Final Accounts of

Proprietary Concern
241
ion 10
rom the following Trial Balance, show the
ecount, Balance Sheet as on 31st Dec. 2020
journal entries and amount of Profit and

Paritculars
Debit Credit
Capital Account
Drawings Account 2,03,000
15,000
Freehold Land and Premises
90,000
Plant and Machinery
40,000
Loose Tools
3,000
Bills Receivable 3,000
Stock 40,000
Materials Purchased 51,000
Wages 20,000
Carriage Inwards 1,000
Carriage Outwards 500
Coal and Coke 5,000
Salaries 5,000
Rent, Rates and Taxes 2,800
Discounts and Allowances 1,500
Bills Payable 3,800
National Bank 25,000
Cash in hand 400
Sundry Debtors 45,000
Sundry Creditors 40,000
epairs and Replacements 1,800
urchases Returns 2.650
orks ensions Account
Bad Debts 7,500

Advertisements
rds Sold
Sakes Returns
1.200

500
1,15.00
38, 3nd 2,000
W
ater
rease,and Waste
rniture :and Fixtures
200
6O0
Mal Expenses 1,200
Ang and Stationery &00
450

"%.h"heWrite 3,64,450 3,64,450

udryBtodebtckepreciation
oon Naand of Plant
t an Machinery
and Tools at 15% and
at 5%, Loose
Furniture at

dune 2020.
020
rs and
on
31st Decen
5% for ecember,
ecemho
2020 amounted to 7 60,000. Provide
doubtful debts. 7 1,500 were due for
for 5"o discount
ages and 450 for salaries
December 2020.n e last bill of7 400for taxes was for the half-year ending
dou
42
Final Accounts of
Proprietary Cono.
Solutlon: Concern
Trading and Profit & Loss Account for the year ended 3lst
Particular December, 2n0
Net Sales Amount Amount
Amount
(1,15,000-2,000)
Less: Cost of Goods
Sold 1,13.000
Opening Stock
Net Purchases (51,000-2,650) 40,000
Wages (20,000+ 1,500) 48,350
Coal and coke 21,500
Carriage inwards 5,000
Oli, grease and waste 1,000
Gas and water 600
200
Less: Closing Stock 1,16,650
Cost of Goods Sold 60,000
Gross Profit
Less: Operating expenses
56,650
56,350
Administrative expenses:
Salaries
Rent, rate and taxes 5,450
Repairs and Replacements 2,600
General expenses 1,800

Printing and allowances 800

Distribution and allowances 450

Depreciation on plant and machinary 1,500

Depreciation on furniture and fixture 2,000
Depreciation on loose tools 60

Selling and Distribution Expenses: 450

Carriage outwards
500
Advertisement
Bad debt 500
Add: New reserve for doubtful debts
1,200
Discount on debtors 2,250 3,450
2,137 1,697
34,653
Add: Operating incomes
Nil
Operating Profit 34,653
Add: Non-operating incomes Nil
Less: Non-operating expenses Nil
Net Profit
34,653
[transferred to capital account]
 counts Propriotary Coneern
243

i n a l

Balaneo Sheot as on 3Ist December, 2020

ital and liabilitiew Amount Amount Amount

2,03,0000
( ' a p i t n l :

C'apital
34,663
Net P'rofit
2,37,65:
6,000
Iess: Drawings
2,22,653
Adjusted Capital
Liabilities:
Non-current Liabilities:
nil
Secured loans:
nil
Unsecured louns:
Current Liabilities:
3,800
Bills Payable
10,000
Sundry Creditors
150
Outstanding salary
1,500 45,750
Outstanding wages 2,68,403
Total

Assets
Non-Current Assets:
Fixed Assets:
90,000
Freehold Land and Premises
38,000
2,000)
Plant and Machinery (40,000 2,550
Loose tools (3,000 - 450)
1,140 1,31,690
P'urniture and fixtures (1,200- 60) nil

Investments:
Current Assets: 60,000
Closing Stock 7,500
Work extention 40,613
(2,250 + 2,137))
Sundry Dcbtors (45,000 - 3,000
Bills reccivable 200

Advanced tax paid 25,000

400 1,36,713
National Bank
Cash in hand 2,68,403
Total
244 Final Accounts o
Proprieta e
lustration 11
Prepare final accountsfron the follwing. Trial Balan and nhet ati

Particulars Dr. (7 C
Machinery
Furnitur
Capital
Purchasen and Sales
Return 1,
Stock
Discount
Debtors and Creditors 45,95
Salaries 7,555
Wages 10,5
Carriage outwards 1,21
Provision for bad debts
Rent 19,0
Advertisement 2,0
Cash
2,54075 254
Adjustments:
1) Closing stock 7 34,220
2) Provision for bad debts is to be kept at 7 600o
33) Allow interest on capital at 10% p.a.
4) Depreciate machinery by 10% and furniture by 5%
55) Outstanding salary 7 550

Solution:
Trading and Profit & Loss Account
Amount Amount Amoun
Particular
Net Sales
126.0
(1,27,000- 1,000)
Lens: Cost of Goods Sold
Opening Stock 30,000
Net Purchases (60,000-750) 59,250
10.000
Wayea
99,250
34,220
Ieen: Ceing Stork
Cont. of God Sold 6097

GroA Profit
Less: OperatinK expenses
Adminintralive expene.
8,100
Salaries (7,550)+ 50)
 245
ccounts of Proprietary Concern
cern Finala
10,000
Rent
Depreciation on machinary 7,800
Depreciation on furniture 100
r. ()
Selling and Distribution Expenses:
Advertisement
2,000
Carriage outwards 1,200
D0,000 Discount allowed 425
27,000 600
New reserve for doubtful debts
730 75 29,700
Less: Old reserve for doubtful debts 525
31,270
800
incomes
5,0 Add: Operating 800 800
Discount received
Operating Profit 32,070
nil
Add: Non-operating incomes

525 Less: Non-operating Expenses

Interest on capital 10,000 10,000
Net Profit/Net Loss 22,070
transferred to capital account]
4,075 Balance Sheet as on..

