Seri.

es

Accountancg

&

Finanrciat Mgmt'

- F'Y'B'Com'

(Sem' - I)

E'oool
600

<l

crt

,ol
I

(Bf Short Notes: (il Maqufacturing A/c (iif Trading and Profit & Loss A/c (iii) Balance Sheet iivi eajusting & Closing entries i

*e. eSSICNMENTS: (Practical Aspect)

120

,tl
I
I

(ulslmpleSumlFromthefollowingparticulars,PrepareaManufacturing

I;o."t f*

the lrear endlug

31'3'2oo7'

5,000 3,000 10,000

3,500
I

3,500
8,000

50,000 35,000 3,000 2,500

1,500

2s.9s8

3,500
|

5,500

,o,roo
I

Factory Rent Repairs to Factory Building Repairs to Plant Factory Manager's Salary Repairs to Office Building

2,500
800

4,200 2,500

,,roo
a,ooo zo,ooo

I I

(Ans: Cost of

Ptod-"dg--{j,07,999)

the following particulars prepare Manufacturing frf fSi=rtt-""tl "rom Trading Account for the year ended 319I1-U9O7'
Raw Materials Work in Progtess Finished Goods
Sales

and

u,rr,
6,000

I
I

zoo
200 8oo
40.000
I

Factory Rent
Purchase Returns @aw Materials)

21,000 9,000 20,000 2,50,000 2,000

1,500

I
I I

- ,;.6e1 ------1
--'-

Manufacturing Wages Purchase of Raw Materials Carriage on Raw Materials

22,000
1,02,000 5,000 3,000

--_l

28,000

Senes

Accountancg

&

Finanrciat Mgmt'

- F'Y'B'Com'

(Sem' - I)

Epool
600

<l

crt

,,

(Bf Short Notes: (i| Manufacturing A/c (iif Trading and Profit & Loss A/c (iii) Balance Sheet iivi eajustlng & Closing entries i"

M"t"'f""t"ti"g Fild A""o,'il

*e. ASSICNMENTS: (Practical Aspect)

120

,tl
I
I

(ulslmpleSumlFromthefollowingparticulars'PrepareaManufacturing

I;o."t f*

the lrear endlng

3l.'3'2oo7'

5,000 3,000 10,000

3,500
I

3,500
8,000

50,000 35,000 3,000 2,500

1,500

2s-9s8

3,500
|

5,500

,0,*oo
I

Factory Rent Repairs to Factory Building Repairs to Plant Factory Manager's Salary Repairs to Office Building

2,500
800

4,200 2,500

,,roo
8,000 zo,ooo

I I

(Ans: Cost of

Ptod-"do--jj,07,999)

the following particulars prepare Manufacturing frf f$i=r&-""t] "rom Trading Account for the year ended 31e I1-U9O7'
Raw Materials Work in Progtess Finished Goods
Sales

and

u,rr,
6,000

I
I

zoo
200 8oo
40.000
I

Factory Rent
Purchase Returns @aw Materials)

21,000 9,000 20,000 2,50,000 2,000

1,500

I
I I

-n4.6lp1
--'- -------1

Manufacturing Wages Purchase of Raw Materials Carriage on Raw Materials

22,000
1,02,000 5,000 3,000

--_l

28,000

162
Finished Goods
Taxes

Reliable Series
44,000

Amu
IwtEF

&

Insurance

lCeht

(Ans. Cost of Production

< 1,18,500/-, Gross Profit

1,52,500)

lke

(31 lSlmple Suml From the following patrieulars, prepare Manufacturing end Tradtng Account for the year ended 31st March, 2OO7. ( Particulars
Opening Stock:
Raw Materials Work in Progress Finished Goods
70,000

ln"nn lru"t lc-iar

lsrro

50,000 1,0s,000 45,500 25,000

1,20,000

lsrror lp.er* lfuett

I

r"r".ti
0

Closing Stock:
Raw Materials

cost

Work in Progress
Finished Goods Purchases: Raw Materials Finished Goods Purchase Returns: Raw Materials Finished Goods

I
{

(
3,03,000 1,22,000
6,000 6,500

E;

t_
I

Carriage Inward:'
On Raw Materials On Finished Goods Productive Wages Rent (1/4 Factory) Factory Insurance Power & Fuel Packing Materials (productive) Machinery Repairs Depreciation on Machinery Stores consumed
Sales Sales

3,000
1,500

28,000
80,000

4,000
8,000

lCapit = lcred.i

2,000 3,250 4,250

10,000

lN"t s

luir"
lnaa t

7,60,000

lcoo.
I

Retum
On Raw Materials Purchased On Finished Goods Purcha^sed

Factc

17,500 7,500 1 000

Freight:

lMacl

l'"',
a

(Ans. Cost of Production-( 4,36,5001-; Gross

Profit-t

2,O1,000/-)

(4| lSimple Suml From following partlculars,

Particulars
Stock (1.4.2006): Raw Materials Work in Progress Finished Goods Stock (31.3.2007): Raw Materials Work in Progress Finished Goods Purcha^se of Raw Materials

prepare a Manufacturlng and Trading Account for the year ended 31st March, 2OO7.

lon, Repr
I

lRent

(
10,000 8,000

lr'."0

larxt s'o'
I

9,000 6,000

loet

2,500
5,000
82-000

l-*
h=

Accountancg & Financial Mgmt. - F.Y.B.Com. (Sem. - I)

Wages 18,000 1,000

rg and

Carriage Inward (Materials) Purchase Return (Materials) Royalty on Production Purchased of Finished Goods Carriage of Finished Goods
Sales Sales Refurn Depreciation on Plant & Machinery Fuel & Power

2,000

l,o0o
8,000

70,000
50,000

500 1,74,000 5,000 4,000 2,500

05,000
|

4s,s00 25,000 20,000 03,000

22,OOO

(Note: Goods are transferred from production department to sales department at cost plus 207o) AdJustments: (al Outstanding Wages < 3,000/(bl Prepaid Power & Fuel < 5OOl-.
(Ans: Cost of Production - t 7,44,OOO I -; Factory Profit GrossProfit-< 12,500.)

