COSTING %2500 | eelrr neha WN %1200 ees T thas WOE asOayt %1200 eC) tn eS EC &BC 1200 Ue 5500/- ALL SUBJECTS Ey Byo) Sait PLE PU ANB ES FOR One ceo oa , Pea a) oi a ams okt ehh Ran a a OFFLINE & VIDEO IN SAME FEES, * °PAPHic DESIGNING couRSE | SUPPLI STUDENTS WILL BE FSET RCE CET TAUGHT FREE » AADITYA GUPTA CLASSES SIRI aN UENO Reet TUL Gm COA CEU ee SiMe Ray Nell cgGuiding You Today For a Better Tomorrow Aaditya Gupta Classes Phone ~ 99035-03989 INVENTORY VALUATION ‘Ashoke’s financial year ends on 31" March, but actual stock is not taken until 4" Apri, ‘when it isphysically ascertained at Rs. 33,500 You find that: a) Sales are entered in the sales day book on the same day as dispatched and return inward in thereturns book on the day the goods are received back 'b) Purchases are entered In the purchase day book on the same day when Invoices are received. €) Purchases between 31% March and 6" April as per purchase day book were As. 120, but ofthese, goods amounting to Rs.40 were not received till the stock was taken, d)_ Sales between 31" March and 6” April as per sales book and cash book were Rs. 1,720, e) Goods invoiced during March but not received till 31” March Rs. 100, of which goods worth Rs.70 were received within 6" April. f)_ The rate of gross profit to sales is 25%. Ascertain the value of stock as on 31” March. DEPRECIATION ns C On 30" June, 2016, machinery, NG f. 16,000 on 01.01.2013 was sold for Rs.12,000, Depreciation is charged ot 40% p.2.'h original cost. ‘Show the Machinery Account for the year from 2023 to 2016 in the books of X who closes his books on31" December every year. RESERVES AND PROVISION (0m 31.12.2035, the trial Balance of a trader contained the following Ledger Balances: Provision for Bad and doubtful debts A/c (2.1.2025) was Rs. 2,000 Provision for discount on debtors A/c (1.1.2015) was R950 Sundry Debtors A/c ~ 80,800 (Rs. 800 to be written off as bad debt) 0n 31.12.2016 Sundry Debtors A/c ~ Rs. 41,000 (Rs. 1,000 to be written off as bad debt). Provision for Bad and doubtful debts A/c 6% on sundry debtors and provision for discount on ebtors A/c 2.5% ‘show the provision for Bad and doubtful debts A/c and provision for discount on debtors A/c in the books of the trader for the year 2015 and 2016. ADJUSTMENT ENTRIES AND RECTIFICATION OF ERRORS: ‘A trader agreed his tral Balance by putting the difference in a suspense account. On subsequentscrutiny, the books disclosed certain errors detailed below: 2|P 2 ge Enroll now for 8.COM and M.COM for all subjects and get the opportunity to learn from the best. Centres ~ Bhawanipur ~ Girlsh Park - Tollygun] - Bangur - Howroh. Online, offilne ‘ond video, all modes ovallable,Guiding You Today For a Better Tomorrow Aaditya Gupta Classes Phone ~ 99035-03989 2) A credit sale of goods to X for Rs.700 had been credited to his account. b) Goods purchased from Q for Rs. 1,500 was entered in the purchase day book but omitted tobe posted to his account in the creditor ledger. ©) Goods returned by Z of Rs.1,000 were not debited to return inward account. 4) An office typewriter purchased for Rs. 3,000 had been debited to purchase account. Pass necessary rectifying entries. ROM INCOM! 