Accountancy Dk Goel 2019 for Class 11 Commerce Accountancy Chapter 15

Question 23:

The following balances were extracted from the books of Modern Traders as at 31st March, 2017:-


Particulars	(₹)	Particulars	(₹)
Capital Account	85,000	Printing and Stationery	800
Drawings Account	5,000	Sundry Creditors	23,000
Plant and Machinery	40,000	Sales	1,20,000
Stock on 1-4-2016	15,000	Postage	800
Purchases	82,000	Bad-Debts	400
Sundry Debtors	20,600	Provision for Doubtful Debts	800
Furniture	5,000	Discount received	400
Freight Inward	2,000	Rent Revenue	1,200
Carriage Outward	500	Insurance	700
Rent, Rates and Taxes	4,600	Salaries	20,000
		Wages	1,300
		Cash in Hand	6,200
		Cash at Bank	25,500

Prepare Final Accounts for the year ended 31st March, 2017 after taking into account the following:
(i) Stock on 31st March, 2017 was valued at ₹ 15,000.
(ii) Goods costing ₹ 6,000 were sent to a customer on "Sale on Return basis" for ₹ 7,200 on 26th March, 2017 and had been recorded in the books as actual sales.
(iii) Provision for Doubtful Debts is to be maintained at 5% of the Debtors.
(iv) Prepaid Insurance was ₹ 100.
(v) Provide Depreciation on Plant and Machinery @ 10% and on Furniture @ 5%.

Answer:

Financial Statements of Modern Traders
Trading Account for the year ended March 31, 2017
Dr.					Cr.
Particulars	Amount (Rs)	Particulars		Amount (Rs)
Opening Stock	15,000	Sales	1,20,000
Purchases	82,000	Less: Sale on Approval Basis	7,200	1,12,800
Freight Inwards	2,000	Closing Stock	15,000
Wages	1,300	Add: Sale on Approval Basis	6,000	21,000
Gross Profit (Balancing Figure)	33,500
	1,33,800			1,33,800

Profit and Loss Account for the year ended March 31, 2017
Dr.					Cr.
Particulars		Amount (Rs)	Particulars	Amount (Rs)
Depreciation: (WN1)			Gross Profit	33,500
Plant & Machinery	4,000		Discount Received	400
Furniture	250	4,250	Rent Revenue	1,200
Bad Debts	400
Add: New Provision (WN2)	670
Less: Old Provision	800	270
Carriage Outwards		500
Insurance	700
Less: Prepaid	100	600
Rent, Rates & Taxes		4,600
Printing & Stationery		800
Postage & Telegram		800
Salaries		20,000
Net Profit (Balancing Figure)		3,280
		35,100		35,100

Balance Sheet as on March 31, 2017
Liabilities		Amount (Rs)	Assets				Amount (Rs)
Capital	85,000		Fixed Assets
Add: Net Profit	3,280		Plant & Machinery	40,000
Less: Drawings	5,000	83,280	Less: Depreciation	4,000			36,000
			Furniture	5,000
Current Liabilities			Less: Depreciation	250			4,750
Creditors		23,000
			Current Assets
			Closing Stock		15,000
			Add: Sale on Approval Basis		6,000		21,000
			Prepaid Insurance				100
			Cash in Hand				6,200
			Cash at Bank				25,500
			Debtors			20,600
			Less: Sale on Approval Basis			7,200
			Less: Provision for Doubtful Debts			670	12,730

		1,06,280					1,06,280

Working Notes:

WN1: Calculation of Amount of Depreciation

\begin{array}{l} Depreciation on Machinery = 40, 000 \times \frac{10}{100} = Rs 4, 000 \\ Depreciation on Furniture = 5, 000 \times \frac{5}{100} = Rs 250 \end{array}

WN2: Calculation of Provision for Doubtful Debts

$\begin{array}{ccl} Provision for Doubtful Debts & = & (Sundry Debtors - Sale on Approval Basis) \times \frac{Rate}{100} \\ = & (20, 600 - 7, 200) \times \frac{5}{100} = Rs 670 \end{array}$

Question 24:

The following Trial Balance has been extracted from the books of Shri Santosh Kumar as at 31st March, 2017:-

	Dr. (₹)	Cr. (₹)
Plant and Machinery	1,00,000
Furniture	12,000
Capital Account		1,91,000
Household Expenses	16,000
Sales		4,68,000
Loose Tools	20,000
Goodwill	10,000
Opening Stock (1-4-2016)	20,000
Returns Outward		4,000
Discount		6,000
Purchases	2,12,000
Returns Inwards	8,000
Wages	1,00,000
Salaries	60,000
Outstanding Salaries		5,000
Investments at 10% p.a.	6,000
Interest on Investments		300
Sundry Creditors		24,000
Miscellaneous Receipts		2,000
Carriage Inwards	12,000
General Expenses and Insurance	39,000
Advertisement Expenses	15,000
Postage	4,000
Sundry Debtors	56,000
B. Barua	2,000
Cash Balance	14,000
Bank		3,200
Suspense Account		2,500

	7,06,000	7,06,000

The following additional information is available:-
(I) Stock on 31st March, 2017 was ₹ 30,800.
(II) Depreciation is to be charged on Plant and Machinery at 5% and Furniture at 6%. Loose Tools are revalued at ₹ 16,000.
(III) Create a provision of 2% for Discount on Debtors.
(IV) Salary of ₹ 2,000 paid to Shri B. Barua, a temporary employee, stands debited to his personal account and it is to be corrected.
(V) Write off 1/5th of advertisement expenses.
You are to prepare Trading and Profit & Loss Account for the year ended 31st March, 2017 and a Balance Sheet as at that date.

