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Old Tuesday, October 15, 2013
KinzaShoaib KinzaShoaib is offline
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5. Following is the Trail Balance of Rizwan & brothers as on December 31, 2004.

PARTICULARS ..........DEBIT Rs. .........CREDIT Rs.

Drawings...... 42,600 X

Machinery 69,000 .. X

Opening stock 87,000.. X

Purchases 6,00,000 .. X

Capital account X.. 2,55,000

Sales .. X............... 7,14,000

Sales return 12,600 .. X

Purchase return X.. 11,400

Salaries 26,400.. X

Stationary 19,200 .. X

Apprentice fee received ........X....................4,800

Bank overdraft .X. 8,400

Bad debts .. 10,200 X

Accounts receivable 1,92,000.. X

Accounts payable .. X 60,000

Provision for bad debts X.. 6,000

TOTAL .. 10,59,600 10,59,600

Stock on December 31, 2004 was Rs. 1,20,000.
Increase bad debts provision on account receivable to 5% and provide discount reserve on account receivable at 2%
Depreciate machinery by 10%
Goods taken away by the owner for his personal use Rs. 2400.
Machinery purchased Rs. 6000 was wrongly included in purchases
Unused machinery purchased Rs. 1800 was wrongly included in closing stock.
Apprentice fee to be adjusted for four years.
Note: No depreciation should be charged on the machinery purchased during the year and on carriage paid on such machinery.

Required: Trading and Profit & Loss Account for the year ended December 31, 2004 and Balance Sheet after taking into account the above adjustments.
Following are the corrections for Q#5 Paper I:

Opening Stock = 87600
Closing Stock = 102000
Unused stationary is correct instead of unused machinery
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