'E RECORD: [SINGLE ENTRY SYSTEM) Mr. Mukherjee kept his books under Single entry system. The following particulars are obtained from hisbooks. You are required to prepare Trading and profit and Loss Account for the year ended 31.12.2015 and a balance sheet as on that date: 34.22.2014 32.2015 (Rs) (Rs) Debtors 138,000 25,000 Stock 93,800 13,200 Furniture 4,000 1,500 Creditors 6,000 4,500 Cash balances as on 1.2.2015 Rs. 5,000 » ‘The following transactions taken plac pti besten ne consideration cain coeced rm oeiors “8° F244 a6” Cash paid to Crestors 44,000 Salaries 12,000 Rent 1,500 Otfice expenses 1,200 Drawings 3,000 Fresh Capital introduced 2.000 Cash purchases 5,000 Cath sales 1.500 Discount Receives 700 Discount Allowed Return inward Return Outward fad debts N IZATION: Following Is the receipt and payments Account of City Club for the year ended 31" December 2014, Receipts and payments Account for the year ended 31.12.14 3| Page Enrol now for 8.COM and M.COM for all subjects and get the opportunity to learn from the best. Centres ~ Bhawanipur - Girlsh Park ~ Tollygun) ~ Bengur - Howrah. Online, offline ‘and video, all modes available.Gulding You Today For a Better Tomorrow ‘Aaditya Gupta Classes Phone ~ 99035-03989 [ Receipts Rs. Payments Rs. Toone ayaa aeoey saa et rancreen ee tank 7300 saso_|pywoses taoo oan aaa yoy eras "500 (including Rs.1,000 for 2013) By printing & stationery 1,800 By postage 650 To sale of old Newspapers 200 By upkeep of land 2,500 Teamaine Sooo | ayspors mate smn To interest on investment 2,000 By balance ¢/d {cost of investment Rs.20,000) Cash 2,450 To tower ond mon [eat a To proc of cones 2sat0 TeShertemetinsowene | 2000 (2,400 30580 ma Tes aT BTL (Rs.) (Rs.) Shctpcone sence | ca he Furniture PA GuC 10,800 Depreciation @ 10% p.a. che irnitu) after selling a part of it. It was decidedthat 50% of t $n reeived WAU be capitalized. Prepare Income and Expenditure Account for the year ended 31.1.2014 and a balance Sheet ason that date. ENTITIES Following is the trial balance of Mr. H. Basak as on 31.3.2015. You are required to prepare trading & profit & loss account for the year ended 31.3.2015 and balance sheet as on the same date Debi ice © Credit balance © ‘Opening stock 10,000 ‘capital 3,60,000 Plant and machinery | 80,000 sundry creditors 20,000 Furniture 50,000 sales 70,000 drawings 10,000 commission received 1,600 4 [Page Enroll now for B.COM and M.COM for all subjects and get the opportunity to learn {from the best. Centres ~ Bhawanipur ~ Girish Park ~ Tollygun) ~ Bangur - Howrah, Online, offline ‘ond video, all modes available.Guiding You Today For a Better Tomorrow ‘Aoditya Gupta Classes Phone - 99035-03989 sundry debtors 30,000 wages 40,000 salaries 6,000 commission paid | 1,600 192600 purchases 40,000 bad debt 7,000 insurance 2,000 cash in hand 1251600 ji. Create @ provision for doubtful debts @ 6 sundry debtors and write off © 3000 asfurther bad dete I. Goods worth €12,00 were lot Pre Gogptfertos 8,000 was received, i Wages include € 400 for instalatiad of ¥. Provide depreciation @ 15% on machineryand-1D % aa furniture NSI ENT At (M/S Poddar & Co. of Kolkata deals with ‘Body Oil’ which is sold in one litre plastic bottle, Poddar& Co. consigned 2,500 bottles of ‘Body ail’ casting Rs. 240 per bottle to Sharma & Co, Of Jalandhar, to be sold at Rs. 400 per bottle and paid Rs,50,000 as freight and insurance. 