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Page No 20.20:

Question 15:

Manu started business with a capital of ₹ 4,00,000 on 1st October, 2005. He borrowed from his friend a sum of ₹ 1,00,000. He brought further ₹ 75,000 as capital on 31st March, 2006, his position was:
Cash: ₹ 30,000; Stock: ₹ 4,70,000; Debtors: ₹ 3,50,000 and Creditors: ₹ 3,00,000.
He withdrew ₹ 8,000 per month during this period. Calculate profit on loss for the period.

Answer:

Statement of Affairs

for the year ending March 31, 2006

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

3,00,000

Cash

30,000

Loan from Friend

1,00,000

Stock

4,70,000

 

 

Debtors

3,50,000

Capital

4,50,000

 

 

(Balancing Figure)

 

 

 

 

8,50,000

 

8,50,000

 

 

 

 

 

Statement of Profit and Loss

for the year ending March 31, 2006

Particulars

Amount

Rs

Capital as on March 31, 2006

4,50,000

Add: Drawings (8,000 × 6)

48,000

 

4,98,000

Less: Additional Capital Introduced

(75,000)

Adjusted Capital as on March 31, 2006

4,23,000

Less: Capital as on Oct.01, 2005

(4,00,000)

Profit made during the year 2005-06

23,000

 

 



Page No 20.37:

Question 1:

Following information of an accounting year is given:
Opening Capital ₹ 60,000; Drawings ₹ 5,000; Capital added during the year ₹ 10,000 and Closing Capital ₹ 90,000. Calculate the Profit or Loss for the year.

Answer:

Statement of Profit or Loss

Particulars

Amount

(Rs)

Capital at the end

90,000

Add: Drawings

5,000

 

95,000

Less: Additional Capital Introduced

(10,000)

Adjusted Capital at the end

85,000

Less: Capital in the beginning

60,000

Net Profit for the year

25,000

 

 

 



Page No 20.38:

Question 2:

Mayank does not keep proper records of his business, he gives you the following information:
 

    ₹
Opening Capital 1,00,000
Closing Capital 1,25,000
Drawings during the year 30,000
Capital added during the year 37,500

Calculate the profit or loss for the year.

Answer:

Statement of Profit or Loss

Particulars

Amount

(Rs)

Capital at the end

1,25,000

Add: Drawings

30,000

 

1,55,000

Less: Additional Capital Introduce

(37,500)

Adjusted Capital at the end

1,17,500

Less: Capital in the beginning

1,00,000

Net Profit for the year

17,500

 

 

 

Page No 20.38:

Question 3:

Capital of Ganesh Gupta in the beginning of the year was ₹ 70,000. During the year his business earned a profit of ₹ 20,000, he withdrew ₹ 7,000 for his personal use. He sold ornaments of his wife for ₹ 20,000, and invested that amount into the business. Find out his Capital at the end of the year.

Answer:

Capital at the end

=

Opening Capital + Additional Capital + Profit − Drawings

 

=

70,000 + 20,000 + 20,000 − 7,000 = Rs 1,03,000

 

Page No 20.38:

Question 4:

Vikas maintains his books of account on Single Entry System. He provides following information from his books. Find out additional capital introduced in the business during the year 2017–18.
Opening Capital–₹ 1,30,000                      Drawing during the year ₹ 50,000
Closing Capital–₹ 2,00,000                       Profit made during the year ₹ 1,00,000

Answer:

Additional Capital  =   Capital at the End + Drawings − (Capital in the Beginning + Profit)
  2,00,000 + 50,000 − (1,30,000 + 1,00,000)
  2,50,000 − 2,30,000 = Rs 20,000

Page No 20.38:

Question 5:

Mohan maintains books on Single Entry System. He gives you the following information:
 

    ₹
Capital on 1st April, 2017 15,200
Capital on 31st March, 2018 16,900
Drawings made during the year 4,800
Capital introduced on 1st August, 2017 2,000

You are required to calculat the Profit or Loss made by Mohan.

Answer:

Statement of Profit or Loss

Particulars

Amount

(Rs)

Capital as on March 31, 2018

16,900

Add: Drawings

4,800

 

21,700

Less: Addition Capital Introduced

(2,000)

Adjusted Capital as on March 31, 2018

19,700

Less: Capital as on April 01, 2017

(15,200)

Profit made during the year 2017-18

4,500

 

 

 

Page No 20.38:

Question 6:

Mahesh who keeps his books on Single Entry System sells goods at Cost plus 50%. On 1st April, 2017 his Capital was â‚¹4,00,000 and on 31st March, 2018 it was â‚¹3,50,000. He had withdrawn â‚¹20,000 per month besides goods of the sale value of â‚¹60,000. How much did he earn in 2017-18?

Answer:

Statement of Profit/Loss
Particulars
Amount
(₹)
Closing Capital
1,32,000
  Less: Opening Capital
(1,00,000)
  Add: Drawings
24,000
Profit for the Year
56,000
   

Working Notes:
Closing Statement of Affairs
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
12,000
Cash
3,200
Loan from Brother
10,000
Stock
34,800
Capital (Bal. Fig.)
1,32,000
Debtors       
31,000
 
 
Plant
85,000
 
1,54,000
 
1,54,000
       

Page No 20.38:

Question 7:

Krishan started his business on 1st April, 2017 with a Capital of ₹ 1,00,000. On 31st March, 2018, his assets were :
 

    ₹
Cash 3,200
Stock 34,800
Debtors 31,000
Plant 85,000

He owed ₹ 12,000 to sundry creditors and ₹ 10,000 to his brother on that date. He withdrew ₹ 2,000 per month for the private expenses. Ascertain his profit.

Answer:

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Sundry Creditors

12,000

Cash

3,200

Brother’s Loan

10,000

Stock

34,800

Capital (Balancing Figure)

1,32,000

Debtors               

31,000

 

 

Plant

85,000

 

 

 

 

 

1,54,000

 

1,54,000

 

 

 

 

 

Statement of Profit or Loss

for the year end March 31, 2018

Particulars

Amount

(Rs)

Capital as on March 31, 2018

1,32,000

Add: Drawings (Rs 2,000 × 12)

24,000

 

1,56,000

Less: Capital as on April 01, 2017

(1,00,000)

Profit made during the year 2017-2018

56,000

 

 

 

Page No 20.38:

Question 8:

Ram Prashad keeps his books on Single Entry System and from them and the particulars supplied, the following figures were gathered together on 31st March, 2018:
Book Debts ₹ 10,000; Cash in Hand ₹ 510; Stock-in-Trade (estimated) ₹ 6,000; Furniture and Fittings ₹ 1,200; Trade Creditors ₹ 4,000; Bank Overdraft ₹ 1,000; Ram Prashad stated that he started business on 1st April with cash ₹ 6000 paid into bank but stocks valued at ₹ 4,000. During the year he estimated his drawings to be ₹ 2,400. You are required to prepare the statement, showing the profit for the year, after writing off 10% for Depreciation on Furniture and Fittings.

