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Hari Automobiles
FINANCIAL ACCOUNTING
GROWTH OF ACCOUNTING
Accounting is as old as money itself. However, the act of accounting was not as developed as it as today because in the early stages of civilization, the numbers of transactions to be recorded were so small that each businessman was able to record and check for himself all his transactions. Accounting was practiced in India twenty-three centuries ago as is clear from the book named ARTHASHASTRA written by Kautilya, King Chandraguptas minister. This book not only relates to politics and economics, but also explains the art of proper keeping of accounts. The chapter The Business of keeping up Accounts in the office of Accountants describes records of accounts to be maintained in accountants office and methods of checking accounts. However, the modern system of accounting is based on the principles of Double Entry System, which owes its origin to Fra Luca Pacioli who first published the principles of Double Entry System in 1494 at Venice in Italy. Thus, the art of accounting has been practiced for centuries but it is only in the late thirties that the study of the subject Accounting has been taken up seriously.
In the recent years large-scale production, cut - throat competition, widening of the market and changes in the technology have brought remarkable changes in the field of Accounting. In the words of Gordon and Shilinglaw: It has come to be recognized as a tool for mastering the various economic problems which a business organization may have to face. It provides information that can be drawn upon by those responsible for decisions affecting the organizations future. This history is written mostly in quantitative terms. It consists partly of files of data, partly of reports summarizing various portions of these data, and partly of the plan established by management, to guide its operations.
MEANING OF ACCOUNTING
The main purpose of accounting is to ascertain profit or loss during a specified period, to show financial conditions of the business on a particular date and to have control over the firms property. Such accounting records are required to be maintained to measure the income of the business and communicate the information so that managers, owners and other parties may use it. Accounting is a discipline which records, classifies, summarizing and interprets financial information about the activities of a concern so that intelligent decisions can be made about the concern. The American Institute of Certified Public Accountants has defined the Financial Accounting as The art of recording, classifying and summarizing in a significant manner in terms of money transactions and events which in part, at least of a financial character and interpreting the results thereof. American Accounting Association defines accounting as The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information. Therefore Accounting is also known as The language of business as the success or failure of a business can be talked in terms of its profit or loss and such results can be ascertained only through Accounting.
ACCOUNTING RECORDS
The Traders are required to maintain at least two registers for recording Accounting transactions of their business they are Journal and Ledger. Every transaction that takes place in the business should be recorded in the journal in the order of its happening. Separate accounts should be opened in the ledger in the names of all these persons with whom the trader deals, in respect of all his assets and liabilities and also incomes and expenses. The transactions relating to each account should be posted to the respective accounts from the journal either daily or weekly, Ledger shows the clear picture of transactions relating to each account.
In big business units clear picture of transactions are more and work of book-keeping is required to be divided between two or three persons, the Journal is sub-divided into Purchases Journal, Sales Journal, Purchases Returns Journal, Sales Returns Journal, Cash Book and Journal Proper. However one ledger is maintained for all accounts. This system of bookkeeping is known as Practical System of Book-Keeping .
An account is nothing but a summarized record of business transactions relating to a person, assets, liability, income or expenditure. Each account is opened on a separate page. Left hand side of the account is called Debit side and Right hand side is called Credit side. Some transactions are to be recorded on the Debit side and some on the Credit side of an account to ascertain the final result of each account. It is known as Debiting an account and Crediting an account respectively.
Single and Double Entry System of Accounting: - In business accounting, both single and Double entry system of accounting is in use. But among them the double accounting form of accounting are being used widely because of its advantages, like accuracy, completeness and durability Etc.
Single Entry System: - This system is based on cash accounting i.e. transactions are recorded only when cash is received or paid. This system ignores credit transactions and accruals. It is used only in Government accounting.