200 bottles were lost in {transit and sum of Rs. 49,000 was received by M/S. Poddar and Co. as compensation from insurance the insurance company. ‘Sharma and Co. took delivery of the remaining goods consigned and paid carriage inward and unloading charges Rs.32,200. He is entitled to a commission of 10% on sales made by him. Sharma & Co. also incurred other expenses covered under agreement amounting to Rs. 18,000. Sharma & Co. reported that 100 bottles were lost due to leakage in the godown (loss due to leakage Lp to 5% of goods received by the consignee is considered as normal loss) and 1,700 bottles were sold. Sharma & Co. paid a cheque of Rs. 5,50,000 In favour of Poddar and Co. You are required to prepare consignment Account in the books of M/S Poddar & Co. CCOUNTING FOR SALE ON APP! £ OF RETURN A trader sends out goods on approval to some customers and includes the same in the sales ‘account. On 31st December, 2011, the sundry debtors balance Rs. 2,00,000 includes Rs. 14,000 ‘regarding goods sent on approval against which no intimation was received as on 31st December 51 Page Enroll now for B.COM and M.COM for ail subjects and get the opportunity to learn from the best. Centres ~ Bhawanipur - Girish Park -Tollygun] - Bangur — Howrah. Online, offline ‘and video, all modes avaliable,=—_—_————_—— Guiding You Today For a Better Tomorrow ‘Aaditya Gupta Closes Phone ~ 99035-03989 2011, These goods were sent out at 25% above cost price and were sent to A RS. 8,000 and to B Rs. 6,000. Stock in trade in the godown was valued at Rs. 45,800 on 31st December 2011. AA sent intimation of acceptance on 31st January 2012 and B returned the goods on 15th January, 2012. Pass adjustment entries on 31.12.2011. Show also the entries to be made during January 2012. SECTIONAL AND SELF BALANCING LEDGER From the following particulars which have been extracted from the book of Mr.'0’, for the year ended 31.03.13. Prepare the ‘Nominal Ledger Adjustment account in the ‘Bought ledger’. Rs, Re Creditors ledger balances on 01.04.12: (Or.) 1,800 Acceptances renewed 2,000 (cr) 14,000 Interest on renewal of bills 500 Purchases 36,500 (including cash purchases Rs.2,000) Sundry charges for 100 dishonored bills payable Cash paid to creditors 21,000 Bills recelvable endorsed to 4,500 Discount received 400 creditors Bills recelvables endorsed Return outward 500 dishonored 3,000 Teanster from: Bills payable accepted Ta bors Ledger to creditors ledger 500 (including renewed bills and interes I editors ledger to debtors ledger 700 ‘Acceptances matured Aaditga Gupte, GiGieres Creditors ledger balance 1,200 Acceptances dishonoured 3,000__ on 31.03.13(0r.) The godown of X Ltd. caught fire on 31.03.14, As a result part of the stock was destroyed. Goods \worthRs.30, 000 could however be saved from the accident, ‘The following particulars are supplied to you: Rs. Stock of goods at 10% lower than the cost as on 01.01.14 1, 08,000 Purchases ess returns tothe date of fie 2, 30,000 Sales less returns tothe date of fre 3,09,000 ‘Average rate of gross profit on sales 33% Sales up to 31.03.14 included Rs.30, 000 for which goods had nat been dispatched. Purchases up to ‘31.03.14 did not include Rs.20, 000 for which invoice had not been received from the ‘suppliers, thoughgoods have not been received at the godown. 6 | Pape Enroll now for 8.COM and M.COM for all subjects and get the opportunity to learn {from the best. Centres ~ Bhowanipur — Girish Park - Tollygunj - Bangur — Howrah. Online, offline ‘and video, all modes available.Guiding You Todoy For a Better Tomorrow Aoditya Gupta Classes Phone ~ 99035-03989 The company had a fire policy of Rs.1, 50,000 covering its stock of goods in the godown. The policy issubject to Average clause. Ascertain the amount of insurance claim to be made. PROFIT INCE From the following particulars prepare a claim for loss of profit under the ‘consequential loss policy:Date