final accounts exercise
TRANSCRIPT
Trial Balance of Mr. Aas on 31st March 2009
S.No. Particulars L.F. Dr. Cr.
1 Capital 44,100 2 Creditors 6,500 3 Building 35,000 4 Furniture 4,000 5 Debtors 6,100 6 Bad Debts 200 7 Purchases 34,000 8 Sales 54,000 9 Return Outward 1,300
10 Return Inward 1,200 11 Sundry Expenses 12,800 12 Cash 4,100 13 Bank 8,500
105,900 105,900
Worksheet Worksheet
Account Title Trial Balance Profit & Loss A/C Balnce Sheet Account TitleL.F. Dr. Cr. Dr. Cr. Assets Liabilities
Capital 44,100 CapitalCreditors 6,500 CreditorsBuilding 35,000 BuildingFurniture 4,000 FurnitureDebtors 6,100 DebtorsBad Debts 200 Bad DebtsPurchases 34,000 PurchasesSales 54,000 SalesReturn Outward 1,300 Return OutwardReturn Inward 1,200 Return InwardSundry Expenses 12,800 Sundry ExpensesCash 4,100 CashBank 8,500 Bank
105,900 105,900
Profit Profit
WorksheetTrial Balance Profit & Loss A/C Balnce Sheet
L.F. Dr. Cr. Dr. Cr. Assets Liabilities 44,100 44,100 6,500 6,500
35,000 35,000 4,000 4,000 6,100 6,100 200 200 34,000 34,000
54,000 54,000 1,300 1,300
1,200 1,200 12,800 12,800 4,100 4,100 8,500 8,500 105,900 105,900
7,100 7,100 55,300 55,300 57,700 57,700
Trial Balance of Mr. Aas on 31st March 2009
S.No. Particulars L.F. Dr. Cr.
1 Capital 44,100 2 Creditors 6,500 3 Building 35,000 4 Furniture 4,000 5 Debtors 6,100 6 Bad Debts 200 7 Purchases 34,000 8 Sales 54,000 9 Return Outward 1,300
10 Return Inward 1,200 11 Sundry Expenses 12,800 12 Cash 4,100 13 Bank 8,500
105,900 105,900
i Stock in trade was valued at Rs. 11,000.ii Included in the sundry expenses account are: Prepaid taxes for the next year
for Rs. 400 and a part of the advertisement terrif paid for the first quarter ofthe next year amounting to Rs. 600.
iii Building and furniture will be depreciated @5% and 10% respectively.iv A reserve for bad & doubtful debts will be created @3%v Rent shown with sundry expenses was outstanding for the month of March 200
for Rs. 500.
Date Particulars LF Dr
i Stock A/C Dr. 11,000To Purchases A/C
( being closing stock valued)ii Prepaid Taxes A/C Dr. 400
Prepaid Adverisement A/C Dr. 600To Sundry Expenses A/C
(being adjusted for Prepayments)iii Depreciation A/C Dr. 2,150
To Buildings A/CTo Furnitures A/C
(being provided for depreciation)iv Profit & Loss A/C Dr. 183
To Provision for bad debts A/C
(being provided for Debtors realisation)v Sundary Expenses A/C Dr. 500
To Rent Outstanding A/C
(being adjusted for accrued rent)
Worksheet
Cr Account Title Trial Balance Adjustments Dr. Cr. Dr. Cr.
