Learning Nepal
ABC Company
Account Question Paper 2076 Set B Q.No.14 Solution
Year ended 31st December 2017
Question
Trial Balance of ABC Company for the year ending 31st December 2017:
| Debit | Rs | Credit | Rs |
|---|---|---|---|
| Opening Stock | 50,000 | Share Capital | 8,00,000 |
| Purchases | 2,00,000 | Debentures | 2,00,000 |
| Land and Building | 15,00,000 | Sales | 15,10,000 |
| Plant and Machine | 5,00,000 | Reserve for Bad Debt | 15,000 |
| Carriage Inwards | 30,000 | Creditors | 55,000 |
| Salaries | 1,50,000 | General Reserves | 45,000 |
| Wages | 35,000 | Purchases Return | 5,000 |
| Bank Balance | 15,000 | Profit and Loss Account | 1,55,000 |
| Debtors | 50,000 | ||
| Investments | 2,00,000 | ||
| Stationeries | 45,000 | ||
| Discount | 5,000 | ||
| Rent | 25,000 | ||
| Sales Return | 10,000 | ||
| Insurance | 20,000 | ||
| Total | 28,35,000 | Total | 28,35,000 |
Additional Information:
- Closing Stock: Rs. 80,000
- Bad Debt written off on Debtors: @ 5%
- Outstanding Salaries: Rs. 30,000
- Unearned Commission: Rs. 10,000
- Proposed Dividend: @ 10%
Required: [Marks: 3+4+1+4]
Prepare the following statements:
- Trading Account
- Profit and Loss Account
- Profit and Loss Appropriation Account
- Balance Sheet
Solution
(i) Trading Account for the year ended 31st December 2017
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 50,000 | By Sales | 15,10,000 |
| To Purchases Less: Return |
1,95,000 | Less: Sales Return | (10,000) |
| To Carriage Inwards | 30,000 | By Net Sales | 15,00,000 |
| To Wages | 35,000 | By Closing Stock | 80,000 |
| To Gross Profit c/d | 12,70,000 | ||
| Total | 15,80,000 | Total | 15,80,000 |
(ii) Profit and Loss Account for the year ended 31st December 2017
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Salaries Add: Outstanding |
1,80,000 | By Gross Profit b/d | 12,70,000 |
| To Rent | 25,000 | By Unearned Commission | 10,000 |
| To Insurance | 20,000 | By Reserve for Bad Debt | 15,000 |
| To Stationery | 45,000 | ||
| To Discount | 5,000 | ||
| To Bad Debts | 2,500 | ||
| To Net Profit c/d | 10,47,500 | ||
| Total | 12,95,000 | Total | 12,95,000 |
(iii) Profit and Loss Appropriation Account for the year ended 31st December 2017
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Proposed Dividend | 80,000 | By Net Profit b/d | 10,47,500 |
| To Balance c/d (to Balance Sheet) | 11,22,500 | By Balance from last year | 1,55,000 |
| Total | 12,02,500 | Total | 12,02,500 |
(iv) Balance Sheet as at 31st December 2017
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| SHARE CAPITAL | FIXED ASSETS | ||
| Share Capital | 8,00,000 | Land & Building | 15,00,000 |
| RESERVES & SURPLUS | Plant & Machine | 5,00,000 | |
| General Reserve | 45,000 | INVESTMENTS | |
| Profit & Loss Balance | 11,22,500 | Investments | 2,00,000 |
| NON-CURRENT LIABILITIES | CURRENT ASSETS | ||
| Debentures | 2,00,000 | Closing Stock | 80,000 |
| CURRENT LIABILITIES | Debtors | 50,000 | |
| Creditors | 55,000 | Bank Balance | 15,000 |
| Outstanding Salaries | 30,000 | ||
| Unearned Commission | 10,000 | ||
| Proposed Dividend | 80,000 | ||
| Total | 23,42,500 | Total | 23,42,500 |
Final Answers:
- Net Profit: ₹10,47,500
- Profit and Loss Appropriation Account: ₹11,22,500
- Balance Sheet Total: ₹23,42,500
Note: All adjustments have been properly incorporated in the financial statements.
Solution by: Shekh Md Ali