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Page No 23.43:

Question 1:

Atul does not keep proper records of his business. He gives you the following information:
 

  (₹)
Opening Capital 2,00,000
Closing Capital 2,50,000
Drawings made during the year 60,000
Capital added during the year 75,000

Calculate profit or loss for the year.

Answer:

Statement of Profit or Loss
for the year ended ….
Particulars Amount
(Rs)
Capital at the end of the year 2,50,000
  Add: Drawings made during the year 60,000
  Less: Additional capital introduced during the year 75,000
Adjusted capital at the end of the year 2,35,000
  Less: Capital in the beginning of the year 2,00,000
Profit made during the year 35,000
   

Page No 23.43:

Question 2:

Mr. Joshi started a business with a capital of ₹ 5,00,000. At the end of the year his position was:

  (₹)
Cash in hand 15,000
Cash at bank 70,000
Sundry Debtors 1,20,000
Stock 2,40,000
Furniture 75,000
Machinery 2,00,000

Sundry creditors at this date totalled ₹ 80,000. During the year he introduced a further capital of ₹ 1,50,000 and withdrew for household expenses ₹ 90,000.
You are required to calculate profit or loss during the year.

Answer:

Statement of Affairs
as on March …
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 80,000 Cash in Hand 15,000
Capital (Balancing Figure) 6,40,000 Cash at Bank 70,000
    Sundry Debtors 1,20,000
    Stock 2,40,000
    Furniture 75,000
    Machinery 2,00,000
  7,20,000   7,20,000
       

 

Statement of Profit or Loss
for the year ended ….
Particulars Amount
(Rs)
Capital at the end of the year 6,40,000
  Add: Drawings made during the year 90,000
  Less: Additional capital introduced during the year 1,50,000
Adjusted capital at the end of the year 5,80,000
  Less: Capital in the beginning of the year 5,00,000
Profit made during the year 80,000
   



Page No 23.44:

Question 3:

Mr. Vasudev does not keep proper records of his business. He provided following information. You are required to prepare a statement showing the profit or loss for the year.

  (₹)
Owner's Equity at the beginning of the year 15,00,000
Bills Receivable 60,000
Cash in hand 80,000
Furniture 9,00,000
Building 10,00,000
Creditors 6,00,000
Stock in trade 2,00,000
Further capital introduced 3,20,000
Drawings made during the period 80,000

Answer:

Statement of Affairs
as on March …
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 6,00,000 Cash in Hand 80,000
Capital (Balancing Figure) 16,40,000 Furniture 9,00,000
    Stock in trade 2,00,000
    Building 10,00,000
    Bills Receivable 60,000
  22,40,000   22,40,000
       

 

Statement of Profit or Loss
for the year ended ….
Particulars Amount
(Rs)
Capital at the end of the year 16,40,000
  Add: Drawings made during the year 80,000
  Less: Additional capital introduced during the year 3,20,000
Adjusted capital at the end of the year 14,00,000
  Less: Capital in the beginning of the year 15,00,000
Loss incurred during the year 1,00,000
   

Page No 23.44:

Question 4:

Tulsi started business on 1st April, 2016 with a capital of ₹ 4,50,000. On 31st March, 2017 her position was as under:

  (₹)
Cash 99,000
Bills Receivable 75,000
Stock 48,000
Land and Building 1,80,000
Furniture 50,000

She owed ₹ 45,000 to her friend Parvati on that date. She withdrew ₹ 8,000 per month for household purposes. Ascertain her profit or loss for the year ended 31st March, 2017.

Answer:

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Loan from Friend 45,000 Cash 99,000
Capital (Balancing Figure) 4,07,000 Bills Receivable 75,000
    Stock 48,000
    Land and Building 1,80,000
    Furniture 50,000
  4,52,000   4,52,000
       

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 4,07,000
  Add: Drawings made during the year  (8,000 × 12) 96,000
  Less: Additional capital introduced during the year -
Adjusted capital at the end of the year 5,03,000
  Less: Capital in the beginning of the year 4,50,000
Profit made during the year 53,000
   

Page No 23.44:

Question 5(A):

From the following information, calculate capital at the beginning :

  ₹
Capital at the end of the year 24,00,000
Drawing Made during the year : ₹ 10,000 per month  
Fresh Capital introduced during the year 4,00,000
Profit of the current year 6,60,000

Answer:

Statement of Profit or Loss
for the year ended December 31, 2005
Particulars Amount
(Rs)
Capital at the end of the year 24,00,000
 
Add: Drawings made during the year  (10,000 × 12)
1,20,000
 
Less: Additional capital introduced during the year
4,00,000
Adjusted capital at the end of the year 21,20,000
 
Less: Capital in the beginning of the year (Balancing Figure)
14,60,000
Profit made during the year 6,60,000
   

Page No 23.44:

Question 5(B):

Calculate Closing Capital:
Opening Capital ₹ 90,000; Profit for the year ₹ 25,000; Drawings ₹ 17,000. During the year proprietor sold ornaments of his wife for ₹ 40,000 and invested the same in business.

Answer:


Closing Capital + Drawings - Additional Capital - Opening Capital = ProfitsClosing Capital = Opening Capital+ Additional Capital + Profits - DrawingsClosing Capital =  90,000 + 40,000 + 25,000 - 17,000 Closing Capital = Rs 1,38,000



Page No 23.45:

Question 6:

Suchitra started a business on 1st April, 2013 with a Capital of ₹ 50,00,000. On 31st March, 2014 her total Assets were ₹ 60,00,000 and Creditors were 3,00,000. She withdrew during the year for her personal expenses ₹ 10,000 per month upto 30th June, 2013 and thereafter ₹ 15,000 per month upto 31st March, 2014. During the year she sold her personal investments of ₹ 80,000 at 5% loss and introduced that amount in the business.
You are required to prepare a Statement of Profit or Loss for the year ending 31st March, 2014.

Answer:

Statement of Profit or Loss
for the year ended March 31, 2014
Particulars Amount
(Rs)
Capital at the end of the year (60,00,000 – 3,00,000) 57,00,000
 
Add: Drawings made during the year (10,000 × 3 + 15,000 × 9)
1,65,000
 
Less: Additional capital introduced during the year (WN)
76,000
Adjusted capital at the end of the year 57,89,000
 
Less: Capital in the beginning of the year
50,00,000
Profit made during the year 7,89,000
   

Working Note: Calculation of additional capital introduced during the year

Value of Investments  = 80,000 Loss =  80,000 × 5% =   4,000_Sale Value of Investments = Rs 76,000(Aditional Capital) 

Page No 23.45:

Question 7:

Following incomplete information is available from records maintained by Mr. X:

  1-4-2016 31-3-2017
  ₹ ₹
Cash 1,000 1,500
Bank 8,000 10,000
Debtors 10,000 12,000
Stock 7,000 6,000
Machinery 20,000 20,000
Creditors 11,000 10,000
Bank Loan 12,000 12,000
During the year Mr. X introduced in the business the amount realised on sale of ₹ 10,000 investments at the premium of 5%. Personal expenses of Mr. X paid from business account amounted to ₹ 1,250 per month. Prepare a statement to calculate Profit (or Loss) during the year.

Answer:

Statement of Affairs
as on April 01, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 11,000 Cash 1,000
Bank Loan 12,000 Bank 8,000
Capital (Balancing Figure) 23,000 Debtors 10,000
    Stock 7,000
    Machinery 20,000
  46,000   46,000
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 10,000 Cash 1,500
Bank Loan 12,000 Bank 10,000
Capital (Balancing Figure) 27,500 Debtors 12,000
    Stock 6,000
    Machinery 20,000
  49,500   49,500
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 27,500
  Add: Drawings made during the year (1,250 × 12) 15,000
  Less: Additional capital introduced during the year (WN) 10,500
Adjusted capital at the end of the year 32,000
  Less: Capital in the beginning of the year 23,000
Profit made during the year 9,000
   

Working Note: Calculation of additional capital introduced during the year

Value of Investments  = 10,000 Premium                   =   500 (10,000 × 5%)Sale Value of Investments = Rs 10,500(Aditional Capital) 

Page No 23.45:

Question 8:

Raghuveer keeps incomplete records. His position was as follows:

  31st March, 2016
(₹)
31st March, 2017
(₹)
Cash in Hand 2,000 3,000
Cash at Bank 30,000 20,000
Stock-in-Trade 2,00,000 1,90,000
Sundry Debtors 85,000 1,40,000
Plant & Machinery 1,50,000 2,70,000
Fixtures and Fittings 18,000 15,000
Sundry Creditors 2,20,000 2,90,000

During the year, Raghuveer introduced ₹ 50,000 as further capital in the business and withdrew ₹ 7,500 per month. From the above information, show Profit or Loss for the year ended 31st March, 2017.

Answer:

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 2,20,000 Cash in Hand 2,000
Capital (Balancing Figure) 2,65,000 Cash at Bank 30,000
    Stock-in-Trade 2,00,000
    Sundry Debtors 85,000
    Plant & Machinery 1,50,000
    Fixtures & Fittings 18,000
  4,85,000   4,85,000
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 2,90,000 Cash in Hand 3,000
Capital (Balancing Figure) 3,48,000 Cash at Bank 20,000
    Stock-in-Trade 1,90,000
    Sundry Debtors 1,40,000
    Plant & Machinery 2,70,000
    Fixtures & Fittings 15,000
  6,38,000   6,38,000
       

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 3,48,000
  Add: Drawings made during the year (7,500 × 12) 90,000
  Less: Additional capital introduced during the year 50,000
Adjusted capital at the end of the year 3,88,000
  Less: Capital in the beginning of the year 2,65,000
Profit made during the year 1,23,000
   

Page No 23.45:

Question 9:

On 1st April 2014, Mr, Ghosh started business with a capital of ₹ 5,00,000. He kept his books on single entry basis. Soon after he purchased furniture for ₹ 40,000 and purchased goods for ₹ 3,00,000. During the year he borrowed ₹ 1,00,000 from his brother and introduced further capital of his own amounting to ₹ 80,000.

On 31st March, 2015, there were sundry debtors amounting to ₹ 2,20,000 and creditors amounted to ₹ 1,40,000. Stock was valued at ₹ 4,50,000. Cash in hand ₹ 15,400 and Bank Overdraft ₹ 40,000

During the year Mr. Ghosh withdrew ₹ 2,000 per week for his family expenses. You are informed that included in sundry debtors is an irrecoverable amount of ₹ 5,000. He also took goods from the business for his personal use amounting to ₹ 4,000.
You are required to calculate his profit or loss during the year.

