Final account

,, 11

• Final Accounts is the last step in the Final Accounts is the last step in the accounting process. Trial Balance is accounting process. Trial Balance is prepared at the end of all the accounting prepared at the end of all the accounting year to know the balances of all the year to know the balances of all the accounts & to test the arithmetic accuracy accounts & to test the arithmetic accuracy of accounts. But the basic objective of of accounts. But the basic objective of accounting is to know about the profit or accounting is to know about the profit or loss during the previous year & present loss during the previous year & present financial position. This can be known only financial position. This can be known only if Trading account and Profit & Loss if Trading account and Profit & Loss account and Balance Sheet are prepared account and Balance Sheet are prepared at the end pf year. These are also known at the end pf year. These are also known as as FINANCIAL STSTEMENTSFINANCIAL STSTEMENTS which are which are prepared. prepared.

FINAL ACCOUNTSFINAL ACCOUNTS

From Trial Balance. Final Accounts From Trial Balance. Final Accounts include the preparation of :include the preparation of :

1) Trading and Profit & Loss account and1) Trading and Profit & Loss account and

2) Balance Sheet 2) Balance Sheet

as these two statements are prepared as these two statements are prepared to give the final results of the business, to give the final results of the business, both of these are collectively called as both of these are collectively called as final accounts. Accounting cycle finally final accounts. Accounting cycle finally ends with these statements as shown ends with these statements as shown in next slide:in next slide:

Entry in the books of Original Entry

(ORIGINAL RECORD)

Posting in the concernedLedger account

(CLASSIFICATION)

Preparation of Trial Balance

(CHECKING THE ACCURACY)

Balancing of Real & Personal accounts

Preparation of final accounts(summary)

ACCOUNTING CYCLETRANSACTIONS

Types of Financial Types of Financial StatementStatement

Final accounts or financial Final accounts or financial statements can be divided in two statements can be divided in two parts:-parts:-

1)1) Trading and Profit & Loss AccountTrading and Profit & Loss Account

2)2) Balance Sheet Balance Sheet

Trading AccountTrading Account Trading account is prepared by trading Trading account is prepared by trading

concerns i.e., concerns which purchase and concerns i.e., concerns which purchase and sell finished goods, to know the gross profit sell finished goods, to know the gross profit or gross loss incurred by them from buying or gross loss incurred by them from buying and selling of goods during a particular and selling of goods during a particular period of time. Gross profit or gross loss is period of time. Gross profit or gross loss is the difference between the cost of goods the difference between the cost of goods sold and the proceeds of their sale. If the sold and the proceeds of their sale. If the sale proceeds exceed the cost of goods sale proceeds exceed the cost of goods sold , gross profit is made. Otherwise,gross sold , gross profit is made. Otherwise,gross loss is made. loss is made.

Ascertainment of Cost of Goods Ascertainment of Cost of Goods SoldSold

Opening StockOpening Stock ……….……….Add: PurchasesAdd: Purchases …….…….Less: Purchase ReturnLess: Purchase Return ……. ……………. ………

Goods Available for SalesGoods Available for Sales……….……….

Add: Direct ExpensesAdd: Direct Expenses ……….……….

Less: Closing StockLess: Closing Stock……….……….

Cost of Goods Sold Cost of Goods Sold ……….……….

Specimen Proforma of Trading Specimen Proforma of Trading AccountAccount

Dr Trading Account of …….. For the year ending……... CrParticulars

To Opening Stock

To Purchases

Less: Returns

To Direct Expenses:

Carriage Inward

Wages

Wages & salaries

Fuel & power

Coal, water & gas

Octroi

Amt. Particulars

By Sales

Less: Returns

By Closing Stock

By Gross Loss c/d*

Amt.