Answer:

Books of Ram Prashad

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Trade Creditors

4,000

Book Debts

10,000

Bank Overdraft

1,000

Cash in Hand

510

Capital (Balancing Figure)

12,590

Stock

6,000

 

 

Furniture and Fittings

1,200

 

 

 

Less: 10% Depreciation

120

1,080

 

 

 

 

 

17,590

 

17,590

 

 

 

 

 

Statement of Affairs

as on April 01, 2017

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Capital (Balancing Figure)

10,000

Bank

6,000

 

 

Stock

4,000

 

 

 

 

 

10,000

 

10,000

 

 

 

 

 

Statement of Profit or Loss

for the year and March 31, 2018

Particulars

Amount

(Rs)

Capital as on March 31, 2018

12,590

Add: Drawings

2,400

 

14,990

Less: Capital as on April 01, 2017

(10,000)

Profit made during the year 2017-18

4,990

 

 

 



Page No 20.39:

Question 9:

Shruti maintains her books of account from Incomplete Records. Her books provide the following information:
 

 
1st April, 2015
(₹)
31st March, 2016
(₹)
Cash  
1,200
1,600
Bills Receivable  
2,400
Debtors  
16,800
27,200
Stock  
22,400
24,400
Investments  
8,000
Furniture  
7,500
8,000
Creditors  
14,900
11,600

She withdrew ₹ 500 per month for personal expenses. She sold her Investments of ₹ 16,000 at 5% premium and introduced the amount into business.
You are required to prepare a Statement of Profit or Loss for the year ending 31st March, 2016.

Answer:

Statement of Profit/Loss
Particulars
Amount
(₹)
Closing Capital
60,000
Less: Opening Capital
(33,000)
Less: Additional Capital
(16,800)
Add: Drawings
6,000
Profit for the Year
16,200
   

Working Notes:
 
Opening Statement of Affairs
as on April 01, 2015
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
14,900
Cash
1,200
Capital (Bal. Fig.)
33,000
Debtors
16,800
 
 
Stock
22,400
 
 
Furniture          
7,500
 
 
 
 
 
 
 
 
 
47,900
 
47,900
       
   
Closing Statement of Affairs
Dr.    
Cr.
Liabilities
Amount
Rs
Assets
Amount
Rs
Creditors
11,600
Cash
1,600
Capital (Bal. Fig.)
60,000
Bills Receivable
2,400
 
 
Debtors
27,200
 
 
Stock
24,400
 
 
Investments
8,000
 
 
Furniture
8,000
 
71,600
 
71,600
       

Page No 20.39:

Question 10:

Hari maintains her books of account on Single Entry System. His books provide the following information:
 

Particulars
1st April, 2017
(₹)
31st March, 2018
(₹)
Furniture .............................................................
2,000
2,000
Stock .............................................................
28,000
30,500
Sundry Debtors .............................................................
21,000
34,000
Cash .............................................................
1,500
2,000
Sundry Creditors .............................................................
17,500
19,000
Bills Receivable .............................................................
...
3,000
Loan ............................................................. ... 5,000
Investments .............................................................
...
10,000

His drawings during the year were ₹ 5,000 Depreciate furniture by 10% and provide a reserve for Bad and Doubtful Debts at 10% on Sundry Debtors.
Prepare the statement showing the profits for the year.

Answer:

Statements of Affairs

as on April 01, 2017

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Sundry Creditors

17,500

Furniture

2,000

Capital (Balancing Figure)

35,000

Stock

28,000

 

 

Sundry Debtors

21,000

 

 

Cash

1,500

 

 

 

 

 

52,500

 

52,500

 

 

 

 

 

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Sundry Creditors

19,000

Furniture

2,000

 

Loan

5,000

Less: 10% Depreciation

(200)

1,800

Capital (Balancing Figure)                

53,900

Stock

30,500

 

 

Sundry Debtors

34,000

 

 

 

Less: 10% Reserve for Doubtful Debts

(3,400)

30,600

 

 

Cash

2,000

 

 

Bills Receivables

3,000

 

 

Investments

10,000

 

 

 

 

 

77,900

 

77,900

 

 

 

 

 

Statement of Profit or Loss

for the year ended March 31, 2018

Particulars

Amount

(₹)

Capital as on March 31, 2018

53,900

Add: Drawings

5,000

 

58,900

Less: Capital as on April 01, 2017

(35,000)

Profit made during the year 2017-18

23,900

 

 

 

Page No 20.39:

Question 11:

A commenced business on 1st April, 2017 with a capital of ₹ 10,000. He immediately bought Furniture and Fixtures for ₹ 2,000. On 1st October, 2017, he borrowed ₹ 5,000 from his wife @ 9% p.a. (interest not yet paid) and introduced a further capital of his own amounting to ₹ 1,500. A drew @ ₹ 300 per month at the end of each month for household expenses. On 31st March, 2018 his position was as follows:
Cash in Hand ₹ 2,800; Sundry Debtors ₹ 4,800; Stock ₹ 6,800; Bills Receivable ₹ 1,600; Sundry Creditors ₹ 500 and owing for Rent ₹ 150. Furniture and Fixtures to be depreciated by 10%. Ascertain the profit or loss made by A during 2017–18.

Answer:

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

₹

Assets

Amount

₹

Wife’s Loan

5,000

 

Furniture and Fixture

2,000

 

Add: Outstanding Interest

 

Less: 10% Depreciation

(200)

1,800

(5,000 × 9% × 6/12)

225

5,225

Cash in Hand

2,800

Sundry Creditors

500

Sundry Debtors

4,800

Rent Outstanding

150

Stock

6,800

Capital (Balancing Figure)

11,925

Bills Receivable

1,600

 

 

 

 

 

17,800

 

17,800

 

 

 

 

 

Statement of Profit or Loss

for the year ended March 31, 2018

Particulars

Amount

₹

Capital as on March 31, 2017

11,925

Add: Drawings (Rs 1,200 × 3)

3,600

 

15,525

Less: Additional Capital Introduced

(1,500)

Adjusted Capital as on March 31, 2017

14,025

Less: Capital as on April 01, 2016

(10,000)

Profit made during the year 2016-17

4,025

 

 

 

Page No 20.39:

Question 12:

Kuldeep, a general merchant, keeps his accounts on Single Entry System. He wants to know the results, of his business on 31st March, 2018 and for that following information is available:
 

Particulars
1st April, 2017
(₹)
31st March, 2018
(₹)
Cash in Hand ................................................................................
1,50,000
1,75,000
Bank Balance ................................................................................
7,50,000
8,00,000
Furniture ................................................................................
1,00,000
1,00,000
Stock ................................................................................
5,00,000
6,50,000
Creditors ................................................................................
3,50,000
4,00,000
Debtors ................................................................................
2,50,000
3,00,000

During the year, he had withdrawn ₹ 5,00,000 for his personal use and invested ₹ 2,50,000 as additional cpaital. Calculate his profits on 31st March, 2018 and prepare the Statement of Affairs as on that date.

