PROBLEM 5.

(Free samples, Value Added Tax, cheque dishonoured and sale

Given below is the Trial Balance of Mr. Ramesh as o n 31st
on approval basis)
March, 2017
Particulars Dr. Amount Cr. Amount
)
Land and Buildings 1,20,000
Office Machinery 70,000
Furniture and Fittings 20,000
Stock on 1-4-2016 16,000
Purchases and Sales 90,000 2,20,000
Salaries 20,000
- TAXMANN® vww wwww
**
42 FINANCIAL STATEMENTS OF NON-CORPORATE BUSINESS ENTITIES

Bad Debts 10,000

Debtors and Creditors 35,000
Value Added Tax 10,000
40,000
Rent, Rates and Taxes 15,000
Advertisement 18,000
Drawings 5,000
Loan to Ashok @ 16% p.a. on 1-10-2016 20,000
Wages 33,000
Interest on Loan to Ashok 1,000
Bills Receivables 10,000
Trade Mark 8,000
Discount 1,000
Wages Payable 2,000
Capital 1,98,000
Bank Overdraft
40,000
5,01,000 5,01,000
Additional Information
() The value of stock on 31-3-2017,7 30,000.
(i) Sales include, 5,000 for the goods sold on approved to Hemant. Goods
are sold at a profit for 25% on cost.
Approval was not received till 31st
March.

(ii Furniture purchased during the year for R 5,000

to Purchase Book.
was wrongly debited
iv) A cheque of T 8,000 received from customers was
in the last week of March. It was reported to have
deposited in the bank
been dishonoured.
( Free samples worth ? 4,000 were distributed
during the vear.
(va Write off further bad debts R 2,000. Also create a
provision for doubtful
debts at 10% on debtors.
(vi) Depreciate furniture by 10% and office machinery by 5%.
Prepare Trading and Profit & Loss Account for the year ended 31st March
2017 and a Balance Sheet as on that date.
[Link]. (H), Delhi University, 2010,
Modified
Ans. [Gross Profit: 7 1,09,000; Net Profit:7 31,000; B/S Total: 7 3,1400
PROBLEM 6. (Calculation of purchases and exchange off 0
asset) The follos
Trial Balance
n017
extracted from the books of Mr. Shyam La
.
was Lal llowing
as on
31st
 FINANCIAL STATEMENTS OF
NON-CORPORATE BUSINESS ENTITIES 43
Particulars
Capital Account Debit ) Credit )
Plant and Machinery 1,00,000
Furniture 78,000
Sales 2,000
Purchases 1,27,000
Returns 60,000
1,000 750
Opening Stock
Discount 30,000
Sundry Debtors and Creditors 425 800
45,000 25,000
Salaries
7,550
Manufacturing Wages
10,000
Carriage Outwards
1,200
Provision for Bad Debts
525
Rent, Rates and Taxes
10,000
Advertisement
2,000
Cash
6,900
2,54,075 2,54,075
Prepare Trading and Profit and Loss Account for the year ended 31st March,
2017 and Balance Sheet as on that date after taking into account the
following
adjustments
() Closing stock was valued at 7 34,220.
(i) Provision for Bad Debts is to be kept at R 500.
(ii) Allow interest on capital at 10% p.a.
(iv) Furniture was old and fully depreciated and the same was disposed
off on the last day of the financial year tor ? 760 in exchange of new
furniture costing7 1,680. The net invoice of R 920 was passed through
Purchase Register.
() Depreciate plant and machinery by 10% p.a.
worth R 5,000 for personal
(V1) Theproprietor Mr. Shyam Lal has taken goods
R 1,000 as samples.
use and distributed goods worth
[[Link], Delhi-2008, Modified
Ans. [Gross Profit:7 67,890; Loss on Exchange of Furniture:7 1,240; Net
Profit:7 27,500; Balance Sheet Total
: 1,57,500]

a VMANN
 PROBLEM 7. (Closing stock, Loss by fire and Apprenticeshin premi
for the year ending 31st March, 2017.m) From
m) From
the following particulars
Brothers, prepare Trading
and Profit and Loss Account and Rala S /s Amit
Amit
e Sheet on
that date

