Single Entry System
Single Entry System
Incomplete Records Incomplete Records Question
Question What is Single Entry System?What is Single Entry System?
Answer
Answer “Single Entry system is a method or a variety of methods, employed for the recording of transactions,“Single Entry system is a method or a variety of methods, employed for the recording of transactions, which ignore the two-fold aspect and consequently fails to provide the businessman with the which ignore the two-fold aspect and consequently fails to provide the businessman with the information necessary for him to be able to ascertain the position.”
information necessary for him to be able to ascertain the position.” Kohler defines it
Kohler defines it as:-“A system of book
“A system of book -keeping in which, as a rule, only records of cash and of personal accounts are-keeping in which, as a rule, only records of cash and of personal accounts are maintained; it is always incomplete double entry system, varying
maintained; it is always incomplete double entry system, varying with circumstances.”with circumstances.” The term “Single Entry System” is popularly used to d
The term “Single Entry System” is popularly used to d escribe the problems of accounts from incompleteescribe the problems of accounts from incomplete records. In fact there is no accountants follow some hybrid methods. For some transactions they records. In fact there is no accountants follow some hybrid methods. For some transactions they complete double entries. For some others they just maintain one entry. Still for some others, they even complete double entries. For some others they just maintain one entry. Still for some others, they even do not pass any entry, this is
do not pass any entry, this is no system of accounting. Briefly, this may be stated as incomplete recordno system of accounting. Briefly, this may be stated as incomplete record s.s. The task of accountant is to establish linkage among the available information & to finalise the The task of accountant is to establish linkage among the available information & to finalise the accounts.
accounts.
Question
Question What are the features of Single Entry Systems?What are the features of Single Entry Systems?
Answer
Answer Following are the features of a single entry system:Following are the features of a single entry system: 1.
1. Content: This system is a mixture of; (i) double entry; (ii) Single entry; and Content: This system is a mixture of; (i) double entry; (ii) Single entry; and (iii) No entry.(iii) No entry. 2.
2. Suitability: This system is suitable for small businesses where the proprietors or partners canSuitability: This system is suitable for small businesses where the proprietors or partners can directly control the affairs of the business.
directly control the affairs of the business. 3.
3. Accounts kept: In this system, generally personal accounts are kept but real & nominalAccounts kept: In this system, generally personal accounts are kept but real & nominal accounts are ignored. This is because, a single entry takes account only of the personal accounts are ignored. This is because, a single entry takes account only of the personal transactions & leaves the impersonal transactions of the
transactions & leaves the impersonal transactions of the business unit entirely unrecorded.business unit entirely unrecorded. 4.
4. Absence of two fold aspect: In the absence of record of the twoAbsence of two fold aspect: In the absence of record of the two – – fold aspect of every fold aspect of every transaction, it is not possible to prepare a trial balance & check the arithmetical accuracy of transaction, it is not possible to prepare a trial balance & check the arithmetical accuracy of the books of account. Similarly, no balance sheet can be prepared in the absence of balances the books of account. Similarly, no balance sheet can be prepared in the absence of balances in ledger.
in ledger. 5.
5. Flexibility: This system is highly changeable & flexible & it is not governed by any definiteFlexibility: This system is highly changeable & flexible & it is not governed by any definite rules of operation.
rules of operation. 6.
6. Profit & Loss: Under this system the profit or loss can be found out but its composition willProfit & Loss: Under this system the profit or loss can be found out but its composition will not be available.
not be available.
Question
Question What are the advantage of single entry system?What are the advantage of single entry system?
Answer
Answer Following are the advantage of a single entry system:Following are the advantage of a single entry system: 1.
1. It is a very simple methodIt is a very simple method 2.
2. It is less expensiveIt is less expensive 3.
3. It is mainly suited to small business.It is mainly suited to small business. 4.
4. It does not require any adequate knowledge of the It does not require any adequate knowledge of the principles of book-keeping.principles of book-keeping.
Question
Question What are the disadvantage of single entry system?What are the disadvantage of single entry system?
Answer
Answer (1)(1) Preparation of Trial Balance not possible: The method does not record both the aspects of aPreparation of Trial Balance not possible: The method does not record both the aspects of a transaction. As such, a trial balance cannot be prepared to check the arithmetical accuracy of transaction. As such, a trial balance cannot be prepared to check the arithmetical accuracy of the books of accounts. This increases the possibility of frauds and misappropriations.
the books of accounts. This increases the possibility of frauds and misappropriations. (2)
(2) Incomplete and Unscientific System: The system is incomplete and unscientific due to the factIncomplete and Unscientific System: The system is incomplete and unscientific due to the fact both the aspects, debit and credit of a transaction are recorded. Also, no set rules are followed both the aspects, debit and credit of a transaction are recorded. Also, no set rules are followed
under this method. under this method. (3)
(3) True Profit or Loss cannot be ascertained: Because nominal accounts are not maintained, aTrue Profit or Loss cannot be ascertained: Because nominal accounts are not maintained, a Trading and Profit and Loss Account cannot be prepared and hence, the profit earned or loss Trading and Profit and Loss Account cannot be prepared and hence, the profit earned or loss suffered during a particular period cannot be ascertained with reasonable accuracy.
suffered during a particular period cannot be ascertained with reasonable accuracy. (4)
(4) Difficulty in preparing Balance Sheet: Since real accounts are not maintained, Balance SheetDifficulty in preparing Balance Sheet: Since real accounts are not maintained, Balance Sheet cannot be prepared to depict the true financial position of the business. Only a statement of cannot be prepared to depict the true financial position of the business. Only a statement of affairs is prepared where in the value of assets and liabilities is written on estimated basis. affairs is prepared where in the value of assets and liabilities is written on estimated basis. (5)
(5) No No Control on Control on Assets: Since Assets: Since real accounts real accounts are not are not maintained, it maintained, it is nois no t possible t possible to keep to keep fullfull control on the assets and as such, the changes o
control on the assets and as such, the changes o f misappropriation of assets cannot be avoided.f misappropriation of assets cannot be avoided. (6)
(6) No recognition in the assessment of Income Tax and Sales Tax: The system fails to reveal the No recognition in the assessment of Income Tax and Sales Tax: The system fails to reveal the true profit and sales of a business. As such, the accounts maintained under the system are not true profit and sales of a business. As such, the accounts maintained under the system are not accepted by tax authorities.
accepted by tax authorities. (7)
(7) Unsuitable for Planning and Control: The system fails to provide the adequate and reliableUnsuitable for Planning and Control: The system fails to provide the adequate and reliable figures required for planning and sound
(8) Difficulty in Comparative Study: Due to incomplete information, the profitability and the financial position of the current year cannot be compared with that of the previous year and as such, it becomes quite difficult to know the reasons of improving or deteriorating profitability and financial position of the business.