Answer:

Statement of Affairs

as on April 01, 2017

Liabilities

Amount

₹

Assets

Amount

₹

Creditors

3,50,000

Cash in Hand

1,50,000

Capital (Balancing Figure)

14,00,000

Bank Balance

7,50,000

 

 

Furniture

1,00,000

 

 

Stock

5,00,000

 

 

Debtors

2,50,000

 

17,50,000

 

17,50,000

 

 

 

 

 

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

₹

Assets

Amount

₹

Creditors

4,00,000

Cash in Hand

1,75,000

Capital (Balancing Figure)

16,25,000

Bank Balance

8,00,000

 

 

Furniture

1,00,000

 

 

Stock

6,50,000

 

 

Debtors

3,00,000

 

20,25,000

 

20,25,000

 

 

 

 

 

Statement of Profit or Loss

for the year ended March 31, 2018

Particulars

Amount

₹

Capital as on March 31, 2017

16,25,000

Add: Drawings

5,00,000

 

21,25,000

Less: Additional Capital Introduced

(2,50,000)

Adjusted Capital as on March 31, 2017

18,75,000

Less: Capital as on April 01, 2016

(14,00,000)

Profit made during the year 2016-17

4,75,000

 

 

 



Page No 20.40:

Question 13:

Following information is supplied to you by a shopkeeper:
 

Particulars
1st April, 2017
(₹)
31st March, 2018
(₹)
Cash ................................................................................
6,000
7,000
Sundry Debtors ................................................................................
68,000
64,000
Stock ................................................................................
59,000
87,000
Furniture ................................................................................
15,000
13,500
Sundry Creditors ................................................................................
20,000
18,000
Bills Payable ................................................................................
15,000
11,000

During the year, he withdrew ₹ 2,500 per month for dometstic purposes. He also borrowed from a friend at 9% a sum of ₹ 20,000 on 1st October, 2017. He has not yet paid the interest. A provision of 5% on debotrs for doubtful debts is to be made.
Ascertain the profit or loss made by him during the period.

Answer:

Statement of Affairs

as on April 01, 2017

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Sundry Creditors

20,000

Cash

6,000

Bills Payable

15,000

Sundry Debtors

68,000

 

 

Stock

59,000

Capital (Balancing Figure)

1,13,000

Furniture

15,000

 

 

 

 

 

1,48,000

 

1,48,000

 

 

 

 

 

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Sundry Creditors

18,000

Cash

7,000

Bills Payable

11,000

Stock

87,000

9% Loan from Friend

20,000

 

Furniture

13,500

Add: Interest Outstanding (2,000 × 9% × 6/12)

 

900

 

20,900

 

 

Capital (Balancing Figure)

1,18,400

 

 

 

 

Sundry Debtors

64,000

 

 

 

Less: 5% Provision for Doubtful Debts

 

(3,200)

 

60,800

 

 

 

 

 

1,68,300

 

1,68,300

 

 

 

 

 

Statement of Profit or Loss

for the year ended March 31, 2018

Particulars

Amount

(₹)

Capital as on March 31, 2017

1,18,400

Add: Drawings (Rs 250 × 12)

30,000

 

1,48,400

Less: Capital as on April 01, 2016

(1,13,000)

Profit made during the year 2016-17

35,400

 

 

 

Page No 20.40:

Question 14:

Vikas is keeping his accounts according to Single Entry System. His capital on 31st December, 2015 was â‚¹ 2,50,000 and his capital on 31st December, 2016 was â‚¹ 4,25,000. He further informs you that during the year he gave a loan of â‚¹ 30,000 to his brother on private account and withdrew â‚¹ 1,000 per month for personal purposes. He used a flat for his personal purpose, the rent of which @ â‚¹ 1,800 per month and electricity charges at an average of 10% of rent per month were paid from the business account. During the year he sold his 7% Government Bonds of â‚¹ 50,000 at 1% premium and brought that money into the business.
Prepare a Statement of Profit or Loss for the year ended 31st December, 2016.

Answer:

Statement of Profit/Loss
Particulars
Amount
(₹)
Closing Capital
4,25,000
  Less: Opening Capital
(2,50,000)
  Less: Additional Capital
(50,500)
  Add: Drawings
65,760
Profit for the Year
1,90,260
   
 
Note: Drawings include loan to brother, withdrawals in cash, rent and electricity charges.

Page No 20.40:

Question 16:

From the following information relating to the business of Mr. X who keeps books on Single Entry System, ascertaint the profit or loss for the year 2017–18:
 

Particulars
1st April, 2017
(₹)
31st March, 2018
(₹)
Machinery ................................................................................
8,000
8,000
Furniture ................................................................................
2,000
2,000
Stock ................................................................................
7,000
5,000
Sundry Debtors ................................................................................
4,000
4,500
Bank Balance ................................................................................
200 (Cr.)
1,800 (Dr.)
Sundry Creditors ................................................................................
5,000
3,500

Mr. X withdrew ₹ 4,100 during the year to meet his household expenses. He introduced ₹ 300 as fresh capital on 15th January, 2018. Machinery and Furniture are to be depreciated at 10% and 5% p.a. respectively.

