You are on page 1of 2

Q.1 The following is the trial balance of R.

Woods as at 30 September 2014


Particulars
Bank
Inventory
Purchases
Rent and
insurance
Plant and
machinery
Office furniture
and fittings
Discount allowed
Bank interest
Wages and
salaries
Light and heat
Drawings
Debtors
Returns inwards

You are
prepare a
profit and loss
the year
September
balance sheet at that date.

Amoun
t
500
12,000
108,000

Particulars

15,000

Discount received

Amoun
t
75,000
22,000
167,00
0
3,000

70,000

Returns outwards

4,000

24,000

Creditors

16,000

Capital
Bank loan
Sales

1,600
400
13,000
9,000
10,000
22,500
1000
2,87,0
00

2,87,0
00

required to
trading and
account for
ended 30
2014 and a

Q.2 On 31 December 2014, the trial balance of Joy toys showed the following accounts and
balances.

Particulars
Capital
Drawings
LoanSBI Bank
Leasehold premises
Motor vehicles
Investments
Trade debtors
Trade creditors
Cash
Bank overdraft
Sales
Purchases
Returns outwards
Returns inwards
Carriage outwards
Stock
Rent and rates
Light and heat
Telephone and postage
Printing and stationery
Bank interest
Interest received

Debit
Rs.

Credit
Rs.
39,980

14,760
20,000
52,500
13,650
4,980
2,630
1,910
460
3,620
81,640
49,870
960
840
390
5,610
1,420
710
540
230
140
148,7
30

620
148,7
30

You are required to prepare a trading and profit and loss account for the year ended 31
December 2014, and a balance sheet at that date

The following chart shows the effects of adjustments in final accounts


Name of items

Adjustment entry

Effect on trading and profit


and loss account

Effect on balance
sheet

1. Closing stock

Closing stock account dr.


To trading account

Closing stock will write in the


credit side of trading account

It will show as asset in


the final account

2. outstanding
expenses or
expenses
payable or
expenses due
but not paid

Expenses account dr.


To outstanding exp.

It will be the current


liability so it will go to
the liability side of
balance sheet.

3. advance
expenses

Advance expenses a/c dr.


To expenses account

Outstanding expenses will


add in expenses. if it is direct
it will go to trading accounts
debit side , if it is indirect
nature then it will go to the
debit side of profit and loss
account
It will deduct from respective
expenses paid.

4. income
receivable

Outstanding income
account dr. To income
account

It will add in the income and


go to credit side of profit and
loss account

It will show as asset in


the assets side of
balance sheet

5. income
received in
advance

Income account dr.


To advance income
account

It will deduct from the income


received

It will shown as
liability in the liabilities
side of balance sheet

6 Goods use for


personal use

Drawing account dr.


To purchase account

7. Destroyed of
goods

loss by fire or accident


account Dr
To trading
If there is no insurance
Profit and loss account dr.
To loss by fire / accident

It will deduct from purchase


in the debit side of trading
account
It will shown in credit side of
trading account and And also
in profit and loss accounts
debit side

It will deduct from


capital in the liabilities
side of balance sheet
It will not go to
balance sheet

8. Depreciation

Depreciation account dr.


To respective asset
account

It will go to the debit side of


profit and loss account

It will deduct from


fixed asset . Because it
decrease the value of
asset

9. Provisional for
doubtful debts

If you have make any


provision for doubtful
debts the its journal entry
will passed
Provision for doubtful
debt account dr.
To Bad debts account
( New bad debts which is
not shown in trial balance
will transfer to provision
for doubtful debt
account )
Commission account dr.
To outstanding
commission

Net value of provision for


doubtful debt account transfer
to profit and loss accounts
debit side

Deduct from debtors

It will shown in the debit side


of profit and loss account as
o/s commission to manager
(If it charge on the amount
after charging such
commission then we will
calculate)

It will shown as
liability

10. Commission
to manager

It will be the current


asset so it will go to
assets side of balance
sheet

You might also like