[cutesafa]

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]

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