Stock 1-4-2016 23,200 Advertisement

1,45,000 Apprenticeship premium
15,950
Capital 1-4-2016
3,480
Purchases 58,000 Bill receivable
10,150
Sales 2,32,000 Bills payable
7,250
Office expenses 23,345 Sundry debtors 58,000
Return inward 4,350 Plant and machinery 13,050
Interest on loan 870 Sundry creditors
45,820
Return outward 1,160 Loan (Dr.), @ 109% on 1-4-2016
14,500
Drawings 8,700 Investment 8,700
Wages 20,010 Cash at bank 10,150
Land and building 1,59,500 Cash in hand 725
Furniture and fixtures 7,250
Adjustments to be made for the current year are
() Interest on capital to be allowed at 59% for the year.
(i) Interest on drawings to be charged to him as ascertained for the year
R 232.
(t) Apprenticeship premium is for three years received in advance on Ist
April, 2016
(iv) Stock valued at 7 8,700 destroyed by fire on 25-3-2017 but the insurance
company admitted a claim of 7 5,800 only, to be paid in June, 2017.
(1) 14,500 out of advertisement expenses are to be carried forward.
( The manager is entitled to a commission of 10% on the net profit calcu-
lated after charging such commission.
(vi) Stock on 31-3-2017 7 20,300.
(Vin) The stock includes goods worth 7 2,900 for which bill had not becu
received and, therefore, not yet accounted for.
Ans. Gross Profit :7 1,53,700: Net Profit :7 L10.543: Balance Sheet 1otal
73,23,205]
PROBLEM 8. (Provision for Doubtful the
Debts and Loss by fire) aia Loss
following Trial Balance and information, prepare Trading and ProrltFro
 NON-CORI
ON-CORPORATE BUSINESS ENTITIE 45
AAcount of Mr. Rishabh for the
year ended 31st March, 2017 and
Sheet as on that date: a Balance
Particulars Debit
Capital ) Credit )
Drawings 1,00,000
Land and Building 12,000
90,000
Plantand Machinery
20,000
Furniture
5,000
Sales 1,40,000
Return Outward
6,000
Debtors
18,400
Loan from Gajanand on 1-7-2016 @ 6% p.a.
30,000
| Purchases

80,000
Returns Inward 5,000
Carriage 10,000
Sundry Expenses 600
Printing and Stationery 500
Insurance Expenses 1,000
Provision for Bad and Doubtful Debts 1,000

Provision for Discount on Debtors 380

Bad Debts 400

1-4-2016 21,300
Opening Stock on
18,500
Salaries and Wages
12,000
Creditors
800
Trade Expenses
4,600
Cash at Bank
1,280
Cash in Hand 2,89,380 2,89,380

Additional Information: was 27,300.

31-3-2017
9Value of closing stock on
worth of general goods
March, 2017 and R 10,000
Fire occurred o n 23rd accepted claim for 7 6,000
only
)
i n s u r a n c e company
Were destroyed. The 2017.
on10th April,
money
and paid the claim
 OF NON-CORPORATE BUSINESS ENTITIES
46 FINANCIAL STATEMENTS

(ii) Bad debts amounting to? 400 are to be written off. Provision for baddand
doubtful debts is to be made at 5% and for discount at 26
2% on
on debto
debtors
provision
Make a of 2% on creditors for discount.
of goods on 27th March, 2017 but the invoi.
(iv) Received 6,000 worth oice
of purchases was not recorded in Purchase Book.
(v) Rishabh took away goods worth 7 2,000 for personal use but no ecord
was made thereof.
(v) Charge depreciation at 2% on land and building, 20%6 on plant and ma.
na-
and 5% on furniture.
chinery
(vi) Insurance prepaid amounts to 200. [[Link]., Delhi-2009, Adapted

Ans. [G.P.:7 63,00; N.P.:7 30,098, B/S Total:7 1,65,088]