Answer:

Statement of Affairs

as on April 01, 2017

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Bank Overdraft

200

Machinery

8,000

Sundry Creditors

5,000

Furniture

2,000

Capital (Balancing Figure)

15,800

Stock

7,000

 

 

Sundry Debtors

4,000

 

 

 

 

 

21,000

 

21,000

 

 

 

 

 

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Sundry Creditors

3,500

Machinery

8,000

 

Capital (Balancing Figure)

16,900

Less: 10% Depreciation

(800)

7,200

 

 

Furniture

2,000

 

 

 

Less: 5% Depreciation

(100)

1,900

 

 

Stock

5,000

 

 

Sundry Debtors

4,500

 

 

Bank Balance

1,800

 

 

 

 

 

20,400

 

20,400

 

 

 

 

 

Statement of Profit or Loss

for the year ended March 31, 2018

Particulars

Amount

(₹)

Capital as on March 31, 2017

16,900

Add: Drawings

4,100

 

21,000

Less: Additional Capital Introduced

(300)

Adjusted Capital as on March 31, 2017

20,700

Less: Capital as on April 01, 2016

(15,800)

Profit made during the year 2016-17

4,900

 

 



Page No 20.41:

Question 17:

X, a retailer, has not maintained proepr books of accont but it has been possible to obtain the follwoing details:
 

Particulars
Last Year
(₹)
This Year
(₹)
Trade Creditors ................................................................................
6,270
5,890
Loan from Naresh ................................................................................
5,000
5,000
Stock ................................................................................
12,350
11,980
Cash in Hand ................................................................................
570
650
Shop Fittings ................................................................................
7,250
7,800
Trade Debtors ................................................................................ 5,280 4,560
Bank Balance ................................................................................
3,990
4,130

Calculate the net profit for this year and draft the Statement of Affairs at the end of the year after noting that:
(a) Shop Fittings are to be depreciated by ₹ 780.
(b) X has drawn ₹ 100 per week for his own use.
(c) Included in the Trade Debtors is an irrecoverable balance of ₹ 270.
(d) Interest at 5% p.a. is due on the loan from Naresh but has not been paid for the year.

Answer:

Statement of Affairs

(Previous Year)

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Trade Creditors

6,270

Stock

12,350

Loan from Naresh

5,000

Cash in Hand

570

Capital (Balancing Figure)

18,170

Shop Fittings

7,250

 

 

Trade Debtors

5,280

 

 

Bank Balance

3,990

 

29,440

 

29,440

 

 

 

 

 

Statement of Affairs

(Current Year)

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Trade Creditors

5,890

Stock

11,980

Loan from Naresh

5,000

 

Cash in Hand

650

Add: Outstanding Interest

 

 

 

(5,000 × 5%)

250

5,250

Shop Fittings

7,800

 

Capital (Balancing Figure)

16,930

Less: Depreciation

(780)

7,020

 

 

Trade Debtors

4,560

 

 

 

Less: Bad Debts

(270)

4,290

 

 

Bank Balance

4,130

 

 

 

 

 

28,070

 

28,070

 

 

 

 

 

Statement of Profit or Loss

(Current Year)

Particulars

Amount

(Rs)

Capital of the Current Year

16,930

Add: Drawings (Rs 100 × 52)

5,200

 

22,130

Less: Capital of the Previous Year

(18,170)

Profit made during the Current Year

3,960

 

 

 

Page No 20.41:

Question 18:

On 1st April, 2017, X started a business with ₹ 40,000 as his capital. On 31st March, 2018, his position was as follows:
 

Particulars

(₹)
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 2017–18, X drew ₹ 24,000. On 1st October, 2017, he introduced further capital amounting to ₹ 30,000. You are required to ascertain profit on loss made by him during the year 2017–18.
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 31st March, 2018.

Answer:

Statement of Affairs

for the year ended March 31, 2018

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

30,000

Bank

10,000

Bills Payable

10,000

Debtors

50,000

 

Capital (Balancing Figure)           

1,30,700

Less: 5% Provision for Doubtful Debts

 

(2,500)

 

47,500

 

 

Stock

40,000

 

 

Plant

68,000

 

 

 

Less: 10% Depreciation

(6,800)

61,200

 

 

Furniture

12,000

 

 

 

 

 

1,70,700

 

1,70,700

 

 

 

 

 

Statement of Profit or Loss

for the year ended March 31, 2018

Particulars

Amount

(₹)

Capital as on March 31, 2018

1,30,700

Add: Drawings

24,000

 

1,54,700

Less: Additional Capital Introduced

(30,000)

Adjusted Capital as on March 31, 2018

1,24,700

Less: Capital as on April 01, 2017

(40,000)

Profit made during the year 2017-18

84,700

 

 

 

Page No 20.41:

Question 19:

C maintains his books according to Single Entry System. Following figures were available from the books for the six months ended 31st December 2017:

Particulars

1st July,
2017
(₹)

31st Dec.
2017
(₹)

Plant and Machinery

1,50,000

1,40,000

Debtors

65,000

60,000

Cash and Bank Balances

25,000

31,000

Stock

40,000

45,000

Creditors

9,000

10,000


Adjustments:

(a) He had withdrawn ₹ 200 in the beginning of every month for household purposes.

(b) Depreciation on Plant and Machinery @ 10% p.a.

(c) Further Bad Debts ₹ 5,000 and Provision for Doubtful Debts to be created @ 2%.

(d) During the period, salaries have been prepaid by ₹ 500 while wages outstanding were ₹ 1,000.

(e) Interest on drawings to be reckoned @ 6% p.a.

You are required to prepare the Statement of Profit or Loss for the half year ended 31st December, 2017, followed by Revised Statement of Affairs as on that date.

Answer:

Statement of Affairs

as on July 01,2017

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

9,000

Cash and Bank balances

25,000

Capital (Balancing Figure)

2,71,000

Debtors

65,000

 

 

Stock

40,000

 

 

Plant and Machinery

1,50,000

 

 

 

 

 

2,80,000

 

2,80,000

 

 

 

 

 

Statement of Affairs

as on December 31,2017

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

10,000

Cash and Bank balances

31,000

Outstanding Wages

1,000

Debtors

60,000

Capital (Balancing Figure)

2,65,500

Stock

45,000

 

 

Prepaid Salary

500

 

 

Plant and Machinery

1,40,000

 

2,76,500

 

2,76,500

 

 

 

 

 

Statement of Profit or Loss

for the half year ended December 31,2017

Particulars

Amount

(₹)

Capital at the end of the year

2,65,500 

 

Add: Drawings made during the year

1,200 

Adjusted capital at the end of the year

2,66,700 

 

Less: Capital in the beginning of the year

2,71,000 

Gross Loss (Profit before Adjustment)

4,300 

  Less: Interest on Drawings

21 

  Add: Depreciation on Plant and Machinery

7,000 

          Bad Debts

5,000 

          Provision for Doubtful Debts

1,100 

       Net Loss (Profit After Adjustment)

17,379 

 

 

 

Statement of Affairs (After adjustments)

as on December 31, 2017

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

10,000

Cash and Bank balances

31,000

Outstanding Wages

1,000

Debtors                        

60,000

 

Capital               

2,71,000

 

Less: Bad Debts

 5,000

 

Less: Net Loss

  17,379

 

 

55,000

 

Less: Drawings

    1,200

 

Less: Provision for D.D.

