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From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors?
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From the following information of RAJU and prepare final accounts for ...
Final Accounts of RAJU for the year ending 31-12-2016
I. Trading Account
Particulars Amount (Rs.) Particulars Amount (Rs.)
Sales xxx Less: Cost of Goods Sold:
Opening Stock xxx Purchases xxx
Add: Purchases xxx Less: Closing Stock xxx
xxx Gross Profit xxx
II. Profit and Loss Account
Particulars Amount (Rs.) Particulars Amount (Rs.)
Gross Profit xxx Add: Other Incomes xxx
xxx Less: Operating Expenses:
Depreciation on Premises xxx
Depreciation on Furniture xxx
Provision for Bad Debts xxx
Interest on Capital xxx
Insurance xxx
xxx Net Profit xxx
III. Balance Sheet
As on 31-12-2016
Liabilities Amount (Rs.) Assets Amount (Rs.)
Capital xxx Fixed Assets:
Add: Interest on Capital xxx Premises xxx
xxx Furniture xxx
Current Liabilities:
Provision for Bad Debts xxx Current Assets:
Insurance (Prepaid) xxx Debtors xxx
Creditors xxx Stock xxx
xxx Cash and Bank Balance xxx
xxx Total xxx Total xxx
Adjustments:
1. Closing Stock: Rs. 20,904/-
- Added to Trading Account
2. Depreciation:
- Premises: 4% of Rs. XXX (Book Value) = Rs. XXX
- Furniture: 5% of Rs. XXX (Book Value) = Rs. XXX
- Deducted from Profit and Loss Account
3. Interest on Capital: 5% on Capital
- Added to Profit and Loss Account
4. Prepaid Insurance: Rs. 200/-
- Deducted from Current Liabilities in Balance Sheet
5. Provision for Bad Debts: 5% on Debtors
- Deducted from Profit and Loss Account
- Added to Current Liabilities in Balance Sheet
Explanation:
1. Closing Stock:
- Closing stock refers to the value of unsold goods at the end of the accounting period.
- It is recorded as an asset in the Balance Sheet and added to the Trading Account.
2. Depreciation:
- Depreciation is the decrease in the value of fixed assets due to wear and tear, obsolescence or passage of time.
- It is a non-cash expense and is deducted from the Profit and Loss Account.
- The given rates of depreciation on premises and furniture are applied to their respective book values to calculate the depreciation amount.
3. Interest on Capital:
- Interest on capital is the return paid to the owner for the use of their capital in the business.
- It is an expense and is deducted from the Profit and Loss Account.
4. Prepaid Insurance:
- Prepaid insurance is the amount paid in advance for insurance coverage.
- It is recorded as a current liability in the Balance Sheet and is deducted from it when it is consumed during the accounting period.
5. Provision for Bad Debts:
- Provision for bad debts is an estimated amount set aside to cover the future losses due to non-payment of debts.
- It is a non-cash expense and is deducted from the Profit and Loss Account.
- The given rate of 5% on debtors is applied to calculate the provision amount.
I. Trading Account
Particulars Amount (Rs.) Particulars Amount (Rs.)
Sales xxx Less: Cost of Goods Sold:
Opening Stock xxx Purchases xxx
Add: Purchases xxx Less: Closing Stock xxx
xxx Gross Profit xxx
II. Profit and Loss Account
Particulars Amount (Rs.) Particulars Amount (Rs.)
Gross Profit xxx Add: Other Incomes xxx
xxx Less: Operating Expenses:
Depreciation on Premises xxx
Depreciation on Furniture xxx
Provision for Bad Debts xxx
Interest on Capital xxx
Insurance xxx
xxx Net Profit xxx
III. Balance Sheet
As on 31-12-2016
Liabilities Amount (Rs.) Assets Amount (Rs.)
Capital xxx Fixed Assets:
Add: Interest on Capital xxx Premises xxx
xxx Furniture xxx
Current Liabilities:
Provision for Bad Debts xxx Current Assets:
Insurance (Prepaid) xxx Debtors xxx
Creditors xxx Stock xxx
xxx Cash and Bank Balance xxx
xxx Total xxx Total xxx
Adjustments:
1. Closing Stock: Rs. 20,904/-
- Added to Trading Account
2. Depreciation:
- Premises: 4% of Rs. XXX (Book Value) = Rs. XXX
- Furniture: 5% of Rs. XXX (Book Value) = Rs. XXX
- Deducted from Profit and Loss Account
3. Interest on Capital: 5% on Capital
- Added to Profit and Loss Account
4. Prepaid Insurance: Rs. 200/-
- Deducted from Current Liabilities in Balance Sheet
5. Provision for Bad Debts: 5% on Debtors
- Deducted from Profit and Loss Account
- Added to Current Liabilities in Balance Sheet
Explanation:
1. Closing Stock:
- Closing stock refers to the value of unsold goods at the end of the accounting period.
- It is recorded as an asset in the Balance Sheet and added to the Trading Account.
2. Depreciation:
- Depreciation is the decrease in the value of fixed assets due to wear and tear, obsolescence or passage of time.
- It is a non-cash expense and is deducted from the Profit and Loss Account.
- The given rates of depreciation on premises and furniture are applied to their respective book values to calculate the depreciation amount.
3. Interest on Capital:
- Interest on capital is the return paid to the owner for the use of their capital in the business.
- It is an expense and is deducted from the Profit and Loss Account.
4. Prepaid Insurance:
- Prepaid insurance is the amount paid in advance for insurance coverage.
- It is recorded as a current liability in the Balance Sheet and is deducted from it when it is consumed during the accounting period.
5. Provision for Bad Debts:
- Provision for bad debts is an estimated amount set aside to cover the future losses due to non-payment of debts.
- It is a non-cash expense and is deducted from the Profit and Loss Account.
- The given rate of 5% on debtors is applied to calculate the provision amount.
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From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors?
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From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors?.
From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors?.
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From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors?, a detailed solution for From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors? has been provided alongside types of From the following information of RAJU and prepare final accounts for the year ending 31-12-2016 Adjustments: Closing stock rs 20904/- Provide 4% depreciation on premises and 5%on furniture Allow 5% interest in capital Prepaid insurance is rs 200/- Provision for bad debts is to be maintains at 5% on debtors? theory, EduRev gives you an
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