Final Accounts of Sole Proprietorship – Practical Problems and Solutions
Practical Problem No.1
Prepare the FInal Accounts, ie., Manufacturing, Trading and Profit and Loss Account for the year ended on March 31, 2020, and a Balance Sheet as on that date from the following balances extracted from the books of John Enterprises run by Mr. John.
Stock on March 31, 2020 are:
Following liabilities are to be provided:
|(a) Factory power||5,620|
|(b) Rent and rates||3,860|
|(c) Lighting and heating||1,600|
|(d) General expenses:|
|(e) Insurance prepaid||1,700|
Provide depreciation @ 10% on plsnt snf 5% on furniture. Increase bad debts provision by $1,000.
Five-sixth of rent and rates, lighting and heating and insurance are to be allocated to the factory and one-sixth to the office.
In the Books of John Enterprises
Manufacturing Trading and Profit and Loss Account
For the year ended March 31, 2020
Balance Sheet as on March 31, 2020