Compilation of Final Accounts

Adjustments & Final Accounts compilation (1 of 5)

Prepare the Adjustment entries and then Trading & Profit & Loss Account & Balance Sheet with the figures from the Books of Accounts of X

Mr. X had prepared the following Trial Balance from his Ledger as on 31.3.2016

Debits : Op. Stock (1.4.15) : 5,00,000 Dr, Purchases  : 29,95,000Dr, Sales Return : 55,000Dr, Cash in Hand : 2,55,000 Dr, Cash at Bank : 5,05,000 Dr, Rates and Taxes : 50,000 Dr, Drawings :      45,000 Dr                , Salaries : 1,00,000 Dr, Postage and Telegram : 1,05,000 Dr, Insurance : 94,000 Dr, Salesman Commission  :78,000 Dr, Printing and Stationery :95,000 Dr, Advertisement :1,74,000 Dr, Furniture and Fittings :5,50,000 Dr, Motor Car :48,000 Dr, Discounts Allowed :55,500 Dr, General expenses: 69,700 Dr, Carriage Inward :10,000 Dr, Carriage Outward :25,000 Dr, Wages :50,000 Dr, Sundry Debtors : 10,00,000  Dr, Total Debits  68,59,200

Credits : Purchase Returns : 45,000 Cr, Sales : 40,45,000 Cr, Discount Received : 1,00,000 Cr, Sundry Creditors : 4,10,000 Cr, Capital : 22,59,200 Cr, Total Credits : 68,59,200

Adjustments to be made for : Closing Stock as on 31st March, 2016  : Rs.1,45,000, Mr. X had withdrawn goods for personal use:  Rs.50,000, Purchases include Purchase of furniture : Rs.1,00,000, Debtors include Rs.50,000 bad debts Sales include goods worth Rs.1,50,000 (Costing Rs.1,00,000), sent to AKN & Co. on approval and remained unsold as on 31st March, 2016. Provision for Bad debts to be created @5% of Sundry Debtors. Depreciation for  Furniture and Fittings @10%.  and Motor Car @ 20%. Salesman commission payable @ 10% on total sales.

Trading Account for the period 1.4.15 to 31.3.16

ParticularsDrParticularsCr
To Opening Stock5,00,000By Sales (40,45,000) – Returns (55,000) – 1,50,000 (Goods sent on approval)38,40,000
To Purchases (29,95,000) – Returns (45,000) – Personal use (50,000) – Furniture Purch (1,00,000)28,00,000By Closing Stock (1,45,000) + Cost of goods sent on approval (1,00,000)2,45,000
To Carriage Inward10,000  
To Wages50,000  
To Gross Profit c/d7,25,000  
Total40,85,000Total40,85,000

Profit and Loss Account of Mr. X for  1.4.15 to 31.3.16

Particulars                                                                      Dr                Particulars                      Cr

To Rates and  Taxes                                                        50,000      By Gross Profit b/d        7,25,000

To Salaries                                                                     1,00,000      By Discounts Received 1,00,000

To Postage and Telegram                                            1,05,000      By Net Loss                    5,02,300

To Salesman’s comm (78,000) + Outst. (3,16,500)      3,94,500                                              

To Insurance                                                                     94,000                                              

To Advertisement                                                           1,74,000                                              

To Printing and Stationery                                              95,000                                              

To Bad Debts                                                                     50,000                                              

To Prov. for Doubtful Debts @5% on 8,00,000               40,000                                              

To Discounts Allowed                                                      55,500                                              

To General Expenses                                                      69,700                                             

To Carriage Outward                                                        25,000                                              

To Deprn: Furn & Fittings (65,000) + Motor Car (9,600)                    74,600                                    

Total                                                                                13,27,300    Total                               13,27,300

Balance Sheet of Mr. X as on 31st March, 2016.

