CIE Accounting Paper-2: Specimen Questions 103 - 103 of 103

Passage

The following entries are found in the books of Mr. Iyer for the year ending 31.12. 2010.

Purchases £1500000, Sales £2500000, Opening stock £500000, Returns Outward £45000, Returns Inward £20000, Carriage Inwards £ 45000, Cash in hand £778000, Cash at bank £608000, Wages £24000, Printing & Stationery £45000, Discount allowed £4000, Bad debts £15000, Insurance £25000, Investments £320000, Debtors £530000, Bills receivable £200000, Postage £4000, Commission £2000, Interest £10000, Repairs £4400, Lighting Charges £5000, Telephone £ 1000, Carriage outwards £4000, Car £250000, Interest received £35000, Discount received £4000, Creditors £1250000, Bills Payable £60400, Capital £1000000

He also stated the below mentioned adjustments, which are to be taken into consideration.

(i) Further bad debts £10000, Provision for doubtful [email protected] % and discount on debtors £5000

(ii) Interest is received on [email protected]%

(iii) Depreciation on car [email protected]%

(iv) Interest and wages was outstanding at £2000 and £1000 respectively

(v) Closing stock was valued at £325000

Question number: 103 (5 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

Does Mr. Iyer have net profit or net loss during the year ending 31.12. 2010?

Explanation

Mr. Iyer earns a NET PROFIT during the year 2010 amounting to £660100

Profit and Loss account of Mr Iyer for the year ended 31.12. 2010

shows table in Profit and Loss account of Mr Iyer for the year ended 31.12. 2010

PARTICULARS

AMOUNT

AMOUNT

PARTICULARS

AMOUNT

AMOUNT

To Printing & Stationery

45000

By Gross profit

775000

To Discount allowed

4000

By Interest received

35000

To insurance

25000

By Interest on [email protected]%

16000

To Postage

4000

By discount received

4000

To commission

2000

To interest

10000

Add: O/S interest

2000

12000

To repairs

4400

To Carriage outwards

4000

To Discount on debtors

5000

To Depreciation on [email protected]%

12500

To Telephone charges

1000

To Bad debts

15000

Add: New bad debts

10000

25000

Add: New provision on Doubtful [email protected]%

26000

51000

To Net profit

660100

830000

830000

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