Import Duty

Custom Duty

Excise Duty

Consumable Store

Factory Rent, Rates,

and Taxes

Foreman/ Works Manager’s

Salary

Royalty on manufactured

goods

To Gross Profit c/d*

Profit & Loss AccountProfit & Loss Account For non-corporate business organisation Profit & For non-corporate business organisation Profit &

Loss account is second part of income Loss account is second part of income statement. It is prepared to know the net loss of statement. It is prepared to know the net loss of business during a particular period. Every business during a particular period. Every businessman has to spend on expenses other businessman has to spend on expenses other than on manufacture or purchase of goods than on manufacture or purchase of goods which are called indirect expenses. There can be which are called indirect expenses. There can be other incomes except sales. So gross profit or other incomes except sales. So gross profit or loss is adjusted keeping in view these indirect loss is adjusted keeping in view these indirect expenses and other incomes to find out net expenses and other incomes to find out net profit or net loss. profit or net loss.

Proforma of Profit & Loss Proforma of Profit & Loss AccountAccount

ParticularsParticulars

To Gross Loss b/dTo Gross Loss b/d

To Establishment To Establishment ChargesCharges

To Administrative To Administrative ChargesCharges

To Selling & To Selling & Distribution Distribution expensesexpenses

To Financial To Financial ChargesCharges

AmtAmt ParticularsParticulars

By Gross Profit b/dBy Gross Profit b/d

By other expensesBy other expenses

By Net Loss By Net Loss

(transferred to (transferred to capital account)capital account)

AmAmtt

To To Depreciation & Depreciation & ProvisionsProvisions

To Abnormal To Abnormal LossesLosses

To Net ProfitTo Net Profit

(transferred to (transferred to Capital Capital Account)Account)

Balance SheetBalance Sheet Balance Sheet is a component of financial Balance Sheet is a component of financial

statements which shows balances of statements which shows balances of capital, liabilities & assets. All nominal capital, liabilities & assets. All nominal accounts are closed by transferring these accounts are closed by transferring these to Trading & Profit & Loss Account. Only to Trading & Profit & Loss Account. Only personal & real accounts are left. personal & real accounts are left.

Balance Sheet is the final phase in Balance Sheet is the final phase in accounting cycle. It is a ‘mirror’ which accounting cycle. It is a ‘mirror’ which reflects the true position of the assets & reflects the true position of the assets & liabities of the business on a particular liabities of the business on a particular date. date.

“ “A statement of financial position of A statement of financial position of economic unit disclosing as at a given economic unit disclosing as at a given moment of time its assets, liabilities & moment of time its assets, liabilities & ownership equities. Eric L.kohler ownership equities. Eric L.kohler

Balance Sheet as on ……………………Liabilities Liabilities

Capital Capital

Add: Net ProfitAdd: Net Profit

Less: DrawingsLess: Drawings

Fixed Liabilities:Fixed Liabilities:

Long term loanLong term loan

Public depositsPublic deposits

Current Current Liabilities:Liabilities:

Unexpired Unexpired IncomeIncome

Short Term Short Term LoansLoans

Trade CreditorsTrade Creditors

Bank OverdraftBank Overdraft

AmtAmt Assets Assets

Fixed Assets:Fixed Assets:

GoodwillGoodwill

Land and BuildingsLand and Buildings

Plant & Machinery Plant & Machinery

Motor Vehicles Motor Vehicles

FurnitureFurniture

Patents & Trade Patents & Trade Marks Marks

Live StockLive Stock

Loose ToolsLoose Tools

InvestmentsInvestments

Amt Amt

Bill PayableBill Payable

OutstandinOutstanding Expensesg Expenses

Current Current Assets:Assets:

Closing StockClosing Stock

Prepaid Prepaid ExpensesExpenses

Accrued Accrued IncomeIncome

DebtorsDebtors

Bill Bill ReceivableReceivable

Cash at Bank Cash at Bank

Cash in handCash in hand

ADJUSTMENTSADJUSTMENTS

CLOSING STOCK CLOSING STOCK The unsold goods lying in store at the The unsold goods lying in store at the

end of accounting year. Treatment:end of accounting year. Treatment:Stock a/c Dr.Stock a/c Dr.