11,000 Capital 44,100 Creditors 6,500 Building 35,000 1,750 Furniture 4,000 400 Debtors 6,100
1,000 Bad Debts 200 Purchases 34,000 11,000 Sales 54,000 Return Outward 1,300
1,750 Return Inward 1,200 400 Sundry Expenses 12,800 500 1,000
Cash 4,100 Bank 8,500
105,900 105,900 183 Stock A/C 11,000
Prepaid Taxes A/C 400 Prepaid Advt. A/C 600 Depreciation A/C 2,150
500 Profit & Loss A/C 183 Provision for bad Debts A/C 183 Rent Outstanding A/C 500
14,833 14,833 Profit
Worksheet
Adj. Trial Balance Profit & Loss A/C Balance Sheet Dr. Cr. Dr. Cr. Assets Liabilities
44,100 44,100 6,500 6,500
33,250 33,250 3,600 3,600 6,100 6,100 200 200 23,000 23,000
54,000 54,000 1,300 1,300
1,200 1,200 12,300 12,300 4,100 4,100 8,500 8,500
11,000 11,000 400 400 600 600 2,150 2,150 183 183
183 183 500 500
106,583 106,583 16,267 39,033 55,300 67,550 67,550
Trial Balance of Mr. A Date
as on 31st March 2009
S.No. Particulars L.F. Dr. Cr. i1 Purchases 15,000 ii2 Debtors 20,000 3 Interest earned 400 4 Salaries 3,000 iii5 Sales 32,100 6 Purchase Returns 500 7 Wages 2,000 8 Rent 1,500 iv9 Sales Returns 1,000
10 Bad Debts 700 11 Creditors 12,000 12 Capital 10,000 v13 Drawings 2,400 14 Provision for Bad Debts 600 15 Printing & Stationery 800 16 Insurance 1,200 vi17 Opening Stock 5,000 18 Office Expenses 1,200 19 Furniture & Fittings 2,000 20 Provision for Depreciation 200 vii
55,800 55,800
i Depreciate Furniture & Fittings by 10% on Original Costii Make a provision for bad debts equal to 5% of Debtors viiiiii Salaries for the month of March amounting to Rs. 300 were unpaid which must be provided for.iv The balance in the Salaries Account include Rs. 200 paid in advance.v Insurance is prepaid to the extent of Rs. 200vi Provide Rs. 800 for Office Expenses.vii Stock worth Rs. 600 was put by A to his personal use, the cost of which has not been adjusted.
viii Closing Stock was valued at Rs. 6,000.
Particulars LF Dr Cr WorksheetProfit & Loss A/C 600
To Provision for Depreciation 200 Account Title
To Provision for Doubtful Debts 400Purchases
(being provided for Dep. & bad debts) DebtorsSalaries A/C 300 Interest earned
To Salaries Outstanding A/C 300 SalariesSales
(being salaries unpaid for March) Purchase ReturnsSalaries Prepaid A/C 200 Wages
To Salaries A/C 200 Rent Sales Returns
(being salaries paid in advance) Bad DebtsInsurance Prepaid A/C 200 Creditors
To Insurance A/C 200 CapitalDrawings
(being insurance prepaid) Provision for Bad DebtsOffice Expenses A/C 800 Printing & Stationery
To Provision for office expenses 800 Insurance Opening Stock
(being provided for Office expenses) Office ExpensesDrawings A/C 600 Furniture & Fittings
To Purchases A/C 600 Provision for Depreciation
(being goods used by the proprietor) Profit & Loss A/CStock A/C 6,000 Salaries Outstanding A/C
To Trading A/C 6,000 Salaries Prepaid A/CInsurance Prepaid A/C
(being closing stock valued) Provision for office expensesClosing Stock A/CTrading A/C
Profit
Worksheet
Trial Balance Adjustments Adj. Trial Balance Profit & Loss A/C Balance Sheet Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Assets Liabilities 15,000 600 14,400 14,400 20,000 20,000 20,000
400 400 400 3,000 300 200 3,100 3,100
32,100 32,100 32,100 500 500 500
2,000 2,000 2,000 1,500 1,500 1,500 1,000 1,000 1,000 700 700 700
12,000 12,000 12,000 10,000 10,000 10,000
2,400 600 3,000 3,000 600 400 1,000 1,000
800 800 800 1,200 200 1,000 1,000 5,000 5,000 5,000 1,200 800 2,000 2,000 2,000 2,000 2,000
200 200 400 400 55,800 55,800
600 600 600 300 300 300
200 200 200 200 200 200
800 800 800 6,000 6,000 6,000
6,000 6,000 6,000
8,700 8,700 63,500 63,500 6,900 6,900 39,000 39,000 31,400 31,400
Trading and Profit & Loss A/Cfor the year ending 31 Mar. 08
Particulars Amount Particulars Amount
Opening stock 5,000 Sales 32,100 Purchases 14,400 Purchase Return 500 wages 2,000 Closing Stock 6,000 Sales Return 1,000
Gross Profit 16,200 38,600 38,600
Salaries 3,100 Gross Profit 16,200 Office Expenses 2,000 Interest 400
Rent 1,500 Insurance 1,000 Printing & Stationery 800 Bad Debts 700 Provision for Bad Debt 400 Provision for depreciation 200
Net Profit 6,900 16,600 16,600
Net Profit 6,900
Trial Balance of Mr. Aas on 31st March 2009
S.No. Particulars L.F. Dr. Cr.