< 24,OOO (2Oo/o

on 1,20,000,

6,000 6,500

I |

(51 lNlocation

,,00,
t,soo
za,ooo
ao,ooo

I I

of Exrrenses / Outstandiag Exp. / Interest on Loan & Investment givenl From the followiag particulars prepare a Manufacturing A/c, Trading and Profit and Loss A/c for the year ended 31st December, 1989 and a Balance Sheet as on that date of Mr.
Chanakya aad also pass AdJusting & Closing entries.
Particulars
19,500 15,000

4,000 8,000 z,ooo 3,250

I |

+,zso
I

Capital Account Creditors Net Sales Miscellaneous Receipts Bad Debts Reserve

I,10,000 400
500

10,000 .60.000

I
|

Goodwill
Factory Shed

rz,soo
I I

5,000 2,000
13,000

Machinery

z,soo r.ooo

Furniture:
Factory 500
300 1,000

Office
4% G.P. Notes Repairs and Renewals Rent, Rates & Taxes Factory lnsurance 6YoLoan from Abhimanyu (1.1.89) Stock (1.1.1989): Materials & Stores Work in Progress Finished Goods Debtors Purchases: Materials & Stores Finished Goods Freisht & Dutv on Materials
.

and

2s0
1,650 390

30,000
13,000

10,000

8,000 9,000 6,000

750
8,250 13,500

I I

z,soo
s,ooo
82.000

85,000
1,000 5-000

I
|

*ry

)
E

164
Electricity & Power
Salaries, Wages & Bonus: Factory

Reliable Senes
1,500 15,000

Accou

trp"",
loirect I sul". o

Office
General

6,500
1^810

ln"b,o.
lcredit<

AdJustments:

lsurk
Particulars

(i) (ii)

(
21,000 1,250 20,750 2%

Closing Stock:
Materials & Stores Work in Progress Finished Goods

P.orisi lcuoiur
I

lkrt".", lriet t r
I I

ror,.r

Depreciation:
Factory Shed

rreieh
A

(iii)

Machinery Fumiture Outstanding Expenses:

Salaries, Wages

t0%
l5o/o

(j
(:

& Bonus
400
100

Factory

Office

(v)

(rD

(vr) (vii)

General Expenses [nsurance premium is paid for the year ending 3lst January, 1990. Electricity & Power, Repairs & Renewals, Rent, Rates & Taxes are to be apportioned between factory & office in the ratio 4:1. Interest to be provided on capital at 4% and also on loans and invesfuents. Reserve for Bad-debts to be provided at4yo onDebtors.

r00

( (

(Ans: Cost of Production - ( l,Ol,S92/-; G.p. > Balance Sheet -< 76,373/-) (6t

glveul From the following particulars prepare nr@ and Profit and Loss Account for the year ended Blst March, 199o and also a Balance Sheet as on that date.
Particulars
Capital Account of Vikram Shah Drawings Account of Vikram Shah Sundry Expenses Discount Allowed Rent, Rates & Taxes Power & Fuel 8,00,000 25,6A0
16,500

Machine

Fumiture
Advertisement Bad-Debts Discount Received
Salaries

Stock on lst April, 1989: Raw Materials

9,500 36,000 36,500 1,44,200 69,400 12,400 s,565 43,200

'

E
lom"

lPlant

lor..
llraot.

15,000

Work in Progress
Finished Goods Plant & Machinery Purchase of Raw Materials

29,800 78,200 2,56,400 1s.64.300

ls,-a

lc*n
lcu.t
lwun
lOffic

Series

Accountancg & Financial Mgmt. - F.Y.B.Com. (Sem. - I)

Repairs to Machinery
18,500

"9
s,000 6,500
I
|

Direct Wages Sales of Finished Goods

Debtors Creditors Bank Balance Provision for Bad-Debts Carriage on Purchase of Raw Materials lnterest Paid Light & Heat Insurance (for 15 months) Freisht Inward

72,400 19,25,200 3,26,200

1,87,600

l;810

r,27,365
13,600 10,500

l.ooo
1,250

I I

3,000 25,600
5,000

0,750

Ur"l
l0o/o
I

$%l
I

4oo
100 100

I
I

__l

Adjustments: (il Depreclation: Plant and Machinery Lso/o; Furniture 97o. (iif Included in creditors is an zrmount of ( 50,000/- borrowed from Mr. Shiamik Desai on 3oth September, 1989 on which interest is payable at 9Vo p.a. (iiif A machine costing < 24,8OO was purchased on lst July, 1989 and debited to Furchases A/c and Furniture costing < 2,OOO|- purchased on lst October, 1989 was charged to Sundry Expenses A/c. (ivf Write off{ 15,700/- as bad and irrecoverable. (vl Make provision for doubtful debts at 5o/o on Debtors. (vil 3/5th of expenditure on account of Light & Heat, Insurance, Rent & Rates and Sundry Expenses are to be allocated to factory and remaining to office. (viif Outstanding Expenses:
Particulars
Wages

(
7,800 4,300
3,500 2;,300 6 )On

; alc
adlng ) and

Advertisement Rent & Rates Power Lisht & Heat

0,000 5,600 6,500 e,500 6,000 6,500

.4,200

I I

(viiif Closing Stock: Raw Materials 19,OOO; Work in Progress 21,530; Finished Goods (Ans: Cost of Production ? 17,93,200; G.P. t 2,53,800; N.P. t 48,602;
Balance Sheet

2,0O,OOO.

