By S. Hall and N. Skene Smith (Auth.)
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Extra resources for Accounting Principles and Practice
6) Make allowance for Discounts on Debtors at the rate of 6J% and increase the provision for Bad Debts by £10. a. is due for the whole of 1962. 46 A C C O U N T I N G P R I N C I P L E S AND P R A C T I C E Trial Balance Capital Loan, B. Baker Buildings Plant and Machinery Stock Purchases Factory Wages Sales Rates Salaries and Wages Carriage Outwards Lighting and Hearing Telephone Insurance Discounts Bad Debts Bad Debts Provision General Expenses Sale of Machinery Creditors Debtors Cash Drawings £ 5,100 4,778 2,109 5,614 4,060 16,108 260 1,219 601 80 20 180 931 94 50 119 220 1,016 1,420 190 2,100 £28,875 Dr.
11. From the following information relating to a manufacturing business, compile a statement from which to ascertain: (a) The cost of materials used, (b) The cost of goods produced, (c) The cost of goods sold and the gross profit theron, and (d) The net profit earned. £ 2,100 Raw Materials: Stock at Beginning 12,000 Purchases 3,100 Stock at End 1,750 Finished Goods: Stock at Beginning 980 Stock at End 1,870 Work in Progress: At Beginning 2,090 At End 34,646 Sales 7,960 Wages Carriage: Inwards 650 Outwards 482 520 Fuel, Light and Power: Factory 168 Office 142 General Expenses: Factory Administration 3,875 1,490 Selling FINAL ACCOUNTS 59 12.
Rose „ G. Bloom 1 Bad Debts Account £ 1962 70 June 30 30 £100 Cr, £ 260 By Balance b/d 180 Cr, £ Adjustment to Provision „ P. & L. A/c 80 20 £100 We are now in a position to consider the preparation of more complicated final accounts. EXAMPLE 13 You are required to prepare the Trading and Profit & Loss Account for the year ended 30th September, 1962 and a Balance Sheet as at that date, for the business of W. Watson. The follow ing balances were extracted from his ledger. 42 A C C O U N T I N G P R I N C I P L E S AND P R A C T I C E £ £ Sales 24,200 Purchases 16,180 Salaries and Wages 4,000 Discounts 300 Returns on Sales 1,100 Debtors 1,410 Bad Debts Provision 300 Sundry Expenses 210 Cash 810 Motor Van 640 420 Heating and Lighting 380 Rent and Rates Shop Fixtures and Fittings 2,160 2,400 Stock 1,210 Drawings 1,810 Creditors 190 Bad Debts written off 3,904 Capital Returns on Purchases 816 220 Motor Expenses (a) The Stock at 30th September, 1962 was £1,810.