1 Purchases 15,000 2 Debtors 20,000 3 Interest earned 400 4 Salaries 3,000 5 Sales 32,100 6 Purchase Returns 500 7 Wages 2,000 8 Rent 1,500 9 Sales Returns 1,000
10 Bad Debts 700 11 Creditors 12,000 12 Capital 10,000 13 Drawings 2,400 14 Provision for Bad Debts 600 15 Printing & Stationery 800 16 Insurance 1,200 17 Opening Stock 5,000 18 Office Expenses 1,200 19 Furniture & Fittings 2,000 20 Provision for Depreciation 200
55,800 55,800
i Depreciate Furniture & Fittings by 10% on Original Costii Make a provision for bad debts equal to 5% of Debtorsiii Salaries for the month of March amounting to Rs. 300 were unpaid which must be provided for.iv The balance in the Salaries Account include Rs. 200 paid in advance.v Insurance is prepaid to the extent of Rs. 200vi Provide Rs. 800 for Office Expenses.vii Stock worth Rs. 600 was put by A to his personal use, the cost of which has not been adjusted.viii Closing Stock was valued at Rs. 6,000.
Date Particulars LF Dr Cr
Profit & Loss A/C 600i To Provision for Depreciation 200ii To Provision for Doubtful Debts 400
(being provided for Dep. & bad debts)iii Salaries A/C 300
To Salaries Outstanding A/C 300
(being salaries unpaid for March)iv Salaries Prepaid A/C 200
To Salaries A/C 200
(being salaries paid in advance)v Insurance Prepaid A/C 200
To Insurance A/C 200
(being insurance prepaid)vi Office Expenses A/C 800
To Provision for office expenses 800
(being provided for Office expenses)vii Drawings A/C 600
To Purchases A/C 600
(being goods used by the proprietor)viii Stock A/C 6,000
To Trading A/C 6,000
(being closing stock valued)
Trading and Profit & Loss A/Cfor the year ending 31 Mar. 08
Particulars Amount Particulars Amount
Opening stock 5,000 Sales 32,100 Purchases 14,400 Purchase Return 500 wages 2,000 Closing Stock 6,000 Sales Return 1,000
Gross Profit 16,200 38,600 38,600
Salaries 3,100 Gross Profit 16,200 Office Expenses 2,000 Interest 400
Rent 1,500 Insurance 1,000 Printing & Stationery 800 Bad Debts 700 Provision for Bad Debt 400 Provision for depreciation 200
Net Profit 6,900 16,600 16,600
Net Profit 6,900
3/31/2009 3/31/2008 Profit & Loss StatementLiabilities for the year ending 31-03-09
Equity Share Capital 60,000 50,000 Profit before taxProfit & Loss A/c 5,000 4,000 TaxationCreditors 4,000 2,500 Profit after taxTaxation 1,500 1,000 Proposed dividendProposed Dividend 2,000 1,000 Profit Retained
72,500 58,500 Assets
Land 10,000 10,000 Additional Information :Furniture 17,000 11,000 Vehicles 12,500 8,000 Depreciation for the yearShort-term Investments 2,000 1,000 DisposalsStock 17,000 14,000 Proceeds on disposalDebtors 8,000 6,000 Written down valueBank & Cash 6,000 8,500 Profit on disposal
72,500 58,500
Profit & Loss Statement Cash Flow Statementfor the year ending 31-03-09 for the year ending 31-03-2009
4,500 cash flow from operations 1,500 Net profit before taxation 4,500 3,000 Ajustment for 2,000 Depreciation 3,500 1,000 Profit on sale of Vehicle 700
operating profit before WC changes 7,300 increase in Debtors 2,000 increase in Inventories 3,000