Capital and Liabilities Amount Amount Amount

Capital:
1,00,000
Capital
Interest on capital 10,000
Net Profit
22,070

Adjusted Capital 1,32,070

Liabilities:
Ount Non-current Liabilities:

Secured loans: nil

6,000 Unsecured loans: nil

Current Liabilities:
Creditors 25,000
Outstanding salary 550 25,550
Total 1,57,620
Assets
Non-Current Assets
0,970 Fixed Assets:
Machinery (78,000 7,800) 70,200
-

Furniture (2,000 100) 1,900 72,100

Investments: nil
246 Final Accounts of Proprietary .
Concern
Current Assets:
Debtors (45,000 600) 44,400
Cash 6,900
Closing Stock 34,220
85,520
Total
1,57,620
Ilustration 12
From the following Trial balance of Mr. Siman as on 31-12-2020 prepare Final a..
unts
as on the above date:

Particulars Dr.(9 Cr.(

Capital Account 1,20,000
Drawings 15,000
Bills Receivable 22,000
Machinery 20,000
60,000
Debtors and Creditors
39,000
58.00
Wages
Purchase and Sales 2,52,000 3,55,000
Commission 5,500
Rent and Taxs 6,000
Stock on 1-1-2020 90,000
Salaries 10,500
Travelling Expenses 2,000
Insurance 600
3,,400
Repairs
Bad debts 3,500
Furniture 9,000
Returns 5,000 2,000
Cash in hand and Bank 2,500
5,40,5005,40,500

Adjustments:
1) Stock on hand 31-12-2020 was 1,00,000
2) Create 5% provision on debtors for doubtful debts.
3) Prepaid insurance amounted to? 100
4) Wages outstanding was 7 1,000
5) Depreciate Machinery by 5% and Furniture by 10% p.a.
Solution:
Trading and Profit & Loss Account of Mr. Siman as on 31-12-2020
Amount
Particular Amount Amount
Net Sales
3,50,000
(3,35.000-5,000)
Less: Cost of Goods Sold
Opening Stock 90,000
 Accounts
of Proprietary Concern 247
nal

Net Purchases (2,52,000-2,000) 2,50,000

Wages (39,000+ 1,000) 40,000
3,80,000
SS: Closing Stock 1,00,000
Cost of
Goods Sold 2,80,000
GrossP r o f i t 70,000
Tess: Operating expenses

Administrative expenses:

Salaries 10,500
3,400
Repairs
Rent and taxes 6,000
Insurance (600 - 100) 500
Depreciation on machinary 1,000
Depreciation on furniture 900
Selling and Distribution Expenses:
Travelling expenses 2,000
Bad debt 3,500
Add: New reserve for doubtful debts 3,000 6,500 30,800
39,200
Add: Operating incomes
Commission received 5,500
Operating Profit 44,700
Nil
Add: Non-operating incomes

Less: Non-operating expenses Nil

44,700
Net Profit
transferred to capital account
Balance Sheet as on 31-12-2020

Amount Amount Amount

Capital and Liabilities
Capital:
1,20,000
Capital
44,700
Net Profit
1,64,700
15,000
Less: Drawings
Adjusted Capital 1,49,700
Liabilities:
Non-current Liabilities:

Seeured loans: nil

Unsecured loans: nil
C u r r e n t Liabilities:

Creditors
58,000
 248 Final Accounts of Proprietary Concer-

1,000
Outstanding wages 59,000
Total 2,08,700
Assets
Non-Current Åssets:
Fixed Assets:
19,000
Machinery (20,000- 1,000)
8,100 27,100
Furniture (9,000 900)
nil
Investments:
Current Assets:
1,00,000
Closing Stock
57,000
Sundry Debtors (60,000 3,000) 100
Prepaid insurance
22,000
Bills receivable
2,500 1,81,600
Cash in hand and bank
2,08,700
Total

llustration 13 2020 prepare the

Mr. Avinash as at 31st December
From the following Trial Balance of
the necessary adjustments.
Final Accounts after considering
Trial Balance
Dr. (9 Cr. ()
Particulars
30,000
Capital account
2,600
Drawings account
12,000
Plant and Machinery
Stock on 1St Jan 2020
5,000
35,000
Purchases 50,000
Sales
2,000
Returns inwards
1,000
Returns outwards
Sundry Debtors
8,000
6,000
Sundry Creditors
500
Carriage inwards
500
Carriage outwards
3,000
Wages
2,000
Salaries
200
Factory Rent
500
Office Rent
500
Insurance 600
Discount received
Discount allowed 300

Furniture 2,000
Bad debts 400