(9) Proper valuation of assets not possible at the time of sale of business: It becomes very difficult to fix the correct price of assets, specially goodwill, at the time of sale of the bu siness.
(10) Internal Check not possible: Because of lack of double entry principles, internal checking is not possible and hence there are always the chances of errors and frauds. Also, it becomes very difficult to detect them. Due to the above mentioned defects the system is known as incomplete, unscientific and unreliable.
Question Differentiate between Balance Sheet and Statement of Affairs.
Answer Basis of Difference Balance Sheet Statement of Affairs
Double or single entry
Basis of preparation
Trial Balance
Capital
Objects
It is prepared on the basis of those books which are kept on double entry.
It is prepared only on the balances of accounts.
Trial Balance is prepared before preparation of Final
Accounts.
Capital is taken from Capital Account in Ledger.
Its object is to find out financial position.
It is prepared on the basis of those books which are partly kept on the basis of double entry and partly on the basis of single entry.
It is prepared on the basis of (I) balances of accounts, (ii) valuation, (iii) calculation, (iv) information and inquiry. Trial Balance is not prepared before preparation of Final
Accounts.
Capital Account is not prepared. Excess of assets over
liabilities is treated as capital. Its object is to find out capital.
Question Differentiate between Double Entry System and Single Entry System
Answer Basis of Difference Double Entry System Single entry System
Recording of Both Aspects
Type of Accounts
Trial Balance
Net Profit or Loss
Adjustments
Proof
Both the aspects of every transaction are recorded in it.
All accounts – personal, real and nominal are maintained under it.
Arithmetical accuracy of the books of accounts can be checked in it by preparing a trial balance.
True financial position is ascertained by preparing a Balance Sheet.
Under this system, adjustments are made while preparing final accounts.
Books maintained under this system are accepted as evidence in the court of law. This method is suitable for all
Under this system, both the aspects of very few transactions are recorded. For some other transactions one aspect and yet for others no aspect at all is recorded.
Only personal accounts and a cash book are maintained under it.
Arithmetical accuracy cannot be checked in it because a trial balance cannot be prepared.
True profit or loss cannot be ascertained because a Balance Sheet cannot be prepared. Only a statement of affairs is prepared based on incomplete
accounts and estimates.
No adjustments are made under this system because of incompleteness of a/cs.
Books maintained under this system are not accepted as evidence in the court of law. This method is suitable only for small size business where the number of transactions is less and that too mostly of cash
Suitability
Reliability
types of business, small or large.
Books maintained under this system are reliable because they are based on scientific principles.
nature.
Books maintained under this system are less reliable because they are based on estimates.
Que. 1- Mr. Y provides you the following information:
(a) Opening and Closing Balances:
Particulars 1.4.20X1 Rs. 31.3.20X2 Rs. Cash in hand Bank Balance Debtors Creditors Stock 150 30,000 100,000 90,000 15,000 -21,000 1,25,000 1,00,000 25,000
(b) Analysis of Pass Book revealed the following:
Withdrawals for petty Cash Expenses Rs. 1,500 p.m. Collection from Debtors Rs. 1,35,000 (c) Uniform Sales Price being Cost + 33-1/3%
(d) Any difference in Cash Account and Bank Account may be treated as personal drawings of Mr. Y. (e) Petty Cash Expenses during the year Rs. 17,850
(f) All Purchases were made on credit only and were paid by cheques only.
(g) All Sales were effected on credit basis only and were collected by cheques only.
Required: Prepare the Trading and Profit & Loss Account for the year ending 31st March, 20X2 and the Balance Sheet as on that date.
Que. 2 - Mr. X provides you the following information:
(a) Opening and Closing Balances:
Particulars 1.4.20X1 Rs. 31.3.20X2 Rs. Cash in hand Bank Balance Debtors Creditors Stock 320 2,500 20,000 20,000 10,000 200 (5,000) 30,000 30,000 30,000 (b) Analysis of Pass – Book revealed the following:
Withdrawal for petty cash expenses Rs. 500 p.m. payment to creditors Rs. 20,000 (c) Uniform Gross Profit being 66-2 /3% on sales.
(d) Any Difference in Cash Account and Bank Account may be treated as personal drawings of Mr. X. (e) Petty Cash Expenses during the year Rs. 5,920.
(f) All Purchases were made on credit only and were paid by cheques only.
(g) All sales were effected on credit basis only and were collected by cheques only.
You are required to prepare the Trading and Profit & Loss Account for the year endin g 31st March 20X2 and the Balance Sheet as on that date
Que. 3- Mr. Ramji (India) keeps his single entry system. From the following, prepare Trading and Profit and Loss Account for
the year ended 31.3.20X2 together with Balance Sheet as on that date. Cash book analysis shows the following:
Rs. Rs. Interest charges 100 Balance at bank on 31.3.20X2 2,425 Personal withdrawals 2,000 Cash in hand as on 31.3.20X2 75 Staff salaries 8,500 Received from debtors 25,000 Other business expenses 7,900 Cash Sales 15,000 Payments to creditors 15,000
Further details available are:
As on As on As on As on
1.4.20X1 31.3.20X2 1.4.20X1
31.3.20X2
Rs. Rs. Rs. Rs.
Stock on hand 9,000 10,220 Furniture 1,000 1,000 Creditors 8,000 5,500 Office premises 15,000 15,000 Debtors 22,000 30,000
Provide 5 per cent interest on X’s capital balance as on 1.4.20X1. Provide Rs. 1,500 fo r doubtful debts. 5 per cent depreciation on all fixed assets 5 per cent group incentive commission to staff has to be provided for on net profit after meeting all expenses and the commission.
Que. 4- X submits to you following figure relating to his business in respect of the year ending 31st March 20X2. You are
required to prepare a Trading and Profit and Loss Account for the year ended and a Balance Sheet as at 31st March 20X2. Any difference in the cash/Bank balance is assumed to be drawings:
Rs. Rs.
