Final s Formats Adjustments Table 5i374n
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FINAL S OF TRADING CONCERN (T Notes 2008)
Mukesh Agarwal Research Group
FINAL S OF TRADING CONCERN 1. Gross Profit =Net Sales – Cost of goods sold Net sales =
Total Sales – Sales Returns or Returns inward Cost of Goods sold =
Opening Stock + Net Purchases + Direct expenses - Closing Stock Net Purchases =
Total purchases – Purchases returns or returns outward Direct Expenses =
Purchasing expenses for goods + Manufacturing Expenses
Direct Expenses Purchasing expenses for goods
Manufacturing Expenses
1.
Carriage OR Carriage Inward OR Carriage on purchases OR Carriage & Cartages.
1.
Coal, Gas, Steam, Water, Fuel, Power
2.
Freight OR Railway Freight
2.
Excise duty
3.
Octroi
3.
Productive Expenses
4.
Royalty
4.
Wages OR Wages & salary
5.
Import duty
5.
Factory lighting
6.
Custom duty
6.
Factory Heating
7.
Dock charges
7.
Factory Rent, Rates, Taxes and Insurance
8.
Clearing charges
8.
Other Factory Expenses
9.
Unloading Charges
9.
Haulage
10. Order placement expenses
10. Factory manager or Works Manager salary 11. Factory worker’s / staff’s salary 12. Stores Overheads 13. Oiling and Cleaning of Machines 14. Technical Directors Fees
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FINAL S OF TRADING CONCERN (T Notes 2008)
2. Net Profit = Gross profit + All Incomes + All Gains OR Profits - Indirect expenses – All Losses Incomes
Gains
Indirect expenses Operating Expenses istrative
Expenses
Selling and Distribution Expenses
Office and
Losses Non Operating Expenses
Commission Received A/c
Profit on sale of Assets
Salaries & Wages
Carriage outward
Interest on loan
Loss on sales of fixed Assets
Discount Received A/c
Profit on sale of investments
Rent, rates & Taxes
Carriage on sales
Interest on capital
Loss on Sales of Investments
Interest Received A/c
Bad debts recovered
Printing & Stationery
Loading Charges
Donations
Bad Debts
Rent Received
Grant received
Lighting
ment
Charity
Loss by fire
Interest on Investments
Insurance
Commission
Finance Charges
Loss by theft
Dividends on Shares
Telephone Charges
Brokerage
Tax refund
Legal charges
Export duty
Interest on drawings
Audit fees
packing charges
Establishment exp.
Delivery van exp.
Trade exp.
Stable exp.
General Charges
Discount allowed
Bank Charges
Agent’s Salary
Postage & Telegrams
Sales tax
Depreciation on office’s Fixed Assets
Depreciation on Sales Department’s Fixed Assets
Repairs & Maintenance
Entertainment Expenses
Director fees
Sales Promotion Expenses
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Loss by accidents
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FINAL S OF TRADING CONCERN (T Notes 2008)
Mukesh Agarwal Research Group
Trading and Profit & Loss s (For the year ended …..)
Dr.
Particulars To Opening Stock To Purchases (-) Purchases Returns (-) Dis. on purchases To Direct Expenses To Gross profit c/d
Amounts XXX (XXX) (XXX)
XXX
By Sales XXX (-) Sales Returns (XXX) By Goods sent on consignments
XXX XXX
XXX XXX (B/F)
By Goods supplied to branch By Goods withdrawn by Owner* By Goods distributed as sample* By Goods gave as charity* By Goods lost* By Closing Stock By Gross loss c/d
XXX XXX XXX XXX XXX XXX (B/F)
*These items, alternatively deducted from purchases. Total
XXX
To Gross loss b/d To Indirect Expenses To All Losses To Net Profit (Transferred to Capital A/c)
XXX XXX XXX (B/F)
Total
Particulars
Cr. Amounts
XXX
Total
XXX
By Gross profit b/d By All Incomes By All Gains & profits By Net Loss (Transferred to Capital A/c)
Total
XXX XXX XXX (B/F)
XXX
Balance Sheet (As on ……………………) Liabilities Bank overdraft B/P Creditors Outstanding Expenses Advance Income Loans Bank Loans Capital (+) Additional Capital (+) Interest on Capital (+) Net Profit (-) Drawings (-) Interest on Drawings (-) Net Loss
Total
Amounts
XXX XXX XXX XXX XXX (XXX) (XXX) (XXX)
XXX XXX XXX XXX XXX XXX XXX
XXX
XXX
Assets
Amounts
Cash in Hand Cash at bank Debtors B/R Closing Stock: Prepaid Expenses Accrued Incomes Investments Loan and Advances Goodwill Land and Building Plant & Machinery Furniture, Fixtures & Fittings Car Loose Tools Patents right Copy right Trade Mark
Total
AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX
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FINAL S OF TRADING CONCERN (T Notes 2008)
Mukesh Agarwal Research Group
FINAL S OF MANUFACTURING CONCERN Manufacturing, Trading and Profit & Loss (For the year ended …………..)
