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Page No 18.60:

Question 1:

State whether the following expenses are capital or revenue in nature:
(i) Expenses on whitewashing and painting of a building purchased to make it ready for use.
(ii) ₹ 10,000 spent on constructing platform for a new machine.
(iii) Repair expenses of ₹ 25,000 incurred for whitewashing of factory building.
(iv) Insurance premium paid as renewal premium.
(v) Purchased a new car.

Answer:

(1) Capital Expenditure: Paid to make an asset ready to use

(2) Capital Expenditure: Paid to make an asset ready to use

(3) Revenue Expenditure: Made for the maintenance of asset

(4) Revenue Expenditure: Part of normal operating cost

(5) Capital Expenditure: Used in business for a number of years

Page No 18.60:

Question 2:

State with reasons whether the following are Capital or Revenue Expenses:
(i) Excise duty paid on purchase of new machine.
(ii) Wages paid to install a machine.
(iii) Repairs carried out on existing car.
(iv) Office block of building repainted for ₹ 50,000.
(v) Paid telephone bill ₹ 2,500.

Answer:

(1) Capital Expenditure: Paid for the acquisition of new asset

(2) Capital Expenditure: Paid to make the asset ready to use

(3) Revenue Expenditure: Paid for the running and maintenance of car

(4) Revenue Expenditure: Paid for the maintenance of Building

(5) Revenue Expenditure: Part of normal operating cost

Page No 18.60:

Question 3:

From the following information determine Gross Profit for the year ended 31st March, 2018
 

 
 
Opening Stock (1st April, 2017)
25,000
Goods purchased during the year
1,40,000
Freight and Packing
10,000
Closing Stock (31st March, 2018)
30,000
Sales
1,90,000
Packing Expenses on Sales
6,000

Answer:

Gross Profit

=

 Sales + Closing Stock – (Opening Stock + Freight and Packing + Goods Purchased)

 

=

1,90,000 + 30,000 – (25,000 + 10,000 + 1,40,000)

 

=

2,20,000 – 1,75,000 = Rs 45,000

 

Alternatively,

Trading Account

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

25,000

Sales

1,90,000

Purchases

1,40,000

Closing Stock

30,000

Freight and Packing

10,000

 

 

Gross Profit (Balancing Figure)

45,000

 

 

 

2,20,000

 

2,20,000

 

 

 

 

Note: Packing Expenses (Rs 6,000) on Sales is an Indirect Expense, therefore it is not considered to compute the amount of Gross Profit.

Page No 18.60:

Question 4:

Calculate Closing Stock from the following details:
 

 
 
Opening Stock
20,000
Purchases
70,000
Cash Sales
60,000
Credit Sales
40,000
 
 
Rate of Gross Profit on Cost 3313%
 

Answer:

Calculation of amount of Closing StockGross Profit=3313% on cost =13rd  on  costGross Profit on sales =14th on salesAnd, Sales = Cash Sales + Credit Sales = 60,000+40,000 = Rs 1,00,000So, Gross Profit =1,00,000×14=Rs 25,000Cost of Goods Sold=SalesGross Profit                               =1,00,00025,000=Rs 75,000Cost of Goods Sold=Opening Stock+Purchases+Direct ExpensesClosing Stock75,000=20,000+70,000+0Closing StockClosing Stock=Rs 15,000

Page No 18.60:

Question 5:

Prepare Trading Account from the transactions givne below:
 

 
 
Opening Stock
23,000
Purchases Return
2,400
Purchases
29,000
Closing Stock
47,700
Sales Return 500 Carriage Inwards 100
Sales
25,400
Depreciation
2,000

Also pass the Journal entries.

Answer:

Trading Account

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

23,000

Sales

25,400

 

Purchases

29,000

 

Less: Sales Return

(500)

24,900

Less: Purchases Return

(2,400)

26,600

Closing Stock

47,700

Carriage Inwards

100

 

 

Gross Profit (Balancing Figure)

22,900

 

 

 

72,600

 

72,600

 

 

 

 

               

Note: Depreciation is an Indirect Expense, therefore it is not shown in the Trading Account.
 

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

 

Trading A/c

Dr.

 

52,600

 

 

To Opening Stock A/c

 

 

 

23,000

 

To Purchases A/c

 

 

 

29,000

 

To Carriage Inwards A/c

 

 

 

100

 

To Sales Return A/c

 

 

 

500

 

(Transfer of balances to the debit side of Trading A/c)

 

 

 

 

 

 

 

 

 

 

 

Sales A/c

Dr.