Answer:

Financial Statements of Shri Santosh Kumar
Trading Account for the year ended March 31, 2017
Dr.						Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
Opening Stock		20,000	Sales	4,68,000
Purchases	2,12,000		Less: Return Inwards	8,000	4,60,000
Less: Return Outwards	4,000	2,08,000	Closing Stock		30,800
Carriage Inwards		12,000
Wages		1,00,000
Gross Profit (Balancing Figure)		1,50,800
		4,90,800			4,90,800

Profit and Loss Account for the year ended March 31, 2017
Dr.						Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
Depreciation: (WN1)			Gross Profit		1,50,800
Plant & Machinery	5,000		Discount		6,000
Furniture	720		Miscellaneous Receipts		2,000
Loose Tools	4,000	9,720	Interest on Investment	300
Salaries	60,000		Add: Accrued (WN3)	300	600
Add: Salary to B.Barua	2,000	62,000
Advertisement Expenses written-off		3,000
Provision for Discount on Debtors (WN2)		1,120
General Expenses & Insurance		39,000
Postage & Telegram		4,000
Net Profit (Balancing Figure)		40,560
		1,59,400			1,59,400

Balance Sheet as on March 31, 2017
Liabilities		Amount (Rs)	Assets			Amount (Rs)
Capital	1,91,000		Fixed Assets
Add: Net Profit	40,560		Plant & Machinery	1,00,000
Less: Drawings	16,000	2,15,560	Less: Depreciation	5,000		95,000
			Furniture	12,000
Current Liabilities			Less: Depreciation	720		11,280
Creditors		24,000	Loose Tools	20,000
Bank Overdraft		3,200	Less: Depreciation	4,000		16,000
Outstanding Salaries		5,000	10% Investment			6,000
Suspense Account		2,500	Current Assets
			Goodwill			10,000
			Closing Stock			30,800
			Advertisement Expenditure			12,000
			Accrued Interest on Investments			300
			Cash in Hand			14,000
			Debtors		56,000
			Less: Provision for Discount on Debtors		1,120	54,880

		2,50,260				2,50,260

Working Notes:

WN1: Calculation of Amount of Depreciation
$\begin{array}{l} Depreciation on Machinery = 1, 00, 000 \times \frac{5}{100} = Rs 5, 000 \\ Depreciation on Furniture = 12, 000 \times \frac{6}{100} = Rs 720 \\ Depreciation on Loose Tools = Rs 4, 000 (20, 000 - 16, 000) \end{array}$

WN2: Calculation of Provision for Discount on Debtors
$Provision for Discount on Debtors = 56, 000 \times \frac{2}{100} = Rs 1, 120$

WN3: Calculation of Accrued Interest on Investment
$Interest on Investment = 6, 000 \times \frac{10}{100} = Rs 600$
Interest on Loan already received = Rs 300
So, Accured Interest = Rs 300

Question 25:

From the following Trial Balance of Sh. Swamy Narain, prepare Trading and Profit & Loss Account for the year ended 31st March 2018 and a Balance Sheet as at that date :

Dr. Balances	₹	Cr. Balances	₹
Opening Stock	50,000	Capital	20,00,000
Purchases	5,30,000	Sales	12,50,000
General Expenses	45,000	Sundry Creditors	1,36,000
Stationery	6,000	Trade Charges due but not paid	5,000
Wages	2,15,000	Outstanding Rent	4,000
Trade Charges	25,000	Bank Balance	45,000
Rent	44,000
Charity	5,000
Advertisement Expenses	30,000
Carriage on Sales	12,000
Bills Receivables	30,000
Sundry Debtors	2,20,000
Cash Discount	16,000
Cash in Hand	22,000
Furniture	1,00,000
Advance for Furniture	40,000
Plant & Machinery	6,00,000
Building	14,50,000
	34,40,000		34,40,000

Adjustments:
(i) Stock on 31 March, 2018 was valued at ₹ 60,000.
(ii) A new machine was installed during the year costing ₹ 2,00,000 but it was not recorded in the books. Wages paid for its installation ₹ 10,000 have been debited to Wages Account.
(iii) An advance of ₹ 10,000 given alongwith purchase order was wrongly recorded in purchases.
(iv) General expenses include ₹ 20,000 paid for Wages.
(v) Wages include a sum of ₹ 50,000 spent on the erection of a Scooter Stand for employees.
(vi) Advance for Furniture is for furniture at proprietor's residence.
(vii) Depreciate Furniture at 15%, Plant & Machinery at 20% and Building at 10%.
(viii) Carry forward 2/3 of Advertisement Expenses as unexpired.
(ix) A B/R of ₹ 20,000 was discounted with bank on 15 Nov. 2017, but not yet matured.

Answer:

Trading Account for the year ended March 31, 2018
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Opening Stock		50,000	Sales	12,50,000
Purchases	5,30,000		Closing Stock	60,000
Less: Advance against Order	(10,000)	5,20,000
Wages	2,15,000
Add: Included in General Expenses	20,000
Less: Construction of Shed	(50,000)
Less: Wages on Machinery	(10,000)	1,75,000
Gross Profit		5,65,000
		13,10,000		13,10,000

Profit & Loss Account for the year ended March 31, 2018
Dr.					Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Cash Discount			16,000	Gross Profit	5,65,000
General Expenses	45,000
Less: Wages	(20,000)		25,000
Stationery			6,000
Trade Charges			25,000
Rent			44,000
Charity			5,000
Advertisement Expenses			10,000
Carriage on Sales			12,000
Depreciation on:
Furniture		15,000
Building		1,50,000
Plant & Machinery		1,62,000	3,27,000
Net Profit			95,000
			5,65,000		5,65,000

Balance Sheet as on March 31, 2018
Dr.					Cr.
Liabilities		Amount (₹)	Assets		Amount (₹)
Creditors		1,36,000	Furniture	1,00,000
Outstanding Trade Charges		5,000	Less: Depreciation	15,000	85,000
Outstanding Rent		4,000	Plant & Machinery	6,00,000
Bank Overdraft		45,000	Add: Additions	2,10,000
Capital	20,00,000		Less: Depreciation	1,62,000	6,48,000
Less: Drawings	40,000		Unexpired Advertisement Expenses		20,000
Add: Net Profit	95,000	20,55,000	Building	14,50,000
Creditors for Machinery		2,00,000	Add: Additions	50,000
			Less: Depreciation	1,50,000	13,50,000
			Cash in Hand		22,000
			Closing Stock		60,000
			Debtors		2,20,000
			Advance against Purchases		10,000
			Bills Receivable		30,000
		24,45,000			24,45,000

