Double Entry Book Keeping Ts Grewal 2019 Solutions for Class 11 Commerce Accountancy Chapter 15 Adjustments In Preparation Of Financial Statements are provided here with simple step-by-step explanations. These solutions for Adjustments In Preparation Of Financial Statements are extremely popular among Class 11 Commerce students for Accountancy Adjustments In Preparation Of Financial Statements Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Double Entry Book Keeping Ts Grewal 2019 Book of Class 11 Commerce Accountancy Chapter 15 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Double Entry Book Keeping Ts Grewal 2019 Solutions. All Double Entry Book Keeping Ts Grewal 2019 Solutions for class Class 11 Commerce Accountancy are prepared by experts and are 100% accurate.

Page No 19.64:

Question 1:

Following are the balances extracted from the books of Manish on 31st March, 2019:
 

 
 
Capital
1,90,000
Cash at Bank
26,000
Drawing
7,000
Salaries
8,000
Plant and Machinery
1,20,000
Repairs
1,900
Delivery Vehicle
26,000
Stock on 1st April, 2018
16,000
Sundry Debtors
36,000
Rent
4,500
Sundry Creditors
26,000
Manufacturing Expenses
1,500
Purchases
20,000
Bills Payable
23,500
Sales
42,000
Bad Debts
5,000
Wages
8,000
Carriage
1,600

Prepare Trading and Profit and Loss Account and Balance Sheet as at 31st March, 2019 after following adjustments are made:
(i) Closing Stock was ₹ 16,000.
(ii) Depreciate Plant and Machinery @ 10% and Delivery Vehicle @ 15%.
(iii) Unpaid Rent amounted to ₹ 500.

Answer:

Trading Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening stock

16,000

Sales

42,000

Purchases

20,000

Closing Stock                         

16,000

Wages

8,000

 

 

Manufacturing Expenses

1,500

 

 

Carriage

1,600

 

 

Gross Profit (Balance Figure)

10,900

 

 

 

58,000

 

58,000

 

 

 

 

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Salaries

8,000

Gross Profit

10,900

Repairs

1,900

Net Loss (Balancing Figure)    

24,900

Rent

4,500

 

 

 

Add: Unpaid Rent

500

5,000

 

 

Bad Debts

5,000

 

 

Depreciation on:

 

 

 

Plant and machinery

12,000

 

 

 

Delivery Vehicle

3,900

15,900

 

 

 

 

 

 

 

35,800

 

35,800

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

1,90,000

 

Fixed Assets

 

Less: Drawings

(7,000)

 

Plant and Machinery

1,20,000

 

Less: Net Loss

(24,900)

 

Less:10% Deprecation

(12,000)

1,08,000

 

1,58,100

Delivery Vehicle

26,000

 

 

 

Less:15% Depreciation

(3,900)

22,100

Current Liabilities

 

 

 

Sundry Creditors

26,000

Current Assets

 

Bills Payable

23,500

Closing Stock

16,000

Unpaid Rent

500

Sundry Debtors

36,000

 

 

Cash at Bank

26,000

 

2,08,100

 

2,08,100

 

 

 

 



Page No 19.65:

Question 2:

Prepare Trading and Profit and Loss Account and Balance Sheet from the following balances, relating to the year ended 31st March, 2019:
 

 
 
Capital
1,00,000
Wages
50,000
Creditors
12,000
Bank
10,000
Returns Outward
5,000
Repairs
500
Sales
1,64,000
Stock on 1st April, 2018
20,000
Bills Payable
5,000
Rent
4,000
Plant and Machinery
40,000
Manufacturing Expenses
8,000
Sundry Debtors
24,000
Trade Expenses
7,000
Drawings
10,000
Bad Debts
2,000
Purchases
1,05,000
Carriage
1,500
Returns Inward
3,000
Fuel and Power
1,000

Additional Information:
(i) Closing Stock was valued at ₹ 14,500.
(ii) Depreciate Plant and Machinery by ₹ 4,000.
(iii) Write off Bad Debts ₹ 5,000.
(iv) ₹ 400 is due for repairs.