Answer:

Statement of Affairs
as on March …
Liabilities Amount (Rs) Assets Amount (Rs)
Loan from Brother 1,00,000 Cash in Hand 15,400
Creditors 1,40,000 Furniture 40,000
Bank Overdraft 40,000 Sundry Debtors 2,20,000  
Capital (Balancing Figure) 4,40,400
Less: Bad Debts
5,000 2,15,000
    Stock 4,50,000
  7,20,400   7,20,400
       

 

Statement of Profit or Loss
for the year ended March 31, 2015
Particulars Amount
(Rs)
Capital at the end of the year 4,40,400
 
Add: Drawings made during the year (2,000 × 52) + (4,000)
1,08,000
 
Less: Additional capital introduced during the year
80,000
Adjusted capital at the end of the year 4,68,400
 
Less: Capital in the beginning of the year
5,00,000
Loss incurred during the year 31,600
   



Page No 23.46:

Question 10:

The Capital of Sh. Madhusudan on 1st April, 2016 was ₹ 5,00,000 and on 31st March, 2017 was ₹ 4,80,000. He has informed you that he withdrew from the business ₹ 8,000 per month for his private use. He paid ₹ 20,000 for his income-tax and the installment of the loan of his personal house at the rate of ₹ 15,000 per month from the business. He had also sold his shares of Reliance Company costing ₹ 1,00,000 at a profit of 20% and invested half of this amount in the business. Calculate the profit or loss of the business.

Answer:

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 4,80,000
  Add: Drawings made during the year (WN1) 2,96,000
  Less: Additional capital introduced during the year (WN2) 60,000
Adjusted capital at the end of the year 7,16,000
  Less: Capital in the beginning of the year 5,00,000
Profit made during the year 2,16,000
   

Working Note:
WN 1: Calculation of Drawings

Cash Withdrawn                    =    96,000 (8,000 × 12)Payment of Income tax          =    20,000Instalment of Personal Loan  = 1,80,000 (15,000 × 12)                                           Rs  2,96,000

WN 2: Calculation of additional capital

Value of Shares = 1,00,000 Add: Profit       =    20,000Sale Value        = Rs 1,20,000Aditional Capital = Rs 60,000 (1,20,0002) 

Page No 23.46:

Question 11:

Charu do not keep proper books of accounts. Prepare the statement of profit or loss for the year ending 31-3-2017 from the following information:

  1-4-2016 31-3-2017
  ₹ ₹
Cash in hand 10,000 36,000
Debtors 20,000 80,000
Creditors 10,000 46,000
Bills Receivable 20,000 24,000
Bills Payable 4,000 42,000
Car 80,000
Stock 40,000 30,000
Furniture 8,000 48,000
Investment 40,000 50,000
Bank balance 1,00,000 90,000

The following adjustments are to be made:
(a) Proprietor withdrew cash ₹ 5,000 per month for private use.
(b) Depreciation @ 5% on Car and @ 10% on furniture.
(c) Outstanding Rent ₹ 6,000.
(d) Fresh Capital introduced during the year ₹ 30,000.

Answer:

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 10,000 Cash in Hand 10,000
Bills Payable 4,000 Cash at Bank 1,00,000
Capital (Balancing Figure) 2,24,000 Stock 40,000
    Debtors 20,000
    Bills Receivable 20,000
    Furniture 8,000
    Investment 40,000
  2,38,000   2,38,000
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 46,000 Cash in Hand 36,000
Bills Payable 42,000 Cash at Bank 90,000
Capital (Balancing Figure) 3,50,000 Stock 30,000
    Debtors 80,000
    Bills Receivable 24,000
    Furniture 48,000
    Investment 50,000
    Car 80,000
  4,38,000   4,38,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 3,50,000
  Add: Drawings made during the year (5,000  12) 60,000
  Less: Additional capital introduced during the year 30,000
Adjusted capital at the end of the year 3,80,000
  Less: Capital in the beginning of the year 2,24,000
Profit Before Adjustment 1,56,000
   Less: Depreciation on Car 4,000
  Less: Depreciation on Furniture 4,800
  Less: Outstanding Rent 6,000
Profit made during the year 1,41,200
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Opening Capital 2,24,000   Cash in Hand 36,000
Add: Net Profit
1,41,200   Cash at Bank 90,000
Add: Fresh Capital
30,000   Stock 30,000
Less: Drawings
60,000 3,35,200 Debtors 80,000
Creditors 46,000 Bills Receivable 24,000
Bills Payable 42,000 Investment 50,000
Outstanding Rent 6,000 Furniture 48,000  
   
Less: Depreciation
4,800 43,200
    Car 80,000  
   
Less: Depreciation
4,000 76,000
  4,29,200   4,29,200
       

 



Page No 23.47:

Question 12:

Ashok keeps incomplete records. The position of his business on 1st April, 2016 was as follows:
Cash in Hand ₹ 2,200; Cash at Bank ₹ 5,400; Stock ₹ 25,100; Sundry Debtors ₹ 18,700; Furniture ₹ 6,000; Sundry Creditors ₹ 13,500.
His position on 31st March, 2017 was as follows:
Cash in Hand ₹ 1,500; Cash at Bank ₹ 8,400; B/R ₹ 3,300; Stock ₹ 26,000; Sundry Debtors ₹ 24,600; Furniture ₹ 8,000; Sundry Creditors ₹ 14,200.
During the year he had withdrawn from the business ₹ 18,000, of which ₹ 9,200 were spent in purchasing a Typewriter for the business.
(a) Depreciate furniture and typewriter by 10%.
(b) Write off ₹ 600 as Bad-Debts.
(c) Make a provision of 5% on Debtors for doubtful debts.
Calculate the profit or loss of his business for the year ended 31st March, 2017 and prepare a final statement of affairs, after the above adjustments.

Answer:

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 13,500 Cash in Hand 2,200
Capital (Balancing Figure) 43,900 Cash at Bank 5,400
    Stock 25,100
    Sundry Debtors 18,700
    Furniture 6,000
  57,400   57,400
       
 
Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 14,200 Cash in Hand 1,500
Capital (Balancing Figure) 66,800 Cash at Bank 8,400
    Stock 26,000
    Sundry Debtors 24,600
    Bills Receivable 3,300
    Furniture 8,000
    Typewriter 9,200
  81,000   81,000
       
 
Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 66,800
  Add: Drawings made during the year (18,000 – 9,200) 8,800
  Less: Additional capital introduced during the year  
Adjusted capital at the end of the year 75,600
  Less: Capital in the beginning of the year 43,900
Profit Before Adjustment 31,700
  Less: Depreciation on Furniture 800
  Less: Depreciation on Typewriter 920
  Less: Bad Debts 600
  Less: Provision for Doubtful Debts 1,200
Profit made during the year 28,180
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 14,200 Cash in Hand 1,500
Opening Capital 43,900   Cash at Bank 8,400
Add: Net Profit
28,180   Stock 26,000
Less: Drawings
8,800 63,280 Bills Receivable 3,300
    Sundry Debtors 24,600  
   
Less: Bad Debts
600  
   
Less: Provision for Bad Debts
1,200 22,800
    Furniture 8,000  
   
Less: Depreciation
800 7,200
    Typewriter 9,200  
   
Less: Depreciation
920 8,280
       
  77,480   77,480
       

Page No 23.47:

Question 13:

From the details given below find out the Credit Sales and Total Sales :

  ₹
Opening Debtors 60,000
Closing Debtors 75,000
Discount allowed 4,400
Sales Return 12,000
Bad-Debts 5,600
Provision for Bad-Debts 3,800
B/R received from Debtors 16,000
B/R dishonoured 4,000
B/R discounted 10,000
Discounted bills dishonoured 3,000
Cash Sales 1,05,000
Cash received from Debtors (including ₹ 6,000 against a debt previously written off) 3,08,000
Cheques received from Debtors 32,000

Answer:

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

60,000

Cash A/c

3,02,000

Bill Receivable A/c

4,000

Sales Return A/c

12,000

Bank A/c

3,000

Bad-Debts A/c

5,600

Sales A/c (Credit)

3,80,000

Bill Receivable A/c

16,000

 

 

Discount Allowed

4,400

 

 

Bank A/c

32,000

 

 

Balance c/d

75,000

 

4,47,000

 

4,47,000

 

 

 

 


Total Sales = Cash Sales + Credit Sales

Total Sales = 1,05,000 + 3,80,000 = 4,85,000

Page No 23.47:

Question 14:

Find out the Credit Purchases from the details given below:

  ₹
Balance of Creditors on 1st April 2018 32,000
Balance of Creditors on 31st March, 2019 46,000
Cash paid to Creditors 2,20,000
Cheques issued to Creditors 60,000
Purchases Returns 10,000
Discount received from Creditors 6,600
Cash Purchases 1,15,000
B/P accepted 16,000
B/P dishonoured 2,000
B/R endorsed to Creditors 7,000
Endorsed B/R dishonoured 3,000

Answer:

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c

2,20,000

Balance b/d

32,000

Discount Received A/c

6,600

Bills Payable A/c

2,000

Bills Payable A/c

16,000

Bills Receivable A/c

3,000

Purchases Return A/c

10,000

Purchases A/c (Credit)

3,28,600

Bills Receivable A/c

7,000

 

 

Bank A/c

60,000

 

 

Balance c/d

46,000

 

 

 

3,65,600

 

3,56,600

 

 

 

 



Page No 23.48:

Question 15:

Anand Mohan has kept incomplete books. From the following particulars, prepare his Final Accounts for the year ending 31st March, 2019:
Receipts:- Received from Debtors ₹ 37,000; Fresh Capital brought in cash ₹ 20,000; Commission Received ₹ 2,800; Cash Sales ₹ 95,000.
Payments:- Paid to Creditors ₹ 35,000; Cash Purchases ₹ 26,500; Ornaments for his wife ₹ 22,000; Wages ₹ 18,800; Rent ₹ 8,400; Salary ₹ 12,000.
His Other Assets and Liabilities:-
 

  31st March, 2018 31st March, 2019
  ₹ ₹
Debtors 15,600 18,000
Creditors 15,400 13,000
Machinery 36,000 36,000
Stock 28,000 21,200
Cash 5,000
 
Adjustments :-
(1) Unpaid wages ₹ 1,500.
(2) Provide for Doubtful Debts at 5% on Debtors.