Double Entry System: - This system is widely used by non-government organizations. Under this System transactions are recorded on accrual basis. i.e. irrespective of whether cash is paid or not. For example where salary is due at the end of a month, it is recorded as an expense of that particular month, though cash is paid in the subsequent month. Further all transactions have two aspects namely debit and credit. This is the reason why the system is called Double Entry System. This system is been developed by Luca Picalio, an French statistician and he is known as Father of Modern Accounting System.
(* Accrual = The amount which is due or yet to be receivable from others)
CLASSIFICATION OF ACCOUNTS
1. Personal Account: The accounts, which are related to persons, companies, organizations and institutions that should be called as Personal Account.
Example: Person Names, Company Names, Organization Names and Institution Names etc.
Debit Rule: The Receiver
Credit Rule: The Giver
Ex: 1) Raju gives a gift to Rajesh & Co Rs.10,000
Rajesh & Co A/c Dr. 10,000
To Raju A/c 10,000
2. Real Account: The Accounts, which are related to companys property that accounts should be called as Real Account. Companys property divided in to two types
A) Fixed Assets: Fixed Assets are those, which provide long-term benefits for running the business. Change in the value of these assets is minimum. For example, Land and Buildings; Plant and Machinery.,Furniture for office use.B) Current Assets: Current Assets are those which dedicate their benefits for running the business and which change in value within a short span of time. For example, Goods, Debtors, Cash and Investments etc., Values of these assets always change.Debit Rule: What comes in
Credit Rule: What goes out
Ex: 1) Purchase Furniture Rs.10,000 for Cash
Furniture A/c Dr. 10,000
To Cash A/c 10,000
2) Purchase Machinery Rs.20,000 from Xyz Ltd.
Machinery A/c Dr. 20,000
To Xyz Ltd A/c 20,000
3. Nominal Account: The accounts, which are related to company expenses, losses, incomes and gains that accounts should be called as Nominal Account. All Non-Visible items like Goodwill, expenses and profits will be covered under this principle. This is also called as Dependent Principle. Because it will not satisfy fully (i.e. Both debit and credit) with out sharing one of the side with real or personal principle.
Expenses: Amount spent for acquiring goods or services for running business is known as Expenses.
Income: The amount earned by a firm out of its business transaction during a period is called Income.
Debit Rule : All Expenses, Losses
Credit Rule: All Incomes, Gains
Ex: 1) Paid Salaries Rs.500
Salaries A/c Dr.500
To Cash A/c 500
2) Received Rent Rs.1,000
Cash A/c Dr. 1,000
To Received Rent A/c 1,000
BASIC TERMS USED IN ACCOUNTING
1) Assets: The properties possessions and other articles belonging to a businessman, which are purchased by him for use in his business but not for re-sale, are called Assets. They may be tangible as well as intangible. Buildings, Machinery, Furniture etc. are the examples of Tangible assets, where as Goodwill, Patents rights etc. are examples of Intangible asset. Moreover, the balance of Cash in hand, Unsold stock of goods, amount receivable from debtors (customers) can also be known as Assets.