Cash paid into bank 1,50,000 Wages 40,000 Private dividends paid into bank 2,000 Delivery Expenses 7,000 Payment for goods out of Bank 1,22,000 Rent & Rates 2,000 Cash received from debtors 2,50,000 Lighting & Heating 1,000 Payments for goods by cash and General expenses 4,600
Cheques 1,60,000
The Assets and liabilities are as follows:
01.04.20X1 31.03.20X2 Rs. Rs. Stock 20,000 15,000 Bank Balance 8,000 12,000 Cash in hand 300 400 Trade Debtors 14,000 20,000 Trade Creditors 27,300 30,000 Investments 50,000 50,000
Que. 5- Mr. X commenced business on 1st April 20X1, with a capital of Rs. 45,000. He immediately purchased Furniture of Rs.
24,000. During the year he received from his uncle a gift of Rs. 3,000 and he borrowed from his father a sum of Rs. 5,000. He had withdrawn Rs. 600 per mon th for his household expenses. He h ad no Bank account and all dealings were in cash. He did not maintain any books but following information is given. Sales (including cash sales Rs. 30,000) 1,00,000, Purchases (including cash purchases Rs. 10,000) Rs. 75,000, Carriage Inwards Rs. 700, Wages Rs. 300, Discount allowed to Debtors Rs. 800, Salaries Rs. 6,200, Bad debts written off Rs. 1,500, Trade Expenses Rs. 1,200, Advertisement Rs. 2,200. He used goods worth Rs. 1,300 for personal purposes and paid Rs. 500 to his son for examination and co llege fees.
On 31st March 20X2, his Debtors were worth Rs. 21,000 and Creditors Rs. 15,000. Stock in trade was valued at Rs. 10,000. Furniture to be depreciated by 10% p.a.
Required:Prepare Trading and Profit and Loss Account for the year ended on 31st March 20X2 and Balance Sheet as at 31st
March 20X2.
Que. 6- The books of X showed the following figures:
Rs. Rs. Cash in Hand 1,600 3,400 Cash at Bank 12,000 76,400 Stock in Trade 88,000 1,00,000 Sundry Debtors ? 1,40,000 Sundry Creditors 93,600 34,000 Furniture and Fixtures 8,000
Office Car 40,000
The Cash Book analysis showed the following figures amongst others:
Receipts from customers Rs. 5,40,000, Discount allowed to customers Rs. 5,600, Further Capital introduced on 1.10.20X1 Rs. 8,000,
Salaries Rs. 44,000, Office Rent Rs. 8,800, Advertising Rs. 3,600, General Expenses Rs. 2,400, Motor Upkeep Rs. 5,400, Printing and Stationery Rs. 3,200, Drawings Rs. 26,400, Payment to trade creditors Rs. 4,48,000, Discount allowed by creditors Rs. 4,8 00, Traveling Expenses Rs. 4,000. No ready figures are available for total sales but COJJI maintains a steady gross profit rate of 25% on sales.
There were bills outstanding for petrol Rs. 100, Advertising Rs. 300 and Printing Rs. 180. Provide 5% on Debtors for doubtful debts and 2.5% on Creditors for discounts. The Motor Car and Furniture are to be depreciated by 20% and 5% respectively. 5% interest is to be allowed on Capital. Required: Prepare Trading and Profit and Loss Account for the Year ended 31st March, 20X2 and his Balance Sheet as on that date.
Que. 7- Mr.X does not keep complete records of his bu siness but gives you the following information:
His assets on 31st March, 20X2 consisted of Machineries Rs. 1,50,000. Furniture Rs. 60,000; Motor Car Rs. 40,000; Stock-in-trade Rs. 50,000; Debtors Rs. 80,000; Cash in hand Rs. 12,000 and Cash at Bank for Rs. 30,000; Creditors on that date amounted to Rs. 1,20,000. On further information received, you come to know that: On 1st October, 20X1 he purchased a new machinery costing Rs. 50,000. Sales are made for cash as well as on credit. There is no cash purchases. He always sells his goods at cost plus 25%. Cash sales for the year were accounted for Rs. 80,000.
During the year collection from Debtors amounted to Rs. 5,00,000 and a sum of Rs. 4,25,000 was paid to creditors. He obtained a Bank Loan for Rs. 50,000 on 1st April, 20X1, the entire amount was repaid in February, 20X2 with interest Rs. 2,500.
In November, 20X1 his Life insurance Policy for Rs. 50,000 became matured and the same was invested in the business. His Drawings were Rs. 2,500 per month all throughout the year.
On 1st April, 20X1 he had Rs. 1,500 as Cash in hand and balance at Bank for Rs. 40,000. Debtors and Creditors on that date amounted to Rs. 60,000 and Rs. 90 ,000 respectively. Provide depreciation of Machineries @ 15% p.a. Furniture @ 10% p.a. and on Motor Car @ 20 % p.a.Required: Prepare a Statement of Profit and Loss for the year ended 31st March, 20X2.
Que. 8- X is tobacco merchant. He follows the practice of paying creditors for goods purchased through his Bank Account and
making payments in cash on all nominal accounts:
Particulars 1st April, 20X1 Rs. 31st Mar., 20X2 Rs. Cash in Hand Cash at Bank Sundry Debtors Sundry Creditors Investments Stock 30 1,000 1,750 3,410 6,250 2,500 50 1,500 2,500 3,750 6,250 1,870 Transactions during the year were as follows:
Salaries Paid 1,500; General Expenses Paid 3,500; Payment for Stationary 870; Payment for Rent and Rates 700; Lighting Charges Paid 250; Cash receipts from Debtors 31,250; Payments to Creditors through Bank and of Trade Expenses in Cash 20,000; Payments into Bank – Business 18,750; Payment into Bank – Additional Capital 250; Payment from Bank Account – Personal 3,250; Cash Payments – Personal 910; Stock taken for personal use 140.
Required: Prepare Trading and Profit and Loss Account for the year ended 31st March,
Que. 9- The following facts have been ascertained from the records of X who maintains his books of accounts under the single
Receipts for the year ended 31st March, 20X2: From sundry debtors Rs. 88,125; Cash Sales Rs. 20,625; Paid in by the proprietor Rs. 12,500.
Payments made during the year ended 31st March, 20X2: New Plant purchased Rs. 3,125; Drawings Rs. 7,500; Wages Rs. 33,625; Salaries Rs. 5,625; Interest paid Rs. 375; Telephone Rs. 625; Rent Rs. 6,000; Light and power Rs. 2,375; Sundry expenses Rs. 10,625; Sundry Creditors Rs. 38,125.
It may be noted that he banks all receipts and makes all payments only by means of cheques.
