1 Selling Property

1
1 Selling Property

• Each freehold 55,000
• Sale of one property 127,500
• Less Cost 55,000
• Profit 72,500
• Entries are
• Debit Property 72,500
• Credit Profit on Sale 72,500
• So Property is now -17,500 72,500 55,000

2
2 calculating Sales

• Closing Debtors are 14,898 - 832 14,066
• Debtors a/c
• Debits Credits
• Opening 7,817 32,870 Bank
• Sales 39,951 832 Bad Debt
•   14,066 Closing
• 47,768 47,768
• Provision for Doubtful Debts
• Credit Provision 437
• Debit Expense in PL 437

3
3 Calculating Purchases

• Creditors a/c
• Debits Credits
• Payments 185,298 14,712 Opening
• Closing 18,002 188,588 Purchases  
• 203,300 203,300

4
4 Stock and Cost of Goods Sold (COGS)

• Stock is valued at LOWER OF
• COST or
• NET REALISABLE VALUE (NRV)
• Cost 9,270
• NRV -7,110
• 2,160 Reduce by this amount
• Closing Stock
• Per Trial Balance 49,451
• Adjustment -2,160
• New Closing Stock 47,291 in PL and Balance Sheet
• Cost of Goods Sold
• Opening Stock 32,832
• Purchases 188,588
• -Closing Stock -47,291

5
5 Private sale of Car

• Debit Sales 1,400
• Credit Drawings 1,400
• Drawings
• Per Trial Balance 22,600
• - Adjustment -1,400
• 21,200

6
6 Wage adjustment

• Debit wages 3,650
• Credit sales 3,650
• Cash sales figure
• Per Trial Balance 254,451
• - adjustment (5) -1,400
• adjustment (6) 3,650
• 256,701

7
7 Extra Expenses

• General Expenses adjustments are
• Accrual 4,470 Dr PL Cr BS
• Prepayment 408 Cr PL Dr BS
• General Expenses in PL
• Per Trial Balance 37,146
• Accrual 4,470
• - Prepayment -408
• 41,208

8
8 Interest

• Debit Interest 1,544 PL
• Credit Bank 1,544 BS
• New Bank figure
• Per Trial Balance -3,431
• Credit interest -1,544
• New Balance -4,975

9
9 Loan Interest

• Loan Interest
• 12,000 X 15 1,800
• Debit Interest 1,800
• Credit Accrual 1,800
• New Interest figure 1,544
• 1,800
• 3,344
• New Accrual figure 4,470
• 1,800
• 6,270

10
10 Depreciation

• Depreciation - Annual
• Van 20,800 X 20 4,160
• Fittings (16,300 - 4,200) 12,100 X 10
  1,210
• Total in PL 5,370
• In Balance Sheet - Accumulated Depreciation
• Vans Fittings
• Per Trial Balance 3,710 4,200
• Annual Charge 4,160 1,210
• New Accumulated figure 7,870 5,410