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    cutesafa's Avatar
    cutesafa Posts: 1, Reputation: 1
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    #1

    Jul 8, 2009, 08:03 AM
    Opening stock not given .
    in the question below opening stock is not given... I want to know how to find that...

    The following is the trial balance as on 31st march 2006

    1. Purchases... 2,20,000
    stock as on 31st march 2006... 30,000
    goods sent as gratis... 3000
    freight and duty... 12,000
    sales... 3,30,000
    debtors.. 32,000 and creditors 20,000
    drawings... 8000
    interest on capital.. 2000
    advertisements... 5000
    Goodwill... 10,000
    travelling expenses... 300
    bank overdraft... 3,250
    horses and cart... 2,600
    bills receivable... 1,200
    bills payable... 2,100
    depreciation on furniture... 150
    interest on overdraft... 200
    furniture... 5,500
    office expenses... 1,500
    palnt and machinery... 6,1900
    capital... 40,000




    and how to do the following adjustment enteries

    1.bad debts to be written off anounts to rs. 2000 and a provision of 5%is required for doubtful debts

    2.closing stock includes goods of cost Rs.3000 bought on 29march 2006 for which invoice is not received and hence, not recorded in the day book


    and what does this statement mean "goods sent as gratis to be recorded amounts to Rs.500".. is it saying that the value recorded before is wrong or do we have to add this amount to the already given amount..


    plzzzzzzzzzzzzzz help... thnx in advance... :)
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
     
    #2

    Jul 8, 2009, 11:58 PM

    Please recheck your trial balance. I agree that the closing stock never appears in the trial balance, it always outside as an adjustment. If you remove the figure of 30,000, your trial balance will be short by 42,000 on the debit side. In the absence of any information this figure of 42,000 may be treated as opening stock.

    I am sure you know how to record adjustments 1 and 2. The value of 500 representing gratis goods, this represents the value in stock and the rest has been distributed among customers. Debit Promotion expenses and credit Goods sent as gratis 2,500

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