Liabilities Assets 
Capital (22,59,200) – Net Loss (5,02,300) –  Drawings (45,000) – Goods withdrawn (50,000)16,61,900Furniture & Fittings (5,50,000) +  Addition (1,00,000)= 6,50,000 – Depn @ 10% (65,000)5,85,000
Motor Car (48,000) –  Depn @ 20% (9,600)38,400
Sundry Creditors4,10,000Sundry Debtors (10,00,000) – Sales on  approval (1,50,000) – Bad Debts (50,000) = 8,00,000 – Prov for Doubtful Debt @5% (40,000)7,60,000
Outstanding salesman’s comm.3,16,500Cash in Hand2,55,000
Cash at Bank5,05,000
Closing stock (1,45,000) + Cost of goods  sent on approval (1,00,000) 2,45,000
Total23,88,400Total23,88,400

Adjustments & Final Accounts compilation (2 of 5)

Prepare the Adjustment entries and then Trading & Profit & Loss Account & Balance Sheet with the figures from the Books of Accounts.

Trial Balance as on 31st March 2016

Debits : Sundry Debtors : 50,000, Cash in Hand : 2,000, Furniture : 3,500, Motor Car  : 15,000, Purchases : 1,25,000, Sales Return : 2,500, Salaries : 8,000, Opening Stock : 10,000, Car Expenses : 6,500, Rent and Taxes :1,000, Insurance : 2,500, Cash at Bank : 4,000, Machinery : 25,000, Wages : 23,000, General Expenses : 4,500, Carriage Inward : 2,000, Carriage Outward : 1,500, Power and Fuel : 6,000, Drawing A/c : 8,000, Total Debits : 3,00,000

Credits : Creditors : 64,000, Sales : 2,16,000, Capital A/c :20,000, Total Credits : 3,00,000

Further Adjustments to be made: Free samples costing Rs.5,000 distributed. Rs.1,000 paid for Machinery erection was debited to wages A/c. Write off further Bad Debts of Rs.2,000. Provision for Bad Debts at 10% of Sundry Debtors. Depreciation of Furniture and Machinery @15% and Motor Car @20%. Commission income outstanding Rs.3,000. Insurance Premium includes Rs.500 paid for Personal Insurance of the Proprietor. 50% of Motor Car Expenses and Depreciation is being charged to Proprietor A/c. Closing Stock was valued at Rs.37,000 on 31st March, 2016.

Trading and P L For the year ended 31st March, 2016

Particulars                                                   (Rs.)          Particulars                                              (Rs.)

To Opening Stock                                         10,000     By Sales (2,16,000) – Returns (2,500)   2,13,500

To Purchases                                              1,25,000     By Goods distributed as sample                5,000

To Wages 23,000 – Mach. Erect (1,000)       22,000     By Closing Stock                                       37,000

To Carriage inward                                         2,000                                                                    

To Power and fuel                                           6,000                                                                    

To Gross profit c/d                                        90,500                                                                    

Total                                                            2,55,500                                                                     2,55,500

Profit and Loss A/c For the year ended 31st March, 2016

To Salary                                                     8,000         By Gross profit b/d                       90,500

To Car exp – 50% for proprietor                 3,250         By Commission receivable            3,000

To Rent and Taxes                                     1,000                                                               

To Insurance (2500) – for proprietor (500)                  2,000                                                             

To General expenses                                4,500                                                               

To Carriage outward                                  1,500                                                               

To Advertisement (free sample)                5,000                                                               

To Bad debts                                               2,000                                                               

To Provisions for bad debts                      4,800                                                               

To Depn.Mach3,900+Furn525+Car1,500  5,925                                                               

To Net profit                                                55,525                                                              

                                                                     93,500                                                                93,500

Balance Sheet As on 31st March, 2016

LiabilitiesRsAssetsRs.
Capital (20,000) + Profit (55,525) – Drawings (8,000) – Insurance (500) – Car Exp (3,250) – Depn on Car (1,500)62,275Furniture (3,500) – Depn @ 15% (525)2,975
Sundry Creditors64,000Motor car (15,000) – Depn 20% (3000)12,000
  Machinery (25,000) + Add Erect Ch (1,000) =26,000 –  Depn @ 15% (3,900)22,100
  Sundry debtors (50000) – Bad Debt (2,000) -=48,000 – Prov for Bad Debt @ 10% (4,800)43,200
  Closing stock37,000
  Com. outstanding3,000
  Cash in Hand2,000
  Cash at Bank4,000
Total1,26,275Total1,26,275

Adjustments & Final Accounts compilation (3 of 5)

Prepare the Adjustment entries and then Trading & Profit & Loss Account & Balance Sheet with the figures from the Books of Accounts of Y