To Trading a/cTo Trading a/c Two fold effect of adjustment will be :-Two fold effect of adjustment will be :-1)1) Show on Credit side of the Trading Show on Credit side of the Trading

accountaccount2)2) On asset side of Balance SheetOn asset side of Balance Sheet

OUTSTANDING EXPENSESThose expenses which have been incurred & not yet paid.

Treatment:

Expenses a/c Dr

To outstanding expenses

Two fold effect:

1.Will be shown on debit side of trading & profit & loss a/c by way of addition to particular expense.

2. Will be shown on liabities side of Balance Sheet.

PREPAID EXPENSES

Those expenses which have been paid in advance i.e., whose benefit will be available in future is called prepaid expenses. Treatment:

Prepaid Expenses a/c Dr

To Expenses a/c

Two fold effect:

1.Will be shown in profit & loss a/c by way deduction from particular expense.

2. Will be shown on asset side of Balance Sheet.

ACCRUED INCOME

That income which has been earned but not received during the accounting year is called accrued income. Treatment:

Accrued Income a/c Dr

To Income a/c

Two fold effect:

1.Will be shown on credit side of P & L a/c

2. Will be shown on asset side of Balance Sheet

INCOME RECEIVED IN ADVANCE

Income received but not earned during accounting year is called income received in advance. Treatment:

Income a/c Dr

To Income Received in advance

Two fold effect:

1.Will be shown on credit side of P & L a/c by the way of deduction from particular income.

2. Will be shown on liabilities side of Balance Sheet.

DEPRECIATION

Depreciation is the reduction in the value of fixed asset due to its use, wear & tear. Treatment:

Depreciation a/c Dr

To Asset a/c

Two fold effect:

1.Is shown on debit side of P & L a/c

2.Is shown on the Asset side of the Balance Sheet by way of deduction from value of concerned asset

BAD DEBTS

Debts which are definitely irrecoverable are called Bad Debts.

Treatment:

Bad Debts A/c Dr

To Sundry Debtors a/c

Two fold effect:

1.Is shown on debit side of P & L a/c.

2.2. Is shown on assets side of Balance Sheet by way of deduction from Sundry Debtors.

INTEREST ON CAPITALINTEREST ON CAPITAL To see whether the business is really To see whether the business is really

earning profit or not ,interest on capital at earning profit or not ,interest on capital at a certain rate is provided. Treatment :a certain rate is provided. Treatment :

Interest on capital A/c Interest on capital A/c To capital A/cTo capital A/c TWO FOLD EFFECT :TWO FOLD EFFECT :1.It will be shown on debit side of Profit and 1.It will be shown on debit side of Profit and

Loss A/cLoss A/c2.Shown on liabilities side of Balance Sheet 2.Shown on liabilities side of Balance Sheet

by way of addition to the capital.by way of addition to the capital.

INTEREST ON DRAWINGSINTEREST ON DRAWINGS Interest on drawings is charged from Interest on drawings is charged from

proprietor ,as drawings reduce capital.proprietor ,as drawings reduce capital.Treatment:Treatment: Drawings A/cDrawings A/c To Interest on Drawings A/cTo Interest on Drawings A/cTwo fold effect will be:Two fold effect will be:1.It will be shown on credit side of Profit 1.It will be shown on credit side of Profit

and Loss Account.and Loss Account.2.On liabilities side of Balance Sheet by 2.On liabilities side of Balance Sheet by

way of addition to the drawings which are way of addition to the drawings which are ultimately deducted from the capital.ultimately deducted from the capital.

PROVISION FOR DOUBTFUL DEBTSPROVISION FOR DOUBTFUL DEBTS

It is a provision created to cover any possible loss It is a provision created to cover any possible loss on account of bad-debts likely to occur in future.on account of bad-debts likely to occur in future.

