Question
State the meaning of:
Income received in advance.
Income received in advance.
✓
Answer
Income Received in Advance: This refers to the income received whose actual realisation of benefits will occur in the next accounting period. These are also called unearned incomes.
Example: Commission of ₹ 1,200 for the year 2011-12 is received in 2010-11. This commission does not belong to the current year as it is related with the work to be done in the next accounting year i.e., 2011-12.
Example: Commission of ₹ 1,200 for the year 2011-12 is received in 2010-11. This commission does not belong to the current year as it is related with the work to be done in the next accounting year i.e., 2011-12.
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A Company purchased a Machine on 1-4-2008 at a cost of ₹ 3,10,000, estimated residual value ₹ 10,000 with a useful life of 15 years. Depreciation is charged under straight line method till 31-3-2018. After 10 years, an expert recommended that the asset to be used for 10 more years. What is the depreciation for the year 2018-19 under straight line method assuming residual value to remain same?
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Total of the purchase invoices recorded in the Purchases Book is posted to debit side of the Purchases Account in the Ledger and credited to the accounts of suppliers. Do you agree? Give reasons.
From the following information, prepare the Trading Account for the year ended 31st March, 2017:
Adjusted Purchases ₹ 15,00,000; Sales ₹ 21,40,000; Returns Inwards ₹ 40,000; Freight and Packing ₹ 15,000; Packing Expenses on Sales ₹ 20,000; Depreciation ₹ 36,000; Factory Expenses ₹ 60,000; Closing Stock ₹ 1,20,000.
Adjusted Purchases ₹ 15,00,000; Sales ₹ 21,40,000; Returns Inwards ₹ 40,000; Freight and Packing ₹ 15,000; Packing Expenses on Sales ₹ 20,000; Depreciation ₹ 36,000; Factory Expenses ₹ 60,000; Closing Stock ₹ 1,20,000.
From the information given below ascertain the profit for the year:
| ₹ | |
| Capital at the beginning of the year, | 70,000 |
| Additional capital introduced during the year, | 17,500 |
| Stock, | 59,500 |
| Sundry debtors, | 25,900 |
| Business premises, | 8,600 |
| Machinery, | 2,100 |
| Sundry creditors, | 33,400 |
| Drawings made during the year, | 26,400 |
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Calculate Closing Stock from the following:
