Aisha Noushad
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)
Vinod.P
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 | ||||