of fire 30.6.2012 Period of indemnity six months Rs, Sum insured 80,000 Turnover for the year ended June 30, 2012 4, 00,000 Net profit for the accounting year ending March 31, 2012 25, 000 Standing charges for the accounting year ending March 34, 2012 57,000 Turnover for the year ending March 31, 2012 4, 10,000, ‘Turnover for the period from 3.7. x Gi 2, 20,000 ‘The turnover of the year 2012- 13 eadnettend of 10% over the turnover of thepreceding year. “pe Ge (Gover 7|P age Enroll now for 8.COM and M.COM for all subjects and get the opportunity to lean from the best. Centres ~ Bhawanlpur ~ Girish Park Tollygunj ~ Bangur ~ Howrah. Online, offline and video, all modes available,SOLUTION Peet eee ee Statement of Reconciliation of Stock as on 31 March Particulars Amount (%) | Amount (%) Value of Stock as on 6® April 33,500 ‘Add : Cost of the goods sold in between 1** April to 6% April 1,290 [1,720 - (25% on 1,720)] 34,790 Less : Purchased goods received between 1% April to 6% April 80 (120-2 40) Goods invoiced during March, but received between 1* April to 6" April 70 150 Value of Physical Stock as on March 31 /stiseeseayaas | seamT 4640] Note: It is to be noted that the value of stock taken on 6t April is the val jue of physical stock as on thatdate (ie. value of actual stock lying in the godown). On the other hand, we need to ascertain value of physical stock as on 31* March. Accordingly, although purchases made between 1* April to 6" April were € 120, but physically entered in the godown stock worth & 80 only. Similarly, Goods worth € 109 invoiced during March, but physically in the godown till 6% April stock worth © 70 only. ee ,eee es ee SOLUTION (€U B.Com.(Hons), 2017] Books of X Dr. Machinery Account cr. Amount Date Particulars ae Date Particulars ee @ @ [1.2.13 [To Bank 1,u0,000 | 31.12.15 | & Depreciation A/e 10,000(20% on 1,00,000 for i yeary By Balance c/d 1,00,000 To Balance b/d ‘To Bank = Addition to machinery 31.12.14 | By Depreciation A/c {20% on 1,00,000 for 1 year) + (10% on 20,000 for % year)} By Balance c/d 1,10,000 To Balance b/d 31.12.15 | By Depreciation A/c To Bank [0% on 1,00,000)+(10% on - Further addition to 20,000) + (10% on 12,800 for 9 machinery months) 31.12.12 | By Balance c/d 1,11,800 1,11,800 To Balance b/d 306.16 | By Depreciation A/c To Profit & Loss A/c On machine sold (10% on 16,000 for % year) 30.6.16 | By Bank - Sale proceeds 31.12.13 | By Depreciation A/c ~ Profit on sale of machine - On remaining machines 31.12.13 | By Balance c/d Working Notes: 1. Profit on sale of machinery on 30.06.2016 Sale proceeds of the machine sold on 30.06.16 12,000, Less: WDV of the machine sold on 30.06.16 10,400 [16,000 - (Dep. for 2013, 2014 & 2015 : 10% on 15,000 for 3 years) ~ (ep. for 2016 : 10% on 16,000 for % year)] 1,600 Profit on sale of machinery 6 i 2016 Depreciation on remaining machines for the year Depreciation on existing machines = 10% on [(1,00,000 - 16,000) + 20,000 + 12,800) for 1 year = 311,680. ,SOLUTION Books of a Trader Provision for Bad Debt & Doubtful Debts Account cr. | pee Particulars ae Date Particulars a 31.12.15 | To Bad Debt 800 | 01.01.15 | By Balance b/f 2,000 31.12.15 | To Balance ¢/f 4800 | 31.12.15 | ByP&LA/c 3,600 (6% on % 80,000) (Bal. Fig.) 5,600 31.12.16 | To Bad Debt 1,000 | 01.01.16 | By Balance b/f 4,8002,400 | 31.12.16 | To Balance ¢/f(6% on € 40,000) 31.12.16 | To P & L A/c - Excess Provi- | 1,400 sion written back (Bal. Fig.) rm Provision for Discount on Debtors Account cr Particulars 