Dr. Particulars
To Opening Stock of WIP To Raw Material Consumed: Opening Stock XXX (+) Purchases of R/M XXX (+) Carriage Inward XXX (+) Freight inward XXX (-) Return Outward of R/M (XXX) (-) Closing Stock (XXX) To Wages To Salary of Works Manager To Power, Electricity & Water To Fuel To Factory Postage & Telephone To Depreciation on: Plant & Machinery Factory land & Building To Repairs to: Plant & Machinery Factory Land & Building To Insurance: Plant & Machinery Factory Land & Building To Factory Rent & Taxes To Factory General Expenses To Royalty based on Production
Amounts
By Sales of Scrap By Cost of t Product By Cost of by Product By Closing Stock of WIP By Trading c/d
(Cost of goods production transferred)
XXX XXX XXX XXX (B/F)
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Total
XXX
To Opening Stock of finished goods To Purchases of F/G XXX (-) Purchases Returns of F/G (XXX) (-) Discount on purchases (XXX) To Manufacturing b/d
XXX
To Purchasing Exp. of F/G To Gross profit c/d
XXX (B/F)
(Cost of goods production transferred)
Particulars
Cr. Amounts
XXX XXX
Total
XXX
By Sales XXX (-) Sales Returns (XXX) By Goods sent on consignments By Goods supplied to branch By Goods withdrawn by Owner* By Goods distributed as sample* By Goods gave as charity* By Goods lost* By Closing Stock of finished goods By Gross loss c/d
Total XXX Total To Gross loss b/d XXX By Gross profit b/d To Indirect Expenses XXX By All Incomes To All Losses XXX By All Gains & profits To Net Profit (B/F) By Net Loss (Transferred to Capital A/c) (Transferred to Capital A/c) Total XXX Total *These items, alternatively deducted from purchases. AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
XXX XXX XXX XXX XXX XXX XXX XXX (B/F)
XXX XXX XXX XXX (B/F) XXX
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FINAL S OF TRADING CONCERN (T Notes 2008)
Mukesh Agarwal Research Group
Balance Sheet (As on ……………………) Liabilities
Amounts
Assets
Amounts
Bank overdraft
XXX
Cash in Hand
XXX
B/P
XXX
Cash at bank
XXX
Creditors
XXX
Debtors
XXX
Outstanding Expenses
XXX
B/R
XXX
Advance Income
XXX
Closing Stock:
XXX
Loans
XXX
Raw Material
XXX
Bank Loans
XXX
Work-in-progress
XXX
Finished Goods
XXX
Capital
XXX
XXX
(+) Additional Capital
XXX
Prepaid Expenses
XXX
(+) Interest on Capital
XXX
Accrued Incomes
XXX
(+) Net Profit
XXX
Investments
XXX
XXX
Loan and Advances
XXX
(-) Drawings
(XXX)
Goodwill
XXX
(-) Interest on Drawings
(XXX)
Land and Building
XXX
(-) Net Loss
(XXX)
Plant & Machinery
XXX
Furniture, Fixtures & Fittings
XXX
Car
XXX
Loose Tools
XXX
Patents right
XXX
Copy right
XXX
Trade Mark
XXX
Total
XXX
XXX
Total
XXX
Class Notes / Working Notes
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FINAL S OF TRADING CONCERN (T Notes 2008)
ADJUSTMENTS TABLE ADJUSTMENTS
JOURNAL ENTRY
EFFECT IN TRADING A/C Dr.
1.
Closing Stock.
Closing Stock A/c To Trading A/c
Dr.
PROFIT & LOSS A/C
Cr.
Dr.
Cr.
BALANCE SHEET Liabilities
Assets
Adjusted Purchases and Closing Stock: - If the amount of closing Stock is appearing in the trial balance, it means that opening and closing stock both have been adjusted in the purchase (Adjusted Purchase = Opening Stock + Total Purchases – Purchase return – Closing Stock). Only closing stock will be given in the trial balance and it will be shown on the Assets side of the Balance Sheet. It will not be shown in the trading as it has already adjusted in the purchases. 2. 3.
Outstanding direct Expenses [due but not paid] Outstanding indirect Exp. [Due but not paid]
Direct Expenses A/c Dr. To out/s Direct Exp. A/c
(+)In Direct Exp.
