2. Financial Accounting 1 Lecture – 32 Question Following trial balance has been extracted from the books of Arif Traders on June 30, 2002

3. Financial Accounting 2 Lecture – 32 Trial Balance Arif Traders Trial Balance as At June 30 2002 Title of AccountDr. Rs.Cr. Rs. Sales987,000P Stock on 30 June, 2002175,500B Material Consumed537,000P Cash in Hand10,500B Cash at Bank57,000B Capital Account July 01, 2001495,000B Drawings142,500B Furniture72,000B

4. Financial Accounting 3 Lecture – 32 Trial Balance Title of AccountDr. Rs.Cr. Rs. Rent Paid51,000P Wages Paid129,000P Discounts Allowed34,500P Discounts Received18,000P Debtors246,000B Creditors124,500B Provision for Doubtful Debts Jul. 01 200113,500B Vehicles120,000B Vehicle Running Costs22,500P Bad Debts Written off40,500P TOTAL1,638,000

5. 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

6. Financial Accounting 5 Lecture – 32 Solution Arif Traders Profit and Loss Account for the Year Ending June 30, 2002 Particulars WorkingRs. Sales Less: Cost of Goods Sold (material consumed) 987,000 (537,000) Gross Profit Discount Received 450,000 18,000 Less: Expenses Wages and Salaries1 Rent2 Discount Allowed Vehicle Running Cost3 Provision for Doubtful Debt4 Depreciation5 (133,500) (44,000) (34,500) (25,500) (43,500) (33,000) 468,000 (314,000) Net Profit154,000

7. Financial Accounting 6 Lecture – 32 Solution Particulars WorkingRs. Sales Less: Cost of Goods Sold (material consumed) 987,000 (537,000) Gross Profit Discount Received 450,000 18,000 468,000

8. Financial Accounting 7 Lecture – 32 Solution Less: Expenses Wages and Salaries1 Rent2 Discount Allowed Vehicle Running Cost3 Provision for Doubtful Debt4 Depreciation5 (133,500) (44,000) (34,500) (25,500) (43,500) (33,000) 468,000 (314,000) Net Profit154,000

9. Financial Accounting 8 Lecture – 32 Solution Arif Traders Profit and Loss Account for the Year Ending June 30, 2002 Particulars WorkingRs. Sales Less: Cost of Goods Sold (material consumed) 987,000 (537,000) Gross Profit Discount Received 450,000 18,000 Less: Expenses Wages and Salaries1 Rent2 Discount Allowed Vehicle Running Cost3 Bad Debts Provision for Doubtful Debt4 Depreciation5 (133,500) (44,000) (34,500) (25,500) (40,500) (3,000) (33,000) 468,000 (314,000) Net Profit154,000

10. Financial Accounting 9 Lecture – 32 Solution Particulars WorkingRs. Sales Less: Cost of Goods Sold (material consumed) 987,000 (537,000) Gross Profit Discount Received 450,000 18,000 468,000

11. Financial Accounting 10 Lecture – 32 Solution Less: Expenses Wages and Salaries1 Rent2 Discount Allowed Vehicle Running Cost3 Bad Debts Provision for Doubtful Debt4 Depreciation5 (133,500) (44,000) (34,500) (25,500) (40,500) (3,000) (33,000) 468,000 (314,000) Net Profit154,000

12. Financial Accounting 11 Lecture – 32 Solution Arif traders Balance Sheet As At June 30, 2002 Particulars WorkingAmount Rs. Assets Fixed Assets5 Current Assets Stocks Debtors6 Prepaid Expenses Cash at Bank Cash in Hand 175,500 229,500 7,000 57,000 10,500 159,000 479,500 Total638,500 Liabilities Capital Profit Less: Drawings 495,000 154,000 (142,500)506,500 Current Liabilities Creditors Expenses Payable7 124,500 7,500132,000 Total638,500

13. Financial Accounting 12 Lecture – 32 Solution Particulars WorkingAmount Rs. Assets Fixed Assets5 Current Assets Stocks Debtors6 Prepaid Expenses Cash at Bank Cash in Hand 175,500 229,500 7,000 57,000 10,500 159,000 479,500 Total638,500

14. Financial Accounting 13 Lecture – 32 Solution Liabilities Capital Profit Less: Drawings 495,000 154,000 (142,500)506,500 Current Liabilities Creditors Expenses Payable7 124,500 7,500132,000 Total638,500

15. Financial Accounting 14 Lecture – 32 Solution Working (1) Salaries Salaries and Wages Debit side. Paid129,000 Payable4,500 Credit side. P&L Account133,500

16. Financial Accounting 15 Lecture – 32 Solution Working (2) Rent Rent Debit side. Paid51,000 Credit side. Prepaid7,000 P&L Account44,000

17. Financial Accounting 16 Lecture – 32 Solution Working (3) Vehicle Running Cost Vehicle Running Cost Debit side. Paid22,500 Payable3,000 Credit side. P&L Account25,500

18. Financial Accounting 17 Lecture – 32 Solution Working (4) Provision for Doubtful Debts Provision for Doubtful Debts Debit side. Bad Debts40,500 Bal. C/F16,500 Credit side. Bal. B/F13,500 P&L Account43,500

19. Financial Accounting 18 Lecture – 32 Solution Working (4) Provision for Doubtful Debts Provision for Doubtful Debts Debit side. Bal. C/F16,500 Credit side. Bal. B/F13,500 P&L Account3,000

20. Financial Accounting 19 Lecture – 32 Solution Working (5) Fixed Assets at WDV CostRateDep.WDV Furniture72,00012.5%9,00063,000 Vehicle 120,00020% 24,00096,000 33,000 159,000

21. Financial Accounting 20 Lecture – 32 Solution Working (6) Debtors Debtors246,000 Less: Provision for Doubtful Debts (note 4)(16,500) 229,500

22. Financial Accounting 21 Lecture – 32 Solution Working (7) Expenses Payable Expenses Payable Debit side. Bal. C/F7,500 Credit side. Salaries4,500 Veh. Running3,000