PROBLEM 9.(Depreciation on Machinery and Manager's Commission) From
the following figures extracted from the books of ShriGovind, you are
required
to prepare a Trading and Profit and Loss Account for the
year ended 31st
March, 2017 and a Balance Sheet as on that date after making the necessary
adjustments

Shri Govind's Capital 2,28,800 Stock as on 1-4-2016 38,500

Shri Govind's drawings
13,200 Wages
Plant& Machinery 35,200
99,000 Sundry Creditors
Freehold Property 44,000
66,000 Postage 1,540
Purchases
1,10,000 Insurance
Returns outwards 1,760
1,100 Gas and fuel
Salaries 2,970
13,200 Bad debts
Office expenses 660
2,750 Office rent
Office furniture 5,500 Freight
2,860
Discount A/c (Dr.) 9,900
1,320 L0ose tools
Sundry Debtors 2,200
29,260 Factory lighting
Loan to Shri Krishna@ 10% 1,100
p.a. balance on 1-4-2016 Provision for Doubtful Debts 880
Cash at bank 44,000 Interest on loan to
29,260 Cash on hand
Shri Krishna 1,100
Bills payable 2,640
5,500 Sales
Adjustments
)
2,31,440
Stock on 31st
March, 2017 was valued at ?
72,600.
 FINANCIAL STATEMENTS OF
NON.(
(i) A new chine ORPORATE BUSINESS ENTITIES
was
recorded
ot recorded in the
not installed during 47
naid
aid for
the
its erectionbooks as no paymentyear costing 15,400 but it was
have been was made for
it.
(ii) Depreciate Plant debited to wages
and
Wages 1,100
1,10
property by 5%.
account.
Machinery by 33/,6; Furniture
ia Loose tools were by 10%; Freehold
Freehold
valued at 7 1,760 on
( Of the Sundry
Debtors, ? 31-3-2017.
660
Maintain provision of 5% on bad and should be written off.
are
(v a

(vid The manager is entitled Sundry Debtors for doubtful debts.

to
charging such commission. commission of
a
10% of the net
profits after
Ans. [Gross Profit:R 1,08,570; Net
Profit 7 40,800;
Manager's Commission:7 4,0801 B/S total:7 3,25,380;|
PROBLEM 10. (P.F. and Loss by fire) The
Rohit as on 31-12-2017. Prepare a following is the Trial Balance of Mr.
vear 2017 from it and Trading and Profit and Loss Account for the
a Balance Sheet as on
31-12-2017:
Particulars Dr. ) Cr. R)
Purchases
1,80,000
Opening Stock 10,000
Salaries 6,600
[Link] including proprietor's contribution 50%
1,200
Rent@ 250 p.m.
2,750
Machinery 29,000
Wages 3,000
Furniture and fittings 5,000
Electricity 550
Trade expenses 1,500
Debtors 10,500
Interest on loan 900
Commission 200
Building 30,000
Sales 2,05,000
| Loan (10%6 Interest p.a.) 10,000
15,000
Creditors 55,000
Capital 5,000
Drawings 1,200
Cash 2,86,200 2,86,200
 48 FINANCIAL STATEMENTS OF NON-CORP

was sold for

R 4,000 and credited
On 1-1-2017 machinery worth 7 5,000 to
() include R 1,000 paid for machinery erectio
erection
machinery account. (i) Wages 000. (iv) Th
Scooter for 7 5,000. The
Purchases include cost of Moped
charges. (ii) has been 1ade
1,000 for which no
entry
proprietor has taken goodscosting bad. (v1) Provide 10%
debtors include 500 which have become
( )Sundry Electricity outstanding
50. (vii) Good.
provision for doubtful debts. (vi)
destroyed by fire, insurance claim
was
received for
costing 5,000 were
Purchases Account. (ix) Provide depreciation at 10
7 4,000 and credited to
@ 5% on building
on machinery, furniture
and moped. Provide depreciation
(xi) Interest on loan is to be charged tor full year
r.
(x) Closing stock is 7 12,000.
Profit: 7 10,200; B/S Total :7 85,8001
Ans. [Gross Profit:7 32,000; Net
PROBLEM 11. (Sale on approval and provision
for doubtful debts) From the
on March 31, 2017, prepare Trading and
following Trial Balance of a trader
lot March, 2017, and Balance Sheet
Profit& Loss Account for the year ending 3
as that date after giving effect to the under mentioned adjustments