 1,100

53,900

Less: Interest on Drawings

        21

2,52,400

Plant and Machinery

1,40,000

 

 

 

Less: Depreciation

    7,000

1,33,000

 

 

Stock

45,000

 

 

Prepaid Salary

500

 

2,63,400

 

2,63,400

 

 

 

 

 

Statement of Affairs (After adjustments)

as on December 31, 2017

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

10,000

Cash and Bank balances

31,000

Outstanding Wages

1,000

Debtors                        

60,000

 

Capital               

2,71,000

 

Less: Bad Debts

 5,000

 

Less: Net Loss

  17,379

 

 

55,000

 

Less: Drawings

    1,200

 

Less: Provision for D.D.

 1,100

53,900

Less: Interest on Drawings

        21

2,52,400

Plant and Machinery

1,40,000

 

 

 

Less: Depreciation

    7,000

1,33,000

 

 

Stock

45,000

 

 

Prepaid Salary

500

 

2,63,400

 

2,63,400

 

 

 

 

 

Working Notes:

WN1: Depreciation on plant and machinery would be charged for six months only i.e., Rs 7,000 (1,40,000×10×6100×12)
 

WN2: Amount of Provision for Doubtful Debts would be Rs 1,100 (2100×(60,0005,000))

 

WN3:      

Calculation of Amount of Interest on Drawings:

Date

Amount

Months

Product

Jul. 01

200

6

1,200

Aug. 01

200

5

1,000

Sep. 01

200

4

800

Oct. 01

200

3

600

Nov. 01

200

2

400

Dec. 01

200

1

200

Total

 

 

4,200


Interest on Drawings =4,200×6×1100×12=Rs 21



Page No 20.42:

Question 20:

A firm sells goods at a Gross profit of 25% of sales. On 1st April, 2017 the Stock was â‚¹40,000; Purchases were â‚¹1,10,000 and the Stock on 31st March, 2018 was â‚¹30,000. What was the value of Sales?

Answer:

Cost of Goods Sold = Net Sales – Gross Profit
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
Cost of Goods Sold = 40,000 + 1,10,000 – 30,000 = ₹ 1,20,000
Gross Profit = 25% of Sales or 33.33% of COGS
Gross Profit = ₹ 40,000
Net Sales = Cost of Goods Sold + Gross Profit
Net Sales = 1,20,000 + 40,000 = ₹ 1,60,000

Page No 20.42:

Question 21:

A firm sells goods at Cost plus 25%. Sales to credit customers (3/4 of total) was â‚¹ 1,80,000. His Opening and Closing Stocks were ₹ 20,000 and ₹ 15,000 respectively. Find out the value of Purchases.

Answer:

Credit Sales = ₹ 1,80,000 (3/4 of Total Sales)
Total Sales = ₹ 2,40,000
Gross Profit = 25% of Cost or 20% of Sales
Gross Profit = ₹ 48,000
Cost of Goods Sold = Net Sales – Gross Profit
Cost of Goods Sold = 2,40,000 – 48,000 = ₹ 1,92,000
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
1,92,000 = 20,000 + Purchases – 15,000
Purchases = ₹ 1,87,000

Page No 20.42:

Question 22:

Calculate Stock in the beginning:
 

  ₹
Sales   80,000
Purchases 60,000
Stock at the end 8,000
Loss on Cost 1/6

Answer:

Let cost be Rs 100
Loss = ₹ 16.67 (1/6 of 100)
Sale = ₹ 83.33 (100 – 16.67)
% Loss on Sale = 20% (16.67/83.33)
Loss on Sale = ₹ 16,000 (20% of 80,000)
Cost of Goods Sold = Net Sales + Loss on Sale
Cost of Goods Sold = 80,000 + 16,000 = ₹ 96,000
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
96,000 = Opening Stock + 60,000 – 8,000
Opening Stock = ₹ 44,000

Page No 20.42:

Question 23:

Calculate the Stock at the end:

  ₹
Stock in the beginning 20,000
Cash Sales 60,000
Credit Sales 40,000
Purchases 70,000
Rate of Gross Profit on Cost 1/3

Answer:

Rate of Gross Profit on Cost = 1/3
Rate of Gross Profit on Sale = 1/4
Total Sales = Cash Sales + Credit Sales
Total Sales = 60,000 + 40,000 = 1,00,000
Gross Profit = ₹ 25,000 (1/4 of 1,00,000)
Cost of Goods Sold = Net Sales – Gross Profit
Cost of Goods Sold = 1,00,000 – 25,000 = ₹ 75,000
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
75,000 = 20,000 + 70,000 – Closing Stock
Closing Stock = ₹ 15,000



Page No 20.43:

Question 24:

Calculate the value of Closing Stock from the following information:

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

Answer:

Rate of Gross Profit on Cost = 1/4
Rate of Gross Profit on Sale = 1/5
Gross Profit = ₹ 24,000 (1/5 of 1,20,000)
Cost of Goods Sold = Net Sales – Gross Profit
Cost of Goods Sold = 1,20,000 – 24,000 = ₹ 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 = ₹ 33,000

Page No 20.43:

Question 25:

Calculate Purchases:

  ₹
Cost of Goods Sold  65,000
Stock in the beginning 4,000
Closing Stock 5,000

Answer:

Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
65,000 = 4,000 + Purchases – 5,000
Purchases = ₹ 66,000

Page No 20.43:

Question 26:

Calculate Sales:

Cost of goods sold ₹ 2,00,000
Rate of Gross Profit 20% on Sales  

Answer:

Rate of Gross Profit on Sale = 1/5
Rate of Gross Profit on Cost = 1/4
Gross Profit = ₹ 50,000 (1/4 of 2,00,000)
Sales = Cost of Goods Sold + Gross Profit
Sales = 2,00,000 + 50,000 = ₹ 2,50,000

Page No 20.43:

Question 27:

Debtors in the beginning of the year were â€‹â‚¹ 30,000, Sales on credit during the year were â‚¹ 75,000, Cash received from the Debtors during the year was â‚¹ 35,000, Returns Inward (regarding credit sales) were â‚¹ 5,000 and Bills Receivable drawn during the year were â‚¹ 25,000. Find the balance of Debtors at th end of the year, assuming that there were Bad Debts during the year of â‚¹ 2,000.