Question 26:

Following is the Trial Balance as on 31st March 2016. Prepare Trading and Profit and Loss Account and Balance Sheet :-

Particulars	Debit (₹)	Credit (₹)
Stock (1st April 2015)	8,000
Sales		2,20,000
Purchases	1,26,000
Productive Wages	56,500
Salaries	16,000
Stores Consumed	6,050
Carriage	3,050
Rent and Rates	5,200
Insurance	1,320
Machinery	52,000
Building	67,000
Capital less Drawings		1,45,600
Sundry Debtors	44,000
Sundry Creditors		20,000
Secured Loan		15,000
Furniture	3,350
General Expenses	2,600
Cash in hand	1,930
Bad Debts	1,020
Bank	6,580
Total	4,00,600	4,00,600
Total

Additional Information :
(a) Stock on 31st March 2016 is ₹ 20,600.
(b) Depreciate machinery @ 10% p.a.
(c) Make a Provision @ 5% for Doubtful Debts.
(d) Provide

2 \frac{1}{2} %

for discount on sundry debtors.
(e) Rent and Rates include security deposit of ₹ 400.
(f) Insurance prepaid ₹ 120.

Answer:

Trading Account for the year ended March 31, 2016
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening Stock	8,000	Sales	2,20,000
Purchases	1,26,000	Closing Stock	20,600
Stores Consumed	6,050
Productive Wages	56,500
Carriage	3,050
Gross Profit	41,000
	2,40,600		2,40,600

Profit & Loss Account for the year ended March 31, 2016
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Salaries		16,000	Gross Profit	41,000
Rent & Rates	5,200
Less: Security Deposit	(400)	4,800
Insurance	1,320
Less: Prepaid	120	1,200
General Expenses		2,600
Bad Debts	1,020
Add: Provision for DD	2,200	3,220
Provision for Discount on Debtors		1,045
Depreciation on Machinery		5,200
Net Profit		6,935
		41,000		41,000

Balance Sheet as on March 31, 2016
Dr.						Cr.
Liabilities		Amount (₹)	Assets			Amount (₹)
Creditors		20,000	Machinery		52,000
Capital	1,45,600		Less: Depreciation		5,200	46,800
Add: Net Profit	6,935	1,52,535	Building			67,000
Secured Loan		15,000	Cash in Hand			1,930
			Closing Stock			20,600
			Debtors	44,000
			Less: Provision for DD	2,200
			Less: Provision for Discount	1,045		40,755
			Furniture			3,350
			Prepaid Insurance			120
			Security Deposit			400
			Bank			6,580
		1,87,535				1,87,535

Question 27:

From the following Trial Balance and other information prepare Trading and Profit and Loss Account for the year ended 31st March 2016 and Balance Sheet as at that date.

Heads of Accounts	Debit (₹)	Credit (₹)
Sundry Debtors	32,000
Stock (1st April 2015)	22,000
Cash in hand	35
Cash at bank	1,545
Plant and Machinery	17,500
Sundry Creditors		10,650
Trade Expenses	1,075
Sales		1,34,500
Salaries	2,225
Carriage Outwards	400
Rent	900
Bills Payable		7,500
Purchases	1,18,870
Discounts	1,100
Premises	34,500
Capital (1st April 2015)		79,500
Total	2,32,150	2,32,150
Total

Additional Information:
Stock on 31st March 2016 was ₹ 12,450. Rent was unpaid to the extent of ₹ 85 and ₹ 150 were outstanding for Trade Expenses. ₹ 400 are to be written off as bad debts out of the above debtors, and 5% is to be provided for doubtful debts. Depreciate plant and machinery 10% and premises by 2%. Manager is entitled a commission of 5% on net profit after charging his commission.

Answer:

Trading Account for the year ended March 31, 2016
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening Stock	22,000	Sales	1,34,500
Purchases	1,18,870	Closing Stock	12,450
Gross Profit	6,080
	1,46,950		1,46,950

Profit & Loss Account for the year ended March 31, 2016
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Salaries		2,225	Gross Profit	6,080
Trade Expenses	1,075		Net Loss	4,275
Add: Outstanding	150	1,225
Rent	900
Add: Outstanding	85	985
Carriage Outwards		400
Bad Debts	400
Add: Provision for DD	1,580	1,980
Discount		1,100
Depreciation on Machinery		1,750
Depreciation on Premises		690
		10,355		10,355

Balance Sheet as on March 31, 2016
Dr.						Cr.
Liabilities		Amount (₹)	Assets			Amount (₹)
Sundry Creditors		10,650	Plant &Machinery		17,500
Capital	79,500		Less: Depreciation		1,750	15,750
Less: Net Loss	4,275	75,225	Cash in Hand			35
Bills Payable		7,500	Closing Stock			12,450
Rent Outstanding		85	Premises		34,500
Trade Expenses Outstanding		150	Less: Depreciation		690	33,810
			Debtors	32,000
			Less: Further Bad Debts	400
			Less: Provision for DD	1,580		30,020
			Cash at Bank			1,545
		93,610				93,610

Question 28:

Following are balances from the trial balance of Ritesh Traders as at 31st March 2019:

Particulars	₹	Particulars	₹
Opening Stock	5,620	Interest on Securities	6,400
Purchases	1,54,200	Land and Building	10,00,000
Sales	3,74,800	Securities	6,00,000
Wages	1,26,000	Cash in Hand	25,600
Carriage Inward	900	Bank Overdraft	3,40,000
Freight on Purchase	4,900	Discount Allowed	1,500
Salaries	8,000	Discount Received	420
Insurance	2,800	Bill Payable	4,000
Repair to Machinery	1,400	Loan (Cr.)	11,000
Drawings	5,600	Bills Receivable	7,000
Customer's A/c	15,800	Capital Account	13,47,600
Postage	500	Suppliers A/c	40,000
Trade Expenses	1,000	X's Loan (Cr.)	18,600
		Plant and Machinery	1,82,000

Prepare Trading and Profit & Loss Account for the year ended 31st March 2019 and Balance Sheet as at that date after taking into account the following adjustments :
(i) Closing Stock was valued at ₹ 19,000.
(ii) Depreciation to be provided on Land and Building @ 5% p.a. and on Plant & Machinery @ 10% p.a.
(iii) Write off ₹ 2,000 as Bad debt.
(iv) Insurance was prepaid ₹ 700.
(v) Create provision for doubtful debts @ 5% on debtors.
(vi) Wages include ₹ 4,800 for installation of a new machinery.

