MGT101 - Financial Accounting- Lecture 32
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The document presents the trial balance for Arif Traders as of June 30, 2002, including details on sales, expenses, assets, and liabilities. It requires the preparation of a profit and loss account and balance sheet, highlighting specific figures for gross profit, net profit, and various accounts. Further workings detail calculations for salaries, rent, vehicle costs, and provisions for doubtful debts.
MGT101 - Financial Accounting- Lecture 32
- 1. Financial Accounting 1 Lecture – 32 Question • Following trial balance has been extracted from the books of Arif Traders on June 30, 2002
- 2. Financial Accounting 2 Lecture – 32 Trial 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
- 3. Financial Accounting 3 Lecture – 32 Trial 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
- 4. Financial Accounting 4 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
- 5. Financial Accounting 5 Lecture – 32 Solution Arif Traders Profit and Loss Account for the Year Ending June 30, 2002 Particulars Working Rs. Rs. Sales Less: Cost of Goods Sold (material consumed) 987,000 (537,000) Gross Profit Discount Received 450,000 18,000 Less: Expenses Wages and Salaries 1 Rent 2 Discount Allowed Vehicle Running Cost 3 Provision for Doubtful Debt 4 Depreciation 5 (133,500) (44,000) (34,500) (25,500) (43,500) (33,000) 468,000 (314,000) Net Profit 154,000
- 6. Financial Accounting 6 Lecture – 32 Solution Particulars Working Rs. Rs. Sales Less: Cost of Goods Sold (material consumed) 987,000 (537,000) Gross Profit Discount Received 450,000 18,000 468,000
- 7. Financial Accounting 7 Lecture – 32 Solution Less: Expenses Wages and Salaries 1 Rent 2 Discount Allowed Vehicle Running Cost 3 Provision for Doubtful Debt 4 Depreciation 5 (133,500) (44,000) (34,500) (25,500) (43,500) (33,000) 468,000 (314,000) Net Profit 154,000
- 8. Financial Accounting 8 Lecture – 32 Solution Arif Traders Profit and Loss Account for the Year Ending June 30, 2002 Particulars Working Rs. Rs. Sales Less: Cost of Goods Sold (material consumed) 987,000 (537,000) Gross Profit Discount Received 450,000 18,000 Less: Expenses Wages and Salaries 1 Rent 2 Discount Allowed Vehicle Running Cost 3 Bad Debts Provision for Doubtful Debt 4 Depreciation 5 (133,500) (44,000) (34,500) (25,500) (40,500) (3,000) (33,000) 468,000 (314,000) Net Profit 154,000
- 9. Financial Accounting 9 Lecture – 32 Solution Particulars Working Rs. Rs. Sales Less: Cost of Goods Sold (material consumed) 987,000 (537,000) Gross Profit Discount Received 450,000 18,000 468,000
- 10. Financial Accounting 10 Lecture – 32 Solution Less: Expenses Wages and Salaries 1 Rent 2 Discount Allowed Vehicle Running Cost 3 Bad Debts Provision for Doubtful Debt 4 Depreciation 5 (133,500) (44,000) (34,500) (25,500) (40,500) (3,000) (33,000) 468,000 (314,000) Net Profit 154,000
- 11. Financial Accounting 11 Lecture – 32 Solution Arif traders Balance Sheet As At June 30, 2002 Particulars Working Amount Rs. Amount Rs. Assets Fixed Assets 5 Current Assets Stocks Debtors 6 Prepaid Expenses Cash at Bank Cash in Hand 175,500 229,500 7,000 57,000 10,500 159,000 479,500 Total 638,500 Liabilities Capital Profit Less: Drawings 495,000 154,000 (142,500) 506,500 Current Liabilities Creditors Expenses Payable 7 124,500 7,500 132,000 Total 638,500
- 12. Financial Accounting 12 Lecture – 32 Solution Particulars Working Amount Rs. Amount Rs. Assets Fixed Assets 5 Current Assets Stocks Debtors 6 Prepaid Expenses Cash at Bank Cash in Hand 175,500 229,500 7,000 57,000 10,500 159,000 479,500 Total 638,500
- 13. Financial Accounting 13 Lecture – 32 Solution Liabilities Capital Profit Less: Drawings 495,000 154,000 (142,500) 506,500 Current Liabilities Creditors Expenses Payable 7 124,500 7,500 132,000 Total 638,500
- 14. Financial Accounting 14 Lecture – 32 Solution • Working • (1) Salaries Salaries and Wages Debit side. Paid 129,000 Payable 4,500 Credit side. P&L Account 133,500
- 15. Financial Accounting 15 Lecture – 32 Solution • Working • (2) Rent Rent Debit side. Paid 51,000 Credit side. Prepaid 7,000 P&L Account 44,000
- 16. Financial Accounting 16 Lecture – 32 Solution • Working • (3) Vehicle Running Cost Vehicle Running Cost Debit side. Paid 22,500 Payable 3,000 Credit side. P&L Account 25,500
- 17. Financial Accounting 17 Lecture – 32 Solution • 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
- 18. Financial Accounting 18 Lecture – 32 Solution • 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
- 19. Financial Accounting 19 Lecture – 32 Solution • Working • (5) Fixed Assets at WDV Cost Rate Dep. WDV Furniture 72,000 12.5% 9,000 63,000 Vehicle 120,000 20% 24,000 96,000 33,000 159,000
- 20. Financial Accounting 20 Lecture – 32 Solution • Working • (6) Debtors Debtors 246,000 Less: Provision for Doubtful Debts (note 4) (16,500) 229,500
- 21. Financial Accounting 21 Lecture – 32 Solution • Working • (7) Expenses Payable Expenses Payable Debit side. Bal. C/F 7,500 Credit side. Salaries 4,500 Veh. Running 3,000