Indirect Exp. A/c Dr. To out/s Indirect Exp. A/c
(+) in Indirect Exp.
Outstanding expenses appearing in trial balance: - If outstanding expenses are given on the credit side of the trial balance, it means that outstanding expenses are already adjusted in the relevant expenses . In this case outstanding expenses will be shown only on the liabilities side of Balance Sheet. 4.
5.
Prepaid / Unexpired Direct Exp. [Exp. Paid in Advance] Prepaid / Unexpired Indirect Exp. [Exp. Paid in Advance]
Prepaid Direct Exp A/c To Direct Exp. A/c
Dr.
Prepaid Indirect Exp A/c Dr. To Indirect Exp.
(-) from Direct Exp.
(-)from Indirect Exp.
Prepaid / Unexpired expenses appearing in trial balance: - If Prepaid / Unexpired expenses are given on the Debit
side of the trial balance, it means that Prepaid / Unexpired expenses are already adjusted in the relevant . In this case Prepaid / Unexpired expenses will be shown only on the Assets side of Balance Sheet. 6. Accrued Income or Accrued Income A/c Dr. outstanding To Income A/c (+) in Income income [ Due but not received]
expenses
* If accrued income is already appearing on the debit side of the trial balance, than it will be shown on the assets side of the balance sheet only. 7.
Advance Income or unexpired Income [Received in Advance]
Income A/c Dr. To Advance Income A/c
(-) from Income
* If income received in advance is already appearing on the credit side of trial balance, it will be shown only in the liabilities side of balance sheet. 8.
Interest on loan [ Due but not paid]
Interest on loan A/c To loan A/c
Dr.
(+) in loan
Implied adjustments: - If a loan carrying certain rate of interest is given on the credit side of the trial balance, than it is essential to calculate interest at the rate mentioned should be made for outstanding interest on loan, as mentioned above.
9.
Interest on capital [charged by owner] 10. Interest on Drawings [Int. due on drawing
Interest on capital A/c To capital A/c
Dr.
11. Interest on Investment [Int. due but not received]
Accrued Intt. A/c Dr. To Intt. On Investment A/c
Drawing A/c Dr. To int. on Drawing A/c
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(+) in capital
(+) in drawing or (-) from capital
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FINAL S OF TRADING CONCERN (T Notes 2008)
12. Advance received from costumer / debtors, but includes in creditors. 13. Advance paid to supplier / creditors, but includes in debtors. 14. Bill receivable Dishonored.
Creditors A/c Dr. To Adv, from Debtors A/c
Adv. to Suppliers A/c To Debtors A/c
Dr.
Debtors A/c To B/R A/c
Dr.
15. Bill discounted Dishonored.
Debtors A/c To Bank A/c
Dr.
16. Bill Discounted but not matured.
No any journal entry ed, show in liabilities side as
17. Bad debts OR bad debts written off
a) at the time of bad debts: Bad debts A/c Dr. To Debtor A/c b) Bad debts written off, If Provision for bad debts are not maintained: P. & L. A/c Dr. To Bad debts A/c c) Bad debts written off, If Provision for bad debts are maintained: Prov. For B/D A/c Dr. To Bad Debts A/c
(-) from Creditors & separately disclosed as Adv. From debtors. (-) from Debtors& separately disclosed as Adv. to creditors. (+) in Debtors & (-) from B/R (+) in Debtors & (-) from Bank A/c
Show as
FOOT NOTE
FOOT NOTE.
(-) from debtors
* If bad debts are already appearing in the trial balance, then these should be shown only on the debit side of profit and Loss . 18. Provision for Bad Debts [maintained the provision]
P. & L. A/c Dr. To Prov. For B/D A/c
(-) from debtors
Provision for bad debts already appearing in the trial balance: - When Provision for bad and doubtful debts is already appearing on the credit side of trial balance, it is called old provision. In this case bad debts, new provision for bad debts and old provision will appear in final s as follows: P r o f i t a n d l o s s A / c Particulars Rs. Particulars Rs. To Bad debts (given in trial balance) XXX (+) Further bad debts (given in adjustments) XXX (+) New Provision (given in adjustments) XXX XXX (-) Old Provision (given in trial balance) (XXX)
NOTE:
XXX
i. If old provision for bad debts is more than the sum of bad debts and new provision, then these items will be shown on the credit side of profit and Loss . ii. It is to be noted that calculation of New provision for bad debts should be the amount of debtors left after adjusting all other adjustments (Excluding Next Adjustment) related to debtors and after deducting further bad debts. iii. There is no need to make a provision for bad debts on GOOD DEBTS.
Liabilities
B a l a n c e Rs.
S h e e t
Assets
Rs.