Treatment: Treatment: Profit and Loss A/c Profit and Loss A/c To Provision for Doubtful Debts A/c To Provision for Doubtful Debts A/c Two effected accounts will be:Two effected accounts will be:1.On debit side of Profit and Loss A/c or by way of 1.On debit side of Profit and Loss A/c or by way of

addition to Bad Debts. (Old provision for addition to Bad Debts. (Old provision for doubtful debts at the beginning of the year will doubtful debts at the beginning of the year will be deducted).be deducted).

2.Shown on assets side of Balance Sheet by way 2.Shown on assets side of Balance Sheet by way of deduction from Sundry Debtors (deducting of deduction from Sundry Debtors (deducting further bad debts if any).further bad debts if any).

PROVISION FOR DISCOUNT ON DEBTORSPROVISION FOR DISCOUNT ON DEBTORS If sales are made by the merchant on condition If sales are made by the merchant on condition

that if the amount of sales is paid within a certain that if the amount of sales is paid within a certain period , he will allow a certain percentage of period , he will allow a certain percentage of discount .discount .

Treatment :Treatment : Profit and Loss A/cProfit and Loss A/c To Provision for Discount on Debtors A/cTo Provision for Discount on Debtors A/c

Two-fold effect will be:Two-fold effect will be:1.Shown on debit side of Profit and Loss A/c1.Shown on debit side of Profit and Loss A/c2.Shown by way of deduction from Sundry Debtors 2.Shown by way of deduction from Sundry Debtors

(after deduction of further bad debts and (after deduction of further bad debts and provision for doubtful debts) on assets side of provision for doubtful debts) on assets side of Balance Sheet.Balance Sheet.

RESERVE FOR DISCOUNT ON RESERVE FOR DISCOUNT ON CREDITORSCREDITORSFirm may have chance to receive discount on last Firm may have chance to receive discount on last

date of accounting year, if the payment is date of accounting year, if the payment is made within the scheduled period .These are made within the scheduled period .These are anticipated profit and therefore this account is anticipated profit and therefore this account is made.made.

Treatment:Treatment: Reserve for Discount on Creditors A/cReserve for Discount on Creditors A/c To Profit & Loss A/c To Profit & Loss A/c Two fold effect will be:Two fold effect will be:1.It is shown on the credit side of Profit &Loss A/c1.It is shown on the credit side of Profit &Loss A/c2.Shown on liabilities side of Balance Sheet by 2.Shown on liabilities side of Balance Sheet by

way of deduction from sundry creditors.way of deduction from sundry creditors.

DEFERRED REVENUE DEFERRED REVENUE EXPENDITUREEXPENDITURE

The expenditure done in initial stage but the The expenditure done in initial stage but the benefit of which will also be available in benefit of which will also be available in subsequent years is called deferred revenue subsequent years is called deferred revenue expenditure.expenditure.

Treatment:Treatment:

Profit &loss A/cProfit &loss A/c

To advertisement A/cTo advertisement A/c

The two fold effect will be:The two fold effect will be:

1.It is show on the debit side of Profit &loss A/c1.It is show on the debit side of Profit &loss A/c

2.Shown on assets side by way of deduction from 2.Shown on assets side by way of deduction from capitalised expenditure.capitalised expenditure.

LOSS OF STOCK BY FIRELOSS OF STOCK BY FIRE Loss of stock may occur due to fire. Loss of stock may occur due to fire.

The position of business may be:The position of business may be:

a)a) All the stock is fully insured.All the stock is fully insured.

b)b) The stock is partly insured.The stock is partly insured.

c)c) The stock is not insured at all.The stock is not insured at all.

a) IF THE STOCK IS FULLY INSUREDa) IF THE STOCK IS FULLY INSURED The whole loss will be claimed from the The whole loss will be claimed from the

insurance company.insurance company.