 

25,400

 

 

Purchase Return A/c

Dr.

 

2,400

 

 

To Trading A/c

 

 

 

27,800

 

(Transfer of balances to the credit side of Trading A/c)

 

 

 

 

 

 

 

 

 

 

 

Closing Stock A/c

Dr.

 

47,700

 

 

To Trading A/c

 

 

 

47,700

 

(Recording of Closing Stock)

 

 

 

 

 

 

 

 

 

 

 

Trading A/c

Dr.

 

22,900

 

 

To Profit & Loss A/c

 

 

 

22,900

 

(Transfer of gross profit to the Profit & Loss A/c)

 

 

 

 

 



Page No 18.61:

Question 6:

Ascertain Gross Profit from the following:
 

 
 
Opening Stock
2,00,000
Carriage on Sales
30,000
Closing Stock
1,80,000
Office Rent
58,000
Purchases 8,50,000 Sales 14,07,000
Carriage on Purchases
23,000
   

Answer:

Trading Account

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

2,00,000

Sales

14,07,000

Purchases

8,50,000

Closing Stock

1,80,000

Carriage on Purchases

23,000

 

 

Gross Profit (Balancing Figure)

5,14,000

 

 

 

15,87,000

 

15,87,000

 

 

 

 

Note: Carriage on Sales and Office Rent are the Indirect Expenses, therefore, these are not considered to compute the amount of Gross Profit.

Page No 18.61:

Question 7:

From the following information prepare Trading Account for the year ended 31st March, 2018:
 

 
 
Stock on 1st April, 2017
40,000
Returns Outward
80,000
Purchases
4,00,000
Wages and Salaries
50,000
Sales 3,80,000 Returns Inward 20,000
Carriage Inwards
20,000
Stock on 31st March, 2018
1,30,000

Net Realisable Value (Market Value) of stock as on 31st March, 2018 was ₹ 1,20,000.

Answer:

Trading Account

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

40,000

Sales

3,80,000

 

Purchases

4,00,000

 

Less: Return Inwards

(20,000)

3,60,000

Less: Return Outwards

(80,000)

3,20,000

Closing Stock

1,20,000

Carriage Inwards

20,000

 

 

Wages and Salaries

50,000

 

 

Gross Profit (Balancing Figure)

50,000

 

 

 

4,80,000

 

4,80,000

 

 

 

 

               

Note: Closing Stock is taken at its Market Price (i.e. Rs 1,20,000) instead of its Cost (i.e. Rs 1,30,000). This is because, as per Principle of Conservatism, Closing stock is taken at Cost or Market Price whichever is less.

Page No 18.61:

Question 8:

From the following information, prepare Trading Account for the year ended 31st March, 2018:
Adjusted Purchases ₹ 6,60,000; Sales ₹ 7,44,000; Closing Stock ₹ 50,400; Freight and Carriage Inwards ₹ 3,600; Wages ₹ 6,000; Freight and Cartage Outwards ₹ 2,000.

Answer:

Trading Account

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Purchase (Adjusted)

6,60,000

Sales

7,44,000

Freight and Carriage Inwards

3,600

 

 

Wages

6,000

 

 

Gross Profit (Balancing Figure)

74,400

 

 

 

7,44,000

 

7,44,000

 

 

 

 

           

Notes:

        1. Freight and Carriage Outwards are indirect expenses, therefore it is not recorded in the Trading Account.

        2. Closing Stock (i.e. Rs 50,400) is not recorded in the Trading Account as it is already adjusted in the amount of Adjusted Purchases.

Page No 18.61:

Question 9:

Following balances appear in the Trail Balance of a firm as on 31st March, 2018:
 

   
Opening Stock: Raw Material 80,000
  Finished Goods 1,40,000
Purchases   3,60,000
Sales   7,00,000
Returns: Purchases 10,000
  Sales 6,000
Wages   1,30,000
Factory Expenses   90,000
Freight: Inwards 20,000
  Outwards 30,000
At the end of the accounting period, stock was:  
Raw Materials   70,000
Work-in-Process   20,000
Finished Goods   1,10,000

Prepare Trading Account of the firm.

Answer:

Financial Statement of….

