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Accounts

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 asked

From the following particulars prepare a trading and profit and loss account of Mr. R
for the year ended 31.3.17 and a balance sheet as on 31.3.17 :
Dr .₹
Cr. ₹
Building 5,00,000
Machinery 2,00,000
Furniture 1,00,000
Cash at bank 90,000
Cash on hand 10,000
18% p.a. loan obtained by Mr. Ron
mortgage of his building (on 1.6.16) 3,00,000
Mr. R's capital 5,20,000
Sundry debtors/Sundry creditors 5,00,000 4,00,000
Stock (on 1.4.16) 1,20,000
Purchases 25,00,000
Sales  32,20,000
Sales returns 1,20,000
Purchases returns 1,00,000
Rent 60,000
Establishment expenses 1,80,000
Electricity charges 15,000
Telephone charges 10,000
Commission on sales. 30,000
Insurance premium 10,000
Bad debts 20,000
Bills receivable 75,000

You are required to provide for depreciation on buildings at 5% p.a. ; on machinery at
25% p.a.; on furniture at 10% p.a. Provision for bad and doubtful debts is to be made at
5% on sundry debtors. Mr. R's manager is entitled to a commission of 10% on the net
profit after charging his commission. Closing stock was not taken on 31.3.17 but only on
7.4.17
Following transactions had taken place during the period from 1.4.17 to 7.4.17 :
Sales 2,50,000, Purchases 1,50,000, Stock on 7.4.17 was 1,80,000, Rate of
on sales was 20%. Insurance premium mentioned in the trial balance was in respect
building and machinery. Interest on mortgage loan to be provided up to 31.3.17.
gross profit
of
7. Following is the trial halance of Shui
[C.A., Foundation)

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

TRADING & PROFIT AND LOSS ACCOUNT OF MR RON FOR THE PERIOD FROM 1-4-2016 TO 31-03-2017
           
PURTICULARS AMOUNT DR. AMOUNT PURTICULARS AMOUNT Cr. AMOUNT
Opeing Stock                        1,20,000.00 Sales            32,20,000.00  
Add Purchases  25,00,000   Less Sales Return          -1,20,000.00      31,00,000.00
Less Purchase Return -1,00,000                   24,00,000.00 * Closing Stock           2,38,333.33
Gross Profit C/d                        8,18,333.33      
Total                     33,38,333.33 Total        33,38,333.33
           
Rent                           60,000.00      
Establishment expenses                         1,80,000.00 Gross Profit b/d           8,18,333.33
Electricity charges                            15,000.00      
Telephone charges                           10,000.00      
Commission on sales                           30,000.00      
nsurance premium                           10,000.00      
Bad debts                           20,000.00      
Depreciation          
Building (5% ON 500000) 25000        
Machinery (25% ON 200000) 50000        
Furniture (10% ON 100000) 10000                         85,000.00      
Interest on Mortgage ( 300000 X 18% FOR 6 MONTHS)                           27,000.00      
Provision for Bad Debts (                           20,000.00      
** Manager's Commission                           36,133.33      
           
Net Profit Trasnfered to Capital Account                        3,25,200.00      
           
Total                      8,18,333.33 Total         8,18,333.33
           
                                      -                              -  
BALANCE SHEET OF MR RON AS ON 31-03-2017
           
LIABILITIES AMOUNT  AMOUNT  ASSETS AMOUNT  AMOUNT 
Capital Account                     5,20,000.00   Bulding            5,00,000.00  
Add:- Net Profit                     3,25,200.00                      8,45,200.00 Less:- Depreciation 5%              -25,000.00         4,75,000.00
***Interest on Mortgage                           27,000.00 Machinery            2,00,000.00  
Commission Payable to Manager                           36,133.33 Less:- Depreciation 25%              -50,000.00         1,50,000.00
Sundry Creditors                        4,00,000.00 Furniture            1,00,000.00  
Mortgage Loan on Building                        3,00,000.00 Less:- Depreciation 10%                10,000.00            90,000.00
      Sundry Debtors            5,00,000.00  
      Less Provision for bad Debts 5%                20,000.00         4,80,000.00
      Cash in hand              10,000.00
      Cash at bank              90,000.00
      Bills Receivable              75,000.00
      Closing Stock           2,38,333.33
           
TOTAL                   16,08,333.33 TOTAL      16,08,333.33
           
           
* CLOSING STOCK CALCULATION          
SALES  FOR THE PERIOD FROM 1-4-2017 TO 7-04-207                     2,50,000.00        
RATE ON SALES                                    0.20        
COST OF GOODS SOLD (2,50,000 X 100 /120)                     2,08,333.33        
           
 OPENING STOCK +PURCHASE-CLOSING STOCK (1-4-17 to 7-4-17)                     2,08,333.33        
ADD CLOSING STOCK AS ON 7-4-2017                     1,80,000.00        
TOTAL                     3,88,333.33        
LESS PURCHASES DURING 1-4-17 TO 7-4-2017                     1,50,000.00        
OPENING STOCK AS ON 1-4-2017 (CLOSING ON 31-03-2016)                     2,38,333.33        
           
** MANGERS COMMISSION          
NET PROFIT BEFORE COMMISSION X 10/100 (361333.33 X10/100) 36133.333        
           
***INTEREST ON  MORTGAGE( 300000 X 18% FOR 6 MONTHS) 300000X 18/100X6/12        

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