Debit Balances CreditBalances

Drawings 6,000 Bank Overdraft 25,000
Wages 15,500 Interest on Investment 5,800
Stock 12,800 Bills Payable 4,600
Loan to X 4,000 Interest on Loan to X 320
Rent 5,000 Capital 1,00,000
General Expenses 1,480 Provision for Doubtful Debts 250
Investments 60,000 Sales 2,30,000
Purchases 1,60,000 Sundry Creditors 12,590
Freight and Carriage 2,100
Goodwill
40,000
Bills Receivable
6,200
Rate and Taxes
1,800
Sales Returns
2,100
Insurance
900
Cash & Bank Balances
3,700
Postage& Telegram 3,800
Land & Buildings
25,000
Plant & Machinery
10,000
Sundry Debtors
l6,500
Packing Charges 400
Bad Debts
1,280
3,78,560 3,78,560
 NON-COR
N-CORPORATE BUSINE ENTITIES 49
Adjustments

( Closing Stock as on 31-3-2017 16.000

Caods costing 700 were sent on
25-3-2017
as "Sale on
for 800 and the approval was not Approval Basis"
received before the end of the month.
i 20% of the goodwill is to be written off.
Further bad debts were estimated at7 350. Increase
ful to the extent of R 1,500 provision for doubt-
( Depreciate Land and Buildings by 3% and Plant and Machinery by 10%.
( Goods worth R 800 were distributed as free samples.
aeIGross Profit:7 54,200; Net Profit :7 33,510 and Balance Sheet Total:
71,69,700]
PROBLEM 12. (Mutual indebtedness, dishonour of bills receivable and sale
on approval). Given below is the Trial Balance of Mr. Alok, a trader, as on
31-3-2017

Particulars Dr. Amount Cr. Amount

Cash in hand 5,000

Land and Building 80,000
50,000
Plant and Machinery
25,000 40,000
Debtors and Creditors
10,000
Stock on 1-4-2016
20,000
15% Investment on 1-4-2016
95,000 1,90,000
Purchases and Sales 20,000
Bank Overdraft
28,000
Wages 16,000
Salaries 15,000
Rent, Rates and Taxes 6,000
Bad Debts 5,000
21,000
Drawings 15,000

Bils Receivable and Bills Payable 6,000

16,000
CarriageInwards
Custom Duty on Purchases 4,000
Life Insurance Premium 30,000
2,000
Advertisement
Provision for Doubtful Debts
T A X M A N N -
 FINANCIAL

Interest on Investments 2,000

Trade Expenses 11,000
Furniture 20,000
Sales Tax Payable 25,000
Capital 1,57,000
4,57,000 4,57,000
Adjustments
() Stock on 31-3-2017 was valued at 40,000.
(i) Included in Debtors are 8,000 due from Ram and included in
are 6,000 due to Ram. Creditorss
(i) Bills Receivable include a bill of R 5,000 received from Varun
been dishonoured. which has
(iv) Sales include? 5,000 for the goods sold on
profit of 25% on cost. Approval was notapproval
at a
basis. Good are sold
received
upto 31-3-2017,
(v) Wages include T 5,000 spent on the erection of
(vi) Create a provision for doubtful debts at 5%
machinery.
on debtors.
(viî Prepaid taxes amounted
to 2,000.
(vii) Depreciate machinery by 10%.
Prepare Trading and Profit and Loss Account
2017 and for the year ended 31st
a Balance Sheet on that date. March,
Ans. [G.P.:7 79,000; N.P.:7
[[Link]. 2007, D.U., Modified]
1,550; B/S Total =7 2,49,550]
PROBLEM 13.
the books of Mr. (Closing stock) From the following balances
X, prepare
ended 31st March, 2013
extracted from
Trading and Profit and Loss Account
and a for the year
Balance
Sheet as on that date
Particulars (Dr.)
Computer at cost Particulars (Cr.)
18,380 X's Capital
Purchases Account 60,000
Cash at Bank 71,280 Sundry Creditors
13,000
Cash in hand 4,000 Bills Payable
10,220
Furniture & Fittings at cost 2,836 Discount received
22,000
1,540 Sales
Rent 60,720
Bills receivable 12,540 Returns outwards
11,432
6,720 Rent due
Trade charges 320
920
Sundry Debtors
34,156

