NOTES

Sengupta & Co. employs a team of eight workers who were paid Rs.30,000 per month each in the year ending 31st December, 2015. At the start of 2016, the company raised salaries by 10% to Rs.33,000 per month each.

On July 1, 2016 the company hired two trainees at salary of Rs.21,000 per month each. The work force are paid salary on the first working day of every month, one month in arrears, so that the employees receive their salary for January on the first working day of February etc.

You are required to calculate:

(i) Amount of salaries which would be charged to the profi t and loss for the year ended

31st December, 2016.

(ii) Amount actually paid as salaries during 2016

(iii) Outstanding Salaries as on 31st December, 2016

Notes of Preparation of Final Accounts of Sole Proprietors - Final Accounts of Non-Manufacturing Entities (Old & New)

1. Distinguish between Provision and reserve fund.
   see in detail
   
   

2. From the following particulars extracted from the books of Ganguli, prepare trading and profit and loss account and balance sheet as at 31st March, 2016 after making the necessary adjustments:

   	Rs.		Rs.
   Ganguli’s capital account (Cr.)	5,40,000	Interest received	72,500
   Stock on 1.4.2015	2,34,000	Cash with Traders Bank Ltd.	40,000
   Sales	14,48,000	Discounts received	14,950
   Sales return	43,000	Investments (at 5%) as on 1.4.2015	25,000
   Purchases	12,15,000	Furniture as on 1-4-2015	9,000
   Purchases return	29,000	Discounts allowed	37,700
   Carriage inwards	93,000	General expenses	19,600
   Rent	28,500	Audit fees	3,500
   Salaries	46,500	Fire insurance premium	3,000
   Sundry debtors	1,20,000	Travelling expenses	11,650
   Sundry creditors	74,000	Postage and telegrams	4,350
   Loan from Dena Bank Ltd. (at 12%)	1,00,000	Cash in hand	1,900
   Interest paid	4,500	Deposits at 10% as on 1-4-2015 (Dr.)	1,50,000
   Printing and stationery	17,000	Drawings	50,000
   Advertisement	56,000

    

   Adjustments:

   (1) Value of stock as on 31st March, 2016 is Rs.3,93,000. This includes goods returned by customers on 31stMarch, 2016 to the value of Rs.15,000 for which no entry has been passed in the books.

   (2) Purchases include furniture purchased on 1st January, 2016 for Rs.10,000.

   (3) Depreciation should be provided on furniture at 10% per annum.

   (4) The loan account from Dena bank in the books of Ganguli appears as follows:

   	Rs.		Rs.
   31.3.2016 To Balance c/d	1,00,000	1.4.2015 By Balance b/d	50,000
   		31.3.2016 By Bank	50,000
   	1,00,000		1,00,000

    

    

   (5) Sundry debtors include Rs.20,000 due from Robert and sundry creditors include Rs.10,000 due to him.

   (6) Interest paid include Rs.3,000 paid to Dena bank.

   (7) Interest received represents Rs.1,000 from the sundry debtors and the balance on investments and deposits.

   (8) Provide for interest payable to Dena bank and for interest receivable on investments and deposits.

   (9) Make provision for doubtful debts at 5% on the balance under sundry debtors. No such provision need to be made for the deposits.

   
   see in detail
   
   

3. Sengupta & Co. employs a team of eight workers who were paid Rs.30,000 per month each in the year ending 31st December, 2015. At the start of 2016, the company raised salaries by 10% to Rs.33,000 per month each.

   On July 1, 2016 the company hired two trainees at salary of Rs.21,000 per month each. The work force are paid salary on the first working day of every month, one month in arrears, so that the employees receive their salary for January on the first working day of February etc.

   You are required to calculate:

   (i) Amount of salaries which would be charged to the profi t and loss for the year ended

   31st December, 2016.

   (ii) Amount actually paid as salaries during 2016

   (iii) Outstanding Salaries as on 31st December, 2016
   see in detail
   
   

4. You are required, prepare a Trading and Profit and Loss Account for the year ending 31st March, 2016 and a Balance Sheet as on that date from the Trial Balance given below:

   	Rs.		Rs.
   Debit Balance:		Salaries	2,20,000
   Trade receivables	3,50,000	Purchases	12,50,000
   Inventory 1st April, 2015	5,00,000	Plant and Machinery	15,70,000
   Cash in Hand	5,60,000	Credit Balance:
   Wages	3,00,000	Capital	25,00,000
   Bad Debts	50,000	Trade payables	9,00,000
   Furniture and Fixtures	1,50,000	Sales	17,00,000
   Depreciation	1,50,000

    

   On 31st March, 2016 the Inventory was valued at Rs.10,00,000
   see in detail
   
   

5. Mr. Kotriwal is engaged in business of selling magazines. Several of his customers pay money in advance for subscribing his magazines. Information related to year ended 31st March 2017 has been given below:

   On 1.4.2016 he had a balance of Rs.2,00,000 advance from customers of which Rs.1,50,000 is related to year 2016-17 while remaining pertains to year 2017-18. During the year 2016-17 he made cash sales of Rs.5,00,000. You are required to compute:

   i) Total income for the year 2016-17.

   ii) Total money received during the year if the closing balance in advance from customers account is Rs.1,70,000.

   
   see in detail