01.01.15 | By Balance b/f 1,880 | 31.12.15 | ByP&LA/c To Balance c/f [2.5% on (® 80,000 -¥ 4,800)] 940 | 01.01.16 | By Balance b/f To Balance c/f [2.5% on (® 40,000 -® 2,400)] To P & LA/c - Excess Provi- sion written back (Bal. Fig.) 3112.16 31.12.16ake eae) A trader agreed his Trial Balance by putting the difference in a Suspense Account. On subsequent scrutiny, the books disclosed certain errors detailed below : (@) A credit sale of goods to X for & 700 had been credited to his account. (b) Goods purchased from Q for € 1,500 was entered in the Purchase Day Book but omitted to be posted to his account in the Creditor Ledger. (©) Goods returned by Z of ® 1,000 were not debited to Return Inward Account. (a) An office typewriter purchased for % 3,000 had been debited to Purchase Account. Pass necessary rectifying entries, {CU B.Com.(General), 2013) SOLUTION Books of .... Rectifying Journal Entries Particulars X (in Debtors) A/c (700 x2) To Suspense A/c [Being the credit sale to X was wrongly credited to his account, now rectified] Suspense A/c To Q (in Creditor Ledger) A/c (Being the goods purchased from Q omitted to be Posted to his account, now rectified] Return Inward A/c To Suspense A/c (Being the goods returned by Z was not debited to Return In- ward Account, now rectified] Office Equipment A/c To Purchases A/c [Being the office typewriter purchased wrongly debited to Pur- chase Account, now rectified]SOLUTION: Books of Mr. Mukherjee ‘Trading and Profit & Loss Account Dr. for the year ended 31% December, 2015 cr. Particulars ‘Amount Particulars ‘Amount | z To Opening Stock 19,800 | By Sales: To Purchases : Cash 1,500 Cash Credit! 69,300 Credit) 70,800 Less : Return inward 1,000 | 69,800 — Less : Return outward 48,200 | By Closing Stock 13,200 To Gross Profit c/d 25,000 83,000 83,000 To Salaries 12,000 | By Gross Profit b/d 25,000 To Office Expenses 1,800 | By Discount Received 700 To Rent 1,500 To Discount Allowed 300 ‘To Bad Debt 200 To Net Profit 9,900 — Transfer to capital 25,700 25,700 Balance Sheet as on 31% December, 2015 7 Liabilities ‘Amount | Amount | Assets ‘Amount | Amount z z z z | Capital Account : Furniture : Opening balances 27/800 Opening balance Add : Fresh capital intro- 2,000 Add ; Purchase during duced the year Add : Net Profit for the 9,900 Stock-in-trade_ year Sundry Debtors 39,700 Cash in hand* Less : Drawings for the year 000 | 36,700 Sundry Creditors 4,500 41,200Working Notes: Q@) Dr. Sundry Debtors Account os ‘Amount . Date | Particulars ; Date Particulars Amount 71.15 | ToBalanceb/f | 18,000 | 31.12.15 | By Cash - Collection from debtors 31.12.15 | ToSales-Credit | 69,300 | 31.12.15 | By Return Inward (Bal. Fig.) 31.12.15 | By Discount Allowed 31.12.15 | By Bad Debt 31.12.15 | By Balance c/f 87,300 @) Dr. Sundry Creditors Account cr. ‘Am Date Particulars aa Particulars | “mm 31.12.15 | ToCash-Paidtocreditors | 44,000] 1.1.15 | By Balance b/f 6,000 31.12.15 | To Return Outward 800 | 31.12.15 | By Purchases 44,000 31.12.15 | To Discount Received 700 — Credit (Bal. Fig.) 31.12.15 | To Balance c/f 4,500 50,000 50,000 (3) Dr. Furniture Account cr. 7 Amount 7 Amount Date Particulars G Date Particulars a 1.1.15 | To Balance b/f 1,000 Q ‘To Cash - Purchase 500 | 31.12.15 | By Balance ¢/f 1,500 1,500 L @ Dr. Cash Account eS ‘Amount a Date Receipts es [ Date Payments t 1.1.15 | To Balance b/f 5,000 | 31.12.15 | By Sundry Creditors oe 31.12.15 | To Sundry Debtors 60,800 | 31.12.15 | By Cash Purchases en 31.1215 | To Cash Sales 