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+--- Thread: how would we make these adjustments.(Debtors) (/thread-how-would-we-make-these-adjustments-debtors)
how would we make these adjustments.(Debtors) - israrhere - 12-27-2006
Dbtors 40000
a)Sales made on approval basis of Rs 600 is still pending.The profit
included in such goods was at 20% on sales.
b)Debtors included an item of Rs 2500 for goods supplied to the proprietor .Rate of profit was at 20% on sale.
pls reply and explain.THANKS....
- Kashif87 - 01-05-2007
a) No entry is passed for sales made on approval basis, so if the sale has been recorded incorrectly, we shall reverse the entry
SALES 600
TO DEBTORS 600
b) Since the proprietor has taken out the goods, it will be considered as drawings. Entry will be
SALES 2500
TO DEBTORS 2500
DRAWINGS(N-1) 2000
TO PURCHASES 2000
N-1 COST OF SALES = 2500/100*80 = 2000