide depreciation at 10 % on machinery and at 5 % on furniture.
(7) Write off ₹ 8,000 from Leasehold Building.
Advertisement expense ₹ 80,000 paid for 2 years from 1st Jan. 2022. Calculate prepaid advertisement expense for the year ended on 31st March, 2022.
Find the odd one:
Mama and Kaka are partners in partnership firm sharing profits and losses equally. You are required to prepare Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as on that date:
| Trial Balance as on 31st March, 2019 | |||
| Debit Balances | Amount (₹) | Cebit Balances | Amount (₹) |
| Insurance | 30,000 | Capital Accounts: | |
| Land and Building ((Addition of ₹ 40,000 wef. 1st July, 2018)) | 1,00,000 | Mama | 1,00,000 |
| Salaries | 10,000 | Kaka | 1,00,000 |
| Export duty | 5,000 | 10% Bank Loan (taken on1st Oct. 2018) | 60,000 |
| Interest | 2,000 | Interest | 3,000 |
| Furniture | 80,000 | Bills payable | 16,000 |
| Debtors | 52,000 | - | |
| 2,79,000 | 2,79,000 | ||
Adjustment:
- Gross profit amounted to ₹ 69,000.
- Prepaid insurance ₹ 7,500.
- Depreciate Land and Building at 10% p.a. and Furniture 5% p.a.
- Write ₹ 2,000 for bad debts and maintain R.D.D. at 5% on sundry debtors.
- Closing stock is valued at ₹ 69,000.
Find odd one.
Find odd one.
Find odd one.
Find odd one.
