MGT101 - Financial Accounting- Lecture 32
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Transcript of MGT101 - Financial Accounting- Lecture 32
Financial Accounting
1
Lecture – 32Question
• Following trial balance has been extracted from the books of Arif Traders on June 30, 2002
Financial Accounting
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Lecture – 32Trial Balance
Arif Traders
Trial Balance as At June 30 2002
Title of Account Dr. Rs. Cr. Rs.
Sales 987,000 P
Stock on 30 June, 2002 175,500 B
Material Consumed 537,000 P
Cash in Hand 10,500 B
Cash at Bank 57,000 B
Capital Account July 01, 2001 495,000 B
Drawings 142,500 B
Furniture 72,000 B
Financial Accounting
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Lecture – 32Trial Balance
Title of Account Dr. Rs. Cr. Rs.
Rent Paid 51,000 P
Wages Paid 129,000 P
Discounts Allowed 34,500 P
Discounts Received 18,000 P
Debtors 246,000 B
Creditors 124,500 B
Provision for Doubtful Debts Jul. 01 2001 13,500 B
Vehicles 120,000 B
Vehicle Running Costs 22,500 P
Bad Debts Written off 40,500 P
TOTAL 1,638,000 1,638,000
Financial Accounting
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Lecture – 32
• Further information available: Wages and salaries payable on June 30, 2002 Rs. 4,500 Rent prepaid on June 30, 2002 Rs. 7,000 Vehicle running costs payable on June 30 Rs. 3,000 Increase in provision for doubtful debts Rs. 3,000 Depreciation rate is 12.5% for furniture and 20% for
vehicle.
• Required You are required to prepare Profit and Loss Account for
the year and Balance Sheet as on June 30, 2002
Financial Accounting
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Lecture – 32Solution
Arif Traders
Profit and Loss Account for the Year Ending June 30, 2002
Particulars Working Rs. Rs.
SalesLess: Cost of Goods Sold (material consumed)
987,000(537,000)
Gross ProfitDiscount Received
450,00018,000
Less: ExpensesWages and Salaries 1Rent 2Discount AllowedVehicle Running Cost 3Provision for Doubtful Debt 4Depreciation 5
(133,500)(44,000)(34,500)(25,500)(43,500)(33,000)
468,000
(314,000)
Net Profit 154,000
Financial Accounting
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Lecture – 32Solution
Particulars Working Rs. Rs.
SalesLess: Cost of Goods Sold (material consumed)
987,000(537,000)
Gross ProfitDiscount Received
450,00018,000
468,000
Financial Accounting
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Lecture – 32Solution
Less: ExpensesWages and Salaries 1Rent 2Discount AllowedVehicle Running Cost 3Provision for Doubtful Debt 4Depreciation 5
(133,500)(44,000)(34,500)(25,500)(43,500)(33,000)
468,000
(314,000)
Net Profit 154,000
Financial Accounting
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Lecture – 32Solution
Arif Traders
Profit and Loss Account for the Year Ending June 30, 2002
Particulars Working Rs. Rs.
SalesLess: Cost of Goods Sold (material consumed)
987,000(537,000)
Gross ProfitDiscount Received
450,00018,000
Less: ExpensesWages and Salaries 1Rent 2Discount AllowedVehicle Running Cost 3Bad DebtsProvision for Doubtful Debt 4Depreciation 5
(133,500)(44,000)(34,500)(25,500)(40,500)(3,000)
(33,000)
468,000
(314,000)
Net Profit 154,000
Financial Accounting
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Lecture – 32Solution
Particulars Working Rs. Rs.
SalesLess: Cost of Goods Sold (material consumed)
987,000(537,000)
Gross ProfitDiscount Received
450,00018,000
468,000
Financial Accounting
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Lecture – 32Solution
Less: ExpensesWages and Salaries 1Rent 2Discount AllowedVehicle Running Cost 3Bad DebtsProvision for Doubtful Debt 4Depreciation 5
(133,500)(44,000)(34,500)(25,500)(40,500)(3,000)
(33,000)
468,000
(314,000)
Net Profit 154,000
Financial Accounting
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Lecture – 32Solution
Arif traders
Balance Sheet As At June 30, 2002
Particulars Working Amount Rs. Amount Rs.
AssetsFixed Assets 5Current Assets
StocksDebtors 6Prepaid ExpensesCash at BankCash in Hand
175,500229,500
7,00057,00010,500
159,000
479,500
Total 638,500
LiabilitiesCapitalProfitLess: Drawings
495,000154,000
(142,500) 506,500
Current LiabilitiesCreditorsExpenses Payable 7
124,5007,500 132,000
Total 638,500
Financial Accounting
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Lecture – 32Solution
Particulars Working Amount Rs. Amount Rs.
AssetsFixed Assets 5Current Assets
StocksDebtors 6Prepaid ExpensesCash at BankCash in Hand
175,500229,500
7,00057,00010,500
159,000
479,500
Total 638,500
Financial Accounting
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Lecture – 32Solution
LiabilitiesCapitalProfitLess: Drawings
495,000154,000
(142,500) 506,500
Current LiabilitiesCreditorsExpenses Payable 7
124,5007,500 132,000
Total 638,500
Financial Accounting
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Lecture – 32Solution
• Working• (1) Salaries
Salaries and Wages
Debit side.
Paid 129,000
Payable 4,500
Credit side.
P&L Account 133,500
Financial Accounting
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Lecture – 32Solution
• Working• (2) Rent
Rent
Debit side.
Paid 51,000
Credit side.
Prepaid 7,000
P&L Account 44,000
Financial Accounting
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Lecture – 32Solution
• Working• (3) Vehicle Running Cost
Vehicle Running Cost
Debit side.
Paid 22,500
Payable 3,000
Credit side.
P&L Account 25,500
Financial Accounting
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Lecture – 32Solution
• Working• (4) Provision for Doubtful Debts
Provision for Doubtful Debts
Debit side.
Bad Debts 40,500
Bal. C/F 16,500
Credit side.
Bal. B/F 13,500
P&L Account 43,500
Financial Accounting
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Lecture – 32Solution
• Working• (4) Provision for Doubtful Debts
Provision for Doubtful Debts
Debit side.
Bal. C/F 16,500
Credit side.
Bal. B/F 13,500
P&L Account 3,000
Financial Accounting
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Lecture – 32Solution
• Working• (5) Fixed Assets at WDV
Cost Rate Dep.WDVFurniture 72,000 12.5% 9,000 63,000
Vehicle 120,000 20% 24,00096,000
33,000 159,000
Financial Accounting
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Lecture – 32Solution
• Working• (6) Debtors
Debtors 246,000Less: Provision for Doubtful
Debts (note 4) (16,500) 229,500
Financial Accounting
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Lecture – 32Solution
• Working• (7) Expenses Payable
Expenses Payable
Debit side.
Bal. C/F 7,500
Credit side.
Salaries 4,500
Veh. Running 3,000