TAXMANN
 FINANCIAL SIAI EMENTS
OF
NON-COR
ORPORATE BUSINESS ITIES 51

Drawings 5,200
Discount 540
Wages 1,800
Salaries
16,780
Returns nwards
1,000
1,77,692
1,77,692
Adjustments:

(h Closing stock on 31st March, 2013 was valued at

Value 26,200) 7 25,600 at cost (Market
(id Depreciation on furniture and fittings shall be provided at 10% p.a.
(in Provide for doubtful debts at 5% on Sundry Debtors.
(iv) Goods costing R 1,500 were used by the proprietor.
() Stationery chargesR 1,200 were due on 31st March, 2013.
(v) Purchases include opening stock at 7 7,000 (cost price).
(vi Sales representative was entitled to a commission of 5% on net profits
after charging such commission.
(vii No depreciation need to be provided for computer as it had been pur-
chased on 31st March, 2013 and not put into use.
[[Link]. (H)/Bachelor in Management Studies, FYUP Nov./Dec. 2013,
D.U.]
Ans. [Gross Profit: 7 25,172; Net Profit:7 12,695; Balance Sheet Total
791,370]
PROBLEM 14. (Loss of stock by fire) From the following Trial Balance and
intormation, prepare Trading and Profit and Loss Account of Mr. Ajit for the
year ended 31st March, 2014 and a Balance Sheet as on that date:
Particulars Dr. Cr. )
1,00,000
Capital
12,000
Drawings
Land and Building 90,000
20,000
Plant and Machinery
5,000
Furniture
1,40,000
Sales 6,000
Return outward 18,400
Debtors
TA YMANN
 FINANNC IA DVI

Loan from Atal on 1-7-2013 @ 6% p.a.

30000
Purchases 80,000|
Returns inward 5,000

Carriage 10,000
Sundry Expenses 600
Printing and Stationery 500

Insurance Expenses 1,000

Provision for Doubtful Debts 1,000
Provision for Discount on Debtors 380
Bad Debts 400
Opening Stock on 1-4-2013 21,300
Salaries and Wages 18,500
Creditors 12,000
Trade Expenses 800
Cash at Bank 4,600
Cash in Hand 1,280
2,89,380 2,89,380
Additional Information:
() Value of closing stock on 31-3-2014 was 7 27,660
(i) Fire occurred on 23rd March, 2014 and 7 10,000 worth of general goods
were destroyed. The insurance
company accepted claim for ? 6,000 only
and paid the claim money on 10th April, 2014.
(ii) Bad debts amounting to7 400 are to be written off. Provision for bad and
doubtful debts is to be made at 5% and for discount at 2% on debtors.
(iv) Received 7 6,000 worth of goods 27th March, 2014 but the invoice
on
ofpurchases was not recorded in Purchase Book.
(v) Ajit took away goods worth 7 2,000 for personal use but no record was
made thereof.
(vi) Charge depreciation at 29% on land and building 20% on plant and ma
chinery and 5% on furniture.
(vi) Insurance prepaid amounts to7 200.
[Link]. (H), SOL, May/June 2014, D.U., Modifieo
Ans. [G.P. :7 63,360; N.P.:7 30,098; B/S Total:7 1,65,448]
 FINANCLAL STATEMENTS OF NON-CORPORATE BUSINESS ENTITIES 53

DROBLEM 15. (Sale on APproval, depreciation, rent and commission payable

w managers). From the tollowing balances and information, prepare
Trading and Profit and Loss Account of Mr. A for the year ended 31st March,
2017 and a Balancee sheet as on that date