Answer:

Financial Statement of Ritesh Traders
Trading Account for the year ended March 31, 2019
Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Opening Stock		5,620	Sales	3,74,800
Purchases		1,54,200	Closing Stock	19,000
Wages	1,26,000
Less: Wrong inclusion	4,800	1,21,200
Carriage Inward		900
Freight on Purchase		4,900
Gross Profit (Balancing Figure)		1,06,980
		3,93,800		3,93,800

Profit and Loss Account for the year ended March 31, 2019
Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Depreciation:			Gross Profit	1,06,980
Land & Building	50,000		Interest on Securities	6,400
Plant & Machinery	18,680	68,680	Discount Received	420
Insurance	2,800
Less: Prepaid	700	2,100
Old Bad Debts	–
Add: New Bad Debts	2,000
Add: New Provision	690
Less: Old Provision	–	2,690
Postage		500
Trade Expenses		1,000
Salaries		8,000
Repairs to Machinery		1,400
Discount Allowed		1,500
Net Profit (Balancing Figure)		27,930
		1,13,800		1,13,800

**Balance Sheet**
*as on March 31, 2019*
Liabilities		Amount (₹)	Assets			Amount (₹)
Capital	13,47,600		Fixed Assets
Add : Net Profit	27,930		Plant & Machinery	1,82,000
Less: Drawings	5,600	13,69,930	Add: Wages	4,800
			Less: Dep.	18,680		1,68,120
			Land & Building	10,00,000
			Less: Dep.	50,000		9,50,000

Current Liabilities			Current Assets
Creditors		40,000	Closing Stock			19,000
Bills Payable		4,000	Securities			6,00,000
X’s Loan		18,600	Prepaid Insurance			700
Bank Overdraft		3,40,000	Bills Receivable			7,000
Loan		11,000	Debtors		15,800
			Less: Bad debts		2,000
			Less: Provision		690	13,110
			Cash in Hand			25,600
		17,83,530				17,83,530

Working Note:

WN1: Calculation of Depreciation

\begin{array}{l} Depreciation on Machinery = 1, 86, 800 \times \frac{10}{100} = Rs 18, 680 \\ Depreciation on Building = 10, 00, 000 \times \frac{5}{100} = Rs 50, 000 \end{array}

WN2: Calculation of Provision for Doubtful Debts

\begin{array}{ccl} Provision for Doubtful Debts & = & (Sundry Debtors - Further Bad Debts) \times \frac{Rate}{100} \\ = & (15, 800 - 2, 000) \times \frac{5}{100} = Rs 690 \begin{array}{l}  \end{array} \end{array}

Question 29:

Prepare Trading and Profit and Loss Account and Balance Sheet from the following Trial Balance and information as on 31st March, 2019:

Name of Account	Debit (₹)	Credit (₹)
Drawings and Capital	15,000	3,25,000
Plant and Machinery	2,00,000	–
Motor Vehicle	1,50,000	–
Return Inward and Outward	25,000	37,000
Stock on 1st April, 2018	82,000	–
Purchases and Sales	4,40,000	6,75,000
Carriage Inward	6,000	–
Trade Expenses	2,500	–
Bad Debts	4,250	–
Provision for Doubtful Debts	–	6,000
Commission	–	4,000
Rent, Rates & Taxes	12,000	–
Salaries and Wages	24,000	–
Debtors and Creditors	70,000	55,000
Fuel and Water	4,750	–
Cash in Hand	16,500	–
Cash at Bank	50,000	–

Total	11,02,000	11,02,000

Adjustments:
(i) Closing Stock was valued at ₹ 1,12,500.
(ii) Commission include ₹ 1,200 being commission received in advance.
(iii) Salaries and wages is outstanding for the month of Feb. & March, 2019.
(iv) Depreciate Plant & Machinery by 15% and Motor Vehicle by 20%.
(v) Write off ₹ 500 as further Bad Debts and maintain provision for doubtful debts at 1% on debtors.

Answer:

Trading Account for the year ended March 31, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Opening Stock		82,000	Sales	6,75,000
Purchases	4,40,000		Less: Return Inwards	25,000	6,50,000
Less: Return Outwards	37,000	4,03,000	Closing Stock		1,12,500
Carriage Inward		6,000
Fuel and Water		4,750
Gross Profit (Balancing Figure)		2,66,750
		7,62,500			7,62,500

Profit and Loss Account for the year ended March 31, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Depreciation:			Gross Profit		2,66,750
Plant & Machinery	30,000		Commission	4,000
Motor Vehicle	30,000	60,000	Less: Unearned	1,200	2,800
Salaries & Wages	24,000		Provision for Doubtful Debts
Add: Outstanding	4,800	28,800	(Old Provision - New Provision)		5,305
Old Bad Debts	4,250
Add: Further Bad Debts	500	4,750
Trade Expenses		2,500
Rent, Rates and Taxes		12,000
Net Profit (Balancing Figure)		1,66,805
		2,74,855			2,74,855

Balance Sheet as on March 31, 2019
Liabilities		Amount (₹)	Assets			Amount (₹)
Capital	3,25,000		Fixed Assets
Add : Net Profit	1,66,805		Plant & Machinery	2,00,000
Less: Drawings	15,000	4,76,805	Less: Dep.	30,000		1,70,000
			Motor Vehicle	1,50,000
			Less: Dep.	30,000		1,20,000

Current Liabilities			Current Assets
Creditors		55,000	Closing Stock			1,12,500
Outstanding Salaries and Wages		4,800	Debtors		70,000
Unearned Commission		1,200	Less: Bad Debts		500
			Less: Provision for Bad Debts		695	68,805
			Cash in Hand			16,500
			Cash at Bank			50,000
		5,37,805				5,37,805