Answer:

Trading Account

for the year ended March 31, 2012

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

28,000

Sales (Cash + Credit)

1,34,400

Purchases (Cash + Credit)

59,100

Closing Stock

21,200

Wages

18,800

 

 

 

  Add: Outstanding

1,500

20,300

 

 

Gross Profit

48,200

 

 

 

1,55,600

 

1,55,600

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2012

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Salary

12,000

Gross Profit

48,200

Rent

8,400

Commission

2,800

Bad Debts

900

 

 

Net Profit

29,700

 

 

 

51,000

 

51,000

 

 

 

 

 

Balance Sheet

as on March 31, 2012

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

69,200

 

Cash in Hand

37,100

  Add: Additional Capital

20,000

 

Closing Stock

21,200

  Less:  Drawings

22,000

 

Debtors

18,000

 

  Add: Net Profit

29,700

96,900

  Less: Bad Debts

900

17,100

Creditors

13,000

Machinery

36,000

Unpaid Wages

1,500

 

 

 

1,11,400

                

1,11,400

 

 

 

 

 
Working Notes:

Balance Sheet

as on March 31, 2011

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

15,400

Debtors

15,600

Capital (Balancing figure)

69,200

Machinery

36,000

 

 

Stock

28,000

 

 

Cash

5,000

 

 

 

 

 

84,600

 

84,600

 

 

 

 

 

Cash Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

5,000

Creditors A/c

35,000

Capital A/c

20,000

Drawings A/c

22,000

Debtors A/c

37,000

Purchases A/c

26,500

Sales A/c

95,000

Wages A/c

18,800

Commission A/c

2,800

Salaries A/c

12,000

 

 

Rent A/c

8,400

 

 

Balance c/d

37,100

 

1,59,800

 

1,59,800

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

15,600

Cash A/c

37,000

Sales A/c

39,400

Balance c/d

18,000

 

 

 

 

 

55,000

 

55,000

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c

35,000

Balance b/d

15,400

Balance c/d

13,000

Purchases A/c

32,600

 

 

 

 

 

48,000

 

48,000

 

 

 

 

Page No 23.48:

Question 16:

Mukesh Khanna has not kept proper books. However, he gives you the following information relating to the year 2018-19:


SUMMARY OF HIS CASH BOOK
  (₹)   (₹)
To Balance b/d 8,100 By Payment to Creditors 56,200
To Received from Debtors 75,000 By Carriage 1,270
To Cash Sales 52,000 By Salaries 24,000
To Sales of Old Newspapers 420 By Rent 16,000
To Loan from Mrs. Khanna
@ 15% p.a. on 1st July, 2018
8,000 By Purchases of Cycle for his son 1,500
    By Furniture Purchased 12,000
    By Balance c/d 32,550
       
  1,43,520 1,43,520
   

The following balances existed on 1st April, 2018 - Debtors ₹ 24,200; Furniture ₹ 18,000; Stock ₹ 30,000; Creditors ₹ 18,000.
The following balances existed on 31st March, 2019 - Debtors ₹ 20,800; Furniture ₹ 30,000; Stock ₹ 35,950; Creditors ₹ 34,600.
Adjustments:-
(1) Depreciate Furniture by 10%.
(2) Provide upto-date interest on Mrs. Khanna's Loan.
Prepare Trading and Profit and Loss A/c for the year ending 31st March, 2019 and a Balance Sheet as at that date.

Answer:

Trading Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

30,000

Sales (Cash + Credit)

1,23,600

Purchases (Credit)

72,800

Closing Stock

35,950

Carriage

1,270

 

 

Gross Profit

55,480

 

 

 

1,59,550

 

1,59,550

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Salary

24,000

Gross Profit

55,480

Rent

16,000

Sale of Old Newspapers

420

Depreciation on Furniture

3,000

 

 

Outstanding Interest on Loan (for 9 months)

900

 

 

Net Profit

12,000

 

 

 

55Ì®,900

 

55,900

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

62,300

 

Cash in Hand

32,550

  Less:  Drawings

1,500

 

Closing Stock

35,950

  Add: Net Profit

12,000

72,800

Furniture

18,000

 

Creditors

34,600

  Add: Additions

12,000

 

Unpaid Interest on Loan

900

  Less: Depreciation

3,000

27,000

Loan from Mrs Khanna

8,000

Debtors

20,800

 

 

 

 

 

1,16,300

                

1,16,300

 

 

 

 

 
Working Notes:

Balance Sheet

as on March 31, 2018

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

18,000

Debtors

24,200

Capital (Balancing figure)

62,300

Furniture

18,000

 

 

Stock

30,000

 

 

Cash

8,100

 

 

 

 

 

80,300

 

80,300

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

24,200

Cash A/c

75,000

Sales A/c

71,600

Balance c/d

20,800

 

 

 

 

 

95,800

 

95,800

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c

56,200

Balance b/d

18,000

Balance c/d

34,600

Purchases A/c

72,800

 

 

 

 

 

90,800

 

90,800

 

 

 

 



Page No 23.49:

Question 17:

Mr. Asif Ali, a retail trader, who keeps Incomplete Records gives you the following information for the year 2018-19:

SUMMARY OF CASH TRANSACTIONS
  (₹)   (₹)
Received from Debtors 38,000 Bank Overdraft on 1-4-2018 2,500
Cash Sales 26,500 Paid to Creditors 31,200
Miscellaneous Income 300 Carriage inwards 800
    Salaries 12,400
    Advertisement 700
    Cash Purchases 16,000
    Balance at Bank on 31-3-2019 1,200
       
  64,800 64,800
   

The Assets and Liabilities were as follows:
  31st March 2018 31st March 2019
  ₹ ₹
Stock 15,000 12,000
Fixed Assets 25,000 25,000
Sundry Debtors 12,000 ?
Sundry Creditors 8,600 ?

Other Informations:
(1) Credit Sales during the year were ₹ 35,100.
(2) Sales returns ₹ 800.
(3) Credit Purchases during the year were ₹ 30,000.
(4) Discount allowed to Debtors ₹ 300.
(5) Discount received from Creditors ₹ 130.

Adjustments:-
(1) Make a provision for doubtful debts @ 5% on Debtors.
(2) Also make a provision for discount @ 2% on Debtors.
Prepare his Trading, P & L A/c and a Balance Sheet as at 31st March, 2019.

Answer:

Trading Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

15,000

Sales (Cash + Credit – Returns)

60,800

Purchases (Credit)

46,000

Closing Stock

12,000

Carriage

800

 

 

Gross Profit

11,000

 

 

 

72,800

 

72,800

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Salary

12,400

Gross Profit

11,000

Advertisement

700

Miscellaneous Income

300

Provision for Doubtful Debts

400

Discount Received

130

Provision for Discount on Debtors

152

Net Loss

2,522

Discount Allowed

300

 

 

 

13,952

 

13,952

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

40,900

 

Cash at Bank

1,200

  Less: Net Loss

2,522

38,378

Debtors

8,000

 

Creditors

7,270

  Less: Provision for DD

400

 

 

 

  Less: Provision for Discount

152

7,448

 

 

Fixed Assets

25,000

 

 

Closing Stock

12,000

 

45,648

                

45,648

 

 

 

 

 

Working Notes:

Balance Sheet

as on March 31, 2018

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

8,600

Debtors

12,000

Bank Overdraft

2,500

Fixed Assets

25,000

Capital (Balancing figure)

40,900

Stock

15,000

 

 

 

 

 

 

 

 

 

52,000

 

52,000

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

12,000

Cash A/c

38,000

Sales A/c

35,100

Sales Return A/c

800

 

 

Discount Allowed A/c

300

 

 

Balance c/d

8,000

 

 

 

 

 

47,100

 

47,100

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Discount Received A/c

130

Balance b/d

8,600

Cash A/c

31,200

Purchases A/c

30,000

Balance c/d

7,270

 

 

 

 

 

 

 

38,600

 

38,600

 

 

 

 



Page No 23.50:

Question 18:

Lalit Mohan keeps incomplete records. From the following information provided by him, prepare a Trading and Profit & Loss Account for the year ended 31st March, 2015 and a Balance Sheet as at that date:

  31st March, 2014 31st March, 2015
  ₹ ₹
Sundry Debtors 15,000 24,400
Stock 32,000 55,000
Cash 8,400 21,700
Sundry Creditors 22,000 ?
Prepaid Expenses Nil 3,600
Unpaid Expenses 1,500 2,200
Furniture 20,000 32,000

Summary of cash transactions during the year:
  ₹
Receipts from Debtors 2,00,000
Payment to Creditors 1,64,000
Carriage Inwards 3,300
Payment for Life Insurance Premium 15,000
Sundry Expenses 40,000
Furniture purchased for cash 12,000

You are informed that there were considerable amount of cash sales during the year. Credit purchases during the year amounted to ₹ 1,80,000. Provide 5% for doubtful debts on debtors.

Answer:

Trading Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

32,000

Sales (Cash + Credit)

2,57,000

Purchases (Credit)

1,80,000

Closing Stock

55,000

Carriage

3,300

 

 

Gross Profit

96,700

 

 

 

3,12,000

 

3,12,000

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Sundry Expenses

40,000

Gross Profit

96,700

Provision for Doubtful Debts

1,220

Prepaid Expenses

3,600

Unpaid Expenses (2,200 – 1,500)

700

 

 

Net Profit

58,380

 

 

 

1,00,300

 

1,00,300

 

 

 

 

 

Balance Sheet

as on March 31, 2015

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

51,900

 

Cash in Hand

21,700

  Less:  Drawings

15,000

 

Debtors

24,400

 

  Add: Net Profit

58,380

95,280

  Less: Provision for DD

1,220

23,180

Creditors

38,000

Prepaid Expenses

3,600

Unpaid Expenses

2,200

Closing Stock

55,000

 

 

Furniture

32,000

 

1,35,480

                

1,35,480

 

 

 

 

 

Working Notes:

Balance Sheet

as on March 31, 2014

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

22,000

Debtors

15,000

Unpaid Expenses

1,500

Stock

32,000

Capital (Balancing figure)

51,900

Cash

8,400

 

 

Furniture

20,000

 

 

 

 

 

75,400

 

75,400

 

 

 

 

 

Cash Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

8,400

Creditors A/c

1,64,000

Debtors A/c

2,00,000

Carriage A/c

3,300

Sales A/c (Balancing Figure)

47,600

Drawings A/c (Life Insurance Premium)

15,000

 

 

Sundry Expenses A/c

40,000

 

 

Furniture A/c

12,000

 

 

Balance c/d

21,700

 

 

 

 

 

2,56,000

 

2,56,000

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

15,000

Cash A/c

2,00,000

Sales A/c

2,09,400

Balance c/d

24,400

 

 

 

 

 

2,24,400

 

2,24,400

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c

1,64,000

Balance b/d

22,000

Balance c/d

38,000

Purchases A/c

1,80,000

 

 

 

 

 

2,02,000

 

2,02,000

 

 

 

 

Page No 23.50:

Question 19:

Vardhman commenced business on 1st April, 2018, with a capital of ₹ 50,000. He immediately purchased furniture of ₹ 20,000. During the year he received from his uncle a gift of ₹ 3,000 and he borrowed from his father a sum of ₹ 5,000. He had withdrawn ₹ 600 per month for his household expenses. He had no Bank account and all dealings were in cash. He did not maintain any books but following information is given :

  ₹
Sales (including cash sales ₹ 30,000) 1,00,000
Purchases (including cash purchases ₹ 10,000) 75,000
Carriage inwards 700
Wages 300
Discount allowed to debtors 800
Salaries 6,200
Bad-Debts written off 1,500
Trade expenses 1,200
Advertisements 2,200

He used goods worth ₹ 1,300 for personal purposes and paid ₹ 500 to his son for examination and college fees.
On 31st March, 2019, his Debtors were worth ₹ 21,000 and Creditors ₹ 15,000. Stock in trade was valued at ₹ 10,000. Furniture to be depreciated by 10% p.a.
Prepare Trading and Profit and Loss Account for the year ended on 31st March, 2019, and Balance Sheet as at 31st March, 2019.