Trading Account 

for the year ended March 31,2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

 

Sales

7,00,000

 

Raw Materials

80,000

 

Less: Return Inwards

6,000

6,94,000

Finished Goods

1,40,000

2,20,000

Closing Stock

 

Purchases

3,60,000

 

Raw Materials

70,000

 

Less: Return Outwards

10,000

3,50,000

Work-in-Progress

20,000

 

Freight Inwards

20,000

Finished Goods

1,10,000

2,00,000

Wages

1,30,000

 

 

Factory Expenses

90,000

 

 

Gross Profit (Balancing Figure)

84,000

 

 

 

8,94,000

 

8,94,000

 

 

 

 

               

Note: Freight outwards is an indirect expense. It will be recorded in Profit & Loss A/c.

Page No 18.61:

Question 10:

From the following information, prepare Trading account for the year ended 31st March, 2018:
Adjusted Purchases ₹ 5,50,000; Sales ₹ 6,25,000; Freight and Carriage Inwards ₹ 3,000; Wages ₹ 7,000; Freight and Cartage Outwards ₹ 2,500; Closing Stock ₹ 50,000.
 

Answer:

Trading Account

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Purchase (Adjusted)

5,50,000

Sales

6,25,000

Freight and Carriage Inwards

3,000

   

Wages

7,000

 

 

Gross Profit (Balancing Figure)

65,000

 

 

 

6,25,000

 

6,25,000

 

 

 

 

           

Notes:

        1. Freight and Carriage Outwards are indirect expenses, therefore it is not recorded in the Trading Account.

        2. Closing Stock (i.e. Rs 50,000) is not recorded in the Trading Account as it is already adjusted in the amount of Adjusted Purchases.



Page No 18.62:

Question 11:

From the following figures, calculate Operating Profit:
 

 
 
Net Profit
1,00,000
Rent Received
10,000
Gain on Sale of Machine
15,000
Interest on Loans
20,000
Donation
2,000
   

Answer:

Operating Profit=Net ProfitRent ReceivedGain on Sale of Machine+Interest on LoanDonation                          =1,00,00010,00015,000+20,0002,000=Rs 93,000

Page No 18.62:

Question 12:

From the following, prepare Profit and Loss Account of Sohan Lal as it would appear in the 1st year that ended 31st March, 2019:
 

 
 
Salaries and Wages
30,000
Advertising
10,000
Commission Paid
2,000
Discount Allowed
18,000
Postage and Courier 1,500 Rent Received 17,000
Insurance 3,000 Interest on Investment 15,000
Interest Paid 4,000 Bad Debts 9,000
Carriage Outwards
5,000
Brokerage Paid
950

The Gross Profit was 45% of sales, which amounted to ₹ 6,50,000.
Also, pass the Journal entries.

Answer:

Profit and Loss Account

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Salaries and Wages

30,000

Gross Profit (6,50,000 × 45%)

2,92,500

Commission Paid

2,000

Rent Received

17,000

Postage and Telegram

1,500

Interest on Investments

15,000

Insurance

3,000

 

 

Interest Paid

4,000

 

 

Carriage Outwards

5,000

 

 

Advertising

10,000

 

 

Discount Allowed

18,000

 

 

Bad Debts

9,000

 

 

Brokerage Paid

950

 

 

Net Profit (Balancing Figure)

2,41,050

 

 

 

3,24,500

 

3,24,500

 

 

 

 

Page No 18.62:

Question 13:

From the following information, prepare Profit and Loss Account for the year ended 31st March, 2018:
 

 
 
Gross Profit 1,20,000 Discount Received
6,000
Rent
5,000
Printing and Stationery
4,000
Salary 35,000 Legal Charges 10,000
Commission Paid 19,000 Bad Debts 2,000
Interest on Loan 5,000 Loss by Fire 6,000
Advertisement 8,000 Depreciation 4,000
Interest Received
8,000
   

Answer:

Profit and Loss Account

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Rent

5,000

Gross Profit

1,20,000

Salary

35,000

Interest Received

8,000

Commission Paid

19,000

Discount Received

6,000

Interest on Loan

5,000

 

 

Advertisement

8,000

 

 

Printing and Stationery

4,000

 

 

Legal Charges

10,000

 

 

Bad Debts

2,000

 

 

Loss by Fire

6,000

 

 

Depreciation

4,000

 

 

Net Profit (Balancing Figure)

36,000

 

 

 

1,34,000

 

1,34,000

 

 

 

 

Page No 18.62:

Question 14:

From the following particular, prepare Balance Sheet as at 31st March, 2018:
 

 
Dr.
(₹)
Cr.
(₹)
Capital
4,00,000
Drawings
44,000
Debtors and Creditors
64,000
42,000
Cash in Hand
3,600
Cash at Bank
72,000
Plant
1,00,000
Furniture
37,000
Net Profit
16,600
General Reserve
10,000
Closing Stock
1,48,000
Total
4,68,600
4,68,600
 
