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Explain point 6 adjustment in detail
Answers (7)
Suppose bank overdraft actual amount is x rupees so first it is given that 20% is secured against stock so net bank o/d given will be x-20%. Further a margin of 20% is deducted from the net bank o/d so the overall bank o/d will be (x-20%)-20% As per Q x-20%)-20%= 160,000 On solving this you will get x= 250,000
siva chaitanya
What is the effect of that transaction in final accounts
It is given to find out closing stock
siva chaitanya
Now this bank overdraft should be 2,50,000 and should be shown on liability side of balance sheet. Then here how to compute closing stock
As per question Bank overdraft as on 31 St March 2020 = 80% of real value of stock after deducting 20% margin from that stock Let full value of stock =X So,160000=80%of X- 20%(80%of X) x =250000
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