Answer:

Trading Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening stock

20,000

Sales

1,64,000

 

Purchases

1,05,000

 

Less: Return Inwards

(3,000)

1,61,000

Less: Return out words

(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

 

 

Fuel and Power

1,000

 

 

 

1,80,500

 

1,80,500

 

 

 

 

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Gross Loss

5,000

 

 

Repairs

500

 

 

 

Add: outstanding

400

900

 

 

Rent

4,000

 

 

Miscellaneous Expenses

7,000

 

 

Bad Debts

2,000

 

Net Loss (Balancing Figure)     

27,900

Add: Additional bad debts

5,000

7,000

 

 

Depreciation on Plant and Machinery

4,000

 

 

 

27,900

 

27,900

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

1,00,000

 

Fixed Assets

 

Less: Drawings

(10,000)

 

Plant and Machinery

40,000

 

Less: Net Loss

(27,900)

62,100

Less: Depreciation

(4,000)

36,000

Current Liabilities

 

Current Assets

 

Creditors

12,000

Closing Stock

14,500

Bills Payable

5,000

Sundry Debtors

24,000

 

Outstanding Repairs

400

Less: Further Bad Debts

(5,000)

19,000

 

 

Bank

10,000

 

79,500

 

79,500

 

 

 

 

 

Page No 19.65:

Question 3:

Following Trial Balance has been extracted from the books of Prasad on 31st March, 2019:
 

Particulars
Dr. (₹)
Particulars
Cr. (₹)
Machinery
4,00,000
Capital
9,00,000
Cash at Bank
1,00,000
Sales
16,00,000
Cash in Hand
50,000
Sundry Creditors
4,50,000
Wages
1,00,000
Interest Received
30,000
Purchases
8,00,000
   
Stock on 1st April, 2018
6,00,000
   
Sundry Debtors
4,40,000
   
Bills Receivable
2,90,000
   
Rent
45,000
   
Commission
25,000
   
General Expenses
80,000
   
Salaries
50,000
   
 
29,80,000
 
29,80,000
       

Additional Information:
(i) Outstanding salaries were ₹ 45,000.
(ii) Depreciate Machinery at 10%.
(iii) Wages outstanding were ₹ 5,000.
(iv) Rent prepaid ₹ 10,000.
(v) Provide for interest on capital @ 5% per annum.
(vi) Stock on 31st March, 2019 ₹ 8,00,000.
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date.

Answer:

Financial Statement of M/s. Ram Prasad & Sons

Trading Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

6,00,000

Sales

16,00,000

Purchases

8,00,000

Closing Stock                        

8,00,000

Wages

1,00,000

 

 

 

Add: Outstanding Wages

5,000

1,05,000

 

 

Gross Profit (Balancing Figure)

8,95,000

 

 

 

 

 

 

 

24,00,000

 

24,00,000

 

 

 

 

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Rent

45,000

 

Gross Profit

8,95,000

Less: Prepaid Rent

(10,000)

35,000

Interest Received

30,000

Commission

25,000

 

 

General Expenses

80,000

 

 

Salaries

50,000

 

 

 

Add: Outstanding Salaries

45,000

95,000

 

 

Depreciation on Machinery

40,000

 

 

Net Profit (Balancing Figure)

6,50,000

 

 

 

9,25,000

 

9,25,000

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

9,00,000

 

Fixed Assets

 

Add: Net Profit

6,50,000

15,50,000

Machinery

4,00,000

 

Current Liabilities

 

Less: 10% Depreciation

(40,000)

3,60,000

Sundry Creditors

4,50,000

Current Assets

 

Outstanding Salary

45,000

Closing Stock

8,00,000

Outstanding Wages

5,000

Sundry Debtors

4,40,000

 

 

Bills Receivable

2,90,000

 

 

Prepaid Rent

10,000

 

 

Cash at Bank

1,00,000

 

 

Cash in Hand

50,000

 

20,50,000

 

20,50,000

 

 

 

 



Page No 19.66:

Question 4:

From the following Trial Balance of Shradha as on 31st March, 2019, prepare Trading and Profit and Loss Account and Balance Sheet:
 

Heads of Accounts
Debit Balances
(₹)
Credit Balances
(₹)
Capital  
80,000
Drawings  
18,000
Sales  
1,55,000
Purchases  
82,600
Stock (1st April, 2018)  
42,000
Returns Outward  
1,600
Carriage Inwards  
1,200
Wages  
4,000
Power  
6,000
Machinery  
50,000
Furniture  
14,000
Rent  
22,000
Salary  
15,000
Insurance  
3,600
8% Bank Loan  
25,000
Debtors  
20,600
Creditors  
18,900
Cash in Hand  
1,500
Total  
2,80,500
2,80,500
       

Adjustments:
(i) Closing Stock ₹ 64,000.
(ii) Wages outstanding ₹ 2,400.
(iii) Bad Debts ₹ 600.
(iv) Provision for Doubtful Debts to be 5%.
(v) Rent is paid for 11 months.
(vi) Insurance premium is paid per annum, ended 31st May, 2019.
(vii) Loan from the bank was taken on 1st October, 2018.
(viii) Provide Depreciation on machinery @ 10% and on Furniture @ 5%.