Trial Balance of Mr. Y as at 31st December, 2016

Debit Balances : Opening Stock : 10,000, Land and Buildings : 35,000, Machinery : 50,000, Furniture & Fixtures : 5,000, Purchases : 1,02,850, Salaries : 11,000, General Expenses : 2,500, Rent : 3,000, Postage, Telegrams : 1,500, Stationery : 2,000, Wages : 26,000, Freight on Purchases : 2,800, Carriage on Sales : 3,000, Repairs : 4,000, Sundry Debtors : 30,000, Bad Debts : 1,000, Cash in Hand : 250, Cash at Bank : 5,000, Sales Returns : 5,100 : Total Debits : 3,00,000

Credit Balances : Capital : 50,000, Loan from Mr. Amit @ 9% p.a. : 30,000, Sundry Creditors : 9,600, Purchase Returns : 2,000, Miscellaneous Receipts : 2,000, Sales ; 2,06,400. Total Credits: 3,00,000

Adjustment Entries to be made : Wages for December, 2016, Rs. 1,000 not yet been paid. General Expenses Includes Insurance premium, Rs.600, paid for the year ending March 31, 2017. Provision for Doubtful Debts @ 5% on debtors. Depreciation : Land and buildings 5%, Machinery 10% and Furniture and Fixtures 15%. Loan taken from Mr. Amit was taken on 1st July, 2010. Interest has not yet paid. Closing stock as on 31st December, 2016, Rs.15,000.

Trading Account for the year ended December 31, 2016

ParticularsDrParticularsCr
To Opening Stock10,000By Sales (2,08,550) – Returns (5,100)2,03,450
To Purchases (1,05,000) – Returns (2,000)1,03,000By Closing Stock15,000
To Wages (26,000) + Outs (1,000)27,000  
To Freight on Purchases2,800  
To Gross Profit c/d75,650  
 2,18,450 2,18,450

Profit & Loss Account for the year ended December 31, 2016

Particulars                                                                           Dr      Particulars                                    Cr

To Salaries                                                                      11,000      By Gross Profit b/d                    75,650

To General Expenses (2,500) – Prep Ins (150)                         2,350      By Miscellaneous Receipts           2,000

To Rent                                                                             3,000                                                   

To Postage & Telegrams                                                      1,500                                                   

To Stationery                                                                     2,000                                                   

To Carriage on Sales                                                           3,000                                                   

To Repairs                                                                         4,000                                                   

To Bad Debts                                                                     1,000                                                   

To Provision For Doubtful Debts                                           1,500                                                   

To Depn : L & B (1,750) + Mach (5,000) + Furn (750)               7,500                                                   

To Interest [Rs.(30,000 x 9%) x ½]                                       1,350                                                   

To Net Profit (Transferred to Capital A/c)                             39,450                                                   

                                                                                      77,650                                                    77,650

Balance Sheet As on 31st December, 2016

LiabilitiesRs.AssetsRs.
Capital Account (50,000) + Profit (39,450)89,450Land & Buildings (35,000) – Depn (1,750)33,250
Loan Amit (30,000) + Int [Rs.(30,000×9%) x ½]= (1,350)31,350Machinery (50,000) – Deprn @10 % (5,000)45,000
Wages Outstanding1,000Furn (5,000) – Deprn @15%    (750)4,250
Sundry Creditors9,600S. Drs (30,000) – Prov for doubt.Debts (1,500)28,500
  Cash in Hand250
  Cash at Bank5,000
  Prepaid Insurance150
  Closing Stock15,000
Total1,31,400Total1,31,400

Adjustments & Final Accounts compilation (4 of 5)

Prepare the Adjustment entries and then Trading & Profit & Loss Account & Balance Sheet with the figures from the Books of Accounts.