Entry:- Insurance Co. A/c Dr.Entry:- Insurance Co. A/c Dr.

To Trading A/cTo Trading A/c

Effect:-Effect:-

1.It will be shown on credit side of Trading 1.It will be shown on credit side of Trading A/c.A/c.

2.It is shown on Assets Side of Balance 2.It is shown on Assets Side of Balance Sheet.Sheet.

b) IF STOCK IS PARTLY INSUREDb) IF STOCK IS PARTLY INSURED The loss of stock covered by insurance policy The loss of stock covered by insurance policy

will be claimed from the insurance company and will be claimed from the insurance company and the rest of amount will be loss for the business.the rest of amount will be loss for the business.

Entry : Insurance Co. A/c Dr.Entry : Insurance Co. A/c Dr.

Profit & Loss A/c Dr.Profit & Loss A/c Dr.

To Trading A/cTo Trading A/c

Effect of this entry:Effect of this entry:

1.Shown on credit side of Trading A/c with the 1.Shown on credit side of Trading A/c with the value of stock & shown on debit side of P& L A/c value of stock & shown on debit side of P& L A/c for that part of the stock which is not insured.for that part of the stock which is not insured.

2.Loss of stock Fire is shown on asset side of the 2.Loss of stock Fire is shown on asset side of the Balance sheet which amount is to be realised Balance sheet which amount is to be realised from the insurance company.from the insurance company.

c) IF STOCK IS NOT INSUREDc) IF STOCK IS NOT INSURED

Whole loss will be borne by the firm.Whole loss will be borne by the firm.

Entry:- Profit & Loss A/c Dr.Entry:- Profit & Loss A/c Dr.

To Trading A/cTo Trading A/c

Effect of this entry :-Effect of this entry :-

1.It is shown on the credit side of Trading 1.It is shown on the credit side of Trading A/c.A/c.

2.It is shown on the debit side of P&L A/c2.It is shown on the debit side of P&L A/c

RESERVE FUNDRESERVE FUND

Reserve is created out of profit & Loss A/c Reserve is created out of profit & Loss A/c and thus is an appropriation of net profit and thus is an appropriation of net profit for strengthening the financial position of for strengthening the financial position of the business. the business.

Treatment :Treatment :

Profit & Loss A/c Dr.Profit & Loss A/c Dr.

To Reserve Fund A/cTo Reserve Fund A/c

Two fold effect will be:Two fold effect will be:

1.It is shown on debit side of P&L A/c.1.It is shown on debit side of P&L A/c.

2.It shown on the liabilities side of Balance.2.It shown on the liabilities side of Balance.

GOOD DISTRIBUTED AS FREE GOOD DISTRIBUTED AS FREE SAMPLES.SAMPLES.To promote the sale of goods, some of the To promote the sale of goods, some of the

produced goods are distributed as free produced goods are distributed as free samples.samples.

Treatment:Treatment: Advertisement A/c Dr.Advertisement A/c Dr. To Purchase A/cTo Purchase A/c

Two fold effect:Two fold effect:1.Its is deducted from purchases .1.Its is deducted from purchases .2.It is shown on debit side of P&L A/c2.It is shown on debit side of P&L A/c

MANAGER’S COMMISSIONMANAGER’S COMMISSION To increase the profit, manager is given some % To increase the profit, manager is given some %

age of commission on profits .It can be given age of commission on profits .It can be given at a certain percentage on the net profits but at a certain percentage on the net profits but before charging such commission.before charging such commission.