 
 

Answer:

Balance Sheet

as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets

Amount

(Rs)

Capital

4,00,000

 

Plant

1,00,000

Less: Drawings

(44,000)

 

Furniture

37,000

Add: Net Profit

16,600

3,72,600

Closing Stock

1,48,000

General Reserve

10,000

Debtors

64,000

Creditors

42,000

Cash at Bank

72,000

 

 

Cash in Hand

3,600

 

4,24,600

 

4,24,600

 

 

 

 



Page No 18.63:

Question 15:

From the following information, prepare Balance Sheet of a trader as at 31st March, 2018 arranging the assets and liabilities–(i) in order of permanence and (ii) in order of liquidity:
 

 
 
Goodwill
20,000
Bank
20,000
Capital
1,80,000
Sundry Creditors
63,000
Liabilities for Expenses 1,200 Bills Receivable 13,000
Cash in Hand 1,000 Plant and Machinery 40,000
Investment 20,000 Provision for Doubtful Debts 2,500
Bills Payable 10,700 Closing Stock 80,000
Net Profit 92,600 Furniture 16,000
Sundry Debtors 50,000 Drawing 30,000
Land and Building
60,000
   

Answer:

(I) Balance Sheet in Order of Permanence

Balance Sheet
as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets

Amount

(Rs)

Capital

1,80,000

 

Goodwill

20,000

Less: Drawings

(30,000)

 

Land and Building

60,000

Add: Net Profit

92,600

2,42,600

Plant and Machinery

40,000

Sundry Creditors

63,000

Furniture

16,000

Bills Payable

10,700

Investment

20,000

Liabilities for Expenses

1,200

Closing Stock

80,000

 

 

Sundry Debtors

50,000

 

 

 

Less: Provision for Doubtful Debts

(2,500)

47,500

 

 

Bill Receivable

13,000

 

 

Bank

20,000

 

 

Cash in Hand

1,000

 

3,17,500

 

3,17,500

 

 

 

 

 

 (II) Balance Sheet in Order of Liquidity

Balance Sheet
as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets

Amount

(Rs)

Liabilities for Expenses                            

1,200

Cash in Hand

1,000

Bills Payable

10,700

Bank

20,000

Sundry Creditors

63,000

Bills Receivable

13,000

Capital

1,80,000

 

Sundry Debtors

50,000

 

Less: Drawings

(30,000)

 

Less: Provision for Doubtful Debts

(2,500)

47,500

Add: Net Profit

92,600

2,42,600

Closing Stock

80,000

 

 

Investment

20,000

 

 

Furniture

16,000

 

 

Plant and Machinery

40,000

 

 

Land and Building

60,000

 

 

Good will

20,000

 

3,17,500

 

3,17,500

 

 

 

 

Page No 18.63:

Question 16:

From the Balance Sheet given below, calculate:
(i) Fixed Assets
(ii) Current Assets
(iii) Current Liabilities
(iv) Working Capital

Balance Sheet
as at 31st March, 2018
Liabilities
Assets
Trade Creditors
42,000
Stock in Hand
48,000
Expenses Accrued
3,200
Debtors
36,000
Bank Overdraft
4,800
Prepaid Expenses
400
Long-Term Loan
20,000
Goodwill
20,000
Interest on Loan
1,000
Land
20,000
Capital
93,400
Plant
32,000
    Furniture
8,000
 
1,64,400
 
1,64,400
       

Answer:

(i) Fixed Assets=Land+Plant+Furniture+Goodwill                        =20,000+32,000+8,000+20,000=Rs 80,000(ii) Current Assets=Stock+Debtors+Prepaid Expenses                            =48,000+36,000+400=Rs 84,400(iii) Current Liabilities=Creditors+Expenses Accrued+Bank Overdraft+Interest on Loan                                    =42,000+3,200+4,800+1,000=Rs 51,000(iv) Working Capital=Current AssetsCurrent Liabilities                                  =84,40051,000=Rs 33,400

Page No 18.63:

Question 17:

Prepare Trading and Profit and Loss Account and Balance Sheet of Jagat Shah as at 31st March, 2018 from the following balances:
 

 
 
Capital (Cr.)
3,60,000
Salaries
60,000
Machinery
70,000
General Expenses
20,000
Sales 8,20,000 Rent 50,000
Purchases 4,00,000 Purchases Return 5,000
Sales Return 10,000 Debtors 3,00,000
Stock on 1st April, 2017 1,00,000 Cash 40,000
Drawing 40,000 Carriage Outwards 20,000
Wages 1,00,000 Advertising 20,000
Carriage Inwards
5,000
Creditros 50,000

The Closing Stock was valued at ₹ 2,00,000.