Debtors XX (-) Further bad debts (given in adjustments)XX XX (-) New provision (given in adjustments) XX
XXX
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FINAL S OF TRADING CONCERN (T Notes 2008)
19. Provision for Discount on Debtors { prov. maintained]
P. & L. A/c Dr. To Prov. For Dis. A/c
20. Provision for Discount on Creditors { prov. maintained] 21. Goods withdrawn by owner. [not entered]
provision for discount To P. & L. A/c
Dr.
Drawing A/c To purchase A/c
Dr.
22. Private Purchases recorded as Business Purchases. 23. Goods given as Charity. [not entered] 24. Goods distributed as free samples. [not entered] 25. Use of goods in Business as Assets. 26. Goods gave to customer on approval (Return) Basis but entered in the Books as a actual sales
Drawing A/c To purchase A/c
Dr.
Charity A/c To Purchases A/c
Dr.
ment A/c To Purchases A/c
Dr.
Respective Assets A/c To Purchases A/c
Dr.
Sales A/c To Debtor A/C
Dr.
27. Goods returned by customer taken in to stock but not entered in the Books. 28. Goods in transit but not Entered in the books. 29. Loss of Goods.
Sales Return A/c To Debtors A/c
Dr.
Goods in transit A/c To Creditors A/c
Dr.
Loss by ___ A/c To purchase A/c
Dr.
30. Insured goods lost worth Rs.5000 but Insurance Co. accepted the claim for Rs. 3000.
Loss by ___ A/c
(-) from debtors
* It is to be noted that calculation of provision for Discount on debtors should be the amount of debtors left after deducting further bad debts and New provision for bad & doubtful debts.
31. Purchased any fixed Assets, but recorded in Purchases book or Purchases A/c 32. Exp. Related to fixed assets purchased or installed recorded as Direct exp.
Dr. 2,000 [actual loss] Ins. Claim A/c Dr. 3000 [claim ] To purchase A./c 5000 [total loss] Respective Assets A/c Dr. To Purchases A/c
Fixed Assets A/c To Direct Exp. A/c
(-) from creditors
(-) from purchase
(+) in Drawing or (-)in capital
(-) from purchase
(+) in Drawing or (-)in capital
(-) from purchase
(-) from purchase
(-) from purchase
(+) in purchases
(-) from sales at SP (+) in closing stock at
(-)from Debtors at SP (+) in closing stock at
(-) from Sales
(-)from debtors
(+) in closing stock
(+) in creditor
(-)from purchases
(-) from purchase total loss Rs.5000
At actual loss Rs.2000
(+) in closing stock
At claim Rs. 3000
(-)from purchases
(-) from Expenses
(+) in Fixed Assets
Dr.
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Mukesh Agarwal Research Group 33. Depreciation Charged on Fixed Assets
Depreciation A/c To Fixed Assets A/c
FINAL S OF TRADING CONCERN (T Notes 2008) Dr.
(-) From Fixed Assets
*If depreciation is already appearing on the debit side of trial balance it will be shown only in the Dr. side of Profit and Loss . 34. Loss of Fixed Assets.
Loss by ___ A/c To Fixed Assets A/c
35. Loss of insured fixed assets.
Loss by ___ A/c
36. Invoice not received for goods purchased. 37. Salaries / Rent / Interest less tax. 38. Employer’s Contribution in provident fund [not shown in trial Balance ] 39. Profit on t Ventures / Consignment. 40. Manager’s Commission Payable on profit.
Dr.
Dr. [actual loss] Ins. Claim A/c Dr. [claim ] To Fixed Assets A./c [total loss] Purchases A/c To Creditors A/c
Dr.
At actual loss (+) in Purchase
Salaries/ Rent / Intt. A/c Dr. To Income tax A/c Salary A/c Dr. To provident fund A/c
t Ventures A/c To Profit & Loss A/c
(-) From Fixed Assets (-) From Fixed Assets At total loss & Show of ins. Claim
(+) in Creditors
(+) in Exp.
(+) in salary
Dr.
Commission A/c Dr. To Comm. payable A/c
Commission payable calculated as follows: i.
When commission is payable on net profit before charging such commission = Net profit before commission Rate of Commission / 100
ii.
When commission is payable on net profit after charging such commission = Net profit before commission Rate of Commission / (100 + Rate)
Class Notes / Working Notes
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FINAL S OF TRADING CONCERN (T Notes 2008)
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FINAL S OF TRADING CONCERN (T Notes 2008)
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Mukesh Agarwal Research Group
FINAL S OF TRADING CONCERN 1. Gross Profit =Net Sales – Cost of goods sold Net sales =
Total Sales – Sales Returns or Returns inward Cost of Goods sold =
Opening Stock + Net Purchases + Direct expenses - Closing Stock Net Purchases =
Total purchases – Purchases returns or returns outward Direct Expenses =
Purchasing expenses for goods + Manufacturing Expenses
Direct Expenses Purchasing expenses for goods
Manufacturing Expenses
1.