Answer:

Debtors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d            
30,000
Cash A/c
35,000
Sales A/c
75,000
Sales Return A/c
5,000
 
 
Bill Receivable A/c
25,000
 
 
Bad-Debts A/c
2,000
 
 
Balance c/d
38,000
 
 
 
 
 
1,05,000
 
1,05,000
       

Page No 20.43:

Question 28:

Creditors on 1st April, 2017 were â‚¹15,000, Purchases on credit were â‚¹30,000, Cash paid to Creditors during 2017-18 was â‚¹20,000, Returns Outward (regarding credit purchases) were â‚¹1,000 and Bills Payable accepted during the year â‚¹10,000. Find the balance of Creditors on 31st March, 2018.

Answer:

Creditors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
20,000
Balance b/d
15,000
Purchases Return A/c
1,000
Purchases A/c  
30,000
Bills Payable A/c
10,000
 
 
Balance c/d
14,000
 
 
 
 
 
 
 
45,000
 
45,000
       

Page No 20.43:

Question 29:

Following information is given of an accounting year:
Opening Creditors â‚¹ 15,000; Cash paid to creditors â‚¹ 15,000; Returns Outward â‚¹ 1,000 and Closing creditors â‚¹ 12,000.
Calculate Credit Purchases during the year.

Answer:

Creditors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
15,000
Balance b/d
15,000
Purchases Return A/c
1,000
Purchases A/c  
13,000
Balance c/d
12,000
 
 
 
 
 
 
 
28,000
 
28,000
       

Page No 20.43:

Question 30:

From the following information supplied by X, who keeps his books on Single Entry System, you are required to calculate Total Purchases:

  ₹
Opening balance of Bills Payable 5,000
Opening balance of Creditors 6,000
Closing balance of Bills Payable 7,000
Closing balance of Creditors 4,000
Cash paid to Creditors during the year 30,200
Bills Payable discharged during the year 8,900
Returns Outward 1,200
Cash Purchases 25,800

Answer:

Creditors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
30,200
Balance b/d
6,000
Purchases Return A/c
1,200
Purchases A/c   
40,300
Bills Payable A/c
10,900
 
 
Balance c/d
4,000
 
 
 
 
 
 
 
46,300
 
46,300
       

Total Purchases = Cash Purchases + Credit Purchases

Total Purchases = 25,800 + 40,300 = ₹ 66,100

Page No 20.43:

Question 31:

Cash sales of a business in a year were â€‹â‚¹ 85,000, the Cost of Goods Sold (including direct expenses) was â‚¹ 97,000 and Gross Profit as shown by the Trading Account for the year was â‚¹ 1,29,000. Calculate Credit Sales during the year.

Answer:

Gross Profit = Net Sales – Cost of Goods Sold
1,29,000 = Net Sales – 97,000
Net Sales = ₹ 2,26,000
Credit Sales = Total Net Sales – Cash Sales
Credit Sales = 2,26,000 – 85,000 = ₹ 1,41,000



Page No 20.44:

Question 32:

From the following information, calculate Total Sales made during the period:

  ₹
Debtors as on 1st April, 2017 20,400
Cash received from debtors during the year (as per Cash Book) 60,800
Returns Inward 5,400
Bad Debts 2,400
Debtors as on 31st March, 2018 27,600
Cash Sales (as per Cash Book) 56,800

Answer:

Debtors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
20,400
Cash A/c
60,800
Sales A/c
75,800
Sales Return A/c
5,400
 
 
Bad-Debts A/c
2,400
 
 
Balance c/d
27,600
 
 
 
 
 
96,200
 
96,200
       

Total Sales = Cash Sales + Credit Sales

Total Sales = 56,800 + 75,800 = ₹ 1,32,600

Page No 20.44:

Question 33:

Calculate Total Sales from the following information:

  ₹
Bills Receivables as on 1st April, 2017 7,800
Debtors as on 1st April, 2017 30,800
Cash received on maturity of Bills Receivable during the year 20,900
Cash received from Debtors 70,000
Bad Debts written off 4,800
Returns Inward 8,700
Bills Receivable dishonoured 1,800
Bills Receivable on 31st March, 2018 6,000
Debtors as on 31st March, 2018 25,500
Cash Sales during the year 15,900

Answer:

Debtors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
30,800
Cash A/c
70,000
Bill Receivable A/c
1,800
Sales Return A/c
8,700
Sales A/c
97,300
Bad-Debts A/c
4,800
 
 
Bill Receivable A/c
20,900
 
 
Balance c/d
25,500
 
 
 
 
 
1,09,000
 
1,09,000
       

Total Sales = Cash Sales + Credit Sales

Total Sales = 15,900 + 97,300 = ₹ 1,13,200

Page No 20.44:

Question 34:

From the following information, ascertain the opening balance of Sundry Debtors and the closing balance of Sundry Creditors: 

  ₹
Sundry Creditors as on 31st March, 2017 20,600
Sundry Debtors as on 31st March, 2018 37,400
Stock as on 31st March, 2017 26,000
Stock as on 31st March, 2018 24,000
During the year ended 31st March, 2018:
    Purchases 1,10,000
    Discount allowed by creditors 800
    Discount allowed to customers 1,100
    Cash paid to sundry creditors 95,000
    Bills Payable issued by them 14,000
    Bills Receivable received from customers 16,500
    Cash received  from customers 1,30,000
    Bills receivable dishonoured 1,900

Answer:

Debtors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
43,100
Cash A/c
1,30,000
Bill Receivable A/c
1,900
Discount Allowed A/c
1,100
Sales A/c
1,40,000
Bill Receivable A/c
16,500
 
 
Balance c/d
37,400
 
 
 
 
 
 
 
 
 
1,85,000
 
1,85,000
       

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

Cost of Goods Sold = 26,000 + 1,10,000 – 24,000 = 1,12,000

Gross Profit=3070×1,12,000=Rs 48,000

Sales = Cost of Goods Sold + Gross Profit

Sales = 1,12,000 + 48,000 = ₹ 1,60,000

Credit Sales = 1,60,000 – 20,000 = ₹ 1,40,000
 
Creditors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
95,000
Balance b/d
20,600
Discount Received A/c
800
Purchases A/c      
1,10,000
Bills Payable A/c
14,000
 
 
Balance c/d
20,800
 
 
 
 
 
 
 
1,30,600
 
1,30,600
       

Page No 20.44:

Question 35:

Roshan, whose accounts are maintained by Single Entry System, acquired a retail business on 1st April, 2017. He had â‚¹40,000 of his own and he borrowed â‚¹ 20,000 from his wife. He paid â‚¹15,000 for Goodwill, â‚¹5,000 for Furniture and â‚¹35,000 for Stock.
Total cash received by him during the financial year from the Debtors was â‚¹2,30,000. His payments were:

  ₹
Purchases 1,56,000
Salary and Wages 21,400
Trade Expenses 7,200
Rent:
For business premises 5,920
For private house 2,960
Payments made for domestic purposes and drawings 26,400

At the end of the year, the Stock was â‚¹37,500. He owed â‚¹13,500 to Creditors for goods and his customers owed to him â‚¹15,000. Provide 5% for Depreciation on Furniture, Interest at 5% on wife's Loan and â‚¹1,000 for Doubtful Debts.
Prepare the Cash Account, the Profit and Loss Account for the year ended 31st March, 2018 and the Balance Sheet at the close of the year.