2) Liabilities: The debts, borrowings and Owings of a businessman, which were contracted for the business, are called Liabilities. The loan from banks, amount payable to creditors (suppliers) etc. come under liabilities. The capital invested by the proprietor in this business is also treated as a liability for the business.3) Purchase: The tern Purchase refers to the total amount of goods acquired/bought by an enterprise for resale or for use in the production of goods or rendering of services in the normal course of business.4) Sales: The term Sales refers to the amount for which the goods are sold or services are rendered. In other words, the revenue of a business unit can be referred as Sales.5) Creditors: Creditors are those persons who have advanced money or supplied goods on credit to the business. However the suppliers of goods on credit can be referred as Trader Creditors.6) Debtors: The term Debtor refers to the person from whom the amounts are due for goods sold or services rendered or in respect of contractual obligations. The debtors for purchases of goods on credit can be referred as Trade Debtors.7) Capital: The money or moneys worth invested by a businessman in his business is called Capital. It is the lifeblood of every business. In accountancy capital is treated as an amount borrowed by the business from its proprietor.8) Drawings: The money or goods taken by the proprietor from his business for his private expenses or domestic use is known as Drawings.9) Stock: The term Stock refers to tangible property held for sale in the ordinary course of business or for consumption the production of goods or services for sale.10) Business: Business is a generic term including any activity undertaken for the purpose of making profits. It refers to any establishment or organization set up for the conduct of trade, commerce or industry.11) Profession: Profession is a practice of intellectual skill by a person in a definite field, requiring specialized training on the part of the person engaged in that field, e.g. a doctor, a lawyer, an accountant, an architect etc.12) Voucher: A Voucher is a written document originating and supporting a business transaction. It is the basis of recording a transaction in the books of account. For example: Cash memos, Pay-in-slips, invoices, etc.13) Goods: The articles, commodities and merchandise in which a businessman deals in his business are called Goods. In other words, goods mean those commodities which are purchased by a businessman for the purpose of reselling them for the profit in his business. Ex: Purchase A/c EXPENSES: - Expenses are divided into two types
1. Direct Expenses
2. Indirect Expenses
Direct Expenses: Expenses are incurred for manufacturing of stock item or these expenses are incurred for purchasing of stock item (or) simply the expenses, which will be shown in trading account Debit side.
Those are: Wages
Carriage on purchase or Carriage Inwards
Fuel Expenses
Gas, Coal and Power expenses
Factory LightingIndirect Expenses: Expenses are incurred for selling of stock item and expenses relating to office administration (or) the expenses, which comes of profit and loss account debit side.
INCOMES: Incomes are divided into two types
1. Direct Income
2. Indirect Income
Direct Income: The income, which we received from the sale of stock item or the closing stock, related expressions will be created under direct incomes (closing stock will be considered as the direct income only in computer accounting packages not in general sense).
Indirect Income: The income which we received other than selling of stock items only the income received from operation of business (or) simply the incomes showed on the credit side of the profit & loss account.
Trial Balance: After posting the accounts in the ledger statement is prepared to show separately the debit and credit balances such a statement is known as Trail Balance. Listing the each and every account and entering in separate columns the total of the debit and credit sides may also prepare it. Whichever it is prepared the totals of two columns should agree. An agreement indicates reasonable accuracy of the accounting work. If the two sides dont agree then it is simply an arithmetical error.