Treatment:Treatment: Profit & Loss A/cProfit & Loss A/c To Commission Payable To Commission Payable

After charging such commissionAfter charging such commission This commission in calculated by a formula :-This commission in calculated by a formula :-Commission Payable = Commission Payable = % of commission% of commission * *

Residual profitResidual profit 100+Rate of Commission 100+Rate of Commission

GOODS ON SALE OR APPROVAL GOODS ON SALE OR APPROVAL BASISBASISSometimes goods are sold to customers on approval basis. If Sometimes goods are sold to customers on approval basis. If

they approve, it will become sale. If such goods are lying they approve, it will become sale. If such goods are lying with customers on last day of the accounting year and these with customers on last day of the accounting year and these can be yet returned , it should be treated as stock lying with can be yet returned , it should be treated as stock lying with customers.customers.

Treatment :Treatment :1. Sales A/c Dr.1. Sales A/c Dr. To debtors A/c (with sales price)To debtors A/c (with sales price)2. Stock A/c Dr. 2. Stock A/c Dr. To trading A/c ( at cost Price of goods)To trading A/c ( at cost Price of goods)Effects :-Effects :-1.Shown on the credit side of trading account by way of 1.Shown on the credit side of trading account by way of

deduction from sales at sales price and added at closing deduction from sales at sales price and added at closing stock at cost pricestock at cost price

2.Shown on assets side as deduction from sundry debtors (sale 2.Shown on assets side as deduction from sundry debtors (sale price )and stock at cost on the assets side of balance sheet.price )and stock at cost on the assets side of balance sheet.

EXAMPLEEXAMPLEM gives the following trial balance as on 31M gives the following trial balance as on 31stst March ,2010 March ,2010

Dr.Dr. Cr.Cr.

Plant &machineryPlant &machinery 6000060000 capitalcapital 5000050000

Fixture & fittings (for Fixture & fittings (for office)office)

24002400 M’s currents A/cM’s currents A/c 25002500

Stock as on April 1, 2009:Stock as on April 1, 2009:

Raw materialsRaw materials

Finished GoodsFinished Goods 1630016300

2540025400

Sundry creditorsSundry creditors 2230022300

PurchasesPurchases 9310093100 Loan at 18% from Indian Loan at 18% from Indian BankBank

2000020000

WagesWages 5130051300 SalesSales 250600250600

Other manufacturing Other manufacturing expensesexpenses

1620016200 Sale of scrapSale of scrap 36003600

Office expensesOffice expenses 1870018700

Sundry expenses Sundry expenses 2600026000

Cash at bank Cash at bank 66006600

PatentsPatents 1800018000

Selling expensesSelling expenses 1500015000

On 31On 31stst march ,2010 the stock of raw material march ,2010 the stock of raw material was 13,300. deprecation provided by M is 15 % was 13,300. deprecation provided by M is 15 % on Plant and Machinery and 10% on fixtures & on Plant and Machinery and 10% on fixtures & fittings (on book value). Patents have two more fittings (on book value). Patents have two more years to run and concern a vital production years to run and concern a vital production process .Manufactured goods were transferred to process .Manufactured goods were transferred to selling department at a value of Rs. 2,00,000. selling department at a value of Rs. 2,00,000. The value of finished goods (at transfer price ) The value of finished goods (at transfer price ) on hand on 31on hand on 31stst March ,2010 was Rs.30,000; the March ,2010 was Rs.30,000; the value of the finished goods as on April 1,2009 value of the finished goods as on April 1,2009 was at cost to M.was at cost to M. Draw the Manufacturing, trading & P&L a/c for Draw the Manufacturing, trading & P&L a/c for 2009-10 and the Balance Sheet of M as at the 2009-10 and the Balance Sheet of M as at the end of the year.end of the year.

MANUFACTURING ,TRADING AND PROFIT AND LOSS ACOOUNT MANUFACTURING ,TRADING AND PROFIT AND LOSS ACOOUNT OF MOF M for the year ending 31 for the year ending 31stst March ,2010 March ,2010

To raw material consumed: Rs.To raw material consumed: Rs.

