2. Financial Accounting 1 Lecture – 33 Question Following trial balance has been extracted from the books of Javed Furniture Manufacturers on June 30, 2002.

3. Financial Accounting 2 Lecture – 33 Javed Furniture Manufacturers Trial Balance As On June 30, 2002 Title of AccountDr. Rs.Cr. Rs. Raw Material stock Jul. 01, 200152,500 Finished goods stock Jul. 01, 200197,250 Work in process Jul. 01, 200133,750 Wages812,500 Freight inward8,750 Raw material purchased925,000 Plant and machinery700,000 Office equipment50,000

4. Financial Accounting 3 Lecture – 33 Title of AccountDr. Rs.Cr. Rs. Acc. depreciation Plant125,000 Acc. depreciation Office equipment20,000 General factory overheads77,500 Office electricity18,750 Factory power34,250 Salaries administrative staff110,000 Salaries sales staff75,000 Salesman commission28,750 Rent30,000 Insurance10,500

5. Financial Accounting 4 Lecture – 33 Title of AccountDr. Rs.Cr. Rs. General Admin Expense33,500 Bank Charges5,750 Discounts Allowed12,000 Carriage outward14,750 Sales2,500,000 Trade Debtors355,750 Trade Creditors312,500 Bank142,000 Cash21,250 Drawings50,000 Capital July 01, 20-1742,000 TOTAL3,699,500

6. Financial Accounting 5 Lecture – 33 Notes: Stocks on June 30, 2002 Raw Material Rs. 60,000 Finished Goods Rs. 100,000 Work in Process Rs. 37,500. Out of total wages Rs. 450,000 is direct and balance indirect. 80% of Rent and Insurance are to be apportioned to factory and balance to administrative office. Depreciation to be charged on Machinery at 20% and Office Equipment at 10% on cost.

7. Financial Accounting 6 Lecture – 33 Required You are required to prepare profit and loss account for the year and balance sheet as on june30, 20-2

8. Financial Accounting 7 Lecture – 33 Solution Javed Furniture Manufacturer Profit and Loss Account for the Year Ending June 30, 2002 Particulars Sales Less: Cost of Goods Sold Gross Profit Less: Administrative Expenses Less: Selling Expenses Operating Profit Less: Financial Charges Net Profit Before Tax

9. Financial Accounting 8 Lecture – 33 Solution Javed Furniture Manufacturer Profit and Loss Account for the Year Ending June 30, 2002 ParticularsNoteRs. Sales Less: Cost of Goods Sold1 2,500,000 2,016,400 Gross Profit Less: Administrative Expenses2 Less: Selling Expenses3 483,600 175,350 118,500 Operating Profit189,750 Less: Financial Charges417,750 Net Profit Before Tax172,000 NOTE: USE DOUBLE LINE

10. Financial Accounting 9 Lecture – 33 Solution Javed Furniture Manufacturer Balance Sheet As At June 30, 2002 Particulars Fixed Assets at WDV Current Assets Current Liabilities Working Capital Total Assets Employed Financed By: Capital Add: Profit for the Year Less: Drawings Total

11. Financial Accounting 10 Lecture – 33 Solution Javed Furniture Manufacturer Balance Sheet As At June 30, 2002 ParticularsNoteAmount Rs. Fixed Assets at WDV5460,000 Current Assets6716,500 Current Liabilities7312,500 Working Capital404,000 Total Assets Employed864,000 Financed By: Capital Add: Profit for the Year Less: Drawings 742,000 172,000 50,000 Total864,000 NOTE: USE DOUBLE LINE NOTE: USE DOUBLE LINE

12. Financial Accounting 11 Lecture – 33 Working 1 – Cost of Goods Sold Cost of Goods Sold Statement Stock of Raw Material Jul 01, 2001 52,500 Add. Purchases 925,000 Add. Carriage Inward 8,750 986,250 Less: Closing Stock of Raw Material (60,000) Raw Material Consumed 926,250 Direct labour 450,000 Factory Overheads General Factory Overheads77,500 Power34,250 Rent (80% of 30,000)24,000 Insurance (80% of 10,500) 8,400 Plant dep. (Note 5) 140,000 Indirect Labour 362,500 646,650 Total Factory Cost2,022,900 Add: Work in Process Jul 01, 2001 33,750 Less: Work in Process Jun 30, 2002 (37,500) Cost of Goods Manufactured2,019,150 Add: Finished Goods Stock Jul 01, 2001 97,250 Less: Finished Goods Stock Jun 30, 2002 (100,000) Cost of Goods Sold 2,016,400 THIS SLIDE WILL BE SHOWN IN 3 PARTS NOTE: USE DOUBLE LINE

13. Financial Accounting 12 Lecture – 33 Cost of Goods Sold Statement Stock of Raw Material Jul 01, 2001 52,500 Add. Purchases 925,000 Add. Carriage Inward 8,750 986,250 Less: Closing Stock of Raw Material (60,000) Raw Material Consumed 926,250 Direct labour 450,000 PART 1

14. Financial Accounting 13 Lecture – 33 Raw Material Consumed 926,250 Direct labour 450,000 Factory Overheads General Factory Overheads77,500 Power34,250 Rent (80% of 30,000)24,000 Insurance (80% of 10,500) 8,400 Plant dep. (Note 5) 140,000 Indirect Labour 362,500 646,650 Total Factory Cost2,022,900 PART 2

15. Financial Accounting 14 Lecture – 33 Working 1 – Cost of Goods Sold Total Factory Cost2,022,900 Add: Work in Process Jul 01, 2001 33,750 Less: Work in Process Jun 30, 2002 (37,500) Cost of Goods Manufactured2,019,150 Add: Finished Goods Stock Jul 01, 2001 97,250 Less: Finished Goods Stock Jun 30, 2002 (100,000) Cost of Goods Sold 2,016,400 NOTE: USE DOUBLE LINE PART 3

16. Financial Accounting 15 Lecture – 33 Working 2 – Administrative Expenses Administrative Salaries110,000 Rent (20% of 30,000) 6,000 Insurance (20% of 10,500) 2,100 General Admin Expenses 33,500 Office Electricity 18,750 Depreciation Office Equip. (Note5) 5,000 Administrative Expenses175,350 NOTE: USE DOUBLE LINE

17. Financial Accounting 16 Lecture – 33 Working 3 – Selling Expenses Salesman’s Salary 75,000 Commission on Sales 28,750 Carriage Outward 14,750 Administrative Expenses 118,500 NOTE: USE DOUBLE LINE

18. Financial Accounting 17 Lecture – 33 Working 4 – Financial Expenses Bank Charges 5,750 Discount Allowed 12,000 Administrative Expenses 17,750 NOTE: USE DOUBLE LINE

19. Financial Accounting 18 Lecture – 33 Working 5 – Fixed Assets at WDV Acc. Depreciation WDV Cost RateOpening For the Closing Year Plant and Mach.700,000 20%125,000 140,000 265,000 435,000 Office Equip. 50,000 10% 20,000 5,000 25,000 25,000 145,000 460,000 NOTE: USE DOUBLE LINE

20. Financial Accounting 19 Lecture – 33 Working 6 – Current Assets Stock Raw Material 60,000 Work in Process 37,500 Finished Goods100,000 Debtors355,750 Bank142,000 Cash 21,250 Current Assets 716,500 NOTE: USE DOUBLE LINE

21. Financial Accounting 20 Lecture – 33 Working 7 – Current Liabilities Creditors312,500 NOTE: USE DOUBLE LINE