Page 163 - DEBK-XI(2020)

Adjustments in Preparation of Financial Statements 19.15

Bad Debts ................................................................................................................................................ 3,000 ...
Investments .............................................................................................................................................. 50,000 ...
Loan from Bank ........................................................................................................................................ ... 50,000
Bills Receivable ........................................................................................................................................ 60,000 ...
Bills Payable ............................................................................................................................................. ... 55,600
Debtors ..................................................................................................................................................... 2,10,000 ...
Creditors ................................................................................................................................................... ... 90,800
Provision for Doubtful Debts ..................................................................................................................... ... 10,000
Provision for Discount on Debtors ............................................................................................................ ... 2,400
Drawings ................................................................................................................................................... 12,775 ...
Capital ...................................................................................................................................................... ... 3,08,000
Machinery ................................................................................................................................................. 50,000 ...
Building ..................................................................................................................................................... 60,000 ...
Furniture and Fittings ................................................................................................................................ 30,000 ...
Outstanding Office Expenses ................................................................................................................... ... 3,200
Prepaid Expenses .................................................................................................................................... 1,200 ...
Input CGST ............................................................................................................................................... 1,000 ...
Input SGST ............................................................................................................................................... 1,000 ...
Total 12,52,000 12,52,000
Additional Information:

(i) Write-off ` 6,000 as bad debts.
(ii) Additional discount of ` 4,000 given to debtors and additional discount of
` 2,000 received from creditors.
(iii) Maintain a provision for discount on debtors @ 2% and also maintain provision
for doubtful debts @ 10% on debtors.
(iv) Rent has been paid for 11 months and has been received for 13 months. CGST
and SGST is levied @ 6% each.
(v) A machine costing ` 20,000 was purchased on 1st July, 2019 and accounted in
the books of account. However, wages of ` 1,000 for its installation have been
debited to Miscellaneous Expenses Account.

(vi) Furniture costing ` 20,000 was purchased on 1st July, 2019 along with CGST and
SGST @ 6% each but it was not recorded in the books as no payment was made
for it. Wages ` 1,000 paid for its assembly have been debited to Miscellaneous
Expenses Account.
(vii) Depreciate furniture @ 10% p.a., machinery @ 10% p.a., and building @ 5% p.a.
(viii) Goods costing ` 5,000, purchased by paying CGST and SGST @ 6% each were
taken by proprietor for personal use.
(ix) A fire broke out on 1st April, 2020 destroying goods costing ` 25,000. These goods
were purchased paying CGST and SGST @ 6% each.