Question

Following balances were extracted from the books of Modern Traders on 31st March, 2018:

Prepare Final Accounts for the year ended 31st March, 2018 after taking into account the following:
(a) Stock on 31st March, 2018 was valued at Rs. 1,50,000.
(b) Outstanding Wages Rs. 5,000.
(c) Provision for Doubtful Debts is to be maintaind at 5% of the Sundry Debtors.
(d) Prepaid Insurance was Rs. 1,000.
(e) An advance paid by the proprietor from his personal bank account of Rs. 50,000 for purchase of a machine on 1st April, 2017 was not recorded in the books. Plant and Machinery was not debited in the books by the amount paid from firm.
(f) Provide Depreciation on Plant and Machinery @ 10% on cost and on Furniture @ 5%.

Answer 1

Note: Advance paid by proprietor for Purchased of Plant and Machinery 1st April 2016 out of his personal bank account but not recorded in the books. Therefore, will increase the Plant and Machinery Account and Capital Account balance by Rs.50,000. And also increase in the amount of depreciation by Rs.5,000.