Working Note:

WN1: Calculation of Amount of Depreciation

\begin{array}{l} Depreciation on Machinery = 2, 00, 000 \times \frac{15}{100} = Rs 30, 000 \\ Depreciation on Motor Vehicle = 1, 50, 000 \times \frac{20}{100} = Rs 30, 000 \end{array}

WN2: Calculation of Provision for Doubtful Debts

\begin{array}{ccl} Provision for Doubtful Debts & = & (Sundry Debtors - Further Bad Debts) \times \frac{Rate}{100} \\ = & (70, 000 - 500) \times \frac{1}{100} = Rs 695 \end{array}

WN3: Calculation of Outstanding Salaries and Wages

\begin{array}{l} Salaries and Wages paid for 10 months = 24,000 \\ Salaries and Wages outstanding for 2 months =24,000 × \frac{2}{10} = Rs 4,800 \end{array}

Question 30:

The following balances were taken from the books of Shri R. Lal as at 31st March, 2017.

Particulars	(₹)	Particulars	(₹)
Capital	1,00,000	Rent (Cr.)	2,100
Drawing	17,600	Railway Freight on sales	16,940
Purchases	80,000	Carriage Inwards	2,310
Sales	1,40,370	Office Expenses	1,340
Purchase Returns	2,820	Printing & Stationery	660
Stock on 1.4.2016	11,460	Postage	820
Bad Debts	1,400	Sundry Debtors	62,070
Bad Debts Provision on 1.4.2016	3,240	Sundry Creditors	18,920
Rates & Insurance	1,300	Cash at Bank	12,400
Discount (Cr.)	190	Cash in Hand	2,210
Bills Receivable	1,240	Office Furniture	3,500
Sales Returns	4,240	Salaries & Commission	9,870
Wages	6,280	Addition to Building	7,000
Building	25,000

Prepare Trading and Profit & Loss A/c and a Balance Sheet as at 31st March, 2017, after keeping in view the following adjustments:
(i) Depreciate old Building at 2 1/2% and addition to Building at 2% and Office Furniture at 5%.
(ii) Write off further Bad-debts ₹ 570.
(iii) Increase the Bad-debts Provision to 6% of Debtors.
(iv) On 31st March, 2017 ₹ 570 are outstanding for salary.
(v) Rent receivable ₹ 200 on 31st March, 2017.
(vi) Interest on capital at 5% to be charged.
(vii) Unexpired Insurance ₹ 240.
(viii) Stock was valued at ₹ 14,290 on 31st March, 2017.

Answer:

Financial Statements of Shri R. Lal
Trading Account for the year ended March31, 2017
Dr.						Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
Opening Stock		11,460	Sales	1,40,370
Purchases	80,000		Less: Return Inwards	4,240	1,36,130
Less: Return Outwards	2,820	77,180	Closing Stock		14,290
Carriage Inwards		2,310
Wages		6,280
Gross Profit (Balancing Figure)		53,190
		1,50,420			1,50,420

Profit and Loss Account for the year ended March 31, 2017
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Depreciation: (WN1)				Gross Profit		53,190
Building		625		Rent	2,100
Furniture		175		Add: Accrued	200	2,300
Additions to Building		140	940	Discount		190
Salary & Commission		9,870
Add: Outstanding Salaries		570	10,440
Bad Debts		1,400
Add: Further Bad Debts		570
Add: New Provision (WN2)		3,690
Less: Old Provision		3,240	2,420
Interest on Capital			5,000
Rates & Insurance	1,300
Less: Unexpired	240		1,060
Railway Freight on Sales			16,940
Office Expenses			1,340
Printing & Stationery			660
Postage & Telegram			820
Net Profit (Balancing Figure)			16,060
			55,680			55,680

Balance Sheet as on March 31, 2017
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital	1,00,000		Fixed Assets
Add: Interest on Capital	5,000		Building	25,000
Add: Net Profit	16,060		Less: Depreciation	625	24,375
Less: Drawings	17,600	1,03,460	Additions to Building	7,000
			Less: Depreciation	140	6,860
Current Liabilities			Office Furniture	3,500
Sundry Creditors		18,920	Less: Depreciation	175	3,325
Outstanding Salaries		570
			Current Assets
			Closing Stock		14,290
			Bills Receivable		1,240
			Accrued Rent		200
			Unexpired Insurance		240
			Cash in Hand		2,210
			Sundry Debtors	62,070
			Less: Further Bad Debts	570
			Less: Provision for Discount on Debtors	3,690	57,810
			Cash at Bank		12,400

		1,22,950			1,22,950

Working Notes

WN1: Calculation of Amount of Depreciation

WN2: Calculation of Provision for Doubtful Debts

Question 31:

From the following balances extracted from the books of Karan and the additional information, prepare the trading and profit and loss account for the year ended 31st March, 2010 and also show the balance sheet as at that date:

	Debit Balance (₹'000)	Credit Balance (₹'000)
Stock on 1st April, 2009	625	–
Purchases and Sales	903	1,372
Returns	22	13
Capital Account	–	300
Drawings	45	–
Land and Buildings	300	–
Furniture and Fittings	80	–
Trade Debtors and Trade Creditors	250	450
Cash in hand	35	–
Investments	100	–
Interest	–	5
Commission	–	30
Direct Expenses	75	–
Postage, Stationery and Telephone	25	–
Fire Insurance Premium	20	–
Salaries	90	–
Bank Overdraft	–	400
	2,570	2,570

Additional Information:
(i) Closing stock on 31st March, 2010 is valued at ₹ 6,50,000. Goods worth ₹ 5,000 are reported to have been taken away by the proprietor for his personal use at home during the year.
(ii) Interest on investments ₹ 5,000 is yet to be received while ₹ 10,000 of the commission received is yet to be earned.
(iii) ₹ 5,000 of the fire insurance premium paid is in respect of the quarter ending 30th June, 2010.
(iv) Salaries ₹ 10,000 for March, 2010 and bank overdraft interest estimated at ₹ 20,000 are yet to be recorded as outstanding charges.
(v) Depreciation is to be provided on land and buildings @ 5% per annum and on furniture and fittings @ 10% per annum.
(vi) Make a provision for doubtful debts @ 5% of trade debtors.