1,500 | 31.12.15 | By Salaries oan 31.12.15 | To Fresh Capital 2,000 | 31.12.15 | By Office expenses 18al Accounts from Incomplete Records 31.12.15 | ByRent 3112.15 | By Furnitures 3112.15 | By Drawings 3112.15 | By Balance c/f (Bal. Fig.) 69,300 5) Balance Sheet as on 01.01.2015 Liabilities ‘Amount | Assets ‘Amount z z Capital A/c (Bal. fig.) 27,800 | Furniture 1,000 Sundry Creditors 6,000 | Stock-in-trade 9,800 Sundry Debtors 18,000 Cash in hand 5,000 33,800 33,800SOLUTION Book of City Club Dr. Income & Expenditure Account for the year ended 31% December, 2014 cr. t t Expenditure ‘moun Income Amon To Salary to Secretary 24,000 | By Donation (50% of 5,000) 2,500 To Honorarium 10,000 | By Sale of old Newspaper 200 ‘To Wages 4,400 | By Subscription 44,250 ‘ToCharities 15,000 By Interest on Investment 2,000Final Accounts of Not-for-profit Organizations 13.21 To Printing & Stationery 1,800 | By Proceeds of Concerts 2,000 ‘To Postage 650 | By Advertisement in Souvenir 2,400 To Rent & Taxes 2,400 | By Deficit 13,680 To Upkeep of Land 2,500 | — Excess of expenditure over income ‘To Sports materials consumed 3,500 | transferred to capital fund ‘To Loss onsale of old furniture | 1,700 To Depreciation on Furniture (10% on & 10,800) 1,080 Balance Sheet as on 31% December, 2014 ee ‘Amount | Amount = ‘Amount | Amount z z z z Capital Fund Furniture 10,800 Opening Balance 50,2000) Less : Depreciation 1,080 9,720 Add : Donation 2,500 Investment 20,000 (50% of 5,000) 52,700 Outstanding Subscriptions 4,200 Less:Deficitfor the year | 13,680] 39,020 | Cash at Bank 23,850 Endowment Fund 20,000 | Cashin hand 2,450 Subscriptions Received in 1,200 advance 60,220 60,220 Working Notes: 1 Dr. subscription Account ce oon Particulars - ae Date Particulars a 01.01.14 | To Balance b/f 7,200 | 01.01.14 | By Balance b/f 450 31:1214| To Income & Expendic | 44250 | 3112.14 By Bank 42,000 ture A/c — Subscription received — Subscription for the during the year year (Bal. fig.) 31.12.14 | To Balance ¢/f 1,200 | 31.12.14 | By Balance c/f2 Dr. Amount Date Particulars t Furniture Account Date Particulars 01.01.14 | To Balance b/f By Bank - Sale of old furniture By Income & Expenditure A/c ~ Loss on sale of furniture (Bal. fig.) By Balance c/f Outstanding Subscriptions Cash at bank Cash in hand 3. Balance Sheet as on 31.12.2013 [ Liabilities Assets | General Fund (Bal. ig) Furniture 20,000 Subscription Received-in-advance Investment 20,000 1,200 7,800 1,650Sel SOLUTION Books of Mr. H. Basak Dr. Trading and Profit & Loss Account for the year ended 31* March, 2015 cr. Particulars Particulars | Amount ‘mount ‘To Opening Stock 10,000 | By Sales To Purchases Less : Cost of goods destroyed by fire To Wages Less : Wages paid for installa- tion of Plant included To Profit & Loss A/c — Gross Profit transferred To Bad Debts Add : Further Bad Debt To Salaries By Trading A/c — Gross Profit transferred To Commission paid To InsuranceFr inal Accounts O) Proprietorship Business Entities 11.39 ‘ro Goods destroyed by fre = net abnormal loss (12,000 - 8,000) |» Provision for Doubtful Debts [6% on (30.000 - 3,000)] ‘To Depreciation on Plant & Machinery {15% on (80,000 + 400) for 1 year) ‘To Depreciation on Furniture {10% on $0,000 for 1 year)] ‘To Capital A/c — Net Profit transferred Balance Sheet as on 31* March, 2015 eecumee ‘Amount | Amount as ‘Amount | Amount t zg zg t Capital A/c: Plant & Machinery 80,000 Opening Balance 1,60,000 ‘Add: Wages for installation 400 wrongly included in wages Less: Net