Furniture Vehicles increase in Creditors 1,500 1,000 2,500 cash generated from operations 3,800
Income tax paid 1,000 1,700 Net cash inflow from operations 2,800 1,000 Cash flow from investing activities 700 sale of vehicles 1,700
purchase of vehicles 8,000 purchase of furnitures 7,000
Net cash outflow from investing activities 13,300 Cash flow from financing activities
issue of share capital 10,000 dividend paid 1,000
Net cash inflow from financing activities 9,000 Net decrease in cash & cash eq. 1,500 Cash & cash eq. at the beginning 9,500 Cash & cash eq. at the end 8,500
Comaparative Balance Sheetas on 31st March …
Liabilities 2008 2009 Assets 2008 2009Share Capital 315,000 465,000 Plant 505,000 715,000 Reserves & Surplus 132,000 140,000 Less: Accumulated Dep. 68,000 103,000 Bonds 245,000 295,000 437,000 612,000 Current Liabilities Long Term Investments 127,000 115,000
Account Payable 43,000 50,000 Current AssetsAccrued Liabilities 9,000 12,000 Inventory 110,000 144,000 Income Tax Payable 5,000 3,000 Account Receivable 55,000 47,000
Cash 15,000 46,000 Prepaid Expenses 5,000 1,000
749,000 965,000 749,000 965,000
Analysis of selected accounts & transactions during 2008-09: 1 Investment purchased for Rs. 78,000.2 Investments costing Rs. 90,000 sold for Rs. 102,000.3 Plant purchased for Rs. 120,000.4 Plant costing Rs. 10,000 with accumulated depreciation of Rs. 2,000 was sold for Rs. 5,000.5 Bonds with face value of Rs. 100,000 was issued in exchange of Plant bought on 31st Mar. 096 Repaid Rs. 50,000 of bonds at face value at maturity.7 Issued 15,000 shares of Rs. 10 each.8 Paid cash dividends Rs. 8,000.
Profit & Loss Accountfor the year ending on 31st March 2009
Cost of goods sold 520,000 Sales 698,000 Gross Profit 178,000
698,000 698,000 Depreciation 37,000 Gross Profit 178,000 Adminstration expenses 110,000 Interest received 6,000 Interest paid 23,000 Gain on sale of Investment 12,000 Loss on sale of Plant 3,000 Income tax 7,000 Net Profit 16,000
196,000 196,000
Cash Flow Statementfor the year ending 31-03-2009
cash flow from operationsNet profit before taxation 23,000 Ajustment for:
Depreciation 37,000 Profit on sale of Investments 12,000 Loss on sale of Plant 3,000 Interest paid 23,000 Interest received 6,000
operating profit before WC changes 68,000 decrease in account receivables 8,000 increase in Inventories 34,000 decrease in prepaid expenses 4,000 increase in account payable 7,000 increase in accrued liabilities 3,000
cash generated from operations 56,000 Income tax paid 9,000
Net cash inflow from operations 47,000 Cash flow from investing activities
sale of Plant 5,000 purchase of Plant 120,000 purchase of Investments 78,000 sale of Investments 102,000 Interest received 6,000
Net cash outflow from investing activities 85,000 Cash flow from financing activities
issue of share capital 150,000 Repayment of bond 50,000 Interest paid 23,000 dividend paid 8,000
Net cash inflow from financing activities 69,000 Net increase in cash & cash eq. 31,000 Cash & cash eq. at the beginning 15,000 Cash & cash eq. at the end 46,000