Dr.
Trading, Profit & Loss A/C Format
Cr.
Particular
AmountParticular
Amount
To Opening stock
By Sales
To Purchase
By Closing Stock
To Wages
By Handling charges received
To Gas, coal and Power
By Gross Loss C/d (if any)
Expenses
To Factory Lighting
To Factory Rent
To Handling Charges
To Carriage on Purchase
Or Carriage Inwards
To Fuel Expenses
To Gross Profit C/d
To Gross Loss B/d (if any)
By Gross profit B/d
To Salaries
By Received Rent
To Rent
By Received Interest
To Advertisement
By Received Commission
To Packing Expenses By Received Discount
To Bad debts
By Profit on Sales of Assets
To Carriage Outwards
By Interest on Drawings
To Insurance Premium
By Interest on Fixed Deposits
To Printing & stationery
By Net Loss ( if any )
To Electricity Charges
To Telephone Charges
To Discount Allowed
To Audit Fees
To Depreciation
To Interest on Capital
To Loss on sale of Asset
To Interest on Loans
To Provision for Bad debts
To Net Profit (Transferred
,to Balance sheet)
Balance Sheet Format
Liabilities
Amount Assets Amount
Capital
Fixed Assets
Add: Additional Capital
Tangable Assets
Interest on capital
Land & Buildings
Net Profit
Furniture
Less: Drawings
Machinery
Interest on Drawings
Motor Vehicles
Net Loss
Computer
Printer
Current Liabilities
In-tangable Assets
Sundry Creditors Goodwill
Bills Payable
Current AssetsOutstanding Expenses
Deposits Given Received income in Advance
Sundry Debtors
Bank Overdraft
Bills Receivable
Loans taken from Parties
Cash-in- Hand
Security deposits received
Bank Account
Duties & Taxes
Closing Stock
Sales Tax
Loan given
Excise Duty
Prepaid Expenses
Luxury Tax
Incomes Accrued
Value Added Tax (VAT)
Investments
Long-term Investment
Short-term Investment
Miscellaneous Expenses
Preliminary Expenses
Increase in Asset Debit
Decrease in Asset
Credit
Increase in Expenses Debit
Decrease in ExpensesCredit
Decrease in Liabilities Debit
Increase in LiabilitiesCredit
Decrease in Income Debit
Increase in Income
Credit
MANUAL ACCOUNTING PROCEDURE
1. Journal Entries (Cash Book / Day Book)
2. Ledger Posting (Ledger Book)
3. Trial Balance
4. Trading, Profit & Loss A/C
5. Balance Sheet
COMPUTER ACCOUNTING PROCEDURE
1. Company Creation
2. Ledger Creation
3. Stock Items Creation
a) Stock Groups
b) Units of Measures
c) Stock Items
d) F11 Features
4. Journal Entries / Voucher Entry
5. Reports Checking
a) Trading, Profit & Loss A/C
b) Balance Sheet
c) Trail Balance
d) Day Book
e) Various Ledger Books
f) Stock Status
g) Cash Flow / Funds Flow
h) Ratio Analysis
Grouping
Profit & LossA/C
Expenses
Incomes
Direct
Indirect
Direct Indirect
Expenses
Expenses
Income Income
Balance Sheet
Liabilities
Assets
Share
Current
Fixed Current
Capital
Liabilities
Assets Assets
Sundry Bills
Loans
Creditors Payable & Advances taken
Sundry
Bills
Cash Cash
Closing
Debtors Receivable in
at
Stock
Hand bank
Voucher Types
1. Receipt (F6) : If cash comes in to business. Cash / Cheque (Bank)
2. Payment (F5) : If cash goes from business. Cash / Cheque (Bank)
3.Purchase (F9) : Only Stock Items are purchase for cash or credit.
4.Sales (F8) : Only Stock Items are sold for cash or credit.
5. Journal (F7) : No Cash /No Bank Entries
(Or)
Adjustment Entries
6. Contra (F4) :
1. Cash deposited into bank
Bank A/c Dr.
To Cash A/c
2. Cash withdrawn from bank
Cash A/c Dr.
To Bank A/c
1. Ravi Electricals
1 April,20091. Ravi started business with cash Rs.3,00,000
2. Purchased LG Washing Machine Rs.10,000 for cash
3. Purchased Samsung Washing Machine Rs.12,000 each from Samsung Ltd.
4. Paid Carriage on Purchase Rs.1,200
5. Sold LG Washing Machine Rs.12,000 for cash
6. Sold Samsung Washing Machine Rs.15,000 each to M.K.Enterprises
7. Paid Salaries Rs.1,200 and Rent Rs.1,000 by cashGross Profit: Rs.3,800
Net Profit
: Rs.1,600
Balance Sheet : Rs.3,13,600
2. Ravi Electricals
1 April,20091. Ravi started business with cash Rs.3,00,000
2. Purchase 10 LG Washing Machines @ Rs.10,000 each for cash
3. Purchase 10 Samsung Washing Machines @ Rs.12,000 each from Samsung Ltd
4. Paid Carriage on Purchase Rs.1,200
5. Sold 10 LG Washing Machines @ Rs.12,000 each for cash6. Sold 10 Samsung Washing Machines @ Rs.12,000 each to M.k.Enterprises
