SOLUTIONS Grade 11

Question 1: Journal Entries (Mr. Sharma)

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
Baisakh 1	Cash A/c Dr. Bank A/c Dr. Stock A/c Dr.   To Capital A/c (Being business started with cash, bank, and goods)		5,00,000 3,00,000 2,00,000	10,00,000
Baisakh 5	Purchase A/c Dr.   To Hari's A/c (Being goods purchased at 10% trade discount)		1,35,000	1,35,000
Baisakh 8	Drawings A/c Dr. Insurance Premium A/c Dr.   To Bank A/c (Being life insurance and fire insurance paid by cheque)		15,000 25,000	40,000
Baisakh 12	Loss by Fire A/c Dr.   To Purchase/Stock A/c (Being goods destroyed by fire)		40,000	40,000
Baisakh 15	Insurance Co. A/c Dr. Profit & Loss A/c Dr.   To Loss by Fire A/c (Being claim admitted at 75% and 25% loss recognized)		30,000 10,000	40,000
Baisakh 22	Bank A/c Dr. Discount Allowed A/c Dr. Sita's A/c Dr.   To Sales A/c (Being goods sold at 25% profit, 5% cash discount on half)		47,500 2,500 50,000	1,00,000

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Question 2: Adjusted Trial Balance (Global Enterprises)

Particulars	Debit (Rs.)	Credit (Rs.)
Cash and Bank	1,20,000
Sundry Debtors (2,50,000 - 10,000 - 12,000)	2,28,000
Provision for Doubtful Debts (5% of 2,40,000)		12,000
Prepaid Insurance (40,000 - 30,000)	10,000
Insurance Expired (Adjustment)	30,000
Machinery (Net: 5,00,000 - 75,000)	4,25,000
Depreciation on Machinery	75,000
Purchases	6,00,000
Wages & Salaries	1,50,000
Rent Expense	60,000
Bad Debts (Adjustment)	10,000
Interest on Bank Loan (Outstanding)	10,000
Capital Account		7,00,000
10% Bank Loan		1,00,000
Outstanding Interest on Loan		10,000
Commission Received (Earned: 30,000 - 10,000)		20,000
Unearned Commission (Liability)		10,000
Sales		10,50,000
Sundry Creditors		35,000
Total	19,37,000	19,37,000

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Question 3: Final Accounts (Gandaki Suppliers)

1. Trading and Profit & Loss Account

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
To Opening Stock	1,30,000	By Sales (8,80,000 - 20,000 mach.)	8,60,000
To Purchases (4,80,000 - 15,000)	4,65,000	By Closing Stock	1,45,000
To Productive Wages (50k + 10k O/S)	60,000
To Factory Power & Carriage Inwards	45,000
To Gross Profit c/d	3,05,000
Total	10,05,000	Total	10,05,000
To Salaries (1,10,000 - 15,000 prepaid)	95,000	By Gross Profit b/d	3,05,000
To Depreciation (Mach 33k + Furn 4k)	37,000	By Rent Received	24,000
To Provision for Bad Debts (New)	7,500	By Discount Received	6,000
To Manager's Commission (10% of 1,84,500)	18,450
To Net Profit (Transferred to Capital)	1,66,050
Total	3,35,000	Total	3,35,000

Working Notes:

• Sales Adjustment: Machinery sold for Rs. 20,000 was wrongly included in Sales. Deduct from Sales and subtract from Machinery.
• Provision for Doubtful Debts: (Debtors 1,60,000 - Further Bad Debts 10,000) = 1,50,000. Provision = 5% of 1,50,000 = Rs. 7,500.
• Manager's Commission: Net Profit before commission = Rs. 1,84,500. Commission = 10% = Rs. 18,450.