Answer:

Financial Statements of Karan
Trading Account for the year ended March 31, 2010
Dr.						Cr.
Particulars		Amount	Particulars		Amount (Rs)
Opening Stock		6,25,000	Sales	13,72,000
Purchases	9,03,000		Less: Return Inwards	22,000	13,50,000
Less: Return Outwards	13,000		Closing Stock		6,50,000
Less: Goods taken for personal use	5,000	8,85,000
Direct Expenses		75,000
Gross Profit (Balancing Figure)		4,15,000
		20,00,000			20,00,000

Profit and Loss Account for the year ended March 31, 2010
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Depreciation: (WN1)				Gross Profit		4,15,000
Building		15,000		Interest on Invest.	5,000
Furniture		8,000	23,000	Add: Accrued	5,000	10,000
Fire Insurance Premium		20,000		Commission	30,000
Less: Prepaid		5,000	15,000	Less: Unearned	10,000	20,000
Provision for Doubtful Debts (WN2)			12,500
Outstanding Interest on Bank Overdraft			20,000
Salaries	90,000
Add: Outstanding	10,000		1,00,000
Postage, Stationery & Telephone			25,000
Net Profit (Balancing Figure)			2,49,500
			4,45,000			4,45,000

Balance Sheet as on March 31, 2010
Liabilities		Amount (Rs)	Assets			Amount (Rs)
Capital	3,00,000		Fixed Assets
Add: Net Profit	2,49,500		Land & Building		3,00,000
Less: Drawings (45,000 + 5,000)	50,000	4,99,500	Less: Depreciation		15,000	2,85,000
			Furniture		80,000
Current Liabilities			Less: Depreciation		8,000	72,000
Trade Creditors		4,50,000	Investment			1,00,000
Outstanding Salaries		10,000
Outstanding Interest on Bank Overdraft		20,000	Current Assets
Bank Overdraft		4,00,000	Closing Stock			6,50,000
Unearned Commission		10,000	Accrued Interest			5,000
			Prepaid Insurance			5,000
			Cash in Hand			35,000
			Trade Debtors	2,50,000
			Less: Provision for Discount on Debtors	12,500		2,37,500

		13,89,500				13,89,500

Working Notes

WN1: Calculation of Amount of Depreciation
$\begin{array}{l} Depreciation on Building = 3, 00, 000 \times \frac{5}{100} = Rs 15, 000 \\ Depreciation on Furniture = 80, 000 \times \frac{8}{100} = Rs 8, 000 \end{array}$

WN2: Calculation of Provision for Doubtful Debts

$\begin{array}{ccl} Provision for Doubtful Debts & = & (Sundry Debtors - Further Bad Debts) \times \frac{Rate}{100} \\ = & (2, 50, 000 - 0) \times \frac{5}{100} = Rs 12, 500 \end{array}$

Question 32:

The following is the trial balance of Mr. Amar Chand as at 31st March, 2016:-

	Dr. (₹)	Cr. (₹)
Stock on 1st April, 2015	62,000	-
Purchases and Sales	3,15,000	4,48,000
Returns	3,700	2,500
Sundry Debtors and Creditors	80,000	43,000
Bills Receivable and Payable	12,100	4,300
Drawings and Capital	30,000	2,00,000
Cash in Hand	24,800	-
Balance with Bank of Tokyo	32,800	-
Discount	2,600	3,800
Carriage on Purchases	7,500	-
Carriage on Sales	1,200	-
Bad-Debts	2,400	-
Bad-Debts Provision	-	3,000
Furniture on 1st April, 2015	10,000	-
New Furniture purchased on 1st January, 2016	6,000	-
Rent	10,000	-
Salaries	25,000	-
Commission	-	2,400
Repairs	2,300	-
Insurance (Annual Premium paid on 1st Jan., 2016)	3,600	-
Salaries Outstanding	-	5,000
Sales Van	75,000
Sales Van Expenses	6,000
	7,12,000	7,12,000

Taking into account the following adjustments, prepare Trading and Profit & Loss Account and the Balance Sheet as at 31st March, 2016:-
1. Stock on 31st March, 2016 was valued at ₹ 46,000.
2. Depreciate Furniture at 15% p.a. and Sales Van at 20% p.a.
3. A sum of ₹ 200 is due for repairs.
4. Write off ₹ 2,000 as further bad-debts and create a provision for doubtful debts @ 5% on Debtors. Also provide 2% for discount on Debtors.
5. Rent is paid at the rate of ₹ 1,000 per month.
6. Allow 8% interest on Capital and charge ₹ 1,500 as interest on Drawings.

Answer:

Financial Statements of Mr. Amar Chand
Trading Account for the year ended March 31, 2016
Dr.						Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
Opening Stock		62,000	Sales	4,48,000
Purchases	3,15,000		Less: Return Inwards	3,700	4,44,300
Less: Return Outwards	2,500	3,12,500	Closing Stock		46,000
Carriage on Purchases		7,500
Gross Profit (Balancing Figure)		1,08,300
		4,90,300			4,90,300

Profit and Loss Account

for the year ended March 31, 2016

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Depreciation: (WN1)

Gross Profit

1,08,300

Furniture

1,725

Commission Received

2,400

Sales Van

15,000

16,725

Interest on Drawings

1,500

Repairs

2,300

Discount Received

3,800

Add: Outstanding

200

2,500

Old Bad Debts

2,400

Add: Further Bad Debts

2,000

Add: New Provision (WN2)

3,900

Less: Old Provision

3,000

5,300

Discount Allowed

2,600

Provision for Discount on Debtors (WN3)

1,482

Rent

10,000

Add: Outstanding (WN4)

2,000

12,000

Insurance

3,600

Less: Prepaid (WN5)

2,700

900

Interest on Capital

16,000

Carriage on Sales

1,200

Salaries

25,000

Sales Van Expenses

6,000

Net Profit (Balancing Figure)