10,36,952)

I
|

t7l

| |
I

9,400 2,400 5,565 3,200 5,000 9,800 8,200 6,400 4,300

lOutstanding Expenses / Prepaid Expenses / Bad debts & R.D.D" givenl Following is the Trlal Balance of Mr. Darshan at 31st December, 2006. You are require to prepare linal accouat showing the result of the transaction for the year. Debit Balance ? Credit Balance {
15,000 780

& Machinery Office Furniture & Fitting

Plant

Capital
Sales

12,000

t,44,000
1,680 15,600

I
|

Opening Stock Motor Vans Sundry Debtors Cash in Fiand Cash at Bank Wages: Factory
C)ffice F.xnenses

14,400 Bills Payable 3,600 Sundry Creditors 13,710 Provision for Doubtful Debts 120 Discount Received 1,950 Refurns Outwards 45,000 4 )OO

750
1,1 10

1,650

.
;i,ilutrJi,i@li:l

.-,"

,*r*rr**Mwr*M

RelinbLe Series
Purchases

Accot

Bills Receivable
Refums Inwards

p6yings
Rent Factory Lighting & Heating Telephone Insurance

64,050 2,160 2,790 2,100

1,800

I
I

240
105

90

Advertising
General Expenses Bad Debts Discount Allowed

1,69s
300

750

The following adJustments are to be made: (il Stock on 3lst December, 2O06: < 15,600. (iif Rent due but not paid 31st December,2O06: t 600. (iiil 3 months factory lighting and heating due but not paid : ( 90. (lvf Insurance paid in advance : { 30. (vl 1O7o depreciation to be written off Plant & Machinery. (vil 5% depreciation to be written ofrfurniture. lviil25o/o depreciation to be written offmotor vans. (viiif Write offturther bad debts : t 21O. (ix) The provision for doubttul debts to be increased to < 900. (M.U. Oct. 2OO7! (Ans: Gross Profrt t 34,680, Net Profit { 21,531, Balance Sheet Total t 49,4O1) (81 lAllocatlon of Expenses / Outstanding Expenses / Bad debts & R.D.D. grvenl The Triat Balance of Mrs. Deepali as oa 31st December, 2OO7 was as follows:
Raw Materials Work in Progress Finished Goods Sundry Debtors Carriage Inward Carriage Outward Bills Receivable
Wages Salaries

Prol She

F*

Lope

Pun

Bui
Plat

23,000
10,000 15,500

Sundry Creditors

Bills Payable Sales of Scrap

Provision for Doubtful Debts Deepali's Capital A"/c
Sales

17,000 8,500 1,500

Fur Tra
Wa
Fac

27,000
1,000 1,000 16,000 12,000 10,000

400
1,600 1,00,000
I

Mo
Fac
I

sur

2,00.000

los
1.", lPri

Repairs of Plant Repairs of Office Furniture

Purchase Cash at Bank

t,200
600
1,00,000

ls,
lr,, loi
Isa

Plant andMachinery

Office Fumiture
Rent

2,300 90,000 9,000

5,000 1,800

lo.
lSu

Lighting Expenses
Factory Insurance General Expenses

lc,

2,000

lSu

Itu
IDi
I

r,,r

ile Series

Accountancg & FinanciatMgmt. - F.Y.B.Com. (Sem' - I)

167

Adjustments: {if closing stock as on 3lst December,2ooT : Raw Materials < 15,800' Finished

(iil

Goods < 18,200, Semi Finished Goods < 7,000' salaries < 2,OOO and Wages for December,2oo7

( 2,000 was paid in January

(iii) Lighting Expenses were outstanding t 6o0 whereas Insurance was prepaid
< 500.

2008.

livl

(vl

the remaining amount is to be charged to factory' Depreciation is to be written off in machinery at lOo/o p.a. and on Furniture at
5o/o

and 25% of the Lighting Expenses and' rent is to be charged to office premises

(vlf Provision for doubtful debts is to be maintained at lo%o. You are required to prepare Manufacturlng Account, Trading Account and ProIit & Loss Account for the year ended 31st December, 2OO7 and Balance (M'U' March' 2OOS) Sfiaar aF ttrr datethat date. on thet Sheet as ( (Ans: COP < 1,40,950; Gross Profit t 61,750; Net Profit 43,550;
Balance Sheet < 1,73,650.)

P.a.

