Page 159 - DEBK-XI(2020)

Adjustments in Preparation of Financial Statements 19.11

Solution: TRADING AND PROFIT AND LOSS ACCOUNT OF AMIT
Dr. for the year ended 31st March, 2020 Cr.
Particulars ` Particulars `
To Opening Stock 19,800 By Sales 95,000
To Purchases 72,100 Less: Returns Inward 1,300 93,700
Less: Returns Outward 2,700 69,400 By Closing Stock 61,700
To Carriage Inwards 3,200
To Salaries and Wages (1/4 of ` 20,500) 5,125
To Gross Profit c/d 57,875
(Transferred to Profit and Loss A/c)
1,55,400 1,55,400
To Office Expenses 6,210 By Gross Profit b/d 57,875
To Delivery Van Expenses 1,400 By Discount 2,910
To Rent 10,700
Add: Outstanding 900 11,600
To Telephone Charges 1,050
To Postage Expenses 950
To Printing and Stationery 2,750
To Commission 8,400
To Salaries and Wages (` 20,500 × 3/4) 15,375
To Bad Debts 3,000
Add: Further Bad Debts 200 3,200
To Depreciation on: Delivery Van 3,000
Furniture 500
Machinery (Note 1) 375 3,875
To Net Profit transferred to Capital A/c 5,975
60,785 60,785

BALANCE SHEET OF AMIT as at 31st March, 2020
Liabilities ` Assets `
Current Liabilities Current Assets
Bills Payable 23,000 Cash in Hand 300
Sundry Creditors 35,750 Bills Receivable 12,000
Outstanding Rent 1,008 Sundry Debtors 18,200
Vendor for Machinery 16,800 Less: Bad Debts 200 18,000
Capital Closing Stock 61,700
Opening Balance 60,000 Input IGST (` 10,000 + ` 1,800 on Machinery) 11,800
Less: Drawings 7,500 Input CGST 54
52,500 Input SGST 54
Add: Net Profit 5,975 58,475 Fixed Assets
Machinery 15,000
Less: Depreciation
(` 15,000 × 3/12 × 10/100) 375 14,625
Delivery Van 15,000
Less: Depreciation 3,000 12,000
Furniture 5,000
Less: Depreciation 500 4,500
1,35,033 1,35,033

Notes: 1. Depreciation on Machinery is calculated on ` 15,000 for 3 months.
2. IGST Paid on machinery is not a cost and therefore is carried forward to be set off in the next year.