Assets and Liabilities: As at 31stMarch, 20X1 As at 31st March, 20X2
Rs. Rs. Sundry Creditors 12,625 12,000 Sundry Debtors 18,750 30,625 Bank 3,125 ? Stock 31,250 15,625 Plant 37,500 36,575
Required: Prepare the Trading and Profit and Loss Account for the year ended 31st March. 20X2 and Balance Sheet as on that
date
Que. 10- You are given the following information for the year 20X1-20X2 from the books of M/s X a firm engaged in Trading
Operations:
Average monthly sales for the year amounted to Rs. 60,000 Goods are sold at cost plus 33.33%
Closing stock in trade on 31-3-20X2 Rs. 58,000 Stock Turnover Ratio – 10 Times
Operating Ratio – 85% on turnover
Depreciation charged on fixed assets for the year – Rs. 20,000
Non-operating income for the year consisted of Bank interest Rs. 3,000 and Dividends received from Investment Rs. 5,000
None – operating expenses amounted to Rs. 5,000 towards loss on sale of Fixed Assets.
Required: Prepare the Trading and P/L A/c of the firm for the year ended 31st March, 20X2 in detail showing Gross Profit,
Operating Profit and Net Profit.
Que. 11- The following is the Balance Sheet of the retail business of Mr. Raja (India) as at 31st March 20X1:
Liabilities Rs. Assets Rs.
Capital
Creditors for goods
Outstanding expenses (rent)
1,25000 30,000 1,000
Furniture and fittings Stocks Sundry debtors Cash at bank Cash in hand 25,000 75,000 20,000 35,000 1,000 1,56,000 1,56,000
You are furnished with the following information:
(a) Mr. Raja (India) always sells his goods at a profit of 25% on sales. (b) Goods are sold for cash and credit. Credit customers pay by cheque only. (c) Payments for purchases are always made by cheque.
(d) It is the practice of Mr. Raja (India) to send to the bank every week-end the takings of the week after paying every week salaries of Rs. 250 to the clerk, sundry expenses of Rs. 50 and personal expenses Rs. 100.
(e) Analysis of the bank pass book for the period ending 31st March 20X2 disclosed the following:
Rs.
Payments to creditors 75,000
Payment of rent 4,000
Amount remitted to the bank 1,35,000 (including cheques for Rs. 10,000 received from custo mers to
whom the goods were sold on credit.)
(f) The following are the balances on 31st March, 20X2.
Stocks 32,500
Creditors for goods 32,500
Sundry debtors 30,000
On the evening of 31st March 20X2 the cashier absconded with the available cash in cash box.
Required: Prepare a Statement showing the amount of cash defalcated by the cashier and also a p/l a/c for the period ended 31st
March 20X2 and a Balance Sheet as on that date.
Que. 12- Mr. X does not maintain complete records of his business but gives you the following information:
Particulars 31.03.20X1 Rs. 31.03.20X2 Rs. Machinery Sundry Creditors Sundry Debtors Stock in trade Cash in hand Furniture Cash at Bank 2,00,000 86,000 ? 70,000 2,600 27,000 15,600 1,50,000 ? 93,000 70,000 1,500 30,000 18,700 His Cash transactions for the year ending on 31st March, 20X2, included the following besides certain other items:
Payments to Creditors Rs. 4,10,000, Cash Sales (25% of total Sales) Rs. 1,70,000, Business Expenses Rs. 82,000, Cash Purchases Rs. 1,30,000, Collection from Debtors Rs. 5,27,000, Withdrawn for Household expenses Rs. 30,000. He maintains a uniform of gross profit of 25% on turnover. Outstanding expenses on 31st March, 2000 amounted to Rs. 5,000. Addition of new machinery was made on October 1st, 20X1. Some old furniture (Book Value Rs,. 6,000) was sold during the year and the proceeds stands credited to Furniture Account. Provide depreciation on Machinery @ 15% p.a. and on Furniture @ 10% p.a. (excluding sold item).
Required:Prepare a Trading and P/L Account for the year ended 31st March, 20X2 and a Balance Sheet as on that date.
Que. 13- From the following information of M/s X & Co. prepare Trading and Profit and Loss Account for the year ending on
31st March, 20X2 and the Balance Sheet as on that date.
Particulars 31.3.20X1 Rs. 31.3.20X2 Rs. Car Furniture Stock Debtors Bank Creditors 90,000 10,000 70,000 62,000 ? 60,000 90,000 10,000 90,000 46,000 16,000 ? The following further information is also available:
(a) M/s X & Co. purchases goods for resale from manufacturers who allow discount of 3% on goods purchased in excess of Rs. 5,00,000 in a year. The discount for the year ended 31st March, 20X2 was Rs. 12,480.
(b) All goods are sold at a gross profit margin of 30% o n selling price. (c) Bank statement for the year reveals the following payments:
Creditors Rs. 9,03,520, Salaries Rs. 60,000, Car expenses Rs. 23,000, Rent Rs 30,000, Printing and Stationery Rs 6,400, Rates and Taxes Rs. 3,000, Carriage outward Rs. 18,600, Traveling expenses Rs. 14,900, Delivery Van purchased Rs. 1,70,000, Miscellaneous expenses Rs. 9,580, Drawings Rs. 50,000.
(d) Depreciation on Car and Van @ 20 % and Furniture @ 10% is to b e provided on Balance as on 31.3.20X2.
Que. 14- From the following information in respect of BHARAT a trader, prepare a Trading, Profit and Loss Account for the
year ended 31st March, 20X2 and a Balance Sheet as on that date.
(a) Liabilities and Assets:
Particulars 31.3.20X1
Rs.
31.3.20X2 Rs.
Debtors for Sales Bills Receivable Creditors for purchases
Fixed Assets (at written down value) Expenses outstanding Prepaid expenses Cash in hand Bank Balance 1,60,00 -1,10,000 60,000 20,000 6,000 2,000 10,000 1,49,500 17,500 1,50,000 63,500 18,000 7,000 1,500 4,750 (b) Receipt and Payment during the year Rs.
Collections from Debtors (after allowing 2.5% discount) ? Payments to Creditors (after receiving 2% discount) 3,92,000 Proceeds of Bills receivable, discounted at 2% 61,250 Proprietor’s drawings 70,000 Purchases of Furniture midway through the year 10,000 4% Government Securities purchased (at 96% on 1.10.20X1) 96,000
Expenses 1,75,000
Miscellaneous income 5,000
(c) Sales are effected so as to realize a gross profit of 33-1/3% on the sale pr oceeds. (d) Goods costing Rs. 9,000, were issued as advertisement articles.
(e) During the year, Bills Receivable were drawn on debtors. Of these, Bills amounting to Rs. 20,000 were endorsed in favour of creditors. Of this later amount, a bill for Rs. 4,000 was disho nored by the debtor.