Opening stock 16,300Opening stock 16,300

Add: Purchases Add: Purchases 93,10093,100

1,094001,09400

Less: Closing Stock Less: Closing Stock 13,30013,300

96,10096,100

By Trading A/c (Transfer)By Trading A/c (Transfer) 2,00,0002,00,000

To wages To wages 51,30051,300

To Manufacturing ExpensesTo Manufacturing Expenses 16,20016,200

To Depreciation on Plant & To Depreciation on Plant & machinery(15% on Rs 60,000)machinery(15% on Rs 60,000) 9,0009,000

To Depreciation on Patents(1/3 To Depreciation on Patents(1/3 of Rs.18,000)of Rs.18,000)

6,0006,000

Less: Sale of ScrapLess: Sale of Scrap1,78,6001,78,600

3,6003,600

Cost of Goods ProducedCost of Goods Produced 1,75,0001,75,000

To profit transferred to To profit transferred to

P&L a/c (12.5% of Transfer P&L a/c (12.5% of Transfer Price Price

i.e., i.e., Rs.25,000 Rs.25,000 X 100 )X 100 )

Rs. 2,00,000Rs. 2,00,000

25,00025,000

2,00,0002,00,000

To opening stock of finished To opening stock of finished Goods Goods

To value of goods To value of goods manufactured transferred manufactured transferred from manufacturing a/cfrom manufacturing a/c

To gross Profit c/d to profit To gross Profit c/d to profit & Loss A/c& Loss A/c

To office ExpensesTo office Expenses

To Depreciation on fixtures To Depreciation on fixtures & fittings& fittings

To selling expensesTo selling expenses

To Interest on Loan from To Interest on Loan from Indian Bank(18% on Rs Indian Bank(18% on Rs 20000)20000)

To stock reserve (12.5% on To stock reserve (12.5% on Rs.30,000 Closing Stock of Rs.30,000 Closing Stock of Finished Goods)Finished Goods)

To Net Profit Transferred to To Net Profit Transferred to M’s Current A/cM’s Current A/c

25,60025,600

2,00,002,00,0000

55,20055,200

2,80,602,80,6000

18,70018,700

240240

15,00015,000

3,6003,600

3,7503,750

38,91038,910

80,20080,200

By Sales By Sales

By Closing Stock Of By Closing Stock Of finished Goodsfinished Goods

By Gross Profit b/dBy Gross Profit b/d

By Profit transferred from By Profit transferred from Manufacturing a/cManufacturing a/c

2,50,6002,50,600

30,00030,000

2,80,0002,80,000

55,20055,200

25,00025,000

80,20080,200

BALANCE SHEET MBALANCE SHEET M as on 31 as on 31stst March ,2010 March ,2010

Sundry creditors Sundry creditors

Loan at 18%from Indian Bank Loan at 18%from Indian Bank

20,000 20,000

Add: Interest outstanding Add: Interest outstanding

for 1 year @18% for 1 year @18% 3,6003,600

M’s current Account :M’s current Account :

Balance as on 1-4-2009 Balance as on 1-4-2009 2,500 2,500

Add: Net Profit Add: Net Profit 38,91038,910

Capital Capital

22,30022,300

23,60023,600

41,41041,410

50,00050,000

1,37,311,37,3100

Cash at the bankCash at the bank

Sundry debtorsSundry debtors

Closing stock of raw materialsClosing stock of raw materials

Closing stock of Closing stock of

finished goods finished goods 30,00030,000

Less: Reserve @12.5% toLess: Reserve @12.5% to

bring goods to cost value bring goods to cost value 3,7503,750

Patents Patents 18,00018,000

Less: written off Less: written off 6,0006,000

Furniture & fittings Furniture & fittings 2,4002,400

Less: 10% Depreciation Less: 10% Depreciation 240240

Plant & Machinery Plant & Machinery 60,00060,000

Less: 15% Depreciation Less: 15% Depreciation 9,0009,000

6,6006,600

26,00026,000

13,30013,300

26,25026,250

12,00012,000

2,1602,160

51,00051,000

1,37,311,37,3100