Answer:

Trading Account for the year ended 31st March, 2018
Dr.
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
35,000
Sales
2,45,000
Purchases: Cash
1,56,000
  Closing Stock
37,500
Credit
13,500
1,69,500
   
Gross Profit c/d
78,000
   
 
2,82,500
 
2,82,500
 
 
 
 
 
Profit and Loss Account
for the year ended March 31, 2018
Dr.
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Salary and Wages
21,400
Gross Profit b/d
78,000
Trade Expenses
7,200
   
Rent for Business Premises
5,920
   
Provision for Doubtful Debts
1,000
 
 
Depreciation on Furniture
250
   
Interest on wife’s loan
1,000
   
Net Profit t/d to Capital
41,230
   
 
78,000
 
78,000
 
 
 
 
 
Balance Sheet
as on March 31, 2018
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
13,500
Cash Balance
15,120
Wife’s Loan from Wife
20,000
  Stock
37,500
  Add: O/s Interest
1,000
21,000
Furniture
5,000
 
Capital
40,000
    Less: Depreciation
250
4,750
  Less: Drawings
29,360
  Debtors
15,000
 
10,640
    Less: Provision for Doubtful Debts
1,000
14,000
  Add: Net Profit
41,230
51,870 
Goodwill
15,000
 
86,370
 
86,370
 
 
   
 
Cash Account
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Capital
40,000
Goodwill
15,000
Wife’s Loan
20,000
Furniture
5,000
Debtors
2,30,000
Stock
35,000
    Purchases
1,56,000
 
 
Salary and Wages
21,400
    Trade Expenses
7,200
 
 
Rent for Business Premises
5,920
    Drawings( 2,960+26,400)
29,360
    Balance c/d
15,120
 
2,90,000
 
2,90,000
 
 
 
 

Working Notes
 
Dr.
Creditors Account
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
 
 
 
 
Balance c/d 13,500 Purchases-Credit (B/F) 13,500
 
13,500
 
13,500
 
 
 
 
 
Dr.
Debtors Account
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Sales A/c (B/F)
2,45,000
Cash
2,30,000
 
 
Balance c/d
15,000
 
2,45,000
 
2,45,000
 
 
 
 



Page No 20.45:

Question 36:

Vijay commenced business as foodgrains merchant on 1st April, 2017 with a capital of â‚¹4,00,000. On the same day, he purchased furniture for â‚¹80,000. From the following particulars obtained from his books which do not conform to Double Entry principles, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2018 and the Balance Sheet as on that date:

  ₹
Sales (including Cash Sales â‚¹2,00,000) 5,00,000
Purchases (including Cash Purchases â‚¹1,20,000 4,00,000
Vijay's Drawings (in cash) 40,000
Salaries to Staff 48,000
Bad Debts written off 4,000
Trade Expenses paid 16,000
 
Vijay used goods of â‚¹12,000 for private purposes during the year. On 31st March, 2018, his Debtors amounted to â‚¹1,40,000 and Creditors â‚¹80,000. Stock-in-Trade on that date was â‚¹1,60,000.

Answer:

Trading Account
for the year ended March 31, 2018
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Purchases
4,00,000
 
Sales
5,00,000
  Less:  Drawings
12,000
3,88,000
Closing Stock        
1,60,000
Gross Profit
2,72,000
 
 
 
6,60,000
 
6,60,000
       
 
Profit & Loss Account
for the year ended March 31, 2018
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Salary
48,000
Gross Profit   
2,72,000
Trade Expenses
16,000
 
 
Bad Debts
4,000
 
 
Net Profit
2,04,000
 
 
 
2,72,000
 
2,72,000
       
 
Balance Sheet
as on March 31, 2018
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Capital
4,00,000
 
Cash in Hand
2,56,000
  Less:  Drawings
52,000
 
Debtors
1,40,000
 
  Add: Net Profit
2,04,000
5,52,000
  Less: Bad Debts
4,000
1,36,000
Creditors
80,000
Furniture
80,000
 
 
Closing Stock
1,60,000
 
6,32,000
                
6,32,000
       
 
Cash Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Capital A/c
4,00,000
Creditors A/c
2,00,000
Debtors A/c             
1,60,000
Drawings A/c
40,000
Sales A/c
2,00,000
Furniture A/c
80,000
 
 
Purchases A/c
1,20,000
 
 
Salaries A/c
48,000
 
 
Trade Expenses A/c
16,000
 
 
Balance c/d
2,56,000
 
7,60,000
 
7,60,000
       
 
Debtors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Sales A/c
3,00,000
Cash A/c
1,60,000
 
 
Balance c/d
1,40,000
 
 
 
 
 
3,00,000
 
3,00,000
       
 
Creditors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
2,00,000
Purchases A/c
2,80,000
Balance c/d
80,000
 
 
 
 
 
 
 
2,80,000
 
2,80,000
       

Page No 20.45:

Question 37:

Following information is obtained from the books of Vinay, who maintained his books of account under Single Entry System: 

 

I. Receipts for the year ended 31st March, 2018:

₹
    From Debtors 88,125
    Cash Sales 20,625

    Paid by Vinay

12,500

 

1,21,250

2. Payments during the year:

 
    New plant bought 3,125
    Drawings 7,500
    Salaries 5,625
    Wages 33,625
    Interest paid 375
    Rent paid 6,625
    Light and power 2,375
    Sundry Expenses 10,625

    Sundry Creditors

38,125

 

1,08,000

   

Vinay banks all receipts and makes payments by means of cheque.
 

 

 

 

Assests and Liabilities

As at 31st March,2017
(₹) 

As at 31st March, 2018

(Rs)

Sundry Creditors 12.625 12,000
Sundry Debtors 18,750 30,625
Bank 3,125 ?
Stock 31,250 15,625
Plant

37,500

36,575

 

From the above information, prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as on that date.