Answer:

Trading Account
for the year ended March 31, 2019
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Purchases (Cash + Credit – Drawings)
73,700
Sales (Cash + Credit)
1,00,000
Carriage Inwards
700
Closing Stock
10,000
Wages
300
 
 
Gross Profit
35,300
 
 
 
 
 
 
 
1,10,000
 
1,10,000
 
 
 
 
 
Profit & Loss Account
for the year ended March 31, 2019
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Discount Allowed
800
Gross Profit
35,300
Salaries
6,200
 
 
Bad Debts
1,500
 
 
Trade Expenses
1,200
 
 
Advertisement
2,200
 
 
Depreciation on Furniture
2,000
 
 
Net Profit
21,400
 
 
 
35,300
 
35,300
 
 
 
 
 
Balance Sheet
as on March 31, 2019
Dr.
 
 
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Capital
50,000
 
Cash in Hand
36,400
Gift from Uncle
3,000
 
Debtors
21,000
  Less:  Drawings
(12 × 600 + 1,300 + 500)
9,000
 
Closing Stock
10,000
  Add: Net Profit
21,400
65,400
Furniture (Less Depreciation)
18,000
Creditors
15,000
 
 
Loan from Father
5,000
 
 
 
 
 
 
 
85,400
                
85,400
 
 
 
 
 
Working Notes:
Debtors Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Sales A/c
70,000
Discount Allowed A/c
800
 
 
Bad Debts A/c
1,500
 
 
Cash A/c
46,700
 
 
Balance c/d
21,000
 
2,24,400
 
2,24,400
 
 
 
 
 
Creditors Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
50,000
Purchases A/c
65,000
Balance c/d
15,000
 
 
 
 
 
 
 
65,000
 
65,000
 
 
 
 
 
Cash Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Capital A/c
50,000
Furniture A/c
20,000
Gift from Uncle
3,000
Drawings A/c (12×600+500)
7,700
Loan from Father A/c
5,000
Purchases A/c
10,000
Sales A/c
30,000
Carriage Inwards A/c
700
Debtors A/c
46,700
Wages A/c
300
 
 
Salaries A/c
6,200
 
 
Trade Expenses A/c
1,200
 
 
Advertisement A/c
2,200
 
 
Creditors A/c
50,000
 
 
Balance c/d
36,400
 
1,34,700
 
1,34,700
 
 
 
 



Page No 23.51:

Question 20:

Calculate the value of Closing Stock from the following particulars:

  ₹   ₹
Purchases 93,000 Wages 20,000
Sales 1,20,000 Carriage Outwards 3,200
Opening Stock                  16,000 Rate of Gross Profit on Cost 25%
       

Answer:

Rate of Gross Profit (on cost) = 25%
Rate of Gross Profit (on sales) = 20%
Gross Profit = 20% of 1,20,000 = 24,000
Gross Profit = Net Sales – Cost of Goods Sold
24,000 = 1,20,000 – Cost of Goods Sold
Cost of Goods Sold = 1,20,000 – 24,000 = Rs 96,000
Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock
96,000 = 16,000 + 93,000 + 20,000 – Closing Stock
Closing Stock = 16,000 + 93,000 + 20,000 – 96,000 = Rs 33,000

Page No 23.51:

Question 21:

Calculate the value of Opening Stock from the following:

  ₹
Sales 2,05,000
Sales Returns 5,000
Purchases 1,24,000
Purchases Returns 4,000
Carriage Inwards 8,000
Closing Stock 36,000
Rate of Gross Profit on Sales 40%

Answer:

Rate of Gross Profit (on sales) = 40%
Gross Profit = 40% of (2,05,000 – 5,000) = 80,000
Gross Profit = Net Sales – Cost of Goods Sold
80,000 = 2,00,000 – Cost of Goods Sold
Cost of Goods Sold = 2,00,000 – 80,000 = ₹ 1,20,000
Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock
1,20,000 = Opening Stock + (1,24,000 – 4,000) + 8,000 – 36,000
Opening Stock = 1,20,000 – 1,20,000 – 8,000 + 36,000 = ₹ 28,000



Page No 23.52:

Question 22:

Chakravarti does not maintain proper books of accounts. Following information is obtained from his books for the year ended 31st March, 2018:
Cash Transactions:

  ₹   ₹
Received from Debtors 72,000 Staff Salary 4,500
Paid to Creditors 56,000 Wages 15,000
Drawings 5,000 Office Expenses 2,000
Received from Cash Sales 30,000 Rent 3,500
Life Insurance Premium 800 Cash in hand on 31-3-2018 16,700
       

Assets and Liabilities:
  1-4-2017 31-3-2018
  ₹ ₹
Debtors 24,000 56,000
Creditors 30,000 40,000
Outstanding Salaries 500 450
Outstanding Wages 1,000 1,200

The Stock on 31st March, 2018 was valued at ₹ 20,000 but Chakravarti has no record of the Stock on 1st April, 2017. However, he informs you that he sells his goods at cost plus 25%.
Prepare his Cash Book, Trading and P & L A/c for the year ended 31st March, 2018 and a Balance Sheet as at that date.

Answer:

Trading Account

for the year ended March 31, 2018

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

46,000

Sales (Cash + Credit)

1,34,000

Purchases (Credit)

66,000

Closing Stock

20,000

Wages

15,000

 

 

Outstanding Wages

200

 

 

Gross Profit

26,800

 

 

 

1,54,000

 

1,54,000

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2018

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Staff Salaries

4,500

Gross Profit

26,800

Office Expenses

2,000

Outstanding Salary

50

Rent

3,500

 

 

Net Profit

16,850

 

 

 

26,850

 

26,850

 

 

 

 

 

Balance Sheet

as on March 31, 2018

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

40,000

 

Cash in Hand

16,700

  Less:  Drawings

5,800

 

Debtors

56,000

  Add: Net Profit

16,850

51,050

Closing Stock

20,000

Creditors

40,000

 

 

Outstanding Salary

450

 

 

Outstanding Wages

1,200

 

 

 

92,700

                

92,700

 

 

 

 

 

Working Notes:

Balance Sheet

as on March 31, 2017

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

30,000

Debtors

24,000

Outstanding Salaries

500

Stock

46,000

Outstanding Wages

1,000

Cash

1,500

Capital (Balancing figure)

40,000

 

 

 

 

 

 

 

71,500

 

71,500

 

 

 

 

 

Cash Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d (Balancing Figure)

1,500

Creditors A/c

56,000

Debtors A/c

72,000

Drawings A/c

5,000

Sales A/c

30,000

Drawings A/c (Life Insurance Premium)

800

 

 

Staff Salary

4,500

 

 

Wages

15,000

 

 

Office Expenses

2,000

 

 

Rent

3,500

 

 

Balance c/d

16,700

 

1,03,500

 

1,03,500

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

24,000

Cash A/c

72,000

Sales A/c

1,04,000

Balance c/d

56,000

 

 

 

 

 

1,28,000

 

1,28,000

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c

56,000

Balance b/d

30,000

Balance c/d

40,000

Purchases A/c

66,000

 

 

 

 

 

96,000

 

96,000

 

 

 

 


Rate of Gross Profit (on cost) = 25%

Rate of Gross Profit (on sales) = 20%

Gross Profit = 20% of (30,000 + 1,04,000) = 26,800

Gross Profit = Net Sales – Cost of Goods Sold

26,800 = 1,34,000 – Cost of Goods Sold

Cost of Goods Sold = 1,34,000 – 26,800 = ₹ 1,07,200

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

1,07,200 = Opening Stock + 66,000 + (15,000 + 200) – 20,000

Opening Stock = 1,07,200 – 66,000 – 15,200 + 20,000 = ₹ 46,000

Page No 23.52:

Question 23:

Mr. Gopal Das has only a Bank Pass Book and does not keep any other books of accounts. From the following information prepare his Final Accounts for the year ended 31st March, 2015.
An analysis of the Pass Book shows:-
Total amount received from Debtors and deposited with the Bank ₹ 2,20,000; Payment to Creditors ₹ 1,82,000; Salaries ₹ 6,000; Rent paid ₹ 4,800; Advertisement ₹ 2,000; Printing ₹ 800; Personal Expenses ₹ 4,000; Payment for Furniture ₹ 12,000; Balance at Bank on 31st March, 2015, ₹ 21,000.
Other Assets and Liabilities were as follows:

  1-4-2014 31-3-2015
  ₹ ₹
Sundry Debtors 30,000 42,000
Sundry Creditors 20,000 15,000
Stock 34,000 ?
Salary Outstanding 400 500

Mr. Gopal Das takes 20% profit on sales.

Answer:

Trading Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

34,000

Sales (Credit)

2,32,000

Purchases (Credit)

1,77,000

Closing Stock

25,400

Gross Profit

46,400

 

 

 

2,57,400

 

2,57,400

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Salaries

6,000

Gross Profit

46,400

Outstanding Salary

100

 

 

Rent

4,800

 

 

Advertisement

2,000

 

 

Printing

800

 

 

Net Profit

32,700

 

 

 

46,400

 

46,400

 

 

 

 

 

Balance Sheet

as on March 31, 2015

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

56,200

 

Debtors

42,000

  Less:  Drawings

4,000

 

Stock

25,400

  Add: Net Profit

32,700

84,900

Bank

21,000

Creditors

15,000

Furniture

12,000

Outstanding Salary

500

 

 

 

 

 

 

 

1,00,400

                

1,00,400

 

 

 

 

 

Working Notes:

Balance Sheet

as on March 31, 2014

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

20,000

Debtors

30,000

Outstanding Salaries

400

Stock

34,000

Capital
(Balancing figure)

56,200

Bank

12,600

 

 

 

 

 

76,600

 

76,600

 

 

 

 

 

Bank Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d
(Balancing Figure)

12,600

Creditors A/c

1,82,000

Debtors A/c

2,20,000

Salary A/c

6,000

 

 

Rent A/c

4,800

 

 

Advertisement A/c

2,000

 

 

Printing A/c

800

 

 

Drawings A/c

4,000

 

 

Furniture A/c

12,000

 

 

Balance c/d

21,000

 

2,32,600

 

2,32,600

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

30,000

Bank A/c

2,20,000

Sales A/c

2,32,000

Balance c/d

42,000

 

 

 

 

 

2,62,000

 

2,62,000

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Bank A/c

1,82,000

Balance b/d

20,000

Balance c/d

15,000

Purchases A/c

1,77,000

 

 

 

 

 

1,97,000

 

1,97,000

 

 

 

 


Rate of Gross Profit (on sales) = 20%

Gross Profit = 20% of 2,32,000 = 46,400

Gross Profit = Net Sales – Cost of Goods Sold

46,400 = 2,32,000 – Cost of Goods Sold

Cost of Goods Sold = 2,32,000 – 46,400 = ₹ 1,85,600

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

1,85,600 = 34,000 + 1,77,000 – Closing Stock

Closing Stock = 34,000 + 1,77,000 – 1,85,600 = ₹ 25,400



Page No 23.53:

Question 24:

Ravi, who keeps his books on Single Entry System, had his capital on 31st March, 2016 ₹ 20,000 and on 1st April, 2015 was ₹ 16,700. He further informs that during the year, he withdrew for his personal expenses ₹ 9,400. He also sold his personal investment of ₹ 10,000 at 15% premium and brought that money into the business.
Prepare a statement of Profit or Loss.