7. Paid Salaries Rs.12,000 and Rent Rs.1,000 by cashGross Profit: Rs.18,800
Net Profit
: Rs.5,800
Balance Sheet: Rs.4,25,800
3. Friend Computers
1 April,2009
1. Rajesh started business with cash Rs.3,20,000
2. Shiva started business with cash Rs.2,40,000
3. Srinu started business with cash Rs.1,60,000
4. Cash deposited into ICICI Bank Rs.50,000
5. Purchase Furniture for cash Rs.2,500 for office use
6. Personal Drawings Rajesh Rs.2,000 ; Shiva Rs.1,000 ; Srinu Rs.500 by cash
7. Bought 10 Computers @ Rs.22,500 from Hcl Computers
8. Sold 5 Computers @ Rs.28,500 each to Kumar & Co.
9. Sold 1 Computer @ Rs.22,500 for cash 10% Discount
10. Salaries paid for Rs.23,000 ; Rent Rs.2,800 by cash
11. Carriage Rs.2,500 ; Legal Expenses Rs.2,750 by cash
12. Commission paid to Naresh Rs.1,800 by cash13. Interest on Capital of Rajesh Rs.6,000 ; Shiva Rs.4,000 and Srinu Rs.2,000
14. Interest on Drawings of Rajesh Rs.200 ; Shiva Rs.100 and Srinu Rs.50
15. Depreciation on Furniture @ 10%
Closing Stock: Rs. 90,000
Gross Profit
: Rs.25,250
Net Loss
: Rs.17,000
Balance Sheet: Rs.9,53,150
4. Radhakrishna & Company
1 April,2009
1. Radhakrishna started business with cash Rs.8,00,000
2. Cash deposited into ICICI Bank Rs.2,00,000
3. Amount deposited into PNB (Punjab National Bank) Rs.2,00,000
4. Purchase Order 15 Stereo Systems @ Rs.18,000 each from Surya Electronics5. Purchase 10 Stereo Systems @ Rs.18,000 each from Surya Electronics
6. Paid Carriage Inwards Rs.500 by cash
7. Sales Order 10 Stereo Systems @ Rs.20,000 each to Shahs Electronics
8. Sold 10 Stereo Systems @ Rs.20,000 each to Shahs Electronics
9. Paid Salary Rs.4,000 and Rent Rs.2,500 by cash
10. Paid Telephone Charges Rs.2,000 by cheque (ICICI Bank)
11. Paid Staff Welfare Expenses Rs.1,500 by cheque (PNB)
12. Cheque issued to Surya Electronics Rs.50,000 (ICICI Bank)
13. Cheque received from Shahs Electronics Rs.80,000 (PNB)
Gross Profit
: Rs. 19,500
Net Profit
: Rs.9,500
Balance Sheet: Rs.9,39,500
5. Hema & Company
1 April,2009
1. Hema started business with cash Rs.15,00,000
2. Purchase Furniture worth Rs.20,000 for office use
3. Amount deposited into Andhra Bank Rs.10,00,000
4. Purchase 15 CD Players @ Rs.14,000 each from Sai Electronics
5. Purchase 20 Audio Systems @ Rs.8,000 each from Bpl India
6. Purchase Computer worth Rs.25,000 and payment made by cheque for office use
7. Purchase Woolen Carpet worth Rs.14,000 and payment made by cheque for office use
8. Sold 4 Audio Systems @ Rs.9,100 each for cash
9. Sold 2 Audio Systems @ Rs.9,300 each to Sudha Electronics
10. Sold 4 CD Players @ Rs.15,200 each for cash11. Sold 6 CD Players @ Rs.15,500 each to Sandhya Electronics
12. Cheque given to Sai Electronics Rs.1,10,000
13. Cash paid to Bpl India Rs.80,000
14. Sold 6 Audio Systems @ Rs.9,300 each to Sandhya Electronics
15. Received cheque from Sandhya Electronics Rs.50,400