Answer:

Financial statement of M/s. Shradha & Sons

Trading Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

42,000

Sales

1,55,000

Purchases

82,600

 

 

 

Less: Return Outwards

(1,600)

81,000

 

 

Carriages Inwards

1,200

Closing Stock

64,000

Wages

4,000

 

 

 

Add: Outstanding Wages

2,400

6,400

 

 

Power

6,000

 

 

Gross Profit (Balancing Figure)

82,400

 

 

 

2,19,000

 

2,19,000

 

 

 

 

***            

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Rent

22,000

 

Gross Profit

82,400

Add: Outstanding for One month (22,000/11)

2,000

24,000

 

 

Salary

15,000

 

 

Insurance

3,600

 

 

 

Less: Prepaid 2 month(3,600 × 2/12)

(600)

3,000

 

 

Outstanding Interest on Bank Loan

(25,000 × 8% × 6/12)

1,000

 

 

Bad Debts

600

 

 

 

Add: Provision for Doubtful Debts

1,000

1,600

 

 

Depreciation on:

 

 

 

Machinery

5,000

 

 

 

Furniture

700

5,700

 

 

Net Profit (Balancing Figure)

32,100

 

 

 

82,400

 

82,400

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

80,000

 

Fixed Assets

 

Add: Net Profit

32,100

 

Machinery

50,000

 

Less: Drawings

(18,000)

94,100

Less: 10% Depreciation

(500)

45,000

  8% Bank Loan

25,000

 

Furniture

14,000

 

Add: Outstanding Interest

1,000

26,000

Less: 5% Deprecation

(700)

13,300

Current Liabilities

 

Current Assets

 

Creditors

18,900

Closing Stock

64,000

Wages Outstanding

2,400

Debtors

20,600

 

Rent Outstanding

2,000

Less: Bad Debts

(600)

 

 

 

Less: 5% Provision for doubtful Debts

(1,000)

19,000

 

 

Prepaid Insurance

600

 

 

Cash in hand

1,500

 

1,43,400

 

1,43,400

 

 

 

 

 

Page No 19.66:

Question 5:

​Trial Balance of a business as at 31st March, 2019 is given below:

   

 

 

 

Particulars Dr.
(₹)
Particulars Cr.
(₹)
Stock on 1st April, 2018 25,000 Sales 2,27,800
Furniture 8,000 Commission 500
Plant and Machinery 1,50,000 Returns Outward 1,000
Debtors 30,000 Creditors 40,000
Wages 12,000 Capital 1,50,000
Salaries 20,000    
Bad Debts 1,000    
Purchases 1,20,000    
Electricity Charges 1,200    
Telephone Charges 2,400    
General Expenses 3,000    
Postage Expenses 1,800    
Returns Inward 900    
Insurance Premium 1,500    
Cash in Hand 2,500    
Cash at Bank 40,000    
  4,19,300   4,19,300
     
           

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date after taking into account the following adjustments:
(i) Closing Stock was valued at ₹ 7,000.
(ii) Outstanding liabilities for wages were ₹ 600 and salaries ₹ 1,400.
(iii) Depreciation is to be provided @ 5% p.a. on fixed assets.
(iv) Included in Plant and Machinery is a machine purchased for ₹ 10,000 on 1st October, 2018.
(v) Insurance premium paid in advance ₹ 200.

Answer:

Trading Account
for the year ended March 31, 2018
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
25,000
Sales
2,27,800
 
Purchases
1,20,000
 
  Less: Returns
900
2,26,900
  Less: Returns
1,000
1,19,000
Closing Stock
7,000
Wages
12,000
 
 
 
  Add: Outstanding Wages
600
12,600
 
 
Gross Profit
77,300
 
 
 
2,33,900
 
2,33,900
       
 
Profit & Loss Account
for the year ended March 31, 2018
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Bad Debts
1,000
Gross Profit
77,300
Insurance Premium
1,500
 
Commission
500
  Less: Prepaid
200
1,300
 
 
Salaries
20,000
 
 
 
  Add: Outstanding Salaries
1,400
21,400
 
 
Electricity Charges
1,200
 
 
General Expenses
3,000
 
 
Postage Expenses
1,800
 
 
Telephone Charges
2,400
 
 
Depreciation on:
 
 
 
Furniture
400
 
 
 
Plant & Machinery
7,250
7,650
 
 
Net Profit
38,050
 
 
 