26,293

1,16,000

Balance Sheet as on March 31, 2016
Liabilities		Amount (Rs)	Assets			Amount (Rs)
Capital	2,00,000		Fixed Assets
Add: Interest on Capital	16,000		Furniture		10,000
Add: Net Profit	26,293		Add: Additions		6,000
Less: Drawings	30,000		Less: Depreciation		1,725	14,275
Less: Interest on Drawings	1,500	2,10,793	Sales Van		75,000
			Less: Depreciation		15,000	60,000

Current Liabilities			Current Assets
Sundry Creditors		43,000	Closing Stock			46,000
Outstanding Salaries		5,000	Bills Receivable			12,100
Outstanding Repairs		200	Bank of Tokyo			32,800
Outstanding Rent		2,000	Prepaid Insurance			2,700
Bills Payable		4,300	Cash in Hand			24,800
			Sundry Debtors	80,000
			Less: Bad debts	2,000
			Less: Provision for Doubtful Debts	3,900
			Less: Provision for Discount on Debtors	1,482		72,618

		2,65,293				2,65,293

Working Notes:

WN1: Calculation of Amount of Depreciation

WN2: Calculation of Provision for Bad Debts

WN3: Calculation of Provision for Discount on Debtors

WN4: Calculation of Outstanding Rent
Rent is paid @ Rs 1,000 per month
Annual Rent = 1,000 × 12 = Rs 12,000
Rent Already Paid = Rs 10,000
Therefore, Outstanding Rent = Rs 2,000

WN5: Calculation of Prepaid Insurance

Question 33:

From the following balances extracted from the books of Sharma, prepare the Trading and Profit & Loss Account for the year ended 31st March 2019 and Balance Sheet as at that date after taking into consideration the adjustments given below:

**Trial Balance**
*as at 31st March, 2019*
Particulars	Dr. (₹)	Cr. (₹)
Drawing and Capital	7,500	50,000
Purchases and Sales	72,100	95,000
Returns	1,300	2,700
Sundry Debtors and Creditors	18,200	35,750
Stock (1.04.2018)	19,800	-
Bad Debts	3,000	-
Bill Receivable and Payable	12,000	23,000
Cash in Hand	300	-
Office Expenses	6,210	-
Sales Van	15,000	-
Sales Van Expenses	1,400	-
Discount	-	2,910
Rent and Taxes	10,700	-
Telephone Charges	1,050	-
Postage	950	-
Furniture	5,000	-
Printing and Stationery	2,750	-
Commission	8,400	-
Carriage Inwards	3,200	-
Salaries and Wages	20,500

	2,09,360	2,09,360

Adjustments:
(i) Closing Stock was valued at ₹ 61,700.
(ii) Depreciate Furniture and Machinery @10% p.a. and Sale Van @20% p.a.
(iii) Outstanding Rent amounted to ₹ 900.
(iv) Bad Debts ₹ 200.
(v) Make a provision for Doubtful Debts @5% on Debtors.
(vi) Charge one-fourth of salaries and wages to the Trading Account.
(vii) A new machinery was purchased on credit and installed on 31st December 2018 costing ₹ 15,000. No entry for the same has yet been passed in the books.

Answer:

Financial Statements of Sharma
Trading Account for the year ended March 31, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Opening Stock		19,800	Sales	95,000
Purchases	72,100		Less: Return Inwards	1,300	93,700
Less: Return Outwards	2,700	69,400	Closing Stock		61,700
Salaries & Wages (1/4^th)		5,125
Carriage Inwards		3,200
Gross Profit (Balancing Figure)		57,875
		1,55,400			1,55,400

Profit and Loss Account for the year ended March 31, 2019
Dr.						Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Depreciation: (WN1)				Gross Profit	57,875
Machinery		375		Discount Received	2,910
Furniture		500
Sales Van		3,000	3,875
Bad Debts		3,000
Add: Further Bad Debts		200
Add: New Provision (WN2)		900	4,100
Office Expenses			6,210
Telephone Charges			1,050
Rent and Taxes	10,700
Add: Outstanding	900		11,600
Postage & Telegram			950
Printing & Stationery			2,750
Salaries & Wages (3/4^th)			15,375
Commission			8,400
Sales Van Expenses			1,400
Net Profit (Balancing Figure)			5,075
			60,785		60,785

Balance Sheet as on March 31, 2019
Liabilities		Amount (₹)	Assets			Amount (₹)
Capital	50,000		Fixed Assets
Add: Net Profit	5,075		Furniture		5,000
Less: Drawings	7,500	47,575	Less: Depreciation		500	4,500
			Machinery		15,000
Current Liabilities			Less: Depreciation		375	14,625
Creditors for Machinery		15,000	Sales Van		15,000
Sundry Creditors		35,750	Less: Depreciation		3,000	12,000
Outstanding Rent		900
Bills Payable		23,000	Current Assets
			Closing Stock			61,700
			Bills Receivable			12,000
			Cash in Hand			300
			Sundry Debtors	18,200
			Less: Further Bad Debts	200
			Less: Provision for Doubtful Debts	900		17,100

		1,22,225				1,22,225

Working Notes:
WN1: Calculation of Amount of Depreciation

$\begin{array}{l} Depreciation on Furniture = 5, 000 \times \frac{10}{100} = Rs 500 \\ Depreciation on Sales Van = 15, 000 \times \frac{20}{100} = Rs 3, 000 \\ Depreciation on Machinery = 15, 000 \times \frac{10}{100} \times \frac{3}{12} = Rs 375 \end{array}$

WN2: Calculation of Provision for Doubtful Debts

\begin{array}{ccl} Provision for Doubtful Debts & = & (Sundry Debtors - Further Bad Debts) \times \frac{Rate}{100} \\ = & (18, 200 - 200) \times \frac{5}{100} = Rs 900 \end{array}

Question 34:

Prepare a trading and profit & loss account of M/s Green Club Ltd. for the year and a Balance Sheet as at that date from the following figures taken from their trial balance:

Debit Balances	(₹)	Credit Balances	(₹)
Opening Stock	1,25,000	Sales	2,50,000
Purchases	35,000	Purchase Return	6,000
Return inward	25,000	Creditors	55,000
Postage	600	Capital	50,000
Salary	12,300	Discount received	1,000
Wages	3,000	Provision for bad debts	4,500
Rent and rates	1,000	Commission received	5,400
Packing and transport	500
General expenses	400
Insurance	4,000
Debtors	50,000
Cash in hand	20,000
Closing Stock	40,000
Machinery	20,000
Lighting	5,000
Discount	3,500
Bad debts	3,500
Investments	23,100
	3,71,900		3,71,900

Adjustments:-
(i) Depreciation charged on Machinery @ 5% p.a.
(ii) Further Bad-debts ₹ 1,500, provision for discount on debtors @ 5% and provision for Doubtful Debts on debtors @ 6%.
(iii) Wages prepaid ₹ 1,000.
(iv) Interest on investments @ 5% p.a.

