Final Accounts of Sole Proprietorship: Practical Problem and Solution
Using the balances extracted from the books of John Enterprises (run by Mr. John), prepare the final accounts (i.e., manufacturing trading and profit and loss account) for the year ended 31 March 2020. Also, prepare a balance sheet as on 31 March 2020.
Stock on 31 March 2020 is as follows:
The 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 plant and 5% on furniture. Increase bad debts provision by $1,000.
Five-sixths 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 31 March 2020
Balance Sheet as on March 31, 2020
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.