1.

The following is the trial balance on June 30, 2006 of the Modern Manufacturing Company Ltd. DetailsAmountRsDetailsAmountRsStock, 30th June, 20057,500Dividend paid in, August, 2005500Sales35,000Interim Dividend paid in Feb., 2006400Purchases24,500Capital- 10,000 Rs 1 shares full Paid10,000Productive wages5,000Debtors3,750Discounts (Dr.)700Creditors1,750Discounts (Cr.)500Plant and machinery2,900Salaries750Cash in Bank1,620Rent495Reserve1,550General expenses1,705Loan to Managing Director325Profit and loss account,1,503Bad Debts15830th June 2005 (Cr.) Stock, on June 30, 2006 Rs 8,200. You are required to make out the trading account, and profit and loss account for the year ended June 30, 2006 and the balance sheet as on the date. You are also to make provision in respect of the following: (i) Depreciate machinery 10% per annum; (ii) Reserve 5% for discount on debtors; (iii) One month rent Rs 45 was due on 30th June; and (iv) Six month’s insurance, included in general expenses, was unexpired at Rs 75.

Answer»

The following is the trial balance on June 30, 2006 of the Modern Manufacturing Company Ltd.

































































































Details



Amount



Rs



Details



Amount



Rs



Stock, 30th June, 2005



7,500



Dividend paid in, August, 2005



500



Sales



35,000



Interim Dividend paid in Feb., 2006



400



Purchases



24,500



Capital- 10,000 Rs 1 shares full Paid



10,000



Productive wages



5,000



Debtors



3,750



Discounts (Dr.)



700



Creditors



1,750



Discounts (Cr.)



500



Plant and machinery



2,900



Salaries



750



Cash in Bank



1,620



Rent



495



Reserve



1,550



General expenses



1,705



Loan to Managing Director



325



Profit and loss account,



1,503



Bad Debts



158



30th June 2005 (Cr.)




















Stock, on June 30, 2006 Rs 8,200. You are required to make out the trading account, and profit and loss account for the year ended June 30, 2006 and the balance sheet as on the date. You are also to make provision in respect of the following: (i) Depreciate machinery 10% per annum; (ii) Reserve 5% for discount on debtors; (iii) One month rent Rs 45 was due on 30th June; and (iv) Six month’s insurance, included in general expenses, was unexpired at Rs 75.


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