Carriage OR Carriage Inward OR Carriage on purchases OR Carriage & Cartages.
1.
Coal, Gas, Steam, Water, Fuel, Power
2.
Freight OR Railway Freight
2.
Excise duty
3.
Octroi
3.
Productive Expenses
4.
Royalty
4.
Wages OR Wages & salary
5.
Import duty
5.
Factory lighting
6.
Custom duty
6.
Factory Heating
7.
Dock charges
7.
Factory Rent, Rates, Taxes and Insurance
8.
Clearing charges
8.
Other Factory Expenses
9.
Unloading Charges
9.
Haulage
10. Order placement expenses
10. Factory manager or Works Manager salary 11. Factory worker’s / staff’s salary 12. Stores Overheads 13. Oiling and Cleaning of Machines 14. Technical Directors Fees
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FINAL S OF TRADING CONCERN (T Notes 2008)
2. Net Profit = Gross profit + All Incomes + All Gains OR Profits - Indirect expenses – All Losses Incomes
Gains
Indirect expenses Operating Expenses istrative
Expenses
Selling and Distribution Expenses
Office and
Losses Non Operating Expenses
Commission Received A/c
Profit on sale of Assets
Salaries & Wages
Carriage outward
Interest on loan
Loss on sales of fixed Assets
Discount Received A/c
Profit on sale of investments
Rent, rates & Taxes
Carriage on sales
Interest on capital
Loss on Sales of Investments
Interest Received A/c
Bad debts recovered
Printing & Stationery
Loading Charges
Donations
Bad Debts
Rent Received
Grant received
Lighting
ment
Charity
Loss by fire
Interest on Investments
Insurance
Commission
Finance Charges
Loss by theft
Dividends on Shares
Telephone Charges
Brokerage
Tax refund
Legal charges
Export duty
Interest on drawings
Audit fees
packing charges
Establishment exp.
Delivery van exp.
Trade exp.
Stable exp.
General Charges
Discount allowed
Bank Charges
Agent’s Salary
Postage & Telegrams
Sales tax
Depreciation on office’s Fixed Assets
Depreciation on Sales Department’s Fixed Assets
Repairs & Maintenance
Entertainment Expenses
Director fees
Sales Promotion Expenses
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Loss by accidents
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FINAL S OF TRADING CONCERN (T Notes 2008)
Mukesh Agarwal Research Group
Trading and Profit & Loss s (For the year ended …..)
Dr.
Particulars To Opening Stock To Purchases (-) Purchases Returns (-) Dis. on purchases To Direct Expenses To Gross profit c/d
Amounts XXX (XXX) (XXX)
XXX
By Sales XXX (-) Sales Returns (XXX) By Goods sent on consignments
XXX XXX
XXX XXX (B/F)
By Goods supplied to branch By Goods withdrawn by Owner* By Goods distributed as sample* By Goods gave as charity* By Goods lost* By Closing Stock By Gross loss c/d
XXX XXX XXX XXX XXX XXX (B/F)
*These items, alternatively deducted from purchases. Total
XXX
To Gross loss b/d To Indirect Expenses To All Losses To Net Profit (Transferred to Capital A/c)
XXX XXX XXX (B/F)
Total
Particulars
Cr. Amounts
XXX
Total
XXX
By Gross profit b/d By All Incomes By All Gains & profits By Net Loss (Transferred to Capital A/c)
Total
XXX XXX XXX (B/F)
XXX
Balance Sheet (As on ……………………) Liabilities Bank overdraft B/P Creditors Outstanding Expenses Advance Income Loans Bank Loans Capital (+) Additional Capital (+) Interest on Capital (+) Net Profit (-) Drawings (-) Interest on Drawings (-) Net Loss
Total
Amounts
XXX XXX XXX XXX XXX (XXX) (XXX) (XXX)
XXX XXX XXX XXX XXX XXX XXX
XXX
XXX
Assets
Amounts
Cash in Hand Cash at bank Debtors B/R Closing Stock: Prepaid Expenses Accrued Incomes Investments Loan and Advances Goodwill Land and Building Plant & Machinery Furniture, Fixtures & Fittings Car Loose Tools Patents right Copy right Trade Mark
Total
AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX
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FINAL S OF TRADING CONCERN (T Notes 2008)
Mukesh Agarwal Research Group
FINAL S OF MANUFACTURING CONCERN Manufacturing, Trading and Profit & Loss (For the year ended …………..)