Vinayaka's Trial
galance as on 31st Marchr 2OOT ls as follows:
Pnrficrrlars

Dr.? I Cr.(
2,50,000 80,000 2,20,000 2,15,000
1,50,000 3,60,000

*,.2OO71

)--l
17,000

3 R.D.D. OO7 was

Opening Stock: Raw Materials Work in Progress Finished Goods

Purchases

Buildings Plant & Machinery

Furniture
I

Trade Mark Wages

8,500
1,500

I I
I

Factory Taxes

400
1,600 1,00,000 2,oo,ooo

lMotive Power
Factory Insurance lSalu.y to Office Staff lofiice Rent
I

40,000 30,000 83,000 4,000 9,000

5,000 11,000 10,500

I
I

lcuolug" Inward lrrinting

I

and Stationery

I
I

lBank Charges

2,500 s,200 2,500

10,000

Travelling Expenses

lDiscount lsol", Return lAdvertisement

I

3,300
11,000

5,500 7,80,000 8,50,000 52,000 82,500 2,500

5,500 34-000

sales

I
I

3.2e.000

lCapital Sundry Creditors I Sundry Debtors I lDiscount I Miscellaneous Expenses lRill. Po.ahle

-.,'"

SMry Nk#s&Nseddfr elfi4ffi

Acct
Bills Receivable
Corporation Bank
Cash in hand

(il (iil

7oo/o, prant & Machinery 15%, Trade Mark 2oo/o, Building 5%. Prepare Manufactultng, Trading and Profit & Loss Account for the financlal s on Blst March, iooz. (M.u: u"i.n, 2ooo, (Ans: COP ( 5,8S,SOO; Gross profit i 1,68,500; Net profit T 1,O0,OOO,

(iitf Depreciation: Furniture

closing stock : Raw Materials T g5,o0o; work in progress Goods t 2,05,000. Factory taxes prepaid t 2,OOO.

( 30,0o0;

Finished

T"ll
Tell
Mar

Balance Sheet T 10,36,000.)

Sto<

Pun

purpose givenl The foflowi"S i" tU. March, 2oo7. you are required to prepare the frnal accounts after giving

Rett Sun

FuI
Frei Car Rer

1,00,000

20,000
1,50,000

Prir Tra
Pos

2,00,000 4,000 30,000 3,21,000 5,000 20,000

15,000 10,000

Pro lnsr Sat

Cas

7,000
1,20,000

24,000 8,000 8,000 12,000 50,000

12.000

(il (iif
(iii|
(ivf (vif

{vl

Depreciation furniture by 1O% p.a. Provision for doubtlul debts is to be created to ttre extent of s%oof debtors. salary for the month of March 2ooz .amounting to ? 3,000 was unpaid which must be provided for. However, salaries include?i Z,OOO p"idi;;;;;. Insurance amounting to { 2,000 is prepaid. Provide for outstanding office expenses { g,OO0. Stock used for private purpose f O,OOO.

e Series

Accountancg & Financial Mgmt. - F.Y.B.Com. (Sem. - I)

169

inished

(vitf Closing stock in trade t 6,000. (M.U.April 2OO7l (Ans: Gross Profit < 1,08,000; Net Profit { 17,000; Balance Sheet < 2,1B,OOO.) (1U lFinished goods loss by lire / Discount allowed & Dlscount earned givenl From the following Trial Balance of Shri Telly as at 31st December, 2OO7; you are required to prepare his Trading and Profit & Loss Account for the year ended 31st December,2OOT and a Balance Sheet as at that date, after making the necessary adjustments.
Telly's Capital Telly's Drawings
Machinery: Balance 1st January, 2007
1,60,000 16,000

'< 200/0,

ranclal
,2OOOI

40,000
10,000

Addition lst July,2007

Stock - lst January, 2007
I

26,000
1,64,000

Purchases and Sales

2,40,000
2,000

rsonal a 31st

gring

a;E_l
popoo

l
I
I |

Returns Sundry Debtors & Creditors Fumiture and Fixfures Freight Inward Carriage Outward Rent, Rates and Taxes Printing & Stationery
Trade Expenses Postage & Telephone

4,000 41,200
10,000

20,000

4,000
1,000

9,200
1,600 800 1,600

Frovision for Doubtful Debts

4,000 ,21,000 5,000

I
|

Insurance Charges Salaries and Wages Cash at Bank

7,400 42.600
trl

'l

AdJustments:

(il

stock on 31st December, 2007 was valued at { 30,000.

Write off

? 29,200. Market

value

,20,000
I
I

liif

1,200 as Bad Debts.

8,000

l .58.000
I

S.

which
:e.

creditors at 2o/o cash. {vl Provide for depreciation on Furniture & Fixture at 5% p.a. and on Plant & Machinery at 2O%o p.a. (vif Insurance prepaid was ( 200. (viilA fire occurred on 25th December, 2OO7 in the godown and stock of the value of t 10,000 was destroyed. It was fulIy insured and the Insurance Company admitted tl:e claim in tull. (M.U. Oct. 2OO4f (Ans: Gross Pro{it ( 83,200; Net Profit t 13,510; Balance Sheet < l,77,llo.)

(iiif The provision for doubtful debts is to be maintained at 5o/o on sundry debtors. (lvf Create a provision for discount on debtors and reserve for discount on

(121[Bllls Payable dishonoured

/ Lease wrltten qffgivenl From the following particulars extracted from the books of Shri Prakash, prepare Trading and Profit & Loss Account for the year ended 31st Decomber, 1989 and i Balance Sheet as on that date.