Particulars Dr. ) Cr. )

A's Capital Account
10,000
Plant and Machinery 3,600
Depreciation on Plant and Machinery 400
Repairs to Plant 520
Wages 5,400
Salaries 2,100
Income-tax of Mr. A 100

Cash in hand and at Bank 400

Land and Building 14,900
Depreciation on Building 500

Purchases 25,000
Purchases Return 300
49,800
Sales
Bank Overdraft 760

Accrued Income 300

400
Salaries Outstanding
Bills Receivable 3,000
1,000
Provision for Doubtful Debts
1,600
Bills Payable
708
Discount
200
Bad Debts
7,000
Debtors 6,252
Creditors 7,400
Opening Stock 70,820
70,820|
Information:
6,000.
31st March, 2017
was
9 Stock on
provision for bad
and maintain a

off further 7 600 for bad debt

Write
debts at 5% on debtors.
 NON-CORPORATE
BUSINESS ENTITIES
54 FINANCIAL STATEMENTS OF

1,000 were sent to customer

for ? 1,200 on 30 March
30 Ma.
(i7t) Goods costing recorded as actual sales.
This was
2017 on sale or return basis. to Landlord account
were debited
a.

(iv) 7 240 paid as rent of the office nd

debtors.
wereincluded in the list of
commission at 10% of net profit ae
after
(v) General manager is to be given
commission of the works manager and his own.
chargingthe
l26 ot
commission at net profit befor
(vi) Works manager is to be given and his own.
re
of General Manager
charging the commission
12,000; B/S Total:7 33,912
[Gross Profit:R18,100; Net Profit:T
Ans.
has extracted. Trial Balance
PROBLEM 16. (Rectification of errors) Deepak
2017:
from his books as on 31st March,

Particulars Particulars

Drawings 16,000 Capital 40,160

Cash in hand 6,760 Sundry Creditors 35,000
Petty Cash 1,000 Sales 6,00.000
Bank 21,000 Accumulated Depreciation 3,600
Motor Car (at Cost) on Motor Car
20,000
Leasehold Land 20,000 Suspense Account 10,000
Stock as at 1-4-2016 50,000
Salaries 12,000
Sundry Debtors 50,000
Rent
9,000
Electricity 6,000
Advertising 9,000
Purchases
4,00,000
Postageand Telephone 3,000
Discount
11,400
General Charges 4,000
Petty Cash Expenses
9,600
Wages
40,000
6,88,760 6,88,760
You are
required to
prepare Trading and Profit
year ended 31st March, 2017 and and Loss Account for he
the Balance
following additional information Sheet as on that date using
 FINANCIAL STATEMENTS OF NON-CORPORATE BUSINESS ENTITIES 55

Closing stock as at 31st March, 2017 was 75,000.

(b Telephone bill amount to R 1,000 remains unpaid.

( Charge depreciation on motor car @ 6% p.a. on original cost.
T h e leasehold land was purchased on 1st April, 2016. On the date of
purchase the unexpired period of the lease was five years.

been passed in books for goods withdrawn from the

() No entry has the
business by the proprietor valued at 10,000.
As
( The petty cash balance represents the month end imprest amount.
on the closing date the petty cashier had
vouchers totalling 7 400 for
which he had not received reimbursement from the main cashier.
(gDiscount allowed amounting toT 1,000 had been posted to the debit side
of Sundry Debtors.
Bank7 4,000had not been entered in the Bank
(h) Cash withdrawn from the
column of Cash Book.

had been undercast on the credit side of 7 4,000.

() Sales account
Ans. [G.P.:7 1,99,000; N.P.: 1,28,400;
7 B/S Total:7 1,78,5601
and omitted purchases). The following is the
PROBLEM 17. (Mutual owings
31st March, 2013:
Trial Balance of Mr. Lal as at
Dr. Amnount Cr. Amount
Particulars
86,690
Lal's Capital
46,800
Opening Stock
3,21,700 3,89,600
Purchases and Sales 5,800
8,600
Returns 5,700
Rent and Taxes
18,600
Freight and Carriage 9,300
Salaries and Wages 24,000 14,800

Sundry Debtors and Creditors 20,000

Bank Loan@ 6% p.a. 900
Bank Interest on Loan 14,600
Printing and Advertising 240
Miscellaneous Income 8,000

Cash at Bank 1,800 4,200

Discount 5,000
Furniture and Fittings
R
 11,450
General Expenses
1,300
Insurance
2,330
Postage and Telephone
380
Cash in hand
870
Travelling Expenses
40,000
Drawings
5,21,330 5,21,330
be made:
The following adjustments should
from Anand and included
() Included amongst the Debtors is 3,000 due
him.
among the creditors 10,000 due to
created @ 5% and Provision
(i) Provision for Bad and Doubtful Debts to be
for Discount @ 26 on Sundry Debtors.
10%.
(iin Depreciate Furniture and Fittings by
been included in the Purchases
(iv) Personal purchases amounting toF 300 had
Day Book.
(1) Interest on Bank Loan shall be provided for the whole year.
(v) On quarter of the amount of Printing and Advertising is to be carried
forward to next year.
(vi) Credit purchase invoice amounting to 400 had been omitted from the
books.
(vii) Stock on 31st March, 2013 was 78,900.
Prepare Trading and Profit and Loss Account for the year ended 31st March,
2013 and Balance Sheet as on that date.
([Link]. (H), Nov./Dec. 2014, D.U., Modified)
Ans. [G.P.:7 78,500; N.P.: 35,953; B/S Total: 1,16,843]
PROBLEM 18. (Typical, Unrecorded Purchases and Dishonour of Bill) Mr.
Ishaan has extracted the following Trial Balance from his books as on
slS
March, 2015:

Particulars Particulars
40,000
Purchases 4,00,000 Sundry Creditors
Sundry Debtors 7,00,000
1,50,000 Sales
Cash in hand 4,000 Capital 10,000
Cash in Bank 8,000
Rent, Rates & Taxes 3,000
Insurance Premium 9,000
 NON-CORPORATE BUSINESS ENTITIES 57
Salaries 42,000
Carriage Outward
Carriage Inward
21,000
Claim Recoverable
18,000
5,000
Advertisement
9,000
Furniture& Fittings
Deposit with Supplier
23,000
6,000
Office Equipment
10,000
Bills Receivable
6,000
Bad debts
4,000
Opening Stock 30,000
Electricity Expenses 2,000
7,50,000 7,50,000
The following further information is provided
(a) A purchase invoice of F
25,000, received from a creditor has not been
entered through oversight.
(b) The claim recoverable has been settled with the insurance
company for
2,000. The amount was received on 6th April, 2015.
(c) The whole of the advertisement suspense account is to be written off
this year. The amount represents the cost of an advertising
campaign
conducted this year.
(a) Depreciation is to be charged on straight line method on furniture and
fittings and office equipment at 5%.
The original costs were:
Furniture and fittings 30,000
Office equipment 15,000
(e) Goods costing 7 5,000 were despatched out on 29th March.
The sale,
when an invoice for 7 7,500 was
however, took place on 3rd April 2015,
raised against a customer.

)Insurance premium includes a prepaid amount of R 1,000.

made on l-10-2014. It carried interest
8) The Deposit with a supplier was

@12% p.a. R 1,200 were dishon-

from c u s t o m e r of R 800 and
T w o bills receivable discounted with the
30th March, 2015. These had earlier been
Oured on
Bank.
 58 FINANCIAL STATEMENTS OF NON-CORPORATE BUSINESS ENTITIES

() Provide 2% on sundry debtors for doubtful debts.

() Physicalstock ofgoodson hand on31st March, 2015 at cost was7 1,00,000.
Prepare Trading & Profit and Loss Account for the year ended 31st March,
2015 and the Balance Sheet as on that date from the above informatioon.

Ans. [Gross Profit 3,42,000; Net Profit 2,49,570; Balance Sheet Total:
73,14,570]