Dr. Particulars
To Opening Stock of WIP To Raw Material Consumed: Opening Stock XXX (+) Purchases of R/M XXX (+) Carriage Inward XXX (+) Freight inward XXX (-) Return Outward of R/M (XXX) (-) Closing Stock (XXX) To Wages To Salary of Works Manager To Power, Electricity & Water To Fuel To Factory Postage & Telephone To Depreciation on: Plant & Machinery Factory land & Building To Repairs to: Plant & Machinery Factory Land & Building To Insurance: Plant & Machinery Factory Land & Building To Factory Rent & Taxes To Factory General Expenses To Royalty based on Production
Amounts
By Sales of Scrap By Cost of t Product By Cost of by Product By Closing Stock of WIP By Trading c/d
(Cost of goods production transferred)
XXX XXX XXX XXX (B/F)
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Total
XXX
To Opening Stock of finished goods To Purchases of F/G XXX (-) Purchases Returns of F/G (XXX) (-) Discount on purchases (XXX) To Manufacturing b/d
XXX
To Purchasing Exp. of F/G To Gross profit c/d
XXX (B/F)
(Cost of goods production transferred)
Particulars
Cr. Amounts
XXX XXX
Total
XXX
By Sales XXX (-) Sales Returns (XXX) By Goods sent on consignments By Goods supplied to branch By Goods withdrawn by Owner* By Goods distributed as sample* By Goods gave as charity* By Goods lost* By Closing Stock of finished goods By Gross loss c/d
Total XXX Total To Gross loss b/d XXX By Gross profit b/d To Indirect Expenses XXX By All Incomes To All Losses XXX By All Gains & profits To Net Profit (B/F) By Net Loss (Transferred to Capital A/c) (Transferred to Capital A/c) Total XXX Total *These items, alternatively deducted from purchases. AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
XXX XXX XXX XXX XXX XXX XXX XXX (B/F)
XXX XXX XXX XXX (B/F) XXX
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FINAL S OF TRADING CONCERN (T Notes 2008)
Mukesh Agarwal Research Group
Balance Sheet (As on ……………………) Liabilities
Amounts
Assets
Amounts
Bank overdraft
XXX
Cash in Hand
XXX
B/P
XXX
Cash at bank
XXX
Creditors
XXX
Debtors
XXX
Outstanding Expenses
XXX
B/R
XXX
Advance Income
XXX
Closing Stock:
XXX
Loans
XXX
Raw Material
XXX
Bank Loans
XXX
Work-in-progress
XXX
Finished Goods
XXX
Capital
XXX
XXX
(+) Additional Capital
XXX
Prepaid Expenses
XXX
(+) Interest on Capital
XXX
Accrued Incomes
XXX
(+) Net Profit
XXX
Investments
XXX
XXX
Loan and Advances
XXX
(-) Drawings
(XXX)
Goodwill
XXX
(-) Interest on Drawings
(XXX)
Land and Building
XXX
(-) Net Loss
(XXX)
Plant & Machinery
XXX
Furniture, Fixtures & Fittings
XXX
Car
XXX
Loose Tools
XXX
Patents right
XXX
Copy right
XXX
Trade Mark
XXX
Total
XXX
XXX
Total
XXX
Class Notes / Working Notes
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Mukesh Agarwal Research Group
FINAL S OF TRADING CONCERN (T Notes 2008)
ADJUSTMENTS TABLE ADJUSTMENTS
JOURNAL ENTRY
EFFECT IN TRADING A/C Dr.
1.
Closing Stock.
Closing Stock A/c To Trading A/c
Dr.
PROFIT & LOSS A/C
Cr.
Dr.
Cr.
BALANCE SHEET Liabilities
Assets
Adjusted Purchases and Closing Stock: - If the amount of closing Stock is appearing in the trial balance, it means that opening and closing stock both have been adjusted in the purchase (Adjusted Purchase = Opening Stock + Total Purchases – Purchase return – Closing Stock). Only closing stock will be given in the trial balance and it will be shown on the Assets side of the Balance Sheet. It will not be shown in the trading as it has already adjusted in the purchases. 2. 3.
Outstanding direct Expenses [due but not paid] Outstanding indirect Exp. [Due but not paid]
Direct Expenses A/c Dr. To out/s Direct Exp. A/c
(+)In Direct Exp.
Indirect Exp. A/c Dr. To out/s Indirect Exp. A/c
(+) in Indirect Exp.
Outstanding expenses appearing in trial balance: - If outstanding expenses are given on the credit side of the trial balance, it means that outstanding expenses are already adjusted in the relevant expenses . In this case outstanding expenses will be shown only on the liabilities side of Balance Sheet. 4.