Trial Balance as at 31st March, 2015 (Debits / Credits are not specified, you have to assume)

Plant & Machinery : 40,500, Furniture and Fittings : 15,250, Bank Overdraft : 1,60,000, Capital Account : 1,15,000, Drawings : 15,000, Purchases : 2,30,500, Opening Stock : 1,32,250, Wages : 22,325, Provisions for Doubtful Debts : 5,700, Provisions for discount On Debtors : 1,375, Sundry Debtors: 1,52,500, Sundry Creditors : 77,500, Bad Debt : 2,200, Bad debt recovered :1,250, Salaries : 32,650, Salaries Payable: 5,350, Prepaid Rent : 500, Rent : 6,500, Carriage inward : 2,350, Carriage outward : 3,250, Sales : 2,90,600, Advertisement Expenses : 6,750, Printing & Stationery : 2,200, Cash in Hand : 2,300, Cash at Bank : 7,250

Adjustments :

The bank overdraft out standing as on 31.3.2015 accounted for 80% of drawing power. Such drawing power is ascertained by deducting 20% as margin from the value of stock as on that date. Purchases include Sales return of Rs.5,500. Sales include purchases returns of Rs.4,750. Goods withdrawn by M for own consumption Rs.7,500 were included in purchases. Wages paid includes installation charges of plant & machinery Rs.750. Depreciation on plant & machinery @ 15% p.a, and on furniture @10% p.a. Provision for doubtful debts required @ 5% and provision for discount on debtors @ 2 1/2%. A debit balance of Rs.2,500 in the account of Ram, a creditor, is included in the list of sundry debtors. Free samples distributed for publicity costing Rs.1,250.

Difference in the trial balance, if any, can be taken as miscellaneous income.

Rectification Entries:

  • Sales Return Dr 5,500, Purchase Cr 5,500 (Amount of Sales Return included in Purchase)
  • Sales Dr 4,750 Purchase Return  Cr 4,750 (Amount of Purchase Return included in Sales)
  • Drawing Dr 7,500, Purchase Cr 7.500 (Goods withdrawn by Proprietor for  Personal use)
  • Plant & Machinery Dr 750, Wages Cr 750 (Machine Installation charges included in wages)
  • Advance to Supplier Dr 2,500, S. Debtors Cr 2,500 (Advance to suppliers included in S. Debtors)
  • Advertisement (Free Sample) Dr 1,250, Purchase Cr 1,250 (Cost of Free Samples given for Publicity)

Trial Balance  As on 31st March, 2015 (After rectification)

Debit Balances

Plant & Machinery : 41,250, Furniture & Fittings : 15,250, Drawings : 22,500, Purchases : 2,16,250, Opening Stock : 1,32,250, Wages : 21,575, Sundry Debtors : 1,50,000, Advance to suppliers : 2,500, Bad debts: 2,200, Salaries : 32,650, Prepaid rent : 500, Rent : 6,500, Carriage inward : 2,350, Carriage outward : 3,250, Returns inward : 5,500, Advertisement : 8,000, Printing & Stationery : 2,200, Cash in hand : 2,300, Cash in Bank : 7,250 : Total Debits : 6,74,275

Credit Balances

Bank Overdraft : 1,60,000, Capital account : 1,15,000, Returns outward : 4,750, Provision for doubtful debts : 5,700, Provision for discount on debtors: 1,375, Sundry Creditors : 77,500, Bad debt recovered : 1,250, Outstanding salaries or Payable Salaries : 5,350, Sales : 2,85,850. Total : 6,56,775

Misc Income (Balancing Figure)  Cr: 17,500 (6,74,275 – 6,56,775).  Total Credits : 6,74,275

Trading Account For the year ended 31st March, 2015

ExpensesDrIncomeCr
To Opening Stock1,32,250By Sales (2,90,600) – Purchase return wrongly included (4,750) – Sales Return (5,500)2,80,350
To Purchases (2,30,500) – Goods withdrawn for personal use (7,500) – Sales return wrongly included (5,500) – Purchase Return (4,750) – Free Samples (1,250)2,11,500By Closing Stock (Rs.1,60,000 x 100/90 x 100/90)2,50,000
To Carriage inward2,350  
To Wages (22,375) – Instln of Plant & Mach.( 750)21,575  
To Gross Profit c/d ((Transferred to P & L A/c)1,62,675  
Total5,30,350Total5,30,350

Profit and Loss Account For the year ended 31st March, 2015

Expenses                                                                    Dr             Income                        Cr

To Salaries                                                                   32,650       By Gross Profit b/d         1,62,675

To Rent                                                                         6,500       By Bad debt recovered         1,250

To Advt(6,750) + Free sample (1250)                                 8,000       By Misc. Income               17,500

To Printing & Stationery                                                   2,200                                         

To Bad Debts                                                                 2,200                                         