-,.-..

r'*,*rur*ormism*w$i#(

n
e

170

Relinble Senes

Accott

Stock lstJanuary, 1989 Purchases less returns

Wages

tF*"h,
10,000
I

sut",
Dr

49,000
15,000 15,000

lCarrial
lBad lDebtor

Loan from Mr. Shri Madan at 5% Capital Debtors

Reserve Salaries

50,000

forBadDebts on lstJanuary, l9g9

42,700
2,800
1,000

lcreoitr Inant C

Rent Rates & Taxes

General Expenses

Dscount Allowed
Creditors
Sales

9,000 900 500

15,000 1,28,600 15,000 8,000

L
lRent

Dece:
T

(i
(i

Plant & Machinery Furniture & Fixtures

Cash at Bank

Bills Receivable
Drawings
Sales Returas Cost oflease on lst January, l9g9

2,000
300 6,000

(i (i (' ('
(,

2,000
s6,000
5

'A{lustments:

The Closing Stock on 31st Dec. 1989 was t 9,800/-. Write off lOo/o Depreciation on Plant & Machinery and 5% on Furniture and Fixtures. (iitf write off ? 6,0o0/- in the current year from the cost of lease. (ivf write of Bad-Debts t 700/- from Debtors and maintain Reserve for Bad Debts at 60/o on Debtors. (vl Bills Payable dishonoured during the year.( g0O/-. (vif Interest on Capital at lOo/o. (Ans. G.P. - ( 62,400/-, N.p. - < 3Z,gSO/_, Balance

(il (ii|

('

@
(

Sh@

r
I
I I

stoct

Purcha

@r 31st December, 1989.

Trade Discount received
Salaries

lsales ivrar,.rr lReturn

lsur*i.
2,025
9,297 1,430 490 60,100 6,500 40,000 5,000
15,000

lRent 8

Travelling Expenses
Discount Allowed Capital

lot"r", lRn.h, l_
I

lcreoit,

lravel

Drawings
Leasehold Premises

iom""

lrr,*,
lauo-o
lComm lPlant I

Furniture Stock on lst January, 1989 Cash in Bank

2,560

ieiu*

b*q

nes

Accountarrcg & Financial Mgmt. - F.Y.B.Com. (Sem. - I)

Purchases

171

00 = 00 00
,00 ,00

Sales
I
I I

I I

'00
I

;00

Carriage Inward Bad Debts Debtors Creditors Bank Charges Rent (for 9 months)

n0
)00

I
I

)00

;00
)00

;00 )00 )oo )00

100

Prepare Trading and Profit & Loss Accoupt for the year ended 31st, Decemblr, 1989 and\a Balance Sheet as on that date' The following matters are to be taken into account: (il Mr. White's wife work in the business and is allowed a salary of ? 2,400 p.a. This amount has been included in Drawings Account'

(iil

I I
I

)00
ooo

oo0 000

I
|

Leasehold premises is to be written off over a period of 2o years (itif Depreciate furnitute by lOo/o. Debtors & Sundry Creditors both include the account of Mr. Black {ivf ' ' Sundry showing debit balance of ( 2,500/- and credit balance at? 2,ooo/-. (vl Of the Debtors due on 3lst December, L989, 4o/o ate irrecoverable and should be written off. (vif The Reserve for doubtful debts should be maintained at 57o. (viil Salaries include < 25O l- paid as advance to staff. (viii) Stock on 31st Dec. 1989 is valued as under cost 15,500/-. Market Price

j l
:

i I

,i
:

,l
I i

and
(141

18,500/-.

(Ans: G.P. ebts

< 26,165/-; N;P.

< 5,481 I -, Balance Sheet Totat < 75'402 I

frepare tiading and Prolit ind Loss Account and the Balance Sheet as on 31st December, 1989. Credit ? Debit ( Particulars
89,500 2,56,600 3,56,400 41,000 2,800
11,000 5,600 5,900 1,19,400

Receivable

Unrecorded

Stock lst January, 1989

Purchases Sales

,fr1 son

Manufacturing Wages
Refurns Inward Salaries Rent

d
,r^l
I

&

Taxes

Interest

& Discount

Roshanlal' s Capital Account Creditors

50,000
1,900

),100
I

Travelling Expenses Office Repairs & Renewals

Insurance. Bad-Debts

3,400 400
3,600 5,600

Commission Received Plant & Machinery

28,800
9,600 9,000

lBills Pavable lFlrnihrre & Fittinss

&eM

Reliable Series
Roshanlal's Drawings 6o/oLoan from Maganlal
Cash 10,500 20,000

Acct

E."d
l.qa.',,

3,000
19,000

lm*
leud-

Bank
Debtors Bills Receivable
Reserve for Doubtfirl Debts

60,000
I 1,500 2.500 5-63-500 5"63.500

lru,",
I

Saler

loi..
lSala lCasl

Adjustments: (il Stock in Hand on 3lst December, 1989 was ? l,28,9OOl-. (ii) Invoices for goods worth < 9OO/- purchased before 31st December, 1989 had been omitted from the book. These goods were included in the Closing Stock. (iiif Create a provision of SYo on Debtors for Doubtful Debts. (ivf Depreciate: Plant and Machinery \oh, Furniture & Fittings 1oolo. (vl Interest on loan for the last 2 months is not paid. (vif Insurance premium per year ( 300/- was paid upto 30th June, 1990. (viif Bills receivable dishonoured < 2,OOO/- and Bills Payable dishonoured < 4,600 /- during the year have not been recorded in the books. (viiif Roshanlal had issued a cheque for ( 1,000/- to chimanlal on 26.12.7999 Chimanlal is one of tl:e creditors of Roshanlal. But no entry had been passed in the books as the cheque was debited in the Bank Passbook on 1st Januaqr, 1990. (Ans: G.P. - ( 94,500/-; N.P. - ( 65,310) | (15f (C.A. Entrance| lR""tifi."tior of Tor.rr"it." affi Shri Madunath, the proprietor of the small retail shop, submits to you the follouring Trial Balance as on 31st March, 1982 which he has not been able to agree. You are requlred (il to rewrite the Trial Balance correcting the mistakes committed by him and (ul to prepare a Profit and Loss Account & a Balance sheet therefrom , after gling effect to the adjustments stated below and other necessary
adjustments.
Particulars
Capital Account Drawings Account Stock (1.4.1981) Retums lnwards Carriage lnwards Deposit with Landlord Returns outwards Carriage outwards Loan to Surinder (given on 1.4.1981, interest 6% p.a.) Interest on above Rent for Shop premises Rent outstanding and payable Stock (31.3.1982)
Purchases

lGoo

L-

Dr"
Cas Cas

Plal

Fur
Insr

Mir
Tra (10
Sto

Int(
Sal Sur
Rer

Debit

Credit

15,000

3,250
17,445 554

Tra
Pur Por

1,240
1,000 840 1,100 1,000
25

Ba
Ch

thr

820
130 18"792

fol

Debtors

12,970 4 000

le Seies

Accountancg & Financial Mgmt. - F.y.B.Com. (Sem. - I)

