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Assignment 2: Accounting for Business- Final Accounts

NB: Students should read the following questions and come to the next
class with your homework.
1. Following are the extracts from the Trail balance of a firm

Trial balance
As on 31st December 2009

Sundry debtors

50,000

Provision for bad debts


5.000
Provision for discounts
2,000
Bad debts

3,000

Discount

1,000

Additional information
1.
2.
3.
4.

Additional bad debts Rs. 1,000


Additional discounts Rs.500
Create a provision for bad debts at 10% on debtors
Create a provision for discount at 5% on debtors.
Pass the journal entries, prepare provision for bad debts account and
provision for discount on debtors account and show how the different
items will appear in firms final accounts.

2.

Following are the extracts from the Trail balance of a firm


Trial balance
As on 31st December 2009
Dr

Sundry creditors

Cr.
50,000

Discount

1.000

Reserve for discount on creditors

2,000

Additional information:
1. Additional discount received from creditors after closing the accounts
Rs. 1,500
2. Create a reserve for discount on creditors at 10%.
1

You are required to Pass the journal entries, prepare reserve for discount
account and show how the different items will appear in firms final
accounts.
Pass the necessary journal entries, prepare provision for bad debts
account and provision for discount on debtors account and show how
the different items will appear in the firms final account.
3. From the following trial balance and additional information, you are
required to prepare the final accounts of Mr.AselaCompany.
Trial balance
As on 31st December 2010
Dr
Capital
Debtors
Drawings
Machinery
Sundry creditors
Wages
Purchases
Opening stock
Bank balance
Carriage charges
Salaries
Rent and taxes
Sales

Cr
20,000
5,400

1,300
7,000
2,800
10,000
19,000
4,000
3,500
300
400
900
29,000
51,800

51,800

Additional information
1. Closing stock Rs. 1,200
2. Outstanding rent and taxes Rs. 100
3. Charge depreciation on machinery at 10%
4. Wages prepaid Rs. 400

4.)From the undermentioned particulars of Mr.Pathi, prepare the manufacturing,


trading and profit and loss account for the year ended 31.3.2008 and balance
sheet as at that date after making necessary adjustments.
Capital as at 1.4.2007

25,000

Drawings account

7,000

Creditors

8,000

Discount received

702

Bank (Cr.)

4,000

Reserve for bad and doubtful debts

600

Purchase returns

530
2

Sales

67,500

Sales return

86

Stock as at 1.4.2007

9,000

Plant and Machinery (including Machinery for Rs.5, 000 purchased on 1.1.2008)
17,000
Furniture

1,500

Buildings

15,000

Purchases

30,230

Debtors

11,000

Manufacturing Wages

6, 000

Manufacturing Expenses

5,000

Carriage inwards

400

Carriage outwards

420

Bad debts

150

Salaries

2,800

Interest and bank chargers (Dr)

126

Discount allowed

150

Insurance (Dr)

300

Bank

140

Cash in hand

30

Stock as at 31.3.2008

7550

Adjustments.
1. Provide for
(a) Interest on capital at 10% p.a. (no interest is to be provided on
drawings
(b) Outstanding expenses
Rs
Salaries
100
Manufacturing wages
50
Interest on bank loans
100
2. Depreciation on
a) Machinery at 10% p.a.
b) Furniture at 10% p.a.
c) Buildings at 2.5%p.a.
3. Prepaid expenses
a) Insurance
100
b) Salary
50
Furniture costing Rs. 500 was sold for Rs. 350 on 1.4.2007 and this amount was
later credited to Furniture account.
3

5. ( No adjustment )
From the following particulars prepare the Manufacturing account, Trading
Account and Profit and Loss Account.
Purchases of raw material

12195

Return inwards

70

Stock on 31.12. 2005: Raw Material


Work in progress

1210
1000

Finished goods

1370

Wages

2000

Factory expenses

1840

Office expenses

300

Salaries

600

Distributing expenses

100

Selling expenses

700

Purchasing expenses

600

Export duty

300

Import duty

200

Interest on bank loan

600

Stock on 1.1.2005
Raw Material

400

Work in progress

300

Finished goods

410

Sales

19500

Return outwards

85

Carriage inwards

100

Carriage outwards

105

Cash discount (allowed)


Sale of scrap

10
20

Depreciation of Machinery

500

Repairs of machinery

100

Depreciation of office furniture

40

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