Prepare Income Statement and Balance sheet

Dr Cr
BS-A Furniture and Fittings 640
BS-A Motor Vehicles 6250
BS-A Buildings 7500
BS-L Capital Accounts 12500
I/S Bad Debts 125
Provision for Bad Debts 200
Sundry Debtor/ creditors 3800 2500
I/S Stock 3460
I/S Purchase and Sales 5475 15450
BS- CL Bank O/d 2850
IS Sales and Purchase returns 200 125
IS Advertisement 450
IS Interest on Bank O/d 118
IS Commission Received 375
BS Cash 650
IS Taxes and Insurance 1250
IS General Expense 782
IS Salaries 3300
34000 34000
Stock in hand at the end of the year is 3250, Tax is 35%

Balance sheet

Equity And Liabilities

Equity Sahreholders fund
Capital 12500

Reserves
EAT 2626
15126

Long term Liabilities

Current Liabilities
Sundry Creditors 2500
Bank O/D 2850
Tax Provision 1414 6764

Total of Euities and Liabilities 21890

Assets
Fixed Assets
Furniture 640
Motor Vehicles 6250
Building 7500 14390

Investments

Current Assets
Debtors 3800
-Prov. For Bad Debt -200 3600
Cash 650
Stock 3250 7500

Fictituous Assets

Total of Assets 21890

 Income Statement
Adjustment Rs
A Sales/ Revenue
Sales 15450
-sales returns -200
Net sales 15250
Other Income 375 15625
B Cost of goods sold (COGS)
Opening stock 3460
+Purchase 5475
-Purchase returns -125 5350
+Expenses on Purchases/ Production
+Wages
- Closing stock -3250 5560

C Gross Profit (Nets Sales- COGS) 10065

D Operating Expenses
Admin/ general/ Selling &Dist
Tax n Insurance 1250
Generl Expenses 782
Salaries 3300 5332
Bad Debt 125
Advertisement 450 575 5907

E EBDIT/Operating Profit (C-D) 4158

F -Depreciation

G EBIT (E-F)

H Interest 118 118

I EBT/ Net profit before Tax 4040

J -Tax 1414
 K EAT/ Net profit after Tax 2626

0
 Income Statement
Adjustment Rs
A Sales/ Revenue
Sales 15450
-sales returns -200
Net sales 15250
Other Income
Commision 375
- adv income -125 250 15500

B Cost of goods sold (COGS)

Opening stock 3460
+Purchase 5475
-Purchase returns -125 5350
+Expenses on Purchases/ Production
+Wages
- Closing stock -3250 5560

C Gross Profit (Nets Sales- COGS) 9940

D Operating Expenses
Admin/ general/ Selling &Dist
Tax n Insurance 1250
+o/s Taxes 120
- P/p Insuranace -100 1270
Generl Expenses 782
Salaries 3300
+O/s 300 3600 5652
Bad Debt 125
+Addln 100
-Old RDD -200
+New RDD 370 395

Advertisement 450 845

E EBDIT/Operating Profit (C-D) 3443

F -Depreciation
Bldg 375
MV 1250
F/F 64 1689

G EBIT (E-F) 1754

H Interest 118
 Add: O/s 85 203
I EBT/ Net profit before Tax 1551

J -Tax @35% 542.85

K EAT/ Net profit after Tax 1008.15

Balance sheet

Equity And Liabilities

Equity Sahreholders fund
Capital 12500

Reserves
EAT 1008.15 13508.15

Long term Liabilities 0

Current Liabilities
Sundry Creditors 2500
Bank O/D 2850
O/s Interest on Bank O/d 85
O/s Taxes 120
O/s Salary 300
Adv Income 125
Tax Provision 542.85 6522.85

Total of Euities and Liabilities 20031

Assets
Fixed Assets
Furniture 640
-depn @ 10% 64 576
Motor Vehicles 6250
Depn @ 20% 1250 5000
Building 7500
- Depn @ 5% 375 7125 12701

Investments
Current Assets
Debtors 3800
Addln B/d 100
3700
New RDD @10% 370 3330

Cash 650
Stock 3250
P/p Insurance 100 7330

Fictituous Assets

Total of Assets 20031 0

.
Adjustments Income Statement Balance sheet
1. Closing Stock COGS Assets-Current Assets
(Valued at MP or CP whichever is less)

2 Depreciation Show under depn heading Assets: Less from the respective asset

3. Outstanding Expenses Add: O/s to respective expense Liability: Current Liability

4. Prepaid Expenses Less: P/P t from the resp exp Assets: Current Asset

5. Advance income Less: from resp income Liability: current Liability

6. Bad debts
provision for Bad debts/ RDD

Adj
 T/b
Dr Cr
pective asset Debtors 50000
Bad debts 5000 I/S
RDD 1000

OP. Exp

Adj S/d
Write off further bad debts 5%
create a provison for Bad debts @ 10% T/B Bad Debts
+Addl Bad Debts
T/b -Old prov
+New RDD
 B/s

Assets

CA
5000 T/B Debtors 50000
2500 Addln B/d 2500
-1000 47500
4750 11250 NRDD 4750 42750
The following are the adjustments are to be made:
a.       Stock in hand on 31december 20X1 was Rd.3250
b.      Depreciate Building @5%, Furniture and Fittings @10%, and Motor Vehicles @20%
c.       Rs.85 is due for interest on bank overdraft
d.      Salaries Rs.300 and Taxes Rs.120 are outstanding
e.       Insurance amounting to Rs.100 is prepaid
f.        1/3rd of the commission received is in respect of work to be done in the next year.
g.      Write off further sum of Rs.100 as bad debts and create a new provision @ 10% on sundry
 Prepare Income Statement and Balance sheert
Dr Cr
Motor Vehicles @20%Furniture and Fittings 640
Motor Vehicles 6250
Buildings 7500
Capital Accounts 12500
ne in the next year. Bad Debts 125
provision @ 10% on sundry
Provision
debtors.
for Bad Debts 200
Sundry Debtor/ creditors 3800 2500
Stock 3460
Purchase and Sales 5475 15450
Bank O/d 2850
Sales and Purchase returns 200 125
Advertisement 450
Interest on Bank O/d 118
Commission 375
Cash 650
Taxes and Insurance 1250
General Expense 782
Salaries 3300
34000 34000
 Dr Cr
Sundry Creditors 19000 BS-CL Rent and Rates
Building 15000 BS-A Furniture
Income Tax 1025 IS Stock 1.4. 20X0
Loose Tools 1000 BS-CA Capital
Cash at Bank 16200 BS-CA Carriage Inwards
Sundry Expenses 1990 IS- Admin Sales
Bank Interest 75 IS- Other Income Motor Van
Purchases 157000 COGS-IS Cash in Hand
Wages 1000 COGS-IS Discount
Bad Debts 100 IS S/d Drawings
Loan from Ram 2500 B/S- LTL Bills Receivable/ paya
Sundry debtors 9500 BS-CA
Investments 6500 BS- Inv Stock at the end of the year is
Reserve for Bad Debts 1600 less from Sdebtrs in B/s
 Dr Cr
850 I/sAdmin
3000 BS- A
27350 I/sCOGS
47390 B/s
1120 COGS-IS
185000 IS
12500 Bs-A
335 BS- Ca
630 535
2000 Les from capital in B/s
9000 10000

e end of the year is 15000 COGS-IS

BS- CA