Answer:

Financial Statements of Jagat Shah

Trading Account 

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars 

Amount

(Rs)

Opening Stock

1,00,000

Sales

8,20,000

 

Purchases

4,00,000

 

Less: Sales Return

(10,000)

8,10,000

Less: Purchases Return

(5,000)

3,95,000

Closing Stock

2,00,000

Wages

1,00,000

 

 

Carriage Inwards

5,000

 

 

Gross Profit (Balancing Figure)

4,10,000

 

 

 

10,10,000

 

10,10,000

 

 

 

 

               
Profit and Loss Account
for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Salaries

60,000

Gross Profit

4,10,000

General Expenses

20,000

 

 

Rent

50,000

 

 

Carriage Outwards

20,000

 

 

Advertising

20,000

 

 

Net Profit (Balancing Figure)

2,40,000

 

 

 

4,10,000

 

4,10,000

 

 

 

 

           

 

Balance Sheet
as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets

Amount

(Rs)

Capital

3,60,000

 

Fixed Assets

 

Less: Drawings

(40,000)

 

Machinery

70,000

Add: Net Profit

2,40,000

5,60,000

Current Assets

 

Current Liabilities

 

Closing Stock

2,00,000

Creditors

50,000

Debtors

3,00,000

 

 

Cash

40,000

 

6,10,000

 

6,10,000

 

 

 

 



Page No 18.64:

Question 18:

From the following balances, prepare Trading and Profit and Loss Account and Balance Sheet:
 

Debit Balances:
Debit Balances (Contd.):
Machinery
3,50,000
Rent
45,000
Debtors 2,70,000 Sundry Expenses 20,000
Drawings 90,000 Carriage 15,000
Purchases 9,50,000 Credit Balances:  
Wages 5,00,000 Capital 10,00,000
Bank 1,50,000 Creditors 1,40,000
Opening Stock 2,00,000 Sales 14,50,000
Closing Stock was valued at ₹ 30,000.

Answer:

Trading Account

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

2,00,000

Sales

14,50,000

Purchases

9,50,000

Closing Stock

30,000

Wages

5,00,000

Gross Loss (Balancing Figure)

1,85,000

Carriage

15,000

 

 

 

16,65,000

 

16,65,000

 

 

 

 

           

 

Profit and Loss Account

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Gross Loss

1,85,000

 

 

Rent

45,000

Net Loss (Balancing Figure)

2,50,000

Sundry Expenses

20,000

 

 

 

2,50,000

 

2,50,000

 

 

 

 

           

 

Balance Sheet

Liabilities 

Amount

(Rs)

Assets

Amount

(Rs)

Capital

10,00,000

 

Fixed Assets

 

Less: Drawings

(90,000)

 

Machinery

3,50,000

Less: Net Loss

(2,50,000)

6,60,000

Current Assets

 

Current Liabilities 

 

Closing Stock

30,000

Creditors

1,40,000

Debtors

2,70,000

 

 

Bank

1,50,000

 

8,00,000

 

8,00,000

 

 

 

 

Page No 18.64:

Question 19:

The following are the balances as on 31st March, 2018 extracted from the books of Dass:
 

 
 
Sales
9,20,000
Postage and Courier
6,200
Purchases
6,83,000
Miscellaneous Expenses
9,000
Returns Inward 13,000 Bad Debts 4,000
Returns Outward 22,000 Debtors 2,20,000
Stock on 1st April, 2017 1,76,000 Creditors 1,28,000
Carriage Inwards 24,000 Loan from Sahil 50,000
Rent 22,000 Capital 5,25,000
Discount 37,500 Drawings 19,100
Printing 7,200 Business Premises 3,90,000
Insurance 5,000 Office Furniture 15,000
Travelling Expenses
14,000
   

The stock on 31st March, 2018 was valued at ₹ 2,40,000.
You are required to prepare Trading Account, Profit and Loss Account and Balance Sheet as at 31st March, 2018.