(f) Capital introduced during the year by the proprietor by cheques was omitted to be recorded in Cash Book, though the Bank balance of Rs. 4,750 on 31st March, 20X2 (as shown above), takes the same into account.
Que. 15- A and B are equal partners. Their books and records showed the following balance as on 31st March, 20X1:
Rs. Rs.
Factory Shed Account Due from Customers Advance for machinery
(Machinery installed in Oct. 20X1) Dues to suppliers
(including Rs. 5,000 for purchase of furniture in March, 20X1) 60,000 1,35,000 20,000 93,000 Bank Overdraft Stock at Cost Bills Payable Machinery Account Furniture Account 15,000 1,20,000 16,000 90,000 25,000
A fire occurred towards the end of March. 20X2 and a portion of the factory shed (book value Rs. 20,000) was destroyed. The following further information is furnished:
Cost of machinery delivered and installed in July, 20X1 is Rs. 60,000. The balance amount due was paid in October 20X1. Sales for the year 20X1-20X2 were Rs. 1,00,000 per month of which 15% was cash sales. The firm maintains a steady gross profit rate of 25% on turnover. Cash purchases amounted to Rs. 25,000.
Rs. Rs.
Trade Debtors as on 31.03.20X2 Payment to Creditors
(including liability for furniture)
Discount allowed to Debtors Discount received from Creditors 50,000 7,70,000 5,000 6,000 Bills Payable as on 31.03.20X2 Bills Payable discharged A Partner’s Drawings B Partner’s Drawings Trade Creditors as on 31.03.20X2 21,000 45,000 25,000 25,000 1,22,000 Cash and Bank Balance as on 31st March, 20X2 amounted to Rs. 2,10,000 and there was no bank o verdraft on that date. The figure of Cash and Bank on 1st April, 20X1 is not readily available. Net Profit for the year may b e assumed at Rs. 90,000 after providing for depreciation on Machinery Rs. 15,000 and on Furniture Rs. 25,000.
Required: Prepare Trading and Profit and Loss Account for the year ended 31st March, 20X2 and the Balance Sheet as on that
date.
Liability Rs. Assets Rs. Capital Account Loan Creditors 96,000 30,000 62,000 Building Furniture Motor Car Stock Debtors Cash in hand Cash at bank 65,000 10,000 18,000 40,000 34,000 4,000 17,000 1,88,000 1,88,000
A riot occurred on the night of 31st March, 2002 in which all boo ks and records were lost. The cashier had absconded with the available cash. He gives you the following information.
(a) His sales for the year ended 31stMarch, 20X2 were 20% higher than the previous year’s. He always sells his goods at cost plus 25%; 20% of the total sales for the year ended 31st March, 20X2 were for cash. There were no cash purchases.
(b) On 1st April, 20X1, the stock level was raised to Rs. 60,000 and stock was maintained at this new level all thro ughout the year. (c) Collection from debtors amounted to Rs. 2,80,000 of which Rs. 70,000 was received in cash. Business expenses amounted to
Rs. 40,000 of which Rs. 10,000 was outstanding on 31st March, 20X2 and Rs. 12,000 was paid by cheques.
(d) Analysis of the pass book revealed the payment to creditors Rs. 2,75,000, Personal Drawings Rs. 15,000, Cash deposited in Bank Rs. 1,43,000, Cash withdrawn from Bank Rs. 24,000.
(e) Gross profit as per last year’s audited accounts was Rs. 60,000. Provide depre ciation on Building and Furniture at 5% and Motor Car at 20%.
The amount defalcated by the cashier may be treated as recoverable from him.
Required: Prepare the Trading and P/L Account for the year ended 31st March, 20X2 and the Balance Sheet as on that d ate.
Que. 17- From the following particulars, prepare Trading and Profit & Loss Account for the year ending on 31st March 20X2 and
the balance Sheet as on that date:
Balance Sheet as at 31st March, 20X1
Liabilities Rs. Assets Rs.
Capital
Creditors for goods Expenses outstanding 1,72,000 62,500 5,000 Machinery Furniture Stock Debtors Cash Bank 70,000 15,000 35,000 1,00,000 5,000 15,000 Total 2,40,000 Total 2,40,000
Information: Debtors’ Velocity 2 months, Creditors’ Velocity 1.5 month, Stock level uniform, Gross Profit Ratio 33-1/3%, Sales
are 20% in cash and 80% on Credit. Sales for the current year is 20% more than the previous year. Receipt from debtors cash Rs. 50,000, balance cheques, Depreciation rate 10%, Machinery Rs. 40,000, Payment out of Bank: Furniture Rs. 5,000, Investments Rs. 40,000, Drawings Rs. 17,500, Business Expenditure Rs. 60,000, Cash Payments: Business Expenditure Rs. 90,000, Cash deposited into Bank 1,00,000.
Que. 18- The following is the Balance Sheet of A and B as on 1st April 20X1:
Liabilities Rs. Assets Rs.
Capitals: A B
Creditors for goods Creditors for expenses
1,00,000 50,000 20,000 30,000 Building Machinery Stock Debtors Bank 65,000 50,000 30,000 40,000 15,000 2,00,000 2,00,000
Information: Creditors’ velocity 1 month, Debtors’ Velocity 1-1/2 months, Stock level uniform in value, Trade Expenses Rs.
75,000, Depreciation on machinery 10%, Depreciation on building 5%, In the current year, cost price will go up by 10%. Sales in the current year will increase by 20% in volume. Rate of gross profit – no change, Drawings – B Rs. 5,000,
Que. 19- The following is the Balance Sheet of X a small trader as on 31.3.20X1. Liabilities Rs. ‘000 Assets Rs. ‘000 Capital Creditors 200 50 Fixed Assets Stock Debtors Cash in Hand Cash at Bank 145 40 50 5 10 250 250
A fire destroyed the accounting records as well as the closing cash of the trader on 31.3.20X2. However, the following information was available.
(a) Debtors and creditors on 31.3.20X2 sho wed an increase of 20% as compared to 31.3.20X1. (b) Credit Period:
Debtors – 1 month : Creditors – 2 months
(c) Stock was maintained at the same level throughout the year. (d) Cash sales constituted 20% of total sales.
(e) All purchases were for credit only.
(f) Current ratio as on 31.3.20X2 was exactly 2.
(g) Total expenses excluding depreciation for the year amounted to Rs. 2,50,000. (h) Depreciation was provided at 10% on the closing value of fixed assets. (i) Bank and Cash transactions:
(1) Payments to creditors included Rs. 50,000 by cash.