Creditors Advertisement Expenses Loan fromMohinder(Taken on 30.9.1981 interest at6%p.a.) Bad-Debts
Patents
Sales

3,000

954 1,200 400

500

&

Patterns

27,914
330

Discount allowed
Salaries Cash

754
62

Goodwill

t-'t30 Total
45.095 69.915

ronoured

Adjustments: (il < 2OO l- out of advertisement expenses to be carried forward to next year. (iil A sum of ? 600/- paid for purchase of a typewriter on 1st October, 1981 has been wrongly debited to purchases account. This is to be rectilied and depreciation on the typewriter is to written off at l}o/o p.a. (Ans: Trial Balance Total - 7 4B,lO9; G.p. - <
Balance Sheet

< 27,874.)

.L2.t989
n passed

: on lst
glvenl

(161[9oods Sold but not despatched glvenl The following is the Trial Balance of P. Kunar, a stationery merchant as at 81.12.19g2.
Drawings Cash in Hand
19,000 1,800 1,50,000

t.

Cash at Bank

s to you has not

Plant & Machinery Furniture & Fixture

Insurance Charges

21,900 90,000
9,000 1,200 600

Loan from Hari Gopal (taken on 1.7.82 @ 6% p.a.) Creditors

Sales

15,000

25,200 2,40,000

r and m , after
recessary

Miscellaneous Expenses Trademark Rights (10 years from 1.1.82) Stock (1.1.82) lnterest on Loan from Hari Gopal
Salaries and Wages

30,000 40,500
300

---l
cr"ilt<
ss4
1,000 1,100 1,000
I
I

Sundry Debtors
Rent, Rates Purchases Postages & Telegram Bad-debts Charities & Donations

&

Taxes

27,300 34,200 9,300

900

1,42,800 1,200
800

400

I
|

,rl
|

fi,7g21
I

_ You are required to prepare a Trading Account, Prolit and Loss Account for the year ended 31.12.1982 and a Balance Sheet as on that date after making the followlng adJustments: (il Stock on 31.t2.L982 ( 38,200/-. (ttf Depreciate Plant & Machinery at 1,Oo/o and F\rrniture & Fixture at 5olo p.a. (iiif Invoices of value < 3,600/- were recorded in the Sales Book on 27th December, 1982, but goods were not despatched until 5th Januaqr, 1983 and

*qr

7i

174

Reliable Series

be written off. Create a reserve of 5o/o on Sundry Debtors for Bad and Doubtful debts For adjustment (3) ? 3,600 to be deducted from closing stock; i.e. Closing - {Hints: Stock to be taken at ( 34,600 /- (< 38,2A0 - T 3,600)l

(ivf of the sundry debtors < t,2oo / - are bad and should

were included in the closing stock.

(vl

Plant & Machinery Purchases less retums Factory Buildings

Wages

(171(c.4. rnterf [IYpicat suml From the following Trial Balance and accompanying of Jailal Billu & sons, prepare Trading and profit & Loss Account for the year ended 31st December, 1972 and Balance Sheet as on that date. Debit Balances t Credit Balances {
10,000
Sales

Dr

90,000 50,000
10,000

Fuel and Power Comrnission paid to pruchase manager Insurance & Taxes

2,000
1,000

Capital Interest on Income-tax paid in advance Suspense account of Chotilal Interest received in advance Creditors

2,00,000 80,000 400 30,000 3,600

15,000

Lt
Pt
R(

Tr
Pr Ci

4,000
1,000

Life Insurance
Goodwill
Debtors Bad-Debts Income Tax advance payment lncome Tax Cash in Hand & at Bank Stock on 31st December, 1972

D M
St Pr Fr

30,000 70,000
1,000

4,000
10,000 15,000

lv
D

20,000
10,000 1.000 3.29.00O

Account of Motilal Commission paid in advance

Suspense

B
S

II
3.29-000
S

Additional Information: (il on investigation, it was found tJrat goods costing < 4o,ooo/- were sent to chotilal under consignment; 3/4 of the goods were sold by him for t 60,000/-. Remaining stock was valued at cost. A cheque of ( do,o00/- was received from Chotilal. Entry for cash received was passed and creditea to ni" suspense Account. commission of 50% on sale is payable to chotilal. (iil Similarly, a joint venture agreement was made with Motilal for which an advance of { 10,000/- was entered. It is now ascertained that the venture earned a profit of t 6,OOO/- of which Jailal Billu & Sons are entitled to get 2/3rd share. (iiif Debtors included an arnount due from Chandi Ram 2,OOA/- and creditors

E
C

(
s

(ivf Purchases included purchase of materials used for the building < 2,oool-. (vl During the year a new plant was erected and firm,s o*r, -rt had spent time
thereon amounting to 7 2OO / -. The amount was included in wages adcount.

included amount due to Chandi Ram

3,OOO/-.

t.e

Series

Accountancg & Financial Mgmt. - F.Y.B.Com. (Sem. - I)

175

(vtf Goods costing ? 600/- (Sales Price t 900/-) were sent on approval on 28th December and recorded as sale, but no consent has been received up to 31st
December.