5.
Prepaid / Unexpired Direct Exp. [Exp. Paid in Advance] Prepaid / Unexpired Indirect Exp. [Exp. Paid in Advance]
Prepaid Direct Exp A/c To Direct Exp. A/c
Dr.
Prepaid Indirect Exp A/c Dr. To Indirect Exp.
(-) from Direct Exp.
(-)from Indirect Exp.
Prepaid / Unexpired expenses appearing in trial balance: - If Prepaid / Unexpired expenses are given on the Debit
side of the trial balance, it means that Prepaid / Unexpired expenses are already adjusted in the relevant . In this case Prepaid / Unexpired expenses will be shown only on the Assets side of Balance Sheet. 6. Accrued Income or Accrued Income A/c Dr. outstanding To Income A/c (+) in Income income [ Due but not received]
expenses
* If accrued income is already appearing on the debit side of the trial balance, than it will be shown on the assets side of the balance sheet only. 7.
Advance Income or unexpired Income [Received in Advance]
Income A/c Dr. To Advance Income A/c
(-) from Income
* If income received in advance is already appearing on the credit side of trial balance, it will be shown only in the liabilities side of balance sheet. 8.
Interest on loan [ Due but not paid]
Interest on loan A/c To loan A/c
Dr.
(+) in loan
Implied adjustments: - If a loan carrying certain rate of interest is given on the credit side of the trial balance, than it is essential to calculate interest at the rate mentioned should be made for outstanding interest on loan, as mentioned above.
9.
Interest on capital [charged by owner] 10. Interest on Drawings [Int. due on drawing
Interest on capital A/c To capital A/c
Dr.
11. Interest on Investment [Int. due but not received]
Accrued Intt. A/c Dr. To Intt. On Investment A/c
Drawing A/c Dr. To int. on Drawing A/c
AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
(+) in capital
(+) in drawing or (-) from capital
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Mukesh Agarwal Research Group
FINAL S OF TRADING CONCERN (T Notes 2008)
12. Advance received from costumer / debtors, but includes in creditors. 13. Advance paid to supplier / creditors, but includes in debtors. 14. Bill receivable Dishonored.
Creditors A/c Dr. To Adv, from Debtors A/c
Adv. to Suppliers A/c To Debtors A/c
Dr.
Debtors A/c To B/R A/c
Dr.
15. Bill discounted Dishonored.
Debtors A/c To Bank A/c
Dr.
16. Bill Discounted but not matured.
No any journal entry ed, show in liabilities side as
17. Bad debts OR bad debts written off
a) at the time of bad debts: Bad debts A/c Dr. To Debtor A/c b) Bad debts written off, If Provision for bad debts are not maintained: P. & L. A/c Dr. To Bad debts A/c c) Bad debts written off, If Provision for bad debts are maintained: Prov. For B/D A/c Dr. To Bad Debts A/c
(-) from Creditors & separately disclosed as Adv. From debtors. (-) from Debtors& separately disclosed as Adv. to creditors. (+) in Debtors & (-) from B/R (+) in Debtors & (-) from Bank A/c
Show as
FOOT NOTE
FOOT NOTE.
(-) from debtors
* If bad debts are already appearing in the trial balance, then these should be shown only on the debit side of profit and Loss . 18. Provision for Bad Debts [maintained the provision]
P. & L. A/c Dr. To Prov. For B/D A/c
(-) from debtors
Provision for bad debts already appearing in the trial balance: - When Provision for bad and doubtful debts is already appearing on the credit side of trial balance, it is called old provision. In this case bad debts, new provision for bad debts and old provision will appear in final s as follows: P r o f i t a n d l o s s A / c Particulars Rs. Particulars Rs. To Bad debts (given in trial balance) XXX (+) Further bad debts (given in adjustments) XXX (+) New Provision (given in adjustments) XXX XXX (-) Old Provision (given in trial balance) (XXX)
NOTE:
XXX
i. If old provision for bad debts is more than the sum of bad debts and new provision, then these items will be shown on the credit side of profit and Loss . ii. It is to be noted that calculation of New provision for bad debts should be the amount of debtors left after adjusting all other adjustments (Excluding Next Adjustment) related to debtors and after deducting further bad debts. iii. There is no need to make a provision for bad debts on GOOD DEBTS.
Liabilities
B a l a n c e Rs.
S h e e t
Assets
Rs.
Debtors XX (-) Further bad debts (given in adjustments)XX XX (-) New provision (given in adjustments) XX
XXX
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Mukesh Agarwal Research Group
FINAL S OF TRADING CONCERN (T Notes 2008)
19. Provision for Discount on Debtors { prov. maintained]
P. & L. A/c Dr. To Prov. For Dis. A/c
20. Provision for Discount on Creditors { prov. maintained] 21. Goods withdrawn by owner. [not entered]
provision for discount To P. & L. A/c
Dr.