Profit for the year | __3,720 1,63,720 10,000 Less: Depreciation 12,060 | 68,340 Furniture 50,000 Less: Depreciation 5,000} 45,000 1,53,720 20,000 Less : Drawings Sundry Creditors Closing Stock 16,000 Sundry Debtors 30,000 Less : Further Bad Debt 3,000 27,000 Less : Provision for Bad Debt 1620] 25,380 Cash in hand 11,000 ‘Add: Insurance claim received against loss of stock 1,73,720 - L720 | Note: Bad debt of £7,000 already appearing in the trial balance represents the amount of bad debt for which entry had already been passed and duly deducted from debtors. But for further bad debt of 73,000 not appearing in the trial balance represents the amount of bad debt for which entry had not Yet been passed and not deducted from debtors. That is why, further bad debt of % 3,000 deducted from debtors.SOLUTION In the books of M/s Poddar & Co. Consignment to Jalandhar Account ing Charges 32,200 ment a ‘Amo Particulars mee | Particulars . To Goods Sent on Consign- | 6,00,000 By Sharma & Co A/c 6,80,000 ment A/c (2,500 x % 240) ~ Sales made(1,700 x % 400) To Cash / Bank A/c 0,000 By Good lost in transit A/c 52,000 - Freight & Insurance paid - Value of goods lost at cost To Sharma & Co A/c: Carriage & Unload- By Unsold Stock on Consign- | 1,43,227%eS 18,000 - Value of unsold stock at cost Other Expenses To Sharma & Co A/c - Commission payable (10% of 6,80,000) ‘To Profit & Loss A/c - Profit on consignment ] 8,75,227 [ars] Working Notes: 1. Valuation of goods lost in transit 1,07,027 z Cost of 200 bottles of body oil destroyed in transit (200 x 240) 48,000 f Add : Proportionate consignor’s expenses (50,000 200 / 2,500] 4,000 Value of the goods destroyed in transit at cost 52,000 2. Valuation of unsold stock on consignment Unsold portion of stock = 2,500 bottles - 200 bottles lost in transit - 1,700 bottles sold - 100 bot- tles normal loss = 500 bottles. Bottles z Cost of the total goods consigned (2,500 bottles x ¥ 240) 2,500 — 6,00,000 Add : Consignor’s expenses 50,000 2,500 650,000 Less : Value of the goods destroyed in transit at cost 200 52,000 / 2,300 5,98,000 Add : Consignee’s non-recurring expenses 32,200 {only carriage & unloading charges considered here] " Total goods with consignee at cost "2,300 630200 Less : Normal loss of goods 100 7 2,200 — 6,30,200 43,227, Total saleable goods with consignee at cost Value of unsold stock at cost = 500 / 2,200 x 6,30,200 = 2 1In the books of the Trader Journal Entries Particulars Dr. (@) cr.) | 31.12.11 314241 | yearendingdate) Stock on Sale or Return A/c Dr| To Sale or Return Suspense A/c (Being the adjustment made in respect of goods sent on sale or return basis, but not yet confirmed by the customers till the year ending date) To Trading A/c [14,000 - (1/5 on 14,000] (Being goods sent on sale or return basis lying with the custom- ers, but not yet confirmed till the year ending date now in- cluded into closing stock at cost price) 15.01.12 31.01.12 | (Being the goods sent on Se eee Sale or Return Suspense A/c Dr| ‘Sale or Return Suspense A/c Dr| To Trade Receivables / Sundry Debtors (B) A/c (Being the goods sent on sale or return basis returned by B) To Sales A/e (Being the goods sent on sale or return basis sold by A at in- voice price) Sales A/c Dr} 14,000 11,200 6,000 8,000 Working Note : 1. Cost Price 14,000 11,200 6,000 8,000 = Invoice Price (IP) - Loading = IP - 25% on Cost = IP - %4 on Cost = IP - (1/5 on IP)SOLUTION Books of Mr. D In Bought Ledger Dr. Nominal Ledger Adjustment Account cr. . a Date