Answer:

Financial Statement of Bhagwan Das

Trading Account 

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Stock

1,76,000

 

 

Purchases

6,83,000

 

Sales

9,20,000

 

Less: Return Outwards

(22,000)

6,61,000

Less: Return Inwards

(13,000)

9,07,000

Carriage Inwards

24,000

Closing Stock

2,40,000

Gross Profit (Balancing Figure)

2,86,000

 

 

 

11,47,000

 

11,47,000

 

 

 

 

               
 
Profit and Loss Account 
for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Rent, Rates and Taxes

22,000

Gross Profit

2,86,000

Discount

37,500

 

 

Printing

7,200

 

 

Insurance

5,000

 

 

Travelling Expenses

14,000

 

 

Postage and Courier

6,200

 

 

Miscellaneous Expenses

9,000

 

 

Bad Debts

4,000

 

 

Net Profit (Balancing Figure)

1,81,100

 

 

 

2,86,000

 

2,86,000

 

 

 

 

           
 
Balance Sheet
as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets

Amount

(Rs)

Capital

5,25,000

 

Fixed Assets

 

Less: Drawings

(19,100)

 

Business Premises

3,90,000

Add: Net Profit

1,81,100

6,87,000

Office Furniture

15,000

Loan from Sahil

50,000

Current Assets

 

Current Liabilities 

 

Closing Stock

2,40,000

Creditors

1,28,000

Debtors

2,20,000

 

8,65,000

 

8,65,000

 

 

 

 

Page No 18.64:

Question 20:

From the following balances of Anand, prepare Trading Account, Profit and Loss Account and Balance Sheet as at 31st March, 2018:
 

 
 
Credit Balances:
 
Debit Balances (Contd.):
 
Capital
3,60,000
Postage
2,730
Creditors 87,200 Bad Debts 2,870
Bills Payable 25,270 Interest 12,950
Sales 7,81,820 Insurance 4,170
Bad Debts Recovered 1,750 Machinery 1,00,000
Loan 1,20,000 Stock (Opening) 99,450
Debit Balances:   Purchases 6,20,920
Debtors 38,850 Wages 43,000
Salaries 40,000 Building 2,37,800
Discount 10,000 Selling Expenses 1,750
    Fixtures and Fittings 1,61,550

Value of goods on hand (31st March, 2018) was ₹ 1,43,000.

Answer:

Financial Statement of Anand

Trading Account 

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

99,450

Sales

7,81,820

Purchases

6,20,920

Closing Stock

1,43,000

Wages

43,000

 

 

Gross Profit (Balancing Figure)

1,61,450

 

 

 

9,24,820

 

9,24,820

 

 

 

 

 

Profit and Loss Account 
for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Salaries

40,000

Gross Profit

1,61,450

Discount

10,000

Bad debts Recovered

1,750

Selling Expense 1,750    

Postage

2,730

 

 

Bad Debts

2,870

 

 

Interest

12,950

 

 

Insurance

4,170

 

 

Net Profit (Balancing Figure)

88,730

 

 

 

1,63,200

 

1,63,200

 

 

 

 

 

Balance Sheet 
as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets

Amount

(Rs)

Capita

3,60,000

 

Fixed Assets

 

Add: Net Profit

88,730

4,48,730

Building

2,37,800

Loan

1,20,000

Machinery

1,00,000

Current Liabilities

 

Fixtures and fittings

1,61,550

Creditors

87,200

Current Assets

 

Bills Payable

25,270

Closing Stock

1,43,000

 

 

Debtors

38,850

 

6,81,200

 

6,81,200

 

 

 

 



Page No 18.65:

Question 21:

From the following balances, prepare Final Accounts of M./s. Raja & Sons for the year ended 31st March, 2018:
Salary ₹ 5,400; Insurance ₹ 2,500; Cash ₹ 400; Purchases ₹ 84,170; Rent Received ₹ 3,150; Drawings ₹ 2,100; Bills Payable ₹ 3,900; Debtors ₹ 38,080; Stock (1st April, 2017) ₹ 29,500; Bank Overdraft ₹ 9,700; Carriage ₹ 2,200; Creditors ₹ 4,200; Trade Expenses ₹ 4,900; Sales Return ₹ 4,700; Machinery ₹ 12,000; Wages ₹ 45,000; Sales ₹ 1,47,200; Purchases Return ₹ 3,900; Capital ₹ 58,900; Closing Stock (31st March, 2018) ₹ 36,200.