Drawing A/c To purchase A/c
Dr.
22. Private Purchases recorded as Business Purchases. 23. Goods given as Charity. [not entered] 24. Goods distributed as free samples. [not entered] 25. Use of goods in Business as Assets. 26. Goods gave to customer on approval (Return) Basis but entered in the Books as a actual sales
Drawing A/c To purchase A/c
Dr.
Charity A/c To Purchases A/c
Dr.
ment A/c To Purchases A/c
Dr.
Respective Assets A/c To Purchases A/c
Dr.
Sales A/c To Debtor A/C
Dr.
27. Goods returned by customer taken in to stock but not entered in the Books. 28. Goods in transit but not Entered in the books. 29. Loss of Goods.
Sales Return A/c To Debtors A/c
Dr.
Goods in transit A/c To Creditors A/c
Dr.
Loss by ___ A/c To purchase A/c
Dr.
30. Insured goods lost worth Rs.5000 but Insurance Co. accepted the claim for Rs. 3000.
Loss by ___ A/c
(-) from debtors
* It is to be noted that calculation of provision for Discount on debtors should be the amount of debtors left after deducting further bad debts and New provision for bad & doubtful debts.
31. Purchased any fixed Assets, but recorded in Purchases book or Purchases A/c 32. Exp. Related to fixed assets purchased or installed recorded as Direct exp.
Dr. 2,000 [actual loss] Ins. Claim A/c Dr. 3000 [claim ] To purchase A./c 5000 [total loss] Respective Assets A/c Dr. To Purchases A/c
Fixed Assets A/c To Direct Exp. A/c
(-) from creditors
(-) from purchase
(+) in Drawing or (-)in capital
(-) from purchase
(+) in Drawing or (-)in capital
(-) from purchase
(-) from purchase
(-) from purchase
(+) in purchases
(-) from sales at SP (+) in closing stock at
(-)from Debtors at SP (+) in closing stock at
(-) from Sales
(-)from debtors
(+) in closing stock
(+) in creditor
(-)from purchases
(-) from purchase total loss Rs.5000
At actual loss Rs.2000
(+) in closing stock
At claim Rs. 3000
(-)from purchases
(-) from Expenses
(+) in Fixed Assets
Dr.
AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
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Mukesh Agarwal Research Group 33. Depreciation Charged on Fixed Assets
Depreciation A/c To Fixed Assets A/c
FINAL S OF TRADING CONCERN (T Notes 2008) Dr.
(-) From Fixed Assets
*If depreciation is already appearing on the debit side of trial balance it will be shown only in the Dr. side of Profit and Loss . 34. Loss of Fixed Assets.
Loss by ___ A/c To Fixed Assets A/c
35. Loss of insured fixed assets.
Loss by ___ A/c
36. Invoice not received for goods purchased. 37. Salaries / Rent / Interest less tax. 38. Employer’s Contribution in provident fund [not shown in trial Balance ] 39. Profit on t Ventures / Consignment. 40. Manager’s Commission Payable on profit.
Dr.
Dr. [actual loss] Ins. Claim A/c Dr. [claim ] To Fixed Assets A./c [total loss] Purchases A/c To Creditors A/c
Dr.
At actual loss (+) in Purchase
Salaries/ Rent / Intt. A/c Dr. To Income tax A/c Salary A/c Dr. To provident fund A/c
t Ventures A/c To Profit & Loss A/c
(-) From Fixed Assets (-) From Fixed Assets At total loss & Show of ins. Claim
(+) in Creditors
(+) in Exp.
(+) in salary
Dr.
Commission A/c Dr. To Comm. payable A/c
Commission payable calculated as follows: i.
When commission is payable on net profit before charging such commission = Net profit before commission Rate of Commission / 100
ii.
When commission is payable on net profit after charging such commission = Net profit before commission Rate of Commission / (100 + Rate)
Class Notes / Working Notes
ONLY CS/CA vkSj dqN ugha AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
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Mukesh Agarwal Research Group
FINAL S OF TRADING CONCERN (T Notes 2008)
AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
+91-751-2424240, 98930-16415 Page 10 of 11
Mukesh Agarwal Research Group
FINAL S OF TRADING CONCERN (T Notes 2008)
AECIndia.Commerce, G M Ext. Place, Shinde Ki Chhawani, Gwalior-474001 CS/CA Guidance ClassesE-mail: [email protected]
+91-751-2424240, 98930-16415 Page 11 of 11
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