Answer:

Statement of Profit/Loss

Particulars

Amount

(₹)

Closing Capital

20,000

  Less: Opening Capital

(16,700)

  Less: Additional Capital

(11,500)

  Add: Drawings

9,400

Profit for the Year

1,200

   

Page No 23.53:

Question 25:

Mohan commenced business on 1st April, 2012 with a capital of ₹ 50,000. On 1st January, 2013, he introduced ₹ 25,000 into business of which ₹ 10,000 was borrowed from Ram. His position on 31st March, 2013 was as under:

Assets: Cash in hand ₹ 4,000; Bank (Cr.) ₹ 6,500; Debtors ₹ 24,000; B/R ₹ 18,600.
Stock ₹ 25,400; Furniture ₹ 15,000; Prepaid expenses ₹ 1,000.
Liabilities : Creditors ₹ 13,500; B/P ₹ 4,800; Ram's Loan ₹ 10,000; Outstanding expenses ₹ 700.

Actual drawings were not known but his living expenses are ₹ 1,000 p.m. Depreciate furniture by 10%. Interest on loan is due @ 12% p.a.
Ascertain his profit or loss for the year 2012-13 & prepare final statement of affairs.

Answer:

Statement of Affairs
as on March 31, 2013
Liabilities Amount (Rs) Assets Amount (Rs)
Bank Overdraft 6,500 Bills Receivable 18,600
Creditors 13,500 Cash in Hand 4,000
Bills Payable 4,800 Stock 25,400
Ram’s Loan 10,000 Debtors 24,000
Outstanding Expenses 700 Furniture 15,000
Capital (Balancing Figure) 52,500 Prepaid Expenses 1,000
  88,000   88,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2013
Particulars Amount
(Rs)
Capital at the end of the year 52,500
  Add: Drawings made during the year 12,000
  Less: Additional capital introduced during the year (25,000 – 10,000) 15,000
Adjusted capital at the end of the year 49,500
  Less: Capital in the beginning of the year 50,000
Loss Before Adjustment (500)
   Less: Depreciation on Furniture 1,500
  Less: Outstanding interest on Loan 300
Loss for the year (2,300)
   

 

Final Statement of Affairs
as on March 31, 2013
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 13,500 Cash in Hand 4,000
Opening Capital 50,000   Debtors 24,000
Add: Additional Capital
15,000   Bills Receivable 18,600
Less: Net Loss
2,300   Stock 25,400
Less: Drawings
12,000 50,700 Furniture 15,000  
Loan from Ram 10,000
Less: Depreciation
1,500 13,500
Bank Overdraft 6,500 Prepaid Expenses 1,000
Bills Payable 4,800    
Outstanding Expenses 700    
Outstanding Interest on Loan 300    
  86,500   86,500
       

Page No 23.53:

Question 26:

On April 1st, 2016, X started a business with ₹ 40,000 as his capital. On March 31st, 2017, his position was as follows:

  (₹)
Creditors 30,000
Bills Payable 10,000
Bank 10,000
Debtors 50,000
Stock 40,000
Plant 68,000
Furniture 12,000

During the year 2016-17 X drew ₹ 24,000. On 1st October 2016, he introduced further capital amounting to ₹ 30,000. You are required to ascertain profit or loss made by him during the year 2016-17.
Adjustments:
(a) Plant is to be depreciated at 10%.
(b) A Provision of 5% is to be made against debtors.
 Also prepare the Statement of Affairs as on March 31st 2017.

Answer:

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Bills Payable 10,000 Bank 10,000
Creditors 30,000 Plant 68,000
Capital (Balancing Figure) 1,40,000 Stock 40,000
    Debtors 50,000
    Furniture 12,000
  1,80,000   1,80,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 1,40,000
  Add: Drawings made during the year 24,000
  Less: Additional capital introduced during the year 30,000
Adjusted capital at the end of the year 1,34,000
  Less: Capital in the beginning of the year 40,000
Profit Before Adjustment 94,000
   Less: Depreciation on Plant 6,800
  Less: Provision for Doubtful Debts 2,500
Profit made during the year 84,700
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 30,000 Bank 10,000
Opening Capital 40,000   Furniture 12,000
Add: Additional Capital
30,000   Stock 40,000
Add: Net Profit
84,700   Debtors 50,000  
Less: Drawings
24,000 1,30,700
Less: Provision for Bad Debts
2,500 47,500
Bills Payable 10,000 Plant 68,000  
   
Less: Depreciation
6,800 61,200
  1,70,700   1,70,700
       



Page No 23.54:

Question 27:

From the following information relating to the business of Mr. X who keeps books by single entry ascertain the profit or loss for the year ended 31st March, 2017:

  1-4-2016 31-3-2017
  ₹ ₹
Machinery 16,000 16,000
Furniture 4,000 4,000
Stock 14,000 10,000
Sundry Debtors 8,000 9,000
Bank Balance 400 3,600
Sundry Creditors 10,000 7,000

Mr. X withdrew ₹ 4,100 during the year to meet his household expenses. He introduced ₹ 600 as fresh capital. Machinery and furniture to be depreciated by 10% and 5% per annum respectively.

Answer:

Statement of Affairs
as on April 01, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 10,000 Cash at Bank 400
Capital (Balancing Figure) 32,400 Machinery 16,000
    Stock 14,000
    Debtors 8,000
    Furniture 4,000
  42,400   42,400
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 7,000 Cash at Bank 3,600
Capital (Balancing Figure) 35,600 Machinery 16,000
    Stock 10,000
    Debtors 9,000
    Furniture 4,000
  42,600   42,600
       

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 35,600
  Add: Drawings made during the year 4,100
  Less: Additional capital introduced during the year 600
Adjusted capital at the end of the year 39,100
  Less: Capital in the beginning of the year 32,400
Profit Before Adjustment 6,700
   Less: Depreciation on Machinery 1,600
  Less: Depreciation on Furniture 200
Profit made during the year 4,900
   

Page No 23.54:

Question 28:

Mr. A does not keep proper records of his business. Following information is available from records kept by him:

  1-4-2016 31-3-2017
  ₹ ₹
Cash 20,000 18,000
Bank 30,000 33,000
Debtors 17,000 25,000
Stock 40,000 60,000
Fixed Assets 29,000 29,000
Creditors 52,000 32,000
Loan 10,000 25,000

Mr. A withdrew from the business â‚¹ 3,000 per month upto 30th September 2016 and thereafter â‚¹ 4,000 per month as drawings. â‚¹ 50,000 realised by the proprietor as maturity value of National Saving Certificates was invested in the business.
Prepare a statement showing net profit (or net loss) for the year.

Answer:

Statement of Affairs

as on April 01, 2016

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Creditors

52,000

Cash in Hand

20,000

Loan

10,000

Cash at Bank

30,000

Capital 

74,000

Debtors

17,000

(Balancing Figure)

 

Stock

40,000

 

 

Fixed Assets

29,000

 

1,36,000

 

1,36,000

 

 

 

 

 

Statement of Affairs

as on March 31, 2017

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Creditors

32,000

Cash in Hand

18,000

Loan

25,000

Cash at Bank

33,000

Capital 

1,08,000

Debtors

25,000

(Balancing Figure)

 

Stock

60,000

 

 

Fixed Assets

29,000

 

1,65,000

 

1,65,000

 

 

 

 

  

Statement of Profit or Loss

for the year ended March 31, 2017

Particulars

Amount

(Rs)

Capital at the end of the year

1,08,000

 

Add: Drawings made during the year

(3,000 × 6 + 4,000 × 6)

42,000

 

Less: Additional capital introduced during the year

50,000

Adjusted capital at the end of the year

1,00,000

 

Less: Capital in the beginning of the year

74,000

Profit made during the year

26,000

 

 

Page No 23.54:

Question 29:

Mr. White does not keep his books properly. Following information is available from his books.

  1-4-2015 31-3-2016
  ₹ ₹
Sundry Creditors 45,000 93,000
Loan from wife 66,000 57,000
S. Debtors 22,500
Land & Building 89,600 90,000
Cash in hand 7,500 8,700
Bank overdraft 25,000
Furniture 1,300 1,300
Stock 34,000 25,000

During the year Mr. White sold his private car for ₹ 50,000 and invested this amount into the business. He withdrew from the business ₹ 1,500 per month upto 31st October, 2015 and thereafter ₹ 4,500 per month as drawings. You are required to prepare a statement of profit or loss and a statement of affairs as at March 31, 2016.

Answer:

Statement of Affairs
as on April 01, 2015
Liabilities Amount (Rs) Assets Amount (Rs)
Loan from Wife 66,000 Cash in Hand 7,500
Creditors 45,000 Furniture 1,300
Bank Overdraft 25,000 Stock 34,000
Capital (Balancing Figure) 18,900 Debtors 22,500
    Land & Building 89,600
  1,54,900   1,54,900
       

 

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 93,000 Cash in Hand 8,700
Loan from Wife 57,000 Furniture 1,300
    Stock 25,000
    Land & Building 90,000
    Capital Overdrawn  (Balancing Figure) 25,000
  1,50,000   1,50,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2016
Particulars Amount
(Rs)
Capital at the end of the year (25,000)
 
Add: Drawings made during the year (1,500 × 7 + 4,500 × 5)
33,000
 
Less: Additional capital introduced during the year
50,000
Adjusted capital at the end of the year (42,000)
 
Less: Capital in the beginning of the year
(18,900)
Loss incurred during the year (60,900)
   



Page No 23.56:

Question 30:

X who keeps incomplete records, gives you the following information:

ASSETS AND LIABILITIES
  1st April, 2016 31st March, 2017
  ₹ ₹
Stock in hand 18,700 20,400
Debtors 12,000 14,000
Creditors 9,000 1,500
Bills Receivable 4,000 5,000
Bills Payable 1,000 200
Furniture 600 600
Building 12,000 12,000
Bank Balance 4,350 3,350
    (Overdraft)

You are also given the following information:
(i) A provision of ₹ 1,450 is required for bad and doubtful debts.
(ii) Depreciation @ 5% is to be written off on Building and furniture.
(iii) Wages outstanding ₹ 3,000; salaries outstanding ₹ 1,200.
(iv) Insurance has been prepaid to the extent of ₹ 250.
(v) Legal Expenses outstanding ₹ 700.
(vi) Drawings of Mr. X during the year were ₹ 7,520.
Prepare a statement of Profit as on 31st March, 2017, and a final statement of affairs as at that date.