Answer:

Financial Statement of M/s. Raja & Sons

Trading Account 

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

29,500

Sales

1,47,200

 

Purchases

84,170

 

Less: Sales Return

(4,700)

1,42,500

Less: Purchases Return

(3,900)

80,270

Closing Stock

36,200

Carriage

2,200

 

 

Wages

45,000

 

 

Gross Profit (Balancing Figure)

21,730

 

 

 

1,78,700

 

1,78,700

 

 

 

 

 

Profit and Loss Account 
for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Salary

5,400

Gross Profit

21,730

Insurance

2,500

Rent Received

3,150

Trade Expenses

4,900

 

 

Net profit (Balancing Figure)

12,080

 

 

 

24,880

 

24,880

 

 

 

 

 

Balance Sheet 
as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets 

Amount

(Rs)

Capital

58,900

 

Fixed Assets

 

Add: Net Profit

12,080

 

Machinery

12,000

Less: Drawings

(2,100)

68,880

 

 

Current Liabilities

 

Current Assets

 

Creditors

4,200

Closing Stock

36,200

Bank Overdraft

9,700

Debtors

38,080

Bills Payable

3,900

Cash

400

 

86,680

 

86,680

 

 

 

 

Page No 18.65:

Question 22:

From the following balances, prepare Final Accounts of M./s. Mangal & Sons for the year ended 31st March, 2018:
Opening Stock ₹ 12,500; Bills Receivable ₹ 2,000; Sales ₹ 70,000; Purchases ₹ 37,500; Creditors ₹ 20,000; Salaries ₹ 3,850; Insurance ₹ 200; Debtors ₹ 32,500; Carriage ₹ 1,450; Commission ₹ 750; Interest ₹ 900; Printing ₹ 250; Bills Payable ₹ 3,150; Returns In ₹ 1,300; Returns Out ₹ 500; Bank ₹ 5,250; Rent and Taxes ₹ 1,300; Furniture ₹ 1,000; Capital ₹ 7,100; Stock on 31st March, 2018 ₹ 15,000.

Answer:

Financial Statement of M/s. Mangal & Sons

Trading Account 

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

12,500

Sales

70,000

 

Purchases

37,500

 

Less: Return Inwards

(1,300)

68,700

Less: Return Outwards

(500)

37,000

Closing Stock

15,000

Carriage

1,450

 

 

Gross Profit (Balancing Figure)

32,750

 

 

 

83,700

 

83,700

 

 

 

 

 

Profit and Loss Account 
for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Salary

3,850

Gross Profit

32,750

Insurance

200

 

 

Commission

750

 

 

Interest

900

 

 

Printing

250

 

 

Rent and Taxes

1,300

 

 

Net Profit (Balancing Figure)

25,500

 

 

 

32,750

 

32,750

 

 

 

 

 

Balance Sheet 
as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets 

Amount

(Rs)

Capital

7,100

 

Fixed Assets

 

Add: Net Profit

25,500

32,600

Furniture

1,000

Current Liabilities

 

Current Assets

 

Creditors

20,000

Closing Stock

15,000

Bills Payable

3,150

Debtors

32,500

 

 

Bills Receivable

2,000

 

 

Bank

5,250

 

55,750

 

55,750

 

 

 

 

Page No 18.65:

Question 23:

From the following balances, prepare Trading and Profit and Loss Account and the Balance Sheet:
 

Debit Balances:
Debit Balances (Contd.):
Machinery
2,00,000
Opening Stock 2,00,000
Building 1,50,000 Rent 45,000
Debtors 2,70,000 Sundry Expenses 20,000
Drawings 90,000 Carriage 15,000
Purchases 9,50,000 Credit Balances:  
Wages 5,00,000 Capital 10,00,000
Bed Debts 10,000 Creditors 1,40,000
Bank 1,50,000 Sales 14,50,000
    Commission 10,000

Closing Stock was of ₹ 70,000 but its net realisable value was estimated at ₹ 60,000.

Answer:

Financial Statement of….

Trading Account 

for the year ended …

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

2,00,000

Sales

14,50,000

Purchases

9,50,000

Closing Stock (Note)

60,000

Carriage

15,000

Gross Loss (Balancing Figure)

1,55,000

Wages

5,00,000

 

 

 

 

 

 

 

16,65,000

 

16,65,000

 

 

 

 

           

 

Profit and Loss Account 

for the year ended March 31, …..

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Gross Loss

1,55,000

Commission

10,000

Bad Debts

10,000

Net Loss (Balancing Figure)

2,20,000

Rent

45,000

 

 

Sundry Expenses

20,000

 

 

 

 

 

 

 

 

 

 

 

2,30,000

 

2,30,000

 

 

 

 

           

 

Balance Sheet 

as on March 31, ….