Closing

(viif Make provision for doubtful debts at 1Vo and depreciate plant buildings at 5o/o.
(Ans: Gross Profit < 1,38,900/- Net Profit <

at 7Oo/o and

ce

and

& Loss

;heet as

1,26,925/-;BlS-< 2,39,9251 (181(C.A. Interf JTypical Suml Mr. Fairdealer is the proprietor of the large business of Cotton price goods. The following Trial Balance was prepared
from his books as on 31st December, 1978.
Particulars

<l
2,00,000
I
|

{
40,000 3,26,700 2,500 6,900
1,600

Debit Balances: Land & Buildings

Purchases

80,000

400
30,000 3,600
15,000

Retums Inward

I I

Travelling Expenses Printing & Stationery

Cash at Bank

30,79s
1,800

Discount Allowed Miscellaneous Expenses Sundry Debtors

Postage

18,620 64,000
800

I I

3.29.000

Furniture Cash in Hand Motor Car Investment (Market value < 14,000/-) Drawings Bills Receivable Stock (1.1.78) lnterest on Baak loan Salaries (including advance < 1,500) Establishment Expenses
Carriage Inward

8,000 5,900
16,000 12,000 10,000

4,800 63,680 3,000 22,000

1,595 3,000 16,000

: sent to

mfor{

Advertisements Credit Balances:

Sales

)0/- was
ed to his

4,68,100
990

Income from Investments

vhich an : venture
ed to get

l2%oBankloan secured on Fixed Assets (no movement during the year) Mr. Fairdealer's Capital A/c Bills Payable
Sundry Creditors
Returns Outward

40,000 80,000

2,600
63,100 3,700
1 ?On

Discount Received

creditors

ool-.
rent time
rcount.

The following further information was obtained: (il Stock as on 3Lst December,1978 was ( l,2O,OOO/-. (iil Sundry Debtors include a sum of t 3,OOO/- due from Mr. B and Sundry Creditors include a sum of t 4,OOO due to Mr. B. (iitf The Reserve for Doubtful Debts is to be maintained @ to% on sundry Debtors. Reserve for Discount on Debtors and Discount on Creditors are to be

(ivf Bills

created @ 5%. Receivable include a dishonoured bill of

{ 600/-.

i
il

..-* *.,*ru*ruul*iWiMM

176 (vl

Reliable Senes

Accour

Stock worth ( 10,000/- destroyed by fire on 25.17.1978 in respect of which insurarrce company admits a claim for only < 7,5AOl-. (vif The manager of Mr. Fairdealer is entifled to a commission of lO%o of Net Profit calculated after charging such commission. (viif /oth of the Advertisement Expenses is to be carried forward. lviill 2yfh of the Net Profit is to be carried to Reserve Fund. (ixf Depreclation to be charged on: (A) Land & Building @2 l/2o/o (Bf Furniture @ lOo/o and (C| Motor Car @2Oo/o You are required to prepare a Trading and Prolit & Loss A/c. for the year ended 31st December, 1978 and to draw up the Balance Sheet as on that date. (Ans: G.P. -< 2,05,920, Net Profit { 1,21,880; Balance Sheet Total - < 3,05,563)

tt*; lr
12

lphnt &
lcapitat

lu*rt
lcreditr

lsluri.

ls*kI
lr"*it,
iPurchz
I I

(191(C.A|: lTvpical Suml You are given a Trial Balance as at 31.10.1961 drawn by the accountant of Mr. X You are required to prepare Trading and Prolit & Loss Account for the year ended 31.10.6L and Balance Sheet as at that date. But on scnrtiny, you have found the following errors in the Trial Balance and also the following adjustments required to be done. (fl Drawings account was debited to the extent of { 500/- which should be charged to Furniture & Fittings. (ii| Purchases Account was debited with < 1,000 which should have been charged to materials purchased for the erection of Building. (flfl { 5OO/- cash paid by Mr. X was credited to Sales. (ivf Provide depreciation on Buildings 2Il2%. Furniture & Fittings 6%. (vl Bad Debts ( 1OO/- should be written off. (vif Provide Bad-Debts Reserve 5%o on Sundry Debtors, Discount on Sundry Creditors @ 2yr"/r. {vtif salaries unpaid ? 2OO/-; Rates prepaid { 60, Insurance prepaid ( i00/-, Carriage Inward unpaid { 100/-.
Capital 50,000
1,500

Freish
Sales

lReser

lBuild
I

rreisl

lr*, Insurr
I

lcooo
lGene lFact(

lo"u,
I

prctr
stoc:

lrraoo

lPurc

lsd"
leuo

lmr", lcus:

Curent Accoutrt
Sales

7,40,004 6,99,200 1,200 400

500 300

lca"

Adjusted Purchases
Salaries

l_
fol

Carriage Inward Cariage Outward

L9'

Lighting
Rates

&

Insurance

400 30,000
8,000

Discount

Building
Sundry Debtors Furniture Sundry Creditors Petty Cash
Cash at Bank Stock at 31.10.61

6,000 20,000

6t-250

F
L-

Senes

Accountancg & Financial Mgmt. - F.Y.B.Com. (Sem' - I) (Ans: Gross Profit - < 4O,8OO/-; Net Profit Balance Sheet Total - < 1,07,000/-)

which Profit

1 37,7OO

/-;