Answer:

Statement of Affairs
as on March 31, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Bills Payable 1,000 Cash at Bank 4,350
Creditors 9,000 Stock 18,700
Capital (Balancing Figure) 41,650 Debtors 12,000
    Bills Receivable 4,000
    Furniture 600
    Building 12,000
  51,650   51,650
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Bills Payable 200 Stock 20,400
Creditors 1,500 Debtors 14,000
Bank Overdraft 3,350 Bills Receivable 5,000
Capital (Balancing Figure) 46,950 Furniture 600
    Building 12,000
  52,000   52,000
       
 
Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 46,950
  Add: Drawings made during the year 7,520
  Less: Additional capital introduced during the year  
Adjusted capital at the end of the year 54,470
  Less: Capital in the beginning of the year 41,650
Profit Before Adjustment 12,820
   Less: Depreciation on Furniture 30
  Less: Depreciation on Building 600
  Less: Provision for Doubtful Debts 1,450
  Less: Outstanding Wages 3,000
  Less: Outstanding Salaries 1,200
  Less: Outstanding Legal Expenses 00
  Add: Prepaid Insurance 250
Profit made during the year 6,090
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 1,500 Prepaid Insurance 250
Opening Capital 41,650   Bills Receivable 5,000
Add: Net Profit
6,090   Stock 20,400
Less: Drawings
7,520 40,220 Furniture 600  
Outstanding Wages 3,000
Less: Depreciation
30 570
Outstanding Salaries 1,200 Debtors 14,000  
Bills Payable 200
Less: Provision for Bad Debts
1,450 12,550
Bank Overdraft 3,350 Building 12,000  
Outstanding Legal Expenses 700
Less: Depreciation
600 11,400
  50,170   50,170
       

Page No 23.56:

Question 31:

The following information is available from Sachin, who maintains books of accounts on single entry system:

 
  1st April, 2016
(₹)
31st March, 2017
(₹)
Cash and Bank 20,000 21,000
Sundry Debtors 17,000 25,000
Stock 40,000 60,000
Furniture 29,000 29,000
Sundry Creditors 32,000 22,000
10% Loan from Mrs. Sachin 30,000 30,000

Sachin withdrew ₹ 5,000 from the business every month for meeting his household expenses. During the year, he sold investments held by him privately for ₹ 35,000 and invested the amount in his business.
At the end of the year 2016-17, it was found that full year's interest on loan from Mrs. Sachin had not been paid. Depreciation @ 10% per annum was to be provided on furniture for the full year. Shop assistant was to be given a share of 5% on the profits ascertained before charging such share.
Calculate profit earned during the year ended 31st March, 2017 by Sachin.

Answer:

Statement of Affairs
as on April 01, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
10% Loan from Mrs. Sachin 30,000 Cash and Bank 20,000
Creditors 32,000 Debtors 17,000
Capital (Balancing Figure) 44,000 Stock 40,000
    Furniture 29,000
  1,06,000   1,06,000
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
10% Loan from Mrs. Sachin 30,000 Cash at Bank 21,000
Creditors 22,000 Debtors 25,000
Capital (Balancing Figure) 83,000 Stock 60,000
    Furniture 29,000
  1,35,000   1,35,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 83,000
  Add: Drawings made during the year  (5,000 × 12) 60,000
  Less: Additional capital introduced during the year 35,000
Adjusted capital at the end of the year 1,08,000
  Less: Capital in the beginning of the year 44,000
Profit Before Adjustment 64,000
   Less: Depreciation on Furniture 2,900
  Less: Outstanding Interest on Loan 3,000
                       58,100
  Less: Shop Assistant’s Share (58,100 × 5/100) 2,905
Profit made during the year 55,195
   


Statement of Affairs

as on March 31,2017

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Opening Capital

44,000

 

Cash at Bank

21,000

Add: Net Profit

55,195

 

Debtors

25,000

Add: Additional Capital Introduced

35,000

 

Stock

60,000

Less: Drawings

60,000

74,195

Furniture

29,000

 

Creditors

22,000

Less: Depreciation

2,900

26,100

Shop’s Assistant Share

2,905

 

 

10% Loan from Sachin

30,000

 

 

 

Add: Outstanding Interest

3,000

33,000

 

 

 

1,32,100

 

1,32,100

 

 

 

 



Page No 23.57:

Question 32:

A retail Trader has not kept proper books of accounts. Ascertain his profit or loss for the year ending 31st March, 2017, and prepare a final statement of affairs from the following information:

 
  1st April, 2016 31st March, 2017
  ₹ ₹
Cash Balance 3,500 4,100
Bank Balance Dr. 6,000 Cr. 15,000
Stock 22,000 36,400
Sundry Debtors 18,800 34,500
Sundry Creditors 12,100 8,000
Loan from X 10,000
Bills Receivable 4,000
Fixed Assets 40,000 60,000

He withdrew from the business ₹ 1,500 per month for his personal use and ₹ 8,000 for giving a personal loan to his brother. He also used a house for his personal purposes, the rent of which at the rate of ₹ 900 per month and electricity charges at an average rate of ₹ 250 per month were paid from the business account.
He had received a lottery prize of ₹ 25,000, out of which he invested half the amount in business.
He has not paid two months' salary to his clerk @ ₹ 1,200 per month, but insurance premium @ ₹ 600 per annum was paid on 1st October, 2016 to run for one year.
Loan from X was taken on 1st July, 2016 on which interest was unpaid @ 18% p.a.
Fixed  assets are to be depreciated @ 10% p.a.

Answer:

Statement of Affairs
as on April 01, 2016
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 12,100 Cash at Bank 6,000
Capital (Balancing Figure) 82,200 Stock 22,000
    Debtors 18,800
    Bills Receivable 4,000
    Fixed Assets 40,000
    Cash  in Hand 3,500
  94,300   94,300
       

 

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Loan from X 10,000 Stock 36,400
Creditors 8,000 Debtors 34,500
Bank Overdraft 15,000 Cash 4,100
Capital (Balancing Figure) 1,02,000 Fixed Assets 60,000
  1,35,000   1,35,000
       

 

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 1,02,000
  Add: Drawings made during the year (WN) 39,800
  Less: Additional capital introduced during the year 25,0002 12,500
Adjusted capital at the end of the year 1,29,300
  Less: Capital in the beginning of the year 82,200
Profit Before Adjustment 47,100
   Less: Depreciation on Fixed Assets 6,000
  Less: Outstanding Interest on Loan 1,350
  Less: Outstanding Salary 2,400
  Add: Prepaid Insurance 300
Profit made during the year 37,650
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 8,000 Cash 4,100
Opening Capital 82,200   Stock 36,400
Add: Additional Capital
12,500   Debtors 34,500
Add: Net Profit
37,650   Prepaid Insurance 300
Less: Drawings
39,800 92,550 Fixed Assets 60,000  
Outstanding Salary 2,400
Less: Depreciation
6,000 54,000
Loan from X 10,000    
Bank Overdraft 15,000    
Outstanding Interest on Loan 1,350    
  1,29,300   1,29,300
       

Working Note: Calculation of Amount of Drawings

Cash Withdrawn   = Rs 18,000 Loan to Brother    = Rs 8,000Rent                      = Rs 10,800 Electricity Charges = Rs 3,000                              = Rs 39,800¯ 

Page No 23.57:

Question 33:

Gopal keeps incomplete records. On 1st April, 2016, his position was as follows:

STATEMENT OF AFFAIRS
Liabilities (₹) Assets (₹)
Bank Overdraft 7,500 Cash 6,400
Sundry Creditors 15,000 Stock 52,000
Capital 1,64,500 Sundry Debtors 28,000
    Fixed Assets 1,00,000
    Prepaid Expenses 600
       
  1,87,000 1,87,000
   

His position on 31st March, 2017 was as follows:
Cash in hand ₹ 3,000; Cash at Bank ₹ 5,000; Stock ₹ 44,000; Debtors ₹ 21,000; Fixed Assets ₹ 80,000; Creditors ₹ 22,000.
You are informed that Gopal has taken stocks worth ₹ 4,500 for his private use and that he has been regularly transferring ₹ 2,000 per month from his business banking account by way of drawings. Out of his drawings he spent ₹ 15,000 for purchasing a Scooter for the business on 1st October, 2016.

You are requested to find out his profit or loss and to prepare the Statement of Affairs after considering the following :
1. Depreciate Fixed Assets and Scooter by 10% p.a.
2. Write off Bad-Debts ₹ 1,000 and provide 5% for doubtful debts on Sundry Debtors.
3. Commission earned but not received by him was ₹ 2,500.

Answer:

Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 22,000 Cash at Bank 5,000
Capital (Balancing Figure) 1,46,000 Cash in Hand 3,000
    Stock 44,000
    Debtors 21,000
    Fixed Assets 80,000
    Scooter 15,000
  1,68,000   1,68,000
       

 

Statement of Profit or Loss
for the year ended March 31, 2017
Particulars Amount
(Rs)
Capital at the end of the year 1,46,000
  Add: Drawings made during the year (24,000 + 4,500 - 15,000) 13,500
  Less: Additional capital introduced during the year  
Adjusted capital at the end of the year 1,59,500
  Less: Capital in the beginning of the year 1,64,500
Loss Before Adjustment (5,000)
   Less: Depreciation on Fixed Assets 8,000
  Less: Depreciation on Scooter 750
  Less: Bad Debts 1,000
  Less: Provision for Doubtful Debts 1,000
  Add: Accrued Commission 2,500
Loss incurred during the year (13,250)
   

 

Final Statement of Affairs
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 22,000 Cash in Hand 3,000
Opening Capital 1,64,500   Cash at Bank 5,000
Less: Net Loss
13,250   Stock 44,000
Less: Drawings
13,500 1,37,750 Debtors 21,000  
   
Less: Bad Debts
1,000  
   
Less: Provision for Bad Debts
1,000 19,000
    Fixed Assets 80,000  
   
Less: Depreciation
8,000 72,000
    Scooter 15,000  
   
Less: Depreciation
750 14,250
    Accrued Commission 2,500
  1,59,750   1,59,750
       



Page No 23.58:

Question 34:

A retail trader did not keep his books on the double entry system. Following balances were obtained from his books:

  1st April 2013 31st March 2014
  ₹ ₹
Sundry Debtors 32,000 38,800
Sundry Creditors 20,300 24,600
Cash 6,000
Stock 22,000 28,000
Office Equipments 8,000 8,000
Machinery 30,000 40,000

Following further details of the transactions for the year ended 31st March, 2014 are available from his incomplete records:
  ₹
Sales (including Cash Sales ₹ 62,000) 1,20,000
Purchases (including Cash Purchases ₹ 25,000) 72,000
Salaries 16,500
Drawings 8,500
Rent, Taxes & Insurance 7,100
Bad-Debts written off 2,400
You are required to prepare his Trading, P & L A/c and Balance Sheet after considering the following:
1. ₹ 1,500 are outstanding for salaries.
2. Insurance was unexpired to the extent of ₹ 800.
3. Goods worth ₹ 2,000 were used by the proprietor for personal use.