Particulars eee oe Partiealars acne Tair | to Balance /f Ta,000 | 2412 | By Balance b/t 7,800 4u13 | ‘To Bought Ledger Adfustment 3.13 | By Bought Ledger Adjustment A/c Ale: Credit Purchases 34,500 Rerum Outward pete pills Payable aishonoure’d 3,000 Cash paid to Creditors 21,000 Sundry charges for aishon” 100 Discount Received 400 ured Bills ; pitts Payable accepted (Excl : se as endorsed | 1000 . pted (Excluding a ee eae sa payabie canceled (OF 2,000 Bills Payable renewed renewal Feterest on renewed BIS 500 Bills Receivable endorsed ‘Transferred from Debtors Ledger ‘Transferred to Debtors Ledger saaaa | rasan! 1,200 | 313.13 | By Balance c/f(Bal fig.) 36,300Notes: 1. Acceptances matured and Cash purchase of goods would not come in Bought Ledger as these do not involve Creditors. 2. In case of renewal of an acceptance, the old acceptance is to be cancelled first and then the re- newed bill is to be accepted.SOLUTION Books of X Ltd. Memorandum Trading Account Dr. for the period from 01.01.2014 to 31.03.2014 cr. Particulars Particulars on To Opening Stock at cost 1,20,000 | By Sales 3,00,000 [100 / 90 x 1,08,000] To Purchases 2,30,000 Less : Sales made but 30,000 Add : Goods received | not yet dispatched but not recorded 20,000 | 2,50,000 | To Gross Profit (#/3 on & 2,70,000) 90,000 | By Closing Stock (Bal. fig.) 4,60,000 Statement showing the value of stock destroyed and the amount of insurance claim , z Value of stock in the godown on the date of fire 1,90,000 Less : Value of salvage stock Value of stock destroyed by fire Here, given policy value is & 1,50,000, which is lower than the value of stock in the godown on the date of occurrence of fire (ie. & 1,90,000) and accordingly, ‘average clause’ will be applied for calcu- lating the amount of insurance claim. . Amount of Insurance Claim = 1,50,000 / 1,90,000 x 1,60,000 = & 1,26,316.SOLUTION 1. 3. 4 Calculation of Rate of Insured Gross Profit Rate of Insured Gp = Net Profit for the last financial year + Insured Standing Charges , 4 99 ‘Turnover for the last financial year “=: Rate of Insured Gp = 28:000#57,000., 449 4,10,000 82,000 * .10,000 "10° = 20% Calculation of Short Sales x ‘Turnover for the corresponding indemnity period during last year 2,20,000 (ce. 1.7.2011 to 31.12.2011) ‘Add : 10% increasing trend in sales during current year (10% of 2,20,000) __22,000 Standard sales during the indemnity period 2,42,000 ‘Actual turnover during the indemnity period (ie. 1.7.2012 to 31.12.2012) __1,12,000 Short Sales . 1,30,000 Calculation of the Amount of Gross Loss of Profit Insurance Claim © Gross Profit on Short Sales (20% on 1,30,000) 26,000 ‘Add : Admissible Increased Cost of Working Nil 26,000 Less : Savings in Insured Standing Charges Nil Gross Insurance Claim 26,000 Calculation of Gross Profit on Annual Adjusted Turnover z “Annual Turnover just preceding the date of ire (ie. 1.7.11 to 30.6.12) 4,00,000 ‘Add : 10% increasing trend in sales during current year (10% of 4,00,000) 40,000 4,840,000 Annual Adjusted Turnover «Gross Profit on Annual Adjusted Turnover = 20% on 4,40,000 = & 88,000.17.22 Calculation of Net Loss of Profit Insurance Claim As the policy value (i.e. % 80,000) is lower than Gross Profit on Annual Adjusted Turnover (i. 88,000), there is under-insurance and average clause will be applicable for computing net insur- ance claim. In such a situation, Amount of Net Insurance Claim = —___Policy Value __ Gross insuranceClaim = 80,000 / 88,000 x 26,000 = Pon Adjusted Annual Turnover 23,636,