(2) Receipts from debtors included Rs. 5,90,000 by way o f cheques. (3) Cash deposited into the bank Rs. 1 ,20,000.
(4) Personal drawings from bank Rs. 50,000.
(5) Fixed assets purchased and paid by cheques Rs. 2,25,000. You are required to prepare:
(a) The Trading and Profit and Loss Account for the year ended 31.3.20X2 and (b) A Balance Sheet on that date.
For your exercise, assume cash destroyed by fire is written off in the Profit and Loss Account.
Que. 20- A and B started a business on April 1,20X1 with Rs. 50,000 as capital, contributed equally but the profit sharing ratio
was 3:2. Their drawings were Rs. 300 and 200 per month respectively. They had kept no accounts but given you the following information: Particulars 31.3.20X2 Rs. 31.3.20X3 Rs. Machinery at cost Stock in trade Debtors Cash Creditors Outstanding Expenses
Bank Balance (as per Pass Book)
20,000 30,000 50,000 2,000 30,000 4,000 6,000 25,000 30,000 60,000 500 20,000 3,000 8,000 Provision is to be made for depreciation at 10 per cent on the cost of machinery as at the end of each year. Debtors on
31.03.20X2 include Rs. 5,000 for goods sent out on consignment at 25 per cent above cost, and the goods were sold only in 20X3. A cheque for Rs. 1,000 had been deposited on 31.03.20X2 but was credited on 2.4.20X2. A cheque for Rs. 2,000 issued on 26.03.20X3 was presented on 3.4.20X3. A cheque for Rs. 1,000 was directly deposited by a customer on 27.03.20X3 but no entry is made either in Pass book or in Cash Book. A cheque for Rs. 500 deposited in march, 20X3 was dishonored but no adjustment for this was made.
Required: Determine the profit for 20X2 – 20X2 and draw up a Balance Sheet as at 31st March, 20X3.
(a) Sales and Purchases Policy: Total Sales during 2000 – Rs. 6,00,000. Volume of sales during 2nd half of 2000 was one third that of 1st half. Volume of credit sales was twice of Cash Sales evenly throughout the year. All purchases were on credit and made evenly throughout the year.
(b) Credit Policy: Closing Debtors represent last two months’ sales whereas Closing Creditors represent last 3 months’ purchases (c) Price Policy: Goods were sold at 1 0% profit on credit sales. Cash selling price was always at a profit of 5% of Sales.
(d) Inventory Policy: First 2 months’ requirements were held as Opening Stock whereas last months’ requirements was held as Closing Stock.
Required: ascertain the (i) Opening Stock as on 1.1.20X1, (ii) Closing Stock as on 31.12.20X1, (iii) Total Purchases during
20X1, (iv) Closing Debtors and Creditors as on 31.12.20X1
Que. 22- Shri Rashid furnishes you with the following information relating to his business:
(a) Assets and liabilities as on 1.1.20X1 31.12.20X1 Rs. Rs. Furniture (w.d.v.) 6,000 6,350 Stock at cost 8,000 7,000 Sundry debtors 16,000 ? Sundry creditors 11,000 15,000 Prepaid expenses 600 700 Unpaid expenses 2,000 1,800 Cash in hand and at bank 1,200 625 (b) Receipts and Payments during 20X1:
Collection from debtors, after allowing discount of Rs. 1,500 amounted to Rs. 58,500. Collections on discounting of bills of exchange, after deduction of discount of Rs. 125 b y the bank, totaled to Rs. 6,12.
Creditors of Rs. 40,000 were paid Rs. 39,200 in full settlement of their dues. Payment for freight inwards Rs. 3,000
Amounts withdrawn for personal use Rs. 7,000 Payments for office furniture Rs. 1,000
Investment carrying annual interest of 4% were purchased at Rs. 96 on 1st July, 20X1 and payment made therefore. Expenses including salaries paid Rs. 14,500.
Miscellaneous receipts Rs. 500.
(c) Bills of exchange drawn on and accepted by customers during the year amounted to Rs. 10,000. Of these, bills of exchange of Rs. 2,000 were endorsed in favour of creditors. An endorsed bill of exchange of Rs. 400 was dishonoured.
(d) Goods costing Rs. 900 were used as advertising materials.
(e) Goods are invariably sold to show a gross profit of 33.1/3% o n sales.
(F) Difference in cash book, if any, is to be treated as further drawing or introduction by Shr i Rashid. (g) Provide at 2.5% for do ubtful debts on closing debtors.
Required: Prepare Trading and Profit and Loss Account for the Year ended 31st December, 20X1 and the Balance Sheet as on
that date.
Que. 23- A and B who had conducted separate business of merchants as sole traders agreed on 28th February, 20X2 to enter into
partnership as from 1st April, 20X2. B had not kept proper records and in order to establish the interests of the partners on 1st April, 20X2, it was arranged that B should carry on business for the month of March, 20X2 and upon the results of that month, their respective interests in the partnership would be determined.
The following is a summary of B’s transactions for the month of March, 20 X2.
Rs. Cash at Bank on 28thFebruary, 20X2 as per Bank statement 5,200
Unpresented cheque at the date. 6,150 Furniture as per valuation 22,000 Sundry debtors – 28thFebruary, 20X2 19,000
Sundry creditors – 28thFebruary, 20X2 18,900 Cash at bank on 31stMarch, 20X2 as per Bank statement 11,840
Unpresented cheques – 31stMarch, 20X2 2,080 Credit sales during the month, the cost of which was Rs. 4,520, amounted
which Was Rs. 1,800 and these goods were no t delivered until 3rd April, 20X2. Credit purchases including goods received on 2nd April, 20X2 and
costing Rs. 2,500 11,240
Stock in hand, taken on 31stMarch, 20X2 and priced at cost, amounted to 30,000 A credit note was issued on 9th March, 20X2 for an overcharge in an
Invoice dated 27thFebruary, 20X2 800 Cash receipts were:
Debtors 13,000
Cash sales (cost of goods sold Rs. 9,600) 13,450 Cash disbursement were:
Commission 1,800
Salaries and expenses 1,600
Rent 400
Creditors (after deduction Rs. 100 discount) 9,900
Drawings 2,000
Bank charges and interest 40
Required: Prepare B’s statement of Assets and Liabilities and Capital as at 31st March, 20X2 and Revenue statement for the
month then. Depreciation may be disregarded.
Que. 24- Mr. X, a sole trader, does not keep proper accounting records for his business transactions. The following information
regarding his assets and liabilities on 31st March, 20X1 is available:
Assets Rs. Liabilities Rs. Stock Debtors Cash Bank balance Premises Motor vehicles 75,000 69,800 4,800 66,000 3,00,000 61,000 Creditors Term loan
Furniture and fittings Outstanding expenses
85,000 80,000 1,10,000 2,700
The cash book entries reveal the following:
Cash Rs. Bank Rs. Cash Rs. Bank Rs.
Opening balance
Collection from customers deposited
4,800 66,000
7,06,000
Payment to suppliers Salaries & Wages Motor expenses Cash purchases (paid by cheques, General expenses Drawings 9,200 960 1,720 4,42,800 26,400 14,800 1,49,600 18,680 85,120
Further information is given below:
(a) The total receipts from customers have not been fully recorded. The figure of Rs. 7,06,000 has been taken from the bank statement.
(b) The opening bank balance includes private investment income of Rs. 2,880.
(c) Goods costing Rs. 38,400 have been sold by adding 10% profit. In respect of other goods, the mark up has been 25%. (d) A discount of Rs. 10,800 has been received from suppliers for early settlement of bills.
(e) Interest on long-term loan is payable at 12% per annum. Half year’s interest remained outstanding on 31st March, 20X2. (f) Rs. 2,000 was owing for salaries and wages and Rs. 1,560 was owing for general expenses at 31st March, 20X2.
(g) Depreciation is to be provided on motor vehicles for the year at 10% of the book value and on furniture and fittings at 5% of the book value.
(h) Other balance on 31st March, 20X2. were: Debtors Rs. 73,280, Creditors Rs. 82,280, Stock Rs. 71,400. You are required to prepare:
(a) a Trading and Profit and Loss Account for the year ended 31st March, 20X2; and (b) a Balance Sheet as at 31st March, 20X2.
Que. 25- Radha keeps her books in single entry system. From the following, prepare the Trading and Profit and Loss Account for the year ended 31st March, 20X2 together with the balance sheet on that date.
Rs. Rs.
Interest charges 1,000 Received from debtors 2,50,000 Personal withdrawals 20,000 Cash sales 1,50,000 Staff salaries 85,000
Other business expenses 79,000 Payments to creditors 1,50,000 Balance in bank on 31.3.20X2 24,250 Cash in hand on 31.3.20X2 750 Further details available are:
On 1.4.20X1 On 31.3.20X2 Stock 90,000 1,02,200 Creditors 80,000 55,000 Debtors 2,20,000 3,00,000 Furniture 10,000 10,000 Premises 1,50,000 1,50,000
Provide 5% interest on Radha’s capital balance as on 1.4.20X1. Provide Rs. 15,000 for doubtful debts, 5% d epreciation on all fixed assets. 5% group incentive commission to staff has to be provided for on net profit after meeting all expenses and the commission.
Que. 26- Mr. X is a small trader, and is financially incapable of ingaging the services of an accountant. He keeps no books but
only an account with a Bank in which all takings are lodged after meeting business expenses and his personal drawings and through which all payments for business purchases are passed.
You are required to ascertain his trading result for the year ended 31st March, 20X3 and the financial position of his business as on that date from the following information supplied by him:
(a) The Bank statement shows deposits during the year of Rs. 12 ,020 and withdrawals of Rs. 11,850.
(b) Rs. 1,000 had b een placed in fixed deposit account on 31st December, 20X1 at 10% per annum and withdrawn with interest on 30th June, 20X2.
(c) The assets and liabilities on 31st March, 20X3 were: Stock Rs. 1,100; Book Debts Rs. 11,150; Bank Balance Rs. 320; Furnit ure Rs. 2,000 and Trade creditors Rs. 400.
(d) In the absence of reliable information, estimates are supplied on the following matters. (i) The Stock and Book Debts have each increased by Rs. 100 during the year. (ii) The Trade creditors were Rs. 200 on 1st April, 20X2.
(iii) During the year personal expenses amounted to Rs. 800 and business expenses Rs. 700. Ignore fractions.
Que. 27-K.Azad, who is in business as a wholesaler in sun flower oil, is a client of your accounting firm. You are required to draw
up his final accounts for the year ended 31.3.20X2. From the files, you pick up his Balance Sheet as at 31.3.20X1 reading as below:
Balance Sheet as at 31.3.20X1
Liabilities Rs. Assets Rs.
K.Azad’s Capital
Creditors for Oil Purchases
12% Security Deposit from Customers Creditors for Expenses:
Rent Salaries Commission 1,50,000 2,00,000 50,000 6,000 4,000 20,000
Cash and Bank Balance Debtors
Stock of Oil (125 tins)
Furniture 30,000 Less: Depreciation 3,000
_________ Rent Advance
Electricity Deposit 3-Wheeler Tempo Van
40,000 Less: Depreciation 10,000 _________ 75,000 1,60,000 1,25,000 27,000 12,000 1,000 30,000 4,30,000 4,30,000
A Summary of the rough Cash Book K.Azad for the year ended 31.3.20X2 is as below:
Cash and Bank Summary
Receipts
Cash Sales
Collections from Debtors Payments
To Landlord Salaries
Miscellaneous Office Expenses Commission
Personal Income – Tax
Transfer on 1.10.20X1 to 12% Fixed Deposit To Creditors for Oil Supplies
Rs. 5,26,500 26,73,500 79,000 48,000 12,000 20,000 50,000 6,00,000 24,00,000
A scrutiny of the other records gives you the following information:
(i) During the year oil was purchased at 250 tins per month basis at a unit cost of Rs. 1,000. 5 tins were damaged in transit in respect of which insurance claim has been preferred. The surveyors have since approved the claim at 80%. The d amaged ones were sold for Rs. 1,500 which is included in the cash sales. One tin has been used up for personal consumption. Total number of tins sold during the year was 3,000 at a unit price of Rs. 1,750.
(ii) Rent until 30.9.20X1 was Rs. 6,000 per month and was increased thereafter by Rs. 1,000 per month. Additional advance rent of Rs. 2,000 was paid and this is included in the figure of payments to landlord.
(iii) Provide depreciation at 10% and 25% of WDV on furniture and tempo van respectively.
(iv) It is further noticed that a customer has paid Rs. 10,000 on 31.03.20X2 as security deposit by cash. One of the staff has defaulted. The claim against the Insurance Company is pending.
Required: Prepare final account for the year ended 31.3.20X2.
Que. 28- The following is the Balance Sheet of the retail business of Sri X as at 31st December, 20X1.
Liabilities Rs. Assets Rs.
