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    Practice Session - PL

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    Divyansh Pandey
    The document provides a trial balance for A. Atmaram as of June 30, 2001 and instructions to prepare a profit and loss statement for the year ended on that date using the provided accounts. It lists debit and credit accounts with their balances and includes notes on inventory values, bad debts write-off, and provisions to create. Adjustment notes require calculating depreciation and addressing insurance claims. The trial balance and adjustments are to be used to prepare the profit and loss statement for the period.

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    Practice Session - PL

    Uploaded by

    Divyansh Pandey
    44 views9 pages
    The document provides a trial balance for A. Atmaram as of June 30, 2001 and instructions to prepare a profit and loss statement for the year ended on that date using the provided accounts. It lists debit and credit accounts with their balances and includes notes on inventory values, bad debts write-off, and provisions to create. Adjustment notes require calculating depreciation and addressing insurance claims. The trial balance and adjustments are to be used to prepare the profit and loss statement for the period.

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    Practice Session_PL

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    The document provides a trial balance for A. Atmaram as of June 30, 2001 and instructions to prepare a profit and loss statement for the year ended on that date using the provided accounts. It lists debit and credit accounts with their balances and includes notes on inventory values, bad debts write-off, and provisions to create. Adjustment notes require calculating depreciation and addressing insurance claims. The trial balance and adjustments are to be used to prepare the profit and loss statement for the period.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    44 views9 pages

    Practice Session - PL

    Uploaded by

    Divyansh Pandey
    The document provides a trial balance for A. Atmaram as of June 30, 2001 and instructions to prepare a profit and loss statement for the year ended on that date using the provided accounts. It lists debit and credit accounts with their balances and includes notes on inventory values, bad debts write-off, and provisions to create. Adjustment notes require calculating depreciation and addressing insurance claims. The trial balance and adjustments are to be used to prepare the profit and loss statement for the period.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    Exercise: From the Trial Balance of A.

    Atmaram as at 30th
    June,2001,you are required to prepare Profit and Loss
    Account for the year ended 30th June,2001.
    Dr.     Cr.
      Rs.   Rs.
    A. Atmaram's Drawing's
    Account 6000 A.Atmaram's Capital Account 80000

    Plant and Machinery(balance


    as on 1st Jan,2000) 20000 Accounts payable 10000

    Plant and Machinery(balance 12000


    as on 1st Jan,2001) 5000 Sales 0
    Inventory on 1st Jan,2000 15000 Return outwards 1000
    Purchases 82000 Provision for doubtful debts 400
    Return inwards 2000 Discounts 800

    Rent of premises sub-let for the


    Accounts receivable 20600 year up to 31st December,2001 1200
    Furniture and fittings 5000   1  
    Freight and Duty 2000    
    Carriage outwards 500   

    Rent, Rates and Taxes 4600   

    Printing and Stationary 800   

    Trade expenses 400   

    Postage and Telegrams 800   

    Insurance charges 700   

    Salaries and Wages 21300   

    Cash in hand 6200   

    Cash at Bank 20500   

     Total 213400  213400


    2
    Adjustments:

    1. Inventory on 30th June,2001 was valued at


    Rs.14600.
    2. Write-off Rs.600 as bad debts.
    3. The provision for doubtful debts is to be maintained
    at 5% on Sundry Debtors.
    4. Create a provision for Discounts on Accounts
    Receivables and Reserve for Discounts on Accounts
    Payable at 2%.

    3
    Adjustments:

    1. Provide for depreciation on Furniture and Fittings at 5% per


    annum, and on Plant and Machinery at 20% per annum.
    2. Insurance prepaid was Rs.100
    3. A fire occurred on 25th June,2001 in the godown and stock of
    the value of Rs.5000 was destroyed.

    4
    Exercise: Fairdealer is the proprietor of a large business of
    cotton goods. The following Trial Balance was prepared from
    his books as on 30th June,2001.

    Dr.     Cr.
      Rs.   Rs.
    Land & Buildings 40000Sales 468100
    Purchases 326700Income from investment 990

    12% bank loan secured on


    fixed assets(no
    movements during the
    Returns inward 2500 year) 40000
    Mr. Fairdealer's capital
    Travelling Expenses 6900 A/C 80000
    Printing & Stationary 1600Bills Payable 2600
    Cash At Bank 30795Accounts Payable 63100
    Discount Allowed 1800Returns outward 3700
    Miscellaneous Expenses 18620Discount Received 1200
    5
    Accounts Receivables 64000   
    Postage 800   
    Furniture 8000   
    Cash in hand 5900   
    Motor car 16000   
    Investment(Market value
    Rs.14000) 12000   
    Drawings 10000   
    Bills receivable 4800   
    Inventory(1-07-2000) 63680   
    Interest on Bank Loan 3000   
    Salaries(Including advance
    Rs.1500) 22000   
    Establishment Expenses 1595   
    Carriage Inwards 3000   
    Advertisements 16000   
    TOTAL 659690  659690
    6
    The following information was obtained.

    1. Inventory as on 30th June,2001 was Rs.120000.


    2. Accounts receivables include a sum of Rs.3000 due from B and
    Accounts Payable include a sum of Rs.4000 due to B. The
    Reserve for doubtful receivables is to be maintained at 10% on
    Accounts Receivables and reserves for discount on receivables
    and discount on payables are to be created at 5%.
    3. Bills receivable include a dishonored bill from B for Rs.600.
    4. Inventory worth Rs.10000 destroyed by fire on 25-06-2001 in
    respect of which the insurance company admits claim for only
    Rs.7500.

    *(Accounts Receivable Rs.64000 – Rs.3000 due from B + Rs.600 Bill


    Dishonored)
    Accounts Payable of Rs.63100 – Rs.3000 due from B

    7
    6. The manager of Fairdealer is entitled to a
    commission of 10% of Net Profit calculated after
    charging such commission.
    7. ¾ of the Advertisement Expenses is to be carried
    forward.
    8. 2.5% of the Net Profit is to be carried to Reserve
    Fund.

    8
    9. Depreciation is to be charged on:
    i. Land and Building at 2.5%
    ii. Furniture at 10%
    iii. Motor Car at 20%.

    You are required to prepare the Statement of income


    and expenditure for the year ended 30th June,2001.

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