Answer:

Trading Account
for the year ended March 31, 2018
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
31,250
Sales (1,00,000 + 20,625)
1,20,625
Purchases
37,500
Closing Stock
15,625
Light & Power             
2,375
 
 
Wages
33,625
 
 
Gross Profit
31,500
 
 
 
1,36,250
 
1,36,250
       
 
Profit & Loss Account
for the year ended March 31, 2018
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Depreciation on Plant
4,050
Gross Profit          
31,500
Interest
375
 
 
Rent
6,625
 
 
Salary
5,625
 
 
Sundry Expenses       
10,625
 
 
Net Profit
4,200
 
 
 
31,500
 
31,500
       
 
Balance Sheet
as on March 31, 2018
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Capital
78,000
 
Bank
16,375
  Less:  Drawings
7,500
 
Closing Stock                 
15,625
  Add: Additional Capital
12,500
 
Debtors
30,625
  Add: Net Profit
4,200
87,200
Plant
36,575
Creditors
12,000
 
 
 
 
 
 
 
99,200
                
99,200
       
 
Balance Sheet
as on April 01, 2017
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
12,625
Bank
37,500
Capital (bal. fig.)
78,000
Closing Stock
18,750
 
 
Debtors
3,125
 
 
Plant
31,250
 
90,625
                
90,625
       
 
Bank Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
3,125
Creditors A/c
38,125
Capital A/c
12,500
Drawings A/c
7,500
Debtors A/c               
88,125
Interest A/c
375
Sales A/c
20,625
Light & Power A/c
2,375
 
 
Plant A/c
3,125
 
 
Rent A/c
6,625
 
 
Salaries A/c
5,625
 
 
Sundry Expenses A/c
10,625
 
 
Wages A/c
33,625
 
 
Balance c/d
16,375
 
1,24,375
 
1,24,375
       
 
Debtors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
18,750
Cash A/c
88,125
Sales A/c (bal.fig.)
1,00,000
Balance c/d
30,625
 
 
 
 
 
1,18,750
 
1,18,750
       
 
Creditors Account
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash A/c
38,125
Balance b/d
12,625
Balance c/d                    
12,000
Purchases A/c (bal.fig.)
37,500
 
 
 
 
 
50,125
 
50,125
       



Page No 20.46:

Question 38:

Surya does not keep a systematic record of his transactions. He is able to give you the following information regarding his assets and liabilities:

  31st March 2017 (₹) 31st March, 2018 (₹)
Creditors for goods 21,000 19,000
Creditors for expenses 1,500 1,800
Bills Payable 8,700 11,500
Sundry Debtors 35,000 34,000
Stock (At cost) 28,000 25,000
Furniture and Fittings 10,000 12,000
Cash 5,100  

Following additional information is also avialable for the year ended 31st March, 2018:
  ₹
Bills Payable Issued 20,800
Cash Sales 15,000
Payment to Sundry Creditors 31,000
Expenses paid 6,600
Drawings 8,000

Bad Debts during the year were â‚¹900. As regards sale, Surya tells you that he always sells goods at Cost plus 25%. Furniture and Fittings are to be depreciated at 10% of the value in the beginning of the year.
Prepare Surya's Trading and Profit and Loss Account for the year ended 31st March, 2018 and his Balance Sheet on that date.

Answer:

Trading Account
for the year ended 31st March, 2018
Dr.
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
28,000
Sales: Cash
15,000
 
Purchases
49,800
Credit
51,000
66,000
Gross Profit c/d
13,200
Closing Stock
25,000
 
91,000
 
91,000
 
 
 
 
 
Profit and Loss Account
for the year ended March 31, 2018
Dr.
 
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Bad Debts
900
Gross Profit b/d
13,200
Expenses
6,600
     
  Add: Closing Creditors for Expenses
1,800
     
8,400
   
 
  Less: Opening Creditors for Expenses 1,500
6,900
   
Depreciation on Furniture and Fittings
1,000
   
Net Profit t/d to Capital
4,400
   
 
13,200
 
13,200
 
 
 
 
 
Balance Sheet
as on March 31, 2018
Liabilities
Amount
(Rs)
Assets
Amount
(Rs)
Creditors for Goods
19,000
Cash Balance
4,600
Creditors for Expenses
1,800
Stock
25,000
Bills Payable
11,500
Debtors
34,000
Capital 46,900   Furniture and Fittings
12,000
  Less: Drawings 8,000      
38,900
     
Add: Net Profit
4,400
43,300
   
 
 
     
 
75,600
 
75,600
 
 
   
 
Working Notes  
Balance Sheet
as on March 31, 2017
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors for Goods
21,000
Cash Balance
5,100
Creditors for Expenses
1,500
Stock
28,000
Bills Payable
8,700
Debtors
35,000
Capital ( Balancing Figure)
46,900
Furniture and Fittings
10,000
 
78,100
 
78,100
 
 
   
 
Cash Account
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Balance b/d
5,100
Expenses
6,600
Sales
15,000
Sundry Creditors
31,000
Debtors
51,100
Furniture and Fittings
3,000
    Bills Payable
18,000
 
 
Drawings
8,000
    Balance c/d
4,600
 
71,200
 
71,200
 
 
 
 
 
Dr.
Creditors for Goods Account
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Bills Payable
20,800
Balance b/d
21,000
Cash
31,000
Purchases-Credit (B/F)
49,800
Balance c/d
19,000
 
 
 
70,800
 
70,800
 
 
 
 
 
Dr.
Debtors Account
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
35,000
Bad Debts
900
Sales-Credit
51,000
Cash (Balancing Figure)
51,100
 
 
Balance c/d
34,000
 
86,000
 
86,000
 
 
   
 
Dr.
Bills Payable Account
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Cash (Balancing Figure)
18,000
Balance b/d
8,700
Balance b/d
11,500
Creditors for goods
20,800
 
29,500
 
29,500
 
 
   
 
Dr.
Furniture and Fittings Account
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d
10,000
Depreciation
1,000
Cash-Purchases (B/F)
3,000
Balance c/d
12,000
 
13,000
 
13,000
 
 
 
 

Computation of Cost of Goods Sold and Credit Sales

COGS = Opening. Stock + Purchases – closing. Stock = 28,000 + 49,800 – 25,000 = 52,800

Gross Profit = 52,800 × 25/100= 13,200

Total Sales = COGS + Gross Profit = 52,800 + 13,200 = 66,000   Credit Sales = Total Sales – Cash Sales

                 = 66,000 – 15,000 = 51,000

Note: It has been assumed that a Drawings in cash of Amount ₹ 8,000 has been made by Surya during the year.



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