Sri Srinivas’s Capital Liabilities for goods Rent 1,00,000 20,500 1,000 Furniture Stock Debtors Cash at bank Cash in hand 10,000 70,000 25,000 14,500 2,000 Total 1,21,500 Total 1,21,000
You are furnished with the following information: (i) Sri X sells his goods at a profit of 20% on sales.
(ii) Goods are sold for cash and credit. Credit customers pay by cheques only. (iii) Payments for purchases are always made by cheques.
(iv) It is the p ractice of Sri X to send to the b ank every weekend the collections of the week after paying every week, salary of Rs. 300 to the clerk, Sundry expenses o f Rs. 50 and personal expenses Rs. 100.
Analysis of the Bank Pass-Book for the 13 week period ending on 31st March, 20X2 disclosed the following: Rs.
Payments to creditors 75,000
Payments of rent upto 31.3.20X2 4,000 Amounts deposited into the bank 1,25,000
(include Rs. 30,000 received from debtors by cheques) The following are the balance on 31st March, 20X2:
Stock 40,000
Debtors 30,000
Creditors for goods 36,500
On the evening of 31st March, 20X2 the Cashier absconded with the available cash in the cash bo x. There was no cash deposit in the week ended on that date.
Required: Prepare a Account showing the amount of cash defalcated by the Cashier and also a Trading & Profit and Loss Account for the period ended 31st March, 20X2 and a Balance Sheet as on that date.
Que. 29- Mr. Pranlal is a dealer in fertilizers. He purchases some chemicals and mixes them to manufacture the fertilizers. He has
prepared the following statements He requires you to examine them, and prepare Trading Account, Profit & Loss Account and Balance Sheet, after taking into account the additional information furnished:
Dr. (a) Trading and Profit & Loss Account as on 31.3.20X2 Cr.
Particulars Rs. Particulars Rs. To Stock as on 31.3.20X2 To Purchases To Expenses 8,00,000 8,00,000 7,00,000 By Sales By Creditors By Stock as on 1 .4.20X1 By Other income By Net loss 5,00,000 10,00,000 2,00,000 1,00,000 5,00,000 23,00,000 23,00,000
Balance Sheet for the year ended 31.3.20X2
Particulars Rs. Particulars Rs. To Capital as on 1.4.20X1 3,00,000 Less: Loss 5,00,000 ---To Loans taken on 1.4.20X1 at 12% To Surpluses (Differences) 8,00,000 1,00,000 4,50,000 By Debtors By Cash By Bank By Closing stock 2,50,000 20,000 80,000 10,00,000 13,50,000 13,50,000
He is entitled to a rebate of 10 per cent on the listed price of a chemical. The purchases during the year ended 31st March, 20X2 of the said chemicals at the listed price, included in the purchases, amounted to Rs. 4,00,000
(b) The details of the expenses are as under : Mixing wages Rs. 2,00,000 Administration and selling expenses Rs. 2,00,000, Mixing equipments purchased Rs. 1,00,000, Construction of factory sheds Rs. 1,00,000, Advance for materials Rs. 1,00,000.
(c) A certain raw material was received on 2nd April, 20X2, the invoice for which amounting to Rs. 1,00,000 is included in the purchases.
(d) A customer who purchased the goods for Rs. 1,00,000 has not taken delivery. The value of such stock was inadvertently included in the closing stock as on 31st March. 20X2.
(e) He had entered into a joint venture with Mr. Babu Ram, The sales made on account of the joint venture was included in the sales for Rs. 2,00,000. He had paid Rs. 1,00,000. for the purchase of raw materials. It has been included in the expenses. His share of profit in the venture was determined at Rs. 50,000. The amount paid for setting the account was wrongly debited to Debtors Account.
(f) Sums received for cash sales of Rs. 5,00,000 was included in the Creditors.
(g) An invoice for Rs. 50,000 for the goods received on 25th March, 20X2 and included in the stock was received only on 1st April, 20X2.
(h) Other out standings as on 31st March, 20X2 were:
(i) For the erection of factory sheds Rs. 50,000 (b) Adm. & Selling expenses Rs. 25,000
(j) Provide depreciation at 5 per cent on the factory sheds and fat 10 per cent on the equipments on the closing balances.
(k) The Bank Balance of Rs. 80,000 includes the encashment of his personal deposit of Rs. 50,000 with the bank. He had forgotten to credit his Capital Account with this amount.
Que. 30- You have been p rovided with following information of M/s Sybal Enterprises as on 31st December 20X1
(a) Summarised Balance Sheet as at 31st December, 20X1
Liabilities Rs. Assets Rs. Capital Loan Expenses Creditors 2,37,474 1,00,000 12,050 Fixed Assets:
(Cost less Depreciation)
Trade Creditors 2,47,903 Building (Rs. 1,42,000 – Rs. 27,500)
Fixture & Fittings (Rs. 21,405 – Rs. 11,214) Motor Vehicles (Rs. 24,690 – Rs. 18,690) Current Assets: Stock in trade Sundry Debtors Cash at Bank Cash in hand 1,14,500 10,191 6,000 2,37,423 1,95,115 7,048 2,150 5,97,247 5,97,247
(b) During the year ended 31st Dec. 20X2 the following trading transactions took place:
Cash Sales Rs. 4,27,042, Receipt from Debtors Rs. 10,07,401, Payment to trade Creditors Rs. 9,28,213, Wages paid Rs. 2,04,111, Overhead Expenses paid Rs. 57,410, Interest on loan paid Rs. 5,000, Salaries Rs. 1,50,000
(c) Depreciation, on the reducing balance method, is to be provided @ 4% p.a. on buildings, 15% p.a. on fixtures & fittings and 25% p.a. on the motor vehicles.
(d) On 1st June 20X2 the enterprise acquired a vehicle on hire purchase terms which provided for the payment of a deposit of Rs. 1,000 and 24 monthly installments of Rs 200 commencing on 30th June, 20X3. The cash price of the vehicle is Rs. 5,200 The only other movement in fixed assets was the scrapping of the old vehicle which originally cost of Rs. 1,960 and had accumulated depreciation of Rs. 1,699.
(e) On 31st Dec. 20X2 – Stock at cost Rs. 2,47,628, Debtors Rs. 1,89,400, Creditors Rs. 2,58,107 Cash in hand amounted to Rs. 1,945, Expenses Creditors – Nil
(f) On 30th June, 20X2 the loan was repaid at a discount of 14% (g) The proprietor has withdrawn during the year Rs. 1,000
Required: Prepare: (A) Joint Cash & Bank Account Trading and Profit & Loss Account for the year ended 20X2 and the Balance