Answer:

Trading Account

for the year ended March 31, 2014

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

22,000

Sales (Cash + Credit)

1,20,000

Purchases (Cash + Credit - Drawings)

70,000

Closing Stock

28,000

Gross Profit

56,000

 

 

 

1,48,000

 

1,48,000

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2014

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Salaries

16,500

 

Gross Profit

56,000

  Add: Outstanding

1,500

18,000

 

 

Rent, Rates & Insurance

7,100

 

 

 

 Less: Prepaid

800

6,300

 

 

Bad Debts

2,400

 

 

Net Profit

29,300

 

 

 

56,000

 

56,000

 

 

 

 

 

Balance Sheet

as on March 31, 2014

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

77,700

 

Debtors

38,800

  Less:  Drawings

10,500

 

Cash

7,000

 Add: Net Profit

29,300

96,500

Stock

28,000

Closing Creditors

24,600

Office Equipment

8,000

Outstanding Salary

1,500

Machinery

40,000

 

 

Unexpired Insurance

800

 

1,22,600

                

1,22,600

 

 

 

 

 

Working Notes:

Balance Sheet

as on March 31, 2013

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

20,300

Debtors

32,000

Capital (Balancing figure)

77,700

Cash

6,000

 

 

Stock

22,000

 

 

Office Equipments

8,000

 

 

Machinery

30,000

 

 

 

 

 

98,000

 

98,000

 

 

 

 

 

Cash Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

6,000

Creditors A/c

42,700

Debtors A/c

48,800

Purchases A/c

25,000

Sales A/c

62,000

Salary A/c

16,500

 

 

Drawings

8,500

 

 

Rent, Rates & Insurance

7,100

 

 

Machinery A/c

10,000

 

 

Balance c/d
Balancing Figure)

7,000

 

1,16,800

 

1,16,800

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

32,000

Cash A/c

48,800

Sales A/c

58,000

Bad-Debts A/c

2,400

 

 

Balance c/d

38,800

 

90,000

 

90,000

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c

42,700

Balance b/d

20,300

Balance c/d

24,600

Purchases A/c

47,000

 

 

 

 

 

67,300

 

67,300

 

 

 

 



Page No 23.59:

Question 35:

Mr. Manoj keeps incomplete records. During the year 2014-15 the analysis of his cash book was as under:-

  (₹)   (₹)
Receipts from Debtors 6,20,200 Bank Overdraft (1-4-2014) 16,500
Cash Sales 2,08,000 Salaries 22,000
Additional Capital introduced 50,000 Rent 11,000
Miscellaneous receipts 1,800 Payment to Creditors 5,20,000
Bank Overdraft (31-3-2015)         2,500 Furniture purchased (1-10-2014) 75,000
    Cash Purchases 2,10,000
    General Expenses 8,000
    Drawings 20,000
       
  8,82,500   8,82,500
       

Assets and Liabilities as on: 1st April, 2014
₹
31st March, 2015
₹
Sundry Debtors 62,000 ?
Sundry Creditors 46,000 30,000
Stock 58,000 72,000
Furniture 25,000 ?

Other Informations:
(i) Credit sales during the year were ₹ 7,00,000
(ii) Sales Returns were ₹ 10,000
(iii) Discount allowed to debtors ₹ 8,400
(iv) Discount received from creditors ₹ 6,000
(v) Bad-debts written off during the year ₹ 11,400

Adjustments:
(i) Write off further bad-debts ₹ 2,000.
(ii) Provide 5% for doubtful debts and 2% for discount on debtors and creditors.
(iii) Charge 10% p.a. depreciation on furniture.
(iv) One month salaries and one month rent was outstanding.
Prepare Trading and Profit & Loss Account for the year ended 31st March, 2015 and a Balance Sheet as at that date.

Answer:

Trading Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

58,000

Sales (Cash + Credit – Returns)

8,98,000

Purchases (Cash + Credit)

7,20,000

Closing Stock

72,000

Gross Profit

1,92,000

 

 

 

9,70,000

 

9,70,000

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Salaries

22,000

 

Gross Profit

1,92,000

  Add: Outstanding

2,000

24,000

Provision for Discount on Creditors

600

Rent

11,000

 

Miscellaneous Receipts

1,800

 Add: Outstanding

1,000

12,000

Discount Received

6,000

General Expenses

8,000

 

 

Bad Debts (2,000 + 11,400)

13,400

 

 

 

  Add: Provision for Doubtful Debts

5,500

18,900

 

 

Provision for Discount on Debtors

2,090

 

 

Discount Allowed

8,400

 

 

Depreciation on Furniture (2,500 + 3,750)

6,250

 

 

Net Profit

1,20,760

 

 

 

2,00,400

 

2,00,400

 

 

 

 

 

Balance Sheet

as on March 31, 2015

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital (82,500 + 50,000)

1,32,500

 

Debtors (1,12,000 – 2,000 –5,500 – 2,090)

1,02,410

  Less:  Drawings

20,000

 

Stock

72,000

  Add: Net Profit

1,20,760

2,33,260

Furniture (25,000 + 75,000 – 6,250)

93,750

Closing Creditors (30,000 – 600)

29,400

 

 

Outstanding Salary

2,000

 

 

Outstanding Rent

1,000

 

 

Bank Overdraft

2,500

 

 

 

 

 

 

 

2,68,160

                

2,68,160

 

 

 

 

 

Working Notes:

Balance Sheet

as on March 31, 2014

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

46,000

Debtors

62,000

Loan

16,500

Stock

58,000

Capital (Balancing figure)

82,500

Furniture

25,000

 

1,45,000

 

1,45,000

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

62,000

Cash A/c

6,20,200

Sales A/c

7,00,000

Sales Return A/c

10,000

 

 

Discount Allowed A/c

8,400

 

 

Bad Debts A/c

11,400

 

 

Balance c/d

1,12,000

 

7,62,000

 

7,62,000

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c

5,20,000

Balance b/d

46,000

Discount Received A/c

6,000

Purchases A/c

5,10,000

Balance c/d

30,000

 

 

 

5,56,000

 

5,56,000

 

 

 

 



Page No 23.60:

Question 36:

Sh. Param Bhushan does not maintain proper books of accounts. From the following, prepare his trading and profit & loss account for the year ended 31st March, 2015, together with balance sheet as at that date:

BALANCE SHEET
as at 31st March, 2014
Liabilities (₹) Assets (₹)
Sundry Creditors 80,000 Cash 22,000
Outstanding Salaries 4,000 Sundry Debtors 1,50,000
Capital 8,08,000 Stock 1,20,000
    Plant and Machinery 2,00,000
    Freehold Premises 4,00,000
       
  8,92,000   8,92,000
       

Cash book analysis shows the following:
  ₹
Payment to Creditors 4,00,000
Staff Salaries 76,000
Rent Paid 17,300
General Expenses (including insurance premium of 
₹ 2,400 paid on 1st January 2015 to run for one year)
8,700
Personal Withdrawals 12,000
Received from Debtors 5,50,000
Cash Sales 1,10,000
Purchase of Computers (on 1st January, 2015) 40,000
Purchase of Furniture (on 1st January, 2015) 60,000

The following further information is available:
Closing Stock ₹ 1,35,000; Closing Debtors ₹ 1,92,000; Closing Creditors ₹ 72,000; Outstanding Salaries at the end ₹ 6,000; General Expenses include ₹ 5,000 for house rent of Sh. Param Bhushan and Cash Sale include ₹ 30,000 for sale of his personal jewellery.
Create a provision of 212% for doubtful debts and depreciate plant and machinery by 10% p.a. and computers and furniture by 20% p.a. Also provide 5% for group incentive commission to staff on net profit after charging such commission.

Answer:

Trading Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

1,20,000

Sales (Cash + Credit)

6,72,000

Purchases (Credit)

3,92,000

Closing Stock

1,35,000

Gross Profit

2,95,000

 

 

 

8,07,000

 

8,07,000

 

 

 

 

 

Profit & Loss Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Staff Salaries

76,000

Gross Profit

2,95,000

Rent Paid

17,300

 

 

General Expenses

1,300

 

 

Insurance Premium

600

 

 

Outstanding Salaries (6,000 – 2,000)

2,000

 

 

Provision for Doubtful Debts

4,800

 

 

Depreciation on

 

 

 

  Plant & Machinery

20,000

 

 

 

  Computer

2,000

 

 

 

  Furniture

3,000

25,000

 

 

Staff Commission

8,000

 

 

Net Profit

1,60,000

 

 

 

2,95,000

 

2,95,000

 

 

 

 

 

Balance Sheet

as on March 31, 2015

Dr.

 

 

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital (8,08,000 + 30,000)

8,38,000

 

Cash

68,000

  Less:  Drawings

17,000

 

Debtors (1,92,000 – 4,800)

1,87,200

  Add: Net Profit

1,60,000

9,81,000

Stock

1,35,000

Closing Creditors

72,000

Plant &Machinery (2,00,000 – 20,000)

1,80,000

Outstanding Salary

6,000

Computer (40,000 – 2,000)

38,000

Staff Commission Payable

8,000

Furniture (60,000 – 3,000)

57,000

 

 

Freehold Premises

4,00,000

 

 

Prepaid Insurance Premium

1,800

 

10,67,000

                

10,67,000

 

 

 

 

 

Working Notes:

Cash Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

22,000

Creditors A/c

4,00,000

Debtors A/c

5,50,000

Staff Salaries

76,000

Sales A/c

80,000

Rent

17,300

Capital A/c

30,000

General Expenses

3,700

 

 

Drawings (12,000 + 5,000)

17,000

 

 

Computer

40,000

 

 

Furniture

60,000

 

 

Balance c/d
(Balancing Figure)

68,000

 

 

 

 

 

6,82,000

 

6,82,000

 

 

 

 

 

Debtors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

1,50,000

Cash A/c

5,50,000

Sales A/c

5,92,000

Balance c/d

1,92,000

 

 

 

 

 

7,42,000

 

7,42,000

 

 

 

 

 

Creditors Account

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c

4,00,000

Balance b/d

80,000

Balance c/d

72,000

Purchases A/c

3,92,000

 

 

 

 

 

4,72,000

 

4,72,000

 

 

 

 



Page No 23.61:

Question 37:

Sonam keeps his books on single entry and provides you with the following information:

  31-12-2017 31-12-2018
  ₹ ₹
Furniture and Fitting 50,000 60,000
Stock 30,000 10,000
Sundry Debtors 60,000 70,000
Sundry Creditors 20,000 NIL
Prepaid Expenses NIL 2,000
Outstanding Expenses 6,000 10,000
Cash in hand 11,000 3,000
Receipts and Payments in 2018:    
Receipts from Debtors   2,10,000
Paid to Creditors   1,00,000
Cartage   20,000
Drawings   1,20,000
Sundry Expenses   1,60,000
Furniture Purchased for Cash   10,000

Prepare Trading and Profit & Loss Account for the year ended 31 December, 2018 after providing for bad debts at 10%.
There was a considerable amount of Cash Sales.