20,000 80,000 34,500 44,560

15,850 15,000 10,000

r.1961 rading

1,740
1,860

ilance owlng

2,50,850 2,000 24,000 2,140 9,500 4,250 25,000

8,200 1,280

luired

rld

be

rarged

78,200 950 34,200

iundry

12,000 1,02,000

lool-,
50,000
I

3,100
1,400

400 4,200

,40,000
I

,rl
I

prepare Trading and Prolit & Loss A/c. for the year ended 31st December, fg7a and Batance-Sheet as on that date after taking into consideratlon the following information: (il stock on hand on 31st December, 1973 was valued at { 80,500/-. . (iil Depreciate Plant & Machinery by 10% & Furniture by 5% & Motor Car by
< l,OOO/-. {iitf Bring Reserve for Bad-debts to 57o on Sundry Debtors' (tvf A commission of lo/o on gross profit has to be provided for work manager' (vl A commission of 2o/o on net Profit (after charging the work manager commission) is to be credited. (Ans: N.P. - < 55,915, Work Manager commission - ( 957, General Manager Commission - ( 1,l42,Balartce Sheet Totai - ( 1,97,610')

20,000
I

;.10.500

l
|

,- :

178

Reliable Series

Accout
12

(2U [Calculation of Commissionl On the 31st December, L996, the following Trial Balauce was extracted from the books of Mohan: Trial Balance as on December 31, L996
Capital Drawings Sundry Debtors and Creditors Bank Loan Interest on Loan
Cash at Bank Reserve for Doubtful Debts

56,000
5,000

r-lGoodu I Factor

4t,200
600

20,800
19,000

luu"ni

lro-io
lmv"*,
lcapita

tt,2t0
1,422 13,500 19,000

leuok lcreoir
lDebtc lstocrr
I

Stock on lst January, 1996 Motor Car

Buildings
Purchase and Sales
Sales Returns

25,000

t,33,094
15,642

Purchase Returns

Carriage Ourwards Establishment Expenses Freight Inward

Salaries

6,002
17,000 5,858

l*o,
lui."
leuo
I

2,000
1,000

p,,."

Rent and Rates Insurance

2,792
6,9',78

lr'.ir
lFact,

Advertising
General Expenses

6,578

lsata

Discount
Rent

l**
6.770

Bills Receivable Bills Payable

Machinery

ln"o

l*'

You are requlred to prepare Trading and Profit & Loss Account for the year ended 31st December, L996 and a Balance Sheet as on that date and also pass adjusting and closing entries. Adjustments: (il Buitdings is to be depreciated @ lOo/o and Motor Car @2OYo. (iil Interest at 5o/o for 6 months on Bank Loan remained unpaid.

(vl

(iitf Salaries amounting to { 5OO and Rates amounting to t (tvf Prepaid insurance amounted to { 250.
Stock on December, 31, 1996 was valued at

2OO

were outstanding.

profits after charging such commission. (Ans: Gross Profit ( 68,084; Net Profit 7 17,963; Balance Sheet Manager's Commission : ( 898/-)

Reserve for Bad debts was to be maintained at 5%o. (viif The ma,nager of the concern was entitled to receive a commission @ 5% on net

(vif

13,000.
A(

1,16,070;

tble Seies

Accountancg & Financial Mgmt. - F.y.B.Com. (Sem. _ I)

1221

179

following
-l

givenl Amar Chemleals has March, L997.

Particulars

following Ledger Balance as on 31st

Debit

on

C*dtt <

-*']
20.800
I

Credit

lGoodwill
I

Factory Shed

u,ooo
I
I

lMachinery

1,4r,
I

2,692
|

Furniture Investments Capital Bank Loan Creditors Debtors Stock on 1.4.1996 Materials Work in Progiess Finished goods

| I I

s0,000 20,000 r,30,000 s,ooo

10,000 1,95,000

3,00,000
1,50,000 1,35,000 1,30,000

Net Sales
Miscellaneous Income Bad Debts Reserve Purchase of Raw Materials Freight on Materials Factory Power Salaries and Wages Factory

7,500 82,500 I1,00,000 4,000 5,000 8,60,000 50,000

15,000 1,50,000

600 e8o

Office
Repairs and Renewals Rent and Taxes lnsurance

65,000

2,500
16,500 3,900
I

5,n4

-r2r2t4

General Expenses

::=

8.100
17_54 000

17.54.000

the year flso pass

The following addltional information is avallable: (il Closing Stock: Material ( 2,10,000, Work in Progress

tanding.

o/o

On nlet

_l

are requlred to prepare Manufacturing, Trading and profit and Loss - You for Account the year ended Sist March, ]rgg7 Sheet as on that date. "rrl-B"l"rree (M.U. November, 19981 (Ans: Cost of Production - ( 10,14,900; Gross profit _ < ZJO, tOO; Net Profit - ( 1,18,200, Balance Sheet - < 2,63,200.) (23f Pass adjusting entries for the following: (il Rent outstanding for December,20O6 t S,O0O. (ii) Insurance for 3 months < 6,000 paid in advance.

Depreciation to be provided at 2r/f/o on Factory Shed, loo/o on Machinery and 15%o on Furniture. (tiif Repairs and Rent and taxes are to be apportioned between Factory and office in the ratio of 3:2. (ivf Reserve for bad and doubtful debts to be provided at 4o/o ondebtors. (vl Insurance P:emium covers a period of one month in ad.vance.

(itf

Goods < 2,OZ,SOO.

12,500 and Finished