Liabilities 

Amount

(Rs)

Assets 

Amount

(Rs)

Capital

10,00,000

 

Fixed Assets

 

Less: Net Loss

2,20,000

 

Building

1,50,000

Less: Drawings

90,000

6,90,000

Machinery

2,00,000

Current Liabilities

 

Current Assets

 

Creditors

1,40,000

Closing Stock

60,000

 

 

Debtors

2,70,000

 

 

Bank

1,50,000

 

 

 

 

 

8,30,000

 

8,30,000

 

 

 

 

 

Note: Closing Stock is recorded at cost price or market price which is lower.

Page No 18.65:

Question 24:

From the following balances taken from the books of Hari & Co., prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as at that date:
 

 
 
Capital
3,50,000
Salaries
11,100
Building
1,87,500
Discount Allowed
3,000
Machinery
92,500
Interest on Investments
1,000
Debtors
35,000
Stock (1st April, 2017)
1,65,000
Investment
35,000
Bills Payable
50,000
General Expenses
8,000
Sales
6,35,000
Rent Paid
37,100
Purchases
4,68,500
Proprietor's Drawings
6,500
Wages
25,000
Electricity Charges
1,900
Cash in Hand
18,000
Carriage Inwards
8,500
Sundry Creditors
1,00,000
Cash at Bank
30,000
Returns Inward
4,500
Returns Outward
1,100
   

Closing Stock was valued at ₹ 1,82,100.

 

 

Answer:

Financial Statement of Hari & Co.

Trading Account 

for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

1,65,000

Sales

6,35,000

 

Purchases

4,68,500

 

Less: Return Inwards

(4,500)

6,30,500

Less: Return Outwards

(1,100)

4,67,400

Closing Stock

1,82,100

Wages

25,000

 

 

Carriage Inwards

8,500

 

 

Gross Profit (Balancing Figure)

1,46,700

 

 

 

8,12,600

 

8,12,600

 

 

 

 

 

Profit and Loss Account 
for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

General Expenses

8,000

 

 

Rent Paid

37,100

Gross Profit

1,46,700

Electricity Charges

1,900

Interest on Investments

1,000

Salaries

11,100

 

 

Discount Allowed

3,000

 

 

Net Profit (Balancing Figure)

86,600

 

 

 

1,47,700

 

1,47,700

 

 

 

 

 

Balance Sheet 
as on March 31, 2018

Liabilities 

Amount

(Rs)

Assets 

Amount

(Rs)

Capital

3,50,000

 

Fixed Assets

 

Add: Net Profit

86,600

 

Building

1,87,500

Less: Drawings

(6,500)

4,30,100

Machinery

92,500

Current Liabilities   Investments 35,000

Sundry Creditors

1,00,000

Current Assets

 

Bills Payable

50,000

Closing Stock

1,82,100

 

 

Debtors

35,000

 

 

Cash at bank

30,000

 

 

Cash in Hand

18,000

 

5,80,100

 

5,80,100

 

 

 

 



Page No 18.66:

Question 25:

From the following balances, as on 31st March, 2018, prepare Trading and Profit and Loss Account and Balance Sheet:
 

 
 
Capital Account
1,00,000
Returns Outward
5,000
Plant and Machinery
40,000
Rent
4,000
Sundry Debtors
24,000
Sales
1,64,000
Sundry Creditors
12,000
Manufacturing Expenses
8,000
Life Insurance Premium
12,000
Trade Expenses
7,000
Purchases
1,05,000
Bad Debts
2,000
Wages
50,000
Carriage
1,500
Bank
10,000
Bills Payable
7,000
Repairs
500
Returns Inward
4,000
Stock (1st April, 2017)
20,000
   

Closing Stock on 31st March, 2018 was valued at ₹ 14,500.

Answer:

Trading Account 
for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

20,000

Sales

1,64,000

 

Purchases

1,05,000

 

Less: Return Inwards

(4,000)

1,60,000

Less: Return Outwards

(5,000)

1,00,000

Closing Stock

14,500

Wages

50,000

Gross Loss (Balancing Figure)

5,000

Manufacturing Expenses

8,000

 

 

Carriage

1,500

 

 

 

1,79,500

 

1,79,500

 

 

 

 

 

Profit and Loss Account 
for the year ended March 31, 2018

Dr.

 

Cr.

Particulars 

Amount

(Rs)

Particulars

Amount

(Rs)

Gross Loss

5,000

 

 

Repairs

500

 

 

Rent