(CA Foundation ~ Principles & Practice of Accounting - Compiler] | Prof.Rahul Malkan Working Notes: (1) Direct Wages - 5,00,000 units @ Rs.0.80 14,000 units @ Rs.0.40 Rs.4,00,000 5,600 Rs. 405,600 (2) Hire charges on Machinery - 5,00,000 units @ Rs.0.70 = Rs.3,50,000 ance sheet of Mittal on Ist January, 2018 was as follow Liabilities Amount Rs. | Assets Trade payables 16,00,000 | Plant & Machinery Expenses payable 2,50,000 | Furniture & Fixture Capital 51,00,000 | Trade receivables Cash at bank 7,00,000 Inventories 13,00,000 69,50,000 69,50,000 During 2018, his profit and loss account revealed a net profit of Rs. 15,10,000. This was after allowing for the following: (i) Interest on capital @ 6% p.a. (ii) Depreciation on plant and machinery @ 10% p.a. and on Furniture and Fixtures @5% p.a.. ii) A provision for Doubtful debts @ 5% of the trade receivables as at 31a December2018 But while preparing the profit and loss account he had forgotten to provide for (1) outstanding expenses totalling Rs. 1,85,000 and (2) prepaid insurance to the extent of Rs. 25,000. His current assets and liabilities on 31.1 December, 2018 were: Trade receivables Rs. 21,00,000; Cash at bank Rs. 5,20,000 and Trade payables Rs. 13,84,000. During the year he withdrew Rs. 6,20,000 for domestic use. Closing inventories is equal to net trade receivables at the year-end. You are required to draw up revised Profit and Loss account and Balance Sheet at the end of the year. Profit and Loss Account (Revised) Particulars Rs. | Particulars Rs. To Outstanding expenses 1,85,000 | By Balance b/d 15,10,000 To Net profit 13,50,000 | By Prepaid insurance 25,000 15,35,000 15,35,000 Balance Sheet of Mittal as on 31st December, 2018 Liabilities Rs. | Assets Rs. Rs. Capital 51,00,000 Cash at Bank 5,20,000 Add: Net Profit 13,50,000 Trade receivables 21,00,000 64,50,000 Less: Provision for doubtful | (105,000) | 19,95,000 debts Less: Drawings (6,20,000) Plant and Machinery 31,00,000 38,30,000 Less: Depreciation 3,10,000) | 27,90,000 Add: Interest on} 3,06,000 | 61,36,000| Furniture & Fixtures 00,000 capital Preparation of Final Accounts of AF WT}