Answer:

Financial Statements of M/s Green Club Ltd.
Trading Account for the year ended …
Dr.						Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
Opening Stock		1,25,000	Sales	2,50,000
Purchases	35,000		Less: Return Inwards	25,000	2,25,000
Less: Return Outwards	6,000	29,000			–
Wages	3,000
Less: Prepaid	1,000	2,000
Gross Profit (Balancing Figure)		69,000
		2,25,000			2,25,000

Profit and Loss Account for the year ended …
Dr.					Cr.
Particulars		Amount (Rs)	Particulars	Amount (Rs)
Depreciation on Machinery (WN1)		1,000	Gross Profit	69,000
Discount Allowed		3,500	Commission Received	5,400
Provision for Discount on Debtors (WN3)		2,280	Discount Received	1,000
Old Bad Debts	3,500		Accrued Interest on Investment (WN4)	1,155
Add: Further Bad Debts	1,500
Add: New Provision (WN2)	2,910
Less: Old Provision	4,500	3,410
Salaries		12,300
Lighting		5,000
Postage and Telegram		600
Rent and Rates		1,000
Packing and Transport		500
General Expenses		400
Insurance		4,000
Net Profit (Balancing Figure)		42,565
		76,555		76,555

Balance Sheet as on …
Liabilities		Amount (Rs)	Assets			Amount (Rs)
Capital	50,000		Fixed Assets
Add: Net Profit	42,565		Machinery	20,000
Less: Drawings	–	92,565	Less: Depreciation	1,000		19,000
			Investments			23,100
Current Liabilities
Creditors		55,000	Current Assets
			Closing Stock			40,000
			Prepaid Wages			1,000
			Accrued Interest on Investment			1,155
			Debtors		50,000
			Less: Further Bad Debts		1,500
			Less: New Provision for Bad Debts		2,910
			Less: Provision for Discount on Debtors		2,280	43,310
			Cash in Hand			20,000
		1,47,565				1,47,565

Working Notes:
WN1: Calculation of Amount of Depreciation

WN2: Calculation of Provision for Doubtful Debts

WN3: Calculation of Provision for Discount on Debtors

WN4: Calculation of Accrued Interest on Investment

Question 35:

Below is given the Trial Balance of Mr. Ram as at 31st December, 2015. You are required to prepare Trading and Profit & Loss Account and Balance Sheet as at that date.

Dr. Balances	(₹)	Cr. Balances	(₹)
Opening Stock	42,000	Sales	4,10,000
Purchases	2,00,000	Sundry Creditors	20,000
Plant	60,000	Purchases Return	8,000
Salary	33,000	Commission	7,500
Wages	44,000	Bank	24,000
Discount	2,000	Capital	1,50,000
Rent	27,500	Interest on Investments	700
Furniture (Including Furniture of ₹ 5,000 purchased on 1st July, 2015)	20,000	Special Rebate	800
Carriage in	5,800
Carriage out	3,200
Sundry Debtors	1,00,000
Office Expenses	6,600
Cash in hand	5,400
Investments at 14% p.a.	10,000
Insurance (Paid to 30th April, 2016)	1,500
Stock on 31st December, 2015	60,000
	6,21,000		6,21,000

Adjustments:-
1. Create a provision for Doubtful Debts @ 5% on Debtors and 2% for discount on Debtors.
2. Provide up-to-date interest on Investments.
3. Expenses for rent, wages, salaries and office expenses are uniform throughout the year and those for December, 2015 have not been paid.
4. Depreciate Plant by 10% p.a. and Furniture by 20% p.a.
5. Unearned Commission ₹ 1,500.

Answer:

Financial Statements of Mr. Ram
Trading Account for the year ended December 31, 2015
Dr.						Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Opening Stock			42,000	Sales	4,10,000
Purchases		2,00,000
Less: Purchases Return		8,000	1,92,000
Carriage Inwards			5,800
Wages	44,000
Add: Outstanding (WN6)	4,000		48,000
Gross Profit (Balancing Figure)			1,22,200
			4,10,000		4,10,000

Profit and Loss Account for the year ended December 31, 2015
Dr.							Cr.
Particulars		Amount (Rs)	Particulars			Amount (Rs)
Depreciation: (WN1)			Gross Profit			1,22,200
Plant	6,000		Commission	7,500
Furniture	3,500	9,500	Less: Unearned	1,500		6,000
Rent	27,500		Interest on Investment		700
Add: Outstanding (WN6)

Accountancy Dk Goel 2019 for Class 11 Commerce Accountancy Chapter 15 - Financial Statements With Adjustments

Page No 22.100:

Question 23:

Answer:

Page No 22.100:

Question 24:

Answer:

Page No 22.101:

Question 25:

Answer:

Page No 22.102:

Question 26:

Answer:

Page No 22.103:

Question 27:

Answer:

Page No 22.104:

Question 28:

Answer:

Page No 22.105:

Question 29:

Answer:

Page No 22.106:

Question 30:

Answer:

Page No 22.106:

Question 31:

Answer:

Page No 22.107:

Question 32:

Answer:

Page No 22.108:

Question 33:

Answer:

Page No 22.109:

Question 34:

Answer:

Page No 22.110:

Question 35:

Answer: