Financial Accounting

The following is the trial balance of Gupta as on 30th June ,2001

Trial Balance Of Gupta For The Year Ending 30TH June ,2001

Dr Rs Rs Cr

Cash 540 Sales 98,780

Bank 2,630
Return Outwards 500
Purchases 40,675 Capital 62,000
Return Inwards 680 Accounts Payable 6,300

Wages 8,480 Rent 9,000

Fuel and Power 4,730
Carriage on sales 3,200
Carriage on purchases 2,040

Inventory 5,760
(1ST July,2001 )
Buildings 32,000
Freehold land 10,000
Machinery 20,000
Patents 75,000
Salaries 15,000
General Expenses 3,000
Insurance 600
Drawings 5,245
Accounts Receivables 14,500

1,76,580 1,76,580

Taking into account the following adjustments prepare the Trading ,Profit and Loss
Account as on 30TH June ,2001.
1. Inventory on hand on 30TH June ,2001 is Rs 6,800
2. Machinery to be depreciated at the rate of 10% and patents at the rate of 20%
3. Salaries for the month of June 2001 amounting to Rs1,500 were unpaid.
4. Insurance includes an annual premium of Rs 170 on a policy expiring on 31ST
December ,2001
5. Bad debts to be written of are Rs 725
6. Rent receivableRs1,000.
 Financial Accounting
Page :176; Illustration:10.6
From the following Trial Balance of Pratibha and company, prepare Trade ,Profit and Loss Account
for the year ending 31ST Dacamber,2002 after giving effect to the undermentioned adjustments.

Trial balance for the year ending 31ST December ,2002

Dr Cr
RS RS
Opening 8,000 Capital a\c on 50,000
Stock 1-1-92
Purchases 20,000 Sales 80,000
Sales 1,500 Purchase 400
Return Return
Carriage 1,200 Apprenticeship 1,500
Inwards Premium
Carriage 2,500 Bills 2,500
Outwards Payable
Wages 3,300 Sundry 15,800
Salaries 5,500 Creditors
Rent 1,100
Freight 2,400
Fire 900
Insurance
Premium
Bad Debts 2,100
Discount 500
Printing 250
and Stationary
Rates and Taxes 350
Travelling 150
Expenses
Sundry 200
Trade
Expenses
Business 55,000
Premises
Furniture and 2,500
Fixtures
Bills Receivable 3,000
Sundry Debtors 20,000
Packing 4,500
Expenses
Loan given to 5,000
Smith
Investments 3,500
Cash in hand 250
Cash at bank 3,500
Proprietor’s 3,000
Withdrawals

1,50,200 1,50,200

Adjustments to be made for the current period are:

1. Inventory in hand 31ST December,2002,RS 7,000
2. Wages to laborers of RS 300 for the last month are outstanding.
3. Salaries to the clerk of the month of December ,2002 are outstanding RS 500.
4. Rent for the godown for the last month is outstanding RS100
5. Fire insurance premium includes RS 600 paid on 17TH July ,2002 to run for one year from 1st
July ,2002 TO 30TH June 2003
6. Apprentice premiums are for three years paid in advance on 1ST Janaury,2002
7. A stationary for RS 30 remains unpaid and unrecorded.
8. Depreciate business premises by 5% ,Furnitures and Fixtures by 10%and packing Machinery by
10%
9. Interest on Smith’s loan has accrued as on 31ST December ,2002
10. Interest on investments RS 75 has accrued as on 31ST December ,2002
11. Interest on capital to be allowed at 5% for the year.
12. Interest on drawings to be charged to him as ascertained for the year RS 80.
13. Create a provision on debtors for doubtful debts 5% and discount at 3%.
14. Create a reserve on creditors for discount at 3%.
 Financial Accounting
Page :187; Illustration:11.6;
The following is the Trial Balance of Rajan Jewelers as on December 31,2005.

Dr. Cr.

Particulars RS Particulars RS
Opening Inventory 72,000 Capital 5,00,000
Purchases 2,25,000 Sales 3,50,000
Furniture 15,000 Purchase returns 1,800
Motor car 30,000 Murthy 32,000
Buildings 4,25,000 Varadan 24,000
Gangappa 12,000 Commission 7,500
Gourishankar 20,000
Mathews 18,000
Advertisements 22,000
Repairs and maintenance 13,000
General expenses 16,000
Insurance 7,000
Cash in hand 3,500
Cash at bank 6,000
Salaries 30,000

9,15,300 9,15,300

Note:
To arrive at accounts receivables and accounts payables you have to add necessary ledger accounts.

You are required you draft Profit and Loss accounts and Balance sheet as on 31st December 2005.

1. Closing Inventory as at 31.12.2005,Rs 80,000.

2. Interest on capital at 6%.
3. Prepaid advertisements RS2,000.
4. Goods used for domestic purpose RS 1,800.
5. Outstanding salaries RS3,000.
6. Depreciation on buildings at 5%,furniture 5%, and Motor car at 10%.
Dr. Sanjay Patankar Page 1.41 Problem 1:

Prepare Trading Account as on 31st Dec. 2005.

Opening stock 5000

Purchases 22000
Carriage Inward 1200
Freight 1700
Return outward 2000
Sales 51700
Custom Duty 2000
Return Inward 700
Closing Stock 5300