16. Sold 4 Audio Systems @ Rs.9,100 each for cash
17. Amount deposited into Andhra Bank Rs.1,10,000
18. Cash withdrawn for personal use Rs.75,000
19. Purchase 5 CD Players @ Rs.14,000 each from Sai Electronics
20. Cheque given to Sai Electronics Rs.1,00,000
21. Purchase 7 Audio Systems from Bpl India @ Rs.8,000 each
22. Cheque given to Bpl India Rs.75,000
23. Purchase Furniture from Modern Furniture House Rs.25,000 for office use
24. Paid Rent Rs.6,000 by cash
25. Paid Electrical Charges Rs.2,000 by cash
26. Paid Salaries Rs.12,000 by cash
27. Cash paid to Modern Furniture House Rs.25,000
Closing Stock: Rs. 2,28,000
Gross Profit
: Rs. 33,000
Net Profit
: Rs. 13,000
Balance Sheet: Rs.15,69,000
6. Bhaskar Furnitures
1 April,2009
1. Bhaskar started business with cash Rs.5,00,000
2. Purchases from A - Z Furnitures50 Tables @ Rs.200 each 200 Chairs @ Rs.150 each 3. Cash Purchases
20 Boards @ Rs.250 each 4. Sales to Princess School
5 Boards @ Rs.400 each
50 Chairs @ Rs.200 each
20 Tables @ Rs.250 each
5. Cash Sales
10 Boards @ Rs.400 each
100 Chairs @ Rs.200 each
20 Tables @ Rs.250 each
6. Returned to A Z Furnitures
5 Tables ; 10 Chairs
7. Paid to A Z Furniture Rs.15,000
8. Received cash from Princess School in full settlement of his account
9. Paid Salaries Rs.5,000 and Rent Rs.2,000
Closing Stock: Rs. 8,250
Gross Profit
: Rs.11,750
Net Profit
: Rs. 4,750
Balance Sheet: Rs.5,27,2507. Ramesh & Company1 April,2009
1. Ramesh started business with cash Rs.9,00,000
2. Purchase 25 Colour TVs @ Rs.18,000 each for cash ; VAT 4%
3. Paid Wages Rs.600
4. Purchase Furniture by cash Rs.50,000 for office use
5. Purchase Printer by cash Rs.30,000 for office use
6. Sold 15 Colour TVs @ Rs.21,000 each for cash, Excise Duty on Sales 8% and VAT 4%
7. Amount deposited into SBI Bank Rs.2,00,000
8. Paid Salary Rs.3,500 and Rent Rs.2,000
9. Amount withdrawn for Personal use Rs.1,00,000 from S B I Bank10. Depreciation on Furniture @10%
11. Depreciation on Printer @60%
Closing Stock: Rs.1,80,000
Gross Profit
: Rs.44,400
Net Profit
: Rs.15,900
Balance Sheet: Rs.8,41,100
8. Radhika & Company1April,20091. Radhika started business with cash Rs.10,00,000
2. Purchase Furniture worth Rs.40,000 by cash for office use
3. Purchase Computer worth Rs.45,000 by cash for office use
4. Purchase 20 Printers @ Rs.10,000 each from Samsung Ltd ; VAT 4%5. Purchase 20 Computers @ Rs.40,000 each for cash ; VAT 4%
6. Sold 10 Printers @ Rs.12,000 each for cash ; VAT 4%
7. Sold 10 Computers @ Rs.50,000 each to Krishna ; VAT 4%
8. Paid cash to Samsung Ltd Rs.1,00,000
9. Received cash from Krishna Rs.5,00,000
10. Paid Salaries Rs.2,000 and Rent Rs.3,000 by cash
Closing Stock: Rs.5,00,000
Gross Profit
: Rs.1,20,000
Net Profit
: Rs.1,15,000
Balance Sheet: Rs.12,07,800
9. Raj & CompanyBalance Sheet as on 31-03-2009
Liabilities
Amount Rs. Assets
Amount Rs.