77,800
 
77,800
       
 
Balance Sheet
as on March 31, 2018
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
40,000
Furniture
8,000
 
Outstanding Wages
600
  Less: Depreciation
400
7,600
Outstanding Salaries
1,400
Plant & Machinery
1,50,000
 
Capital
1,50,000
 
  Less: Depreciation
7,250
1,42,750
  Add: Net Profit
38,050
1,88,050
Cash at Bank
40,000
 
 
Cash in Hand
2,500
 
 
Closing Stock
7,000
 
 
Debtors
30,000
 
 
Prepaid Insurance
200
 
2,30,050
 
2,30,050
       



Page No 19.67:

Question 6:

​Following are the balances extracted from the books of Narain on 31st March, 2019:​

         
Particulars Amount
(₹)
Particulars 
Amount
(₹)
Narain's Capital 3,00,000 Sales 15,00,000
Narain's Drawings 50,000 Sales Return 20,000
Furniture and Fittings 26,000 Discounts (Dr.) 16,000
Bank Overdraft 42,000 Discounts (Cr.) 20,000
Creditors 1,38,000 Insurance 20,000
Business Premises 2,00,000 General Expenses 40,000
Stock on 1st April, 2018 2,20,000 Salaries 90,000
Debtors 1,80,000 Commission (Dr.) 22,000
Rent from Tenants 10,000 Carriage on Purchases 18,000
Purchases 11,00,000 Bad Debts Written off 8,000

Additional Information:
(i) Closing Stock as on 31st March, 2019 was ₹ 2,00,600, whereas its Net Realisable Value (Market Value) was ₹ 2,05,000.
(ii) Depreciate: Business Premises by ₹ 3,000 and Furniture and Fittings by ₹ 2,500.
(iii) Make a provision of 5% on debtors for doubtful debts.
(iv) Carry forward ₹ 2,000 for unexpired insurance.
(v) Outstanding salary was ₹ 15,000.
Prepare Trading and Profit and Loss Account for the year and Balance Sheet as at that date.

Answer:

Trading Account
for the year ended March 31, 2019
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
2,20,000
Sales
15,00,000
 
Purchases
11,00,000
  Less: Returns
20,000
14,80,000
Carriage on Purchases
18,000
Closing Stock
2,00,600
Gross Profit
3,42,600
 
 
 
16,80,600
 
16,80,600
       
Note: As per the prudence concept, closing stock is taken to be at the market value or the book value whichever is less.
 
Profit & Loss Account
for the year ended March 31, 2019
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Commission
22,000
Gross Profit
3,42,600
Insurance Premium
20,000
 
Discount
20,000
  Less: Prepaid
2,000
18,000
Rent from Tenants
10,000
Salaries
90,000
 
 
 
  Add: Outstanding Salaries
15,000
1,05,000
 
 
Bad Debts Written Off
8,000
 
 
Provision for Doubtful Debts
9,000
 
 
Discount
16,000
 
 
General Expenses
40,000
 
 
Depreciation on:
 
 
 
  Furniture
2,500
 
 
 
  Business Premises
3,000
5,500
 
 
Net Profit
1,49,100
 
 
 
3,72,600
 
3,72,600
       
 
Balance Sheet
as on March 31, 2019
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Bank Overdraft
42,000
Furniture & Fittings
26,000
 
Creditors
1,38,000
  Less: Depreciation
2,500
23,500
Outstanding Salaries
15,000
Business Premises
2,00,000
 
Capital
3,00,000
 
  Less: Depreciation
3,000
1,97,000
  Less: Drawings
50,000
 
Debtors
1,80,000
 
  Add: Net Profit
1,49,100
3,99,100
  Less: Provision
9,000
1,71,000
 
 
Closing Stock
2,00,600
 
 
Prepaid Insurance
2,000
 
5,94,100
 
5,94,100
       



Page No 19.68:

Question 7:

Following balances are taken from the books of Niranjan. Prepare Trading and Profit and Loss Account and Balance Sheet for the year ended 31st March, 2019:
 

Particulars
Particulars
Capital
12,00,000
Drawings
2,10,000
Opening Stock
4,50,000
Plant and Machinery
2,40,000
Furniture
15,000
Purchases
29,50,000
Sales
43,50,000
Insurances
15,000
Purchases Return
40,000
Sales Return
70,000
Rent
50,000
Trade Expenses
20,000
Salaries
2,40,000
Wages
4,00,000
Bad Debts
10,000
6% Investments
5,00,000
Sundry Debtors
4,00,000
Sundry Creditors
1,90,000
Bills Payable