Answer:

Trading Account
for the year ended 31 December, 2018
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
30,000
Sales (Cash + Credit)
4,12,000
Purchases (Credit)
80,000
Closing Stock
10,000
Cartage
20,000
 
 
Gross Profit
2,92,000
 
 
 
4,13,000
 
4,13,000
 
 
 
 
 
Profit & Loss Account
for the year ended 31 December, 2018
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Sundry Expenses
1,60,000
Gross Profit
2,92,000
Provision for Bad Debts
7,000
Prepaid Expenses
2,000
Outstanding Expenses
4,000
 
 
Net Profit
1,23,000
 
 
 
2,94,000
 
2,94,000
 
 
 
 
 
Balance Sheet
as on 31 December, 2018
Dr.
 
 
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Capital
1,25,000
 
Furniture & Fittings
60,000
  Less:  Drawings
1,20,000
 
Stock
10,000
 Add: Net Profit
1,23,000
1,28,000
Debtors (70,000 – 7,000)
63,000
Outstanding Expenses
10,000
Prepaid Expenses
2,000
 
 
Cash in hand
3,000
 
 
 
 
 
1,38,000
                
1,38,000
 
 
 
 
 
Working Notes:
Balance Sheet
as on 31 December, 2017
Dr.
 
 
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
20,000
Furniture & Fittings
50,000
Outstanding Expenses
6,000
Stock
30,000
Capital (Balancing figure)
1,25,000
Debtors
60,000
 
 
Cash in hand
11,000
 
 
 
 
 
1,51,000
 
1,51,000
 
 
 
 
 
Cash Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
11,000
Creditors A/c
1,00,000
Debtors A/c
2,10,000
Cartage A/c
20,000
Sales A/c (Balancing Figure)
1,92,000
Drawings A/c
1,20,000
 
 
Sundry Expenses A/c
1,60,000
 
 
Furniture A/c
10,000
 
 
Balance c/d
3,000
 
4,13,000
 
4,13,000
 
 
 
 
 
Debtors Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
60,000
Cash A/c
2,10,000
Sales A/c
2,20,000
Balance c/d
70,000
 
 
 
 
 
2,80,000
 
2,80,000
 
 
 
 
 
Creditors Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
1,00,000
Balance b/d
20,000
 
 
Purchases A/c
80,000
 
 
 
 
 
1,00,000
 
1,00,000
 
 
 
 

Page No 23.61:

Question 38:

Ascertain the value of Closing Stock from the following:

  ₹
Stock in the beginning 18,000
Purchases 69,000
Sales 1,02,000
Sales Return 2,000
Freight 10,000
Rate of G.P. on cost is 25%.

Answer:

Rate of Gross Profit (on cost) = 25%

Rate of Gross Profit (on sales) = 20%

Gross Profit = 20% of 1,00,000 = 20,000

Gross Profit = Net Sales – Cost of Goods Sold

20,000 = 1,00,000 – Cost of Goods Sold

Cost of Goods Sold = 1,00,000 – 20,000 = ₹ 80,000

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

80,000 = 18,000 + 69,000 + 10,000 – Closing Stock

Closing Stock = 18,000 + 69,000 + 10,000 – 80,000 = ₹ 17,000

Page No 23.61:

Question 39:

From the following particulars, ascertain the value of Opening Stock:-

  ₹   ₹
Purchases 60,000 Wages 3,000
Sales 1,05,000 Carriage Outwards 1,200
Closing Stock 20,000 Rate of Gross Profit on cost of goods sold 50%
       

Answer:

Rate of Gross Profit (on cost) = 50%

Rate of Gross Profit (on sales) = 33.33%

Gross Profit = 33.33% of (1,05,000) = 35,000

Gross Profit = Net Sales – Cost of Goods Sold

35,000 = 1,05,000 – Cost of Goods Sold

Cost of Goods Sold = 1,05,000 – 35,000 = ₹ 70,000

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

70,000 = Opening Stock + 60,000 + 3,000 – 20,000

Opening Stock = 70,000 – 60,000 – 3,000 + 20,000 = ₹ 27,000



Page No 23.62:

Question 40:

Mr. Bhardwaj has kept incomplete records. He submits to you the following information:

STATEMENT OF AFFAIRS
as at 1st April, 2014
  (₹)   (₹)
Sundry Creditors 18,000 Cash at Bank 7,600
Capital 82,000 Sundry Debtors 42,400
    Stock 20,000
    Machinery 30,000
       
  1,00,000   1,00,000
       

Bhardwaj banks all receipts and makes all payments only by means of cheques. Following is the analysis of his bank transactions:
  ₹
Receipt from Debtors 96,400
Payment to Creditors 62,500
Payment of Freight & Carriage 2,000
Payment of Office Expenses 10,800
Drawings 12,200

Sundry Debtors on 31st March, 2015 were ₹ 36,000 and Sundry Creditors were ₹ 25,000. No information is available regarding stock-in-trade on 31st March, 2015, but it is ascertained that Mr. Bhardwaj takes 20% profit on Sales. Prepare Bhardwaj's Bank A/c, Trading and Profit & Loss A/c and a Balance Sheet as at 31st March, 2015.

Answer:

Trading Account
for the year ended December 31, 2007
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
20,000
Sales (Credit)
90,000
Purchases (Credit)
69,500
Closing Stock
19,500
Freight & Carriage
2,000
 
 
Gross Profit
18,000
 
 
 
1,09,500
 
1,09,500
 
 
 
 
 
Profit & Loss Account
for the year ended December 31, 2007
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Office Expenses
10,800
Gross Profit
18,000
Net Profit
7,200
 
 
 
 
 
 
 
18,000
 
18,000
 
 
 
 
 
Balance Sheet
as on December 31, 2007
Dr.
 
 
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Capital
82,000
 
Cash at Bank
16,500
 Less:  Drawings
12,200
 
Debtors
36,000
Add: Net Profit
7,200
77,000
Stock
19,500
Closing Creditors
25,000
Machinery
30,000
 
 
 
 
 
 
 
 
 
1,02,000
                
1,02,000
 
 
 
 
 
Working Notes:
Bank Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
7,600
Creditors A/c
62,500
Debtors A/c
96,400
Freight & Carriage A/c
2,000
 
 
Office Expenses A/c
10,800
 
 
Drawings A/c
12,200
 
 
Balance c/d
(Balancing Figure)
16,500
 
1,04,000
 
1,04,000
 
 
 
 
 
Debtors Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
42,400
Bank A/c
96,400
Sales A/c
90,000
Balance c/d
36,000
 
 
 
 
 
1,32,400
 
1,32,400
 
 
 
 
 
Creditors Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Bank A/c
62,500
Balance b/d
18,000
Balance c/d
25,000
Purchases A/c
69,500
 
 
 
 
 
87,500
 
87,500
 
 
 
 
 
Rate of Gross Profit (on sales) = 20%
Gross Profit = 20% of 90,000 = 18,000
Gross Profit = Net Sales – Cost of Goods Sold
18,000 = 90,000 – Cost of Goods Sold
Cost of Goods Sold = 90,000 – 18,000 = ₹ 72,000
Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock
72,000 = 20,000 + 69,500 + 2,000 – Closing Stock
Closing Stock = 20,000 + 69,500 + 2,000 – 72,000 = ₹ 19,500

Page No 23.62:

Question 41:

From the following records kept on single entry basis, prepare final accounts assuming that ratio of gross profit to sales is 25%:

  1-1-2018 31-12-2018
  ₹ ₹
Cash at Bank 1,400 1,800
Debtors ? 2,400
Stock ? 1,700
Fixed Assets 10,000 10,000
Creditors 1,600 ?
Loan 1,000 800

Transactions during the year 2018:
  ₹
Collections from debtors 9,300
Cash Sales 1,000
Credit Sales 9,000
Payment to Creditors 6,100
Cash Purchase 1,600
Credit Purchase 6,400
Drawings 1,000
Business Expenses 1,000
Discount Received 200
Discount Allowed 100

Answer:

Trading Account
for the year ended December 31, 2018
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
1,200
Sales (Cash + Credit)
10,000
Purchases (Cash + Credit)
8,000
Closing Stock
1,700
Gross Profit
2,500
 
 
 
11,700
 
11,700
 
 
 
 
 
Profit & Loss Account
for the year ended December 31, 2018
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Business Expenses
1,000
Gross Profit
2,500
Discount Allowed
100
Discount Received
200
Net Profit
1,600
 
 
 
 
 
 
 
2,700
 
2,700
 
 
 
 
 
Balance Sheet
as on December 31, 2018
Dr.
 
 
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Capital
12,800
 
Cash at Bank
1,800
  Less:  Drawings
1,000
 
Debtors
2,400
 Add: Net Profit
1,600
13,400
Stock
1,700
Closing Creditors
1,700
Fixed Assets
10,000
Loan
800
 
 
 
 
 
 
 
15,900
                
15,900
 
 
 
 
 
Working Notes:
Balance Sheet
as on January 01, 2018
Dr.
 
 
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
1,600
Cash at Bank
1,400
Loan
1,000
Debtors
2,800
Capital (Balancing figure)
12,800
Stock
1,200
 
 
Fixed Assets
10,000
 
 
 
 
 
15,400
 
15,400
 
 
 
 
 
Debtors Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
2,800
Cash A/c
9,300
Sales A/c
9,000
Discount Allowed A/c
100
 
 
Balance c/d
2,400
 
11,800
 
11,800
 
 
 
 
 
Creditors Account
Dr.
 
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
6,100
Balance b/d
1,600
Discount Received A/c
200
Purchases A/c
6,400
Balance c/d
1,700
 
 
 
8,000
 
8,000
 
 
 
 
 
Rate of Gross Profit (on sales) = 25%

Gross Profit = 25% of (1,000 + 9,000) = 2,500

Gross Profit = Net Sales – Cost of Goods Sold

2,500 = 10,000 – Cost of Goods Sold

Cost of Goods Sold = 10,000 – 2,500 = ₹ 7,500

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

7,500 = Opening Stock + (1,600 +6,400) + 0 – 1,700

Opening Stock = 7,500 – 8,000 + 1,700 = ₹ 1,200



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