Raj Capital
3,10,000Furniture
54,000
LG Electronics 24,000Electrical Equipment
20,000
S B H
40,000
Sam Sum Bros
20,000
Closing Stock
50,000
(5 Refrigerators
@ Rs.10,000 each)
Cash
1,50,000
3,34.000
3,34,000
1 April,2009
1. Purchase 40 Refrigerators @ Rs.10,000 each from LG Electronics ; VAT 4%2. Paid Carriage on Purchase Rs.1,000
3. Sold 20 Refrigerators @ Rs.12,000 for cash ; VAT 4%
4. Sold 20 Refrigerators @ Rs.12,000 to Sam Sum Bros ; VAT 4%
5. Paid cash to LG Electronics Rs.3,50,000
6. Paid Salaries Rs.5,000 and Rent Rs.3,000
7. One Refrigerator returned to LG Electronics
8. One Refrigerator returned by Sam sum Bros
9. Received cash from Sam sum Bros in full settlement of his account
Closing Stock: Rs. 50,000
Gross Profit
: Rs.77,000
Net Profit
: Rs.69,000
Balance Sheet: Rs.4,58,60010. Suresh Electricals1 April,2009
1. Suresh commenced business with cash Rs.5,00,000
2. Purchase Furniture worth Rs.80,000 for business use
3. Deposited in IDBI Bank Rs.1,00,000
4. Purchase Office Desk paid by cheque Rs.2,000
5. Purchase 10 DVD Players from Aiwa & Co. @ Rs.7,000 each
6. Paid Carriage Rs.250
7. Sold 5 DVD Players for cash @ Rs.9,000 each
8. Sold 5 DVD Players to X & Co. @ Rs.9,000 each
9. Paid Salaries Rs.3,000 and Rent Rs.2,500
Gross Profit
: Rs.19,750
Net Profit
: Rs.14,250
Balance Sheet: Rs.5,84,250
11. Srinivas Automobiles1 April,2009
1. Srinivas started business with cash Rs.5,00,000
2. Purchase Computer Rs.30,000 for office use
3. Purchase Furniture Rs.20,000 for office use
4. Purchase 10 Scooters@ Rs.10,000 each for cash
5. Purchase 10 Scootys @ Rs.5,000 each from Sony & Co.
6. Sold 10 Scooters @ Rs.12,000 each to Sanjay for cash
7. Sold 10 Scootys @ Rs.6,000 each to Sagar
8. Sold Computer for Rs.28,000, which was in office use
9. Paid Electricity Charges Rs.800
10. Paid medical expenses for Srinivas son Rs.500
11. Deposited cash in S B I for Rs.20,000
12. Withdraw cash from S B I for office use Rs.5,00013. Withdraw cash from S B I for private use Rs.2,000
14. Charge Interest on Capital Rs.4,000
15. Charge Interest on Drawings Rs.250
16. Depreciation on Furniture @ 10%
Closing Stock: Nil
Gross Profit
: Rs.30,000
Net Profit
: Rs.23,450
Balance Sheet: Rs.5,74,700
12. Vinay & CompanyBalance sheet as on 31-03-2009Liabilities Amount Rs. Assets
Amount Rs.
Vinay Capital 25,800
Cash
11,000
Usha & Co. 28,800
Ramesh
14,100
Closing Stock
21,700
Equipment
2,400
Furniture
5,400
54,600 54,600
1 April,20091. Purchased Goods from Usha & Co. Rs.13,500
2. Purchased a Machine from Tisco Ltd. Rs.800
3. Sold Ramesh on account Goods worth Rs.18,200
4. Received from Ramesh Rs.15,000
5. Paid Rs.18,200 to Usha & Co.
6. Paid Insurance Premium Rs.120
7. Made Cash Payment :Wages Rs.1,500 (Vinay)& rajesh1000Other Expenses Rs.1,140
8. Paid Rent of Rs.660
9. Proprietor withdraw Rs.200 for his personal use
10. Depreciation on Equipment Rs.35 & Furniture Rs.55
11. Closing Stock Rs.24,700
Gross Profit : Rs.7,700
Net Profit : Rs.3,190
Balance Sheet : Rs.53,690
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