To Carriage Outward                                                       3,250                                         

To Prov. for doubtful debts  Reqd (7,500)- Existing (5,700)                    1,800                                   

To Prov. for discount on (3,563) – (1,375)                           2,188                                         

To Depn: P M@15%(6,187) +Furn@10% (1,525)                 7,712                                         

To Net Profit (Transferred to Capital A/c)                               1,14,925                                            

                                                                                                1,81,425                                    1,81,425

Balance Sheet as on 31.3.2015

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
LiabilitiesRsAssetsRs
Capital (1,15,000) + Net Profit (1,14,925) – Drawing (15,000) – Goods withdrawn (7500)2,07,425Plant & Machinery (40,500) + Installn chrges (750) = 41,250 – Depn @15% (6,187)35,063
Bank Overdraft1,60,000Furn (15,250) – Deprn @10% (1,525)13,725
Sundry creditors77,500Closing Stock (1,60,000 x 100/90 x 100/90)2,50,000
Payable Salaries5,350Sundry Debtors (1,52,500) – Cr Bal included (2500) = 1,50,000 – Prov. for doubt. debts @ 5% (7,500) = 1,42,500. – Prov. for Discount @ 2.5% (3,563)1,38,937
  
  Advance to Suppliers2,500
  Prepaid Rent500
  Cash  at Bank7,250
  Cash in Hand2,300
 4,50,275 4,50,275

Adjustments & Final Accounts compilation (5 of 5)

Prepare the Adjustment entries and then Trading & Profit & Loss Account & Balance Sheet with the figures from the Books of Accounts.

Trial Balance as on 31st December, 2015.

Debit Balances              

Purchases : 15,000, Sundry Debtors : 20,000, Salaries : 3,000, Wages : 2,000, Rent : 1,500, Sales Returns : 1,000, Bad Debts Written off : 700, Drawings : 2,400, Printing and Stationery : 800, Insurance : 1,200, Opening Stock : 5,000, Office Expenses : 1,200, Furniture and Fixture : 2,000, Total Debits : 55,800

Credit Balances

Interest Earned : 600, Sales : 32,100, Purchases Returns : 500, Sundry Creditors : 12,000, Capital Account : 10,000, Provision for Bad Debts : 600, Total Credits : 55,800

Adjustments to be made :

Depreciation Furniture and Fixture @ 10%, provision for Doubtful Debts @ 5% on Sundry Debtors, Salaries for December amounting Rs.300 were unpaid, and included Rs.200 paid in advance. Insurance is pre-paid to the extent of Rs.200. Office expenses of Rs.800 are yet to be paid. Stock costing at Rs.600 was put for personal use. Closing stock – Rs.6,000.

Trading and Account for the year ended December 31st, 2015

ParticularsRs.ParticularsRs.
To Opening Stock5,000By Sales (32,100) – Return (1,000)31,100
To Purchases (15,000) – Return (500) – Personal Use (600)13,900By Closing Stock6,000
To Wages2,000  
To Gross Profit c/d16,200  
Total37,100Total37,100

Profit and Loss Account  for the year ended December 31st, 2010

ExpensesRsIncomeRs
To Salaries (3,000) + Unpaid (300) – Adv Paid (200)3,100By Gross Profit b/d16,200
To Office Expenses (1,200) + Outstanding (800)2,000By Interest earned600
To Rent1,500By Provision for Bad Debts600
To Insurance (1200) – Prepaid (200)1,000  
To Printing and Stationery800  
To Bad Debt700  
To Provision for Bad Debts @ 5% on Debtors (20,000)1,000  
To Depreciation on Furniture & Fixture @ 10% (2000)200  
To Net profit7,100  
Total17,400Total17,400

Balance Sheet as at December 31st, 2015

LiabilitiesRs.AssetsRs.
Capital (10,000) + Net Profit (7,100) – Drawings (2,400) – Materials personal use (600)14,100Furniture (2,000) – Depn (200)1,800
Sundry Creditors12,000Closing Stock6,000
Outsd Expenses Office Exp(800) + Salaries (300)1,100Sundry Debtors (20,000) – Prv for Bad Debts @5% (1000)19,000
  Advances salary paid to Staff200
  Prepaid Insurance Expenses200
 27,200 27,200

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