Provision for discount on Debtors|Charity in the form of Goods|Goods distributed as free Sample|Drawings in the form of goods|Managers Commission on Net Profit|Methods of Calculating the Managers Commission|Financial Statements- Questions

From the following balances extracted from the books of Raga Ltd. prepare a trading and profit and loss account for the year ended March 31, 2017 and a balance sheet as on that date. The additional information is as under : 1. Closing stock was valued at the end of the year Rs. 20,000. 2. Depreciation on plant and machinery charged at 5% and land and building at 10%. 3. Discount on debtors at 3%. 4. Make a provision at 5% on debtors for doubtful debts. 5. Salary outstanding was Rs. 100 and Wages prepaid was Rs. 40. 6. The manager is entitled a commission of 5% on net profit after charging such commission.

Prepare the trading and profit and loss account of M/s Roni Plastic Ltd. from the following trial balance and a balance sheet as at March 31, 2017. Adjustments 1. Depreciation on land and building at @ 5% and Motor vehicle at @ 15%. 2. Interest on loan is @ 5% taken on April 01, 2016. 3. Goods costing Rs. 1,200 were sent to a customer on sale on return basis for Rs. 1,400 on March 30, 2017 and has been recorded in the books as actual sales. 4. Salaries amounting to Rs. 1,400 and Rates amounting to Rs. 800 are due. 5. The bad debts provision is to be brought up to @ 5% on sundry debtors. 6. Closing stock was Rs. 13,700. 7. Goods costing Rs. 1,000 were taken away by the proprietor for his personal use but not entry has been made in the books of account. 8. Insurance pre-paid Rs. 350. 9. Provide the manager’s commission at @ 5% on Net profit after charging such commission.

Give journal entries to rectify the following errors assuming that suspense account had been opened. (a) Goods distributed as free sample 5,000 were not recorded in the books. (b) Goods withdrawn for personal use by the proprietor 2,000 were not recorded in the books. (c) Bill receivable received from a debtor 6,000 was not posted to his account. (d) Total of Returns inwards book 1,200 was posted to Returns outwards account. (e) Discount allowed to Reema 700 on receiving cash from her was recorded in the books as 70.

Give rectifying Journal entries for the following errors: (i) Goods returned by Mohan of Rs. 1,500 not recorded in books. (ii) Goods distributed as free samples for Rs. 5,000 not recorded. (iii) Depreciation of machinery of Rs. 10,000 not charged. (iv) Goods costing Rs. 780, selling price Rs. 1,000 given as charity not recorded.

Following balances have been extracted from the trial balance of M/s Keshav Electronics Ltd. You are required to prepare the trading and profit and loss account and a balance sheet as on March 31, 2017. The following additional information is available : 1. Stock on March 31, 2017 was Rs. 30,000. 2. Depreciation is to be charged on building at 5% and motor van at 10%. 3. Provision for doubtful debts is to be maintained at 5% on Sundry Debtors. 4. Unexpired insurance was Rs. 600. 5. The Manager is entitled to a commissiion @ 5% on net profit after charging such commission.

Study the following information carefully and answer the question given below: The Centre reportedly wants to continue providing subsidy to consumers for cooking gas and kerosene for five more years. This is not good news from the point of view of reining in the fiscal deficit. Mounting subventions for subsidies means diversion of savings by the government from investment to consumption, raising the cost of capital in the process. The government must cut expenditure on subsidies to create more fiscal space for investments in both physical and social infrastructure. It should outline a plan for comprehensive reform in major subsidies including petroleum, food and fertilizers and set goal posts. Which of the following is an inference which can be made from the facts stated in the above paragraph? 1) India's fiscal deficit is negligible in comparison to other emerging economies in the world. 2) Subsidy on food and fertilizers are essential for the growth of Indian economy. 3) Reform in financial sector will weaken India's position in the international arena. 4) Gradual withdrawal of subsidy is essential for effectively managing fiscal deficit in India. 5) None of these