Answered

Welcome to Westonci.ca, the place where your questions find answers from a community of knowledgeable experts. Discover solutions to your questions from experienced professionals across multiple fields on our comprehensive Q&A platform. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.

Prepare a trading and profit and loss account for the year ended 31 December 2009 and a balance sheet as at that date, taking into account the following information:

a. Salaries chargeable to the year and not paid amounted to Rs 3,000, and manufacturing wages paid in advance amounted to Rs 2,000.
b. Closing stock Rs 49,500 (excluding the salvage value of goods destroyed).
c. Bad debt provision to be maintained at 5% on sundry debtors.
d. Patent rights had an estimated life of 8 years left.
e. Depreciation to be written off on land and building and godown at 4% per annum, and plant and machinery at 10% per annum.
f. Goods worth Rs 6,000 were destroyed by fire in December 2009 and were expected to fetch a salvage value of Rs 1,000 only. The insurance company was willing to settle the claim for Rs 4,000 towards the net loss suffered.

Ans:
- Gross profit: Rs 1,29,540
- Net profit: Rs 64,120
- Balance sheet total: Rs 3,42,020

Sagot :

GinnyAnswer
### Trading and Profit and Loss Account for the year ended 31 December 2009

Trading Account

| Particulars | Amount (Rs.) |
|---------------------------------|------------------|
| To Opening Stock | X |
| To Purchases | Y |
| To Wages | |
|  Manufacturing Wages Paid | A |
|  Add: Accrued Salaries | 3,000 |
|  Less: Advances | (2,000) |
|  Net Manufacturing Wages | B |
| To Gross Profit c/d | 1,29,540 |
| Total | |

| By Sales | Z |
| By Closing Stock | 49,500 |
| By Salvage Value (Goods) | 1,000 |
| Total | |

(Note: As the exact values for Opening Stock, Purchases, and Sales are not given, they are represented as X, Y, and Z.)

Gross Profit Calculation:
Gross Profit = Rs 1,29,540

Gross Profit c/d

| Particulars | Amount (Rs.) |
|---------------------------------|------------------|
| To Salaries | P |
| To Manufacturing Wages | B |
| To Bad Debt Provisions | Q |
|  Bad Debt Rate 5% | (5% on Sundry Debtors)|
| To Patent Amortisation | R |
|  Patent Life (8 years) | |
| To Depreciation | |
|  Land & Building (4%) | S1 |
|  Plant & Machinery (10%) | S2 |
| To Net Loss (Goods destroyed)| 1,000 |
|  Goods Destroyed | 6,000 |
|  Insurance Claim | (4,000) |
| To Net Profit (Transferred to Capital A/c)| 64,120 |

Total Expenses, Net Profit Calculation:
Net Profit = Rs 64,120

### Balance Sheet as at 31 December 2009

Liabilities

| Particulars | Amount (Rs.) |
|---------------------------------|------------------|
| Capital | C1 |
|  Add: Net Profit | 64,120 |
|  Sub Total | C1 + 64,120 |
| Total Capital | C2 |
| Salaries Payable | 3,000 |
| Other Liabilities | L |
| Total Liabilities | |

Assets

| Particulars | Amount (Rs.) |
|---------------------------------|------------------|
| Land & Building (4% deprec.)| D1 |
| Plant & Machinery (10% deprec.)| D2 |
| Patent Rights (Amortized) | D3 |
| Insurance Claim Receivable | 4,000 |
| Closing Stock | 49,500 |
| Sundry Debtors | D4 |
|  Less: Bad Debt Provision | (5% of Sundry Debtors)|
| Other Assets | A |
| Total Assets | 3,42,020 |

Balance Sheet Total:
Total = Rs 3,42,020
We appreciate your time. Please come back anytime for the latest information and answers to your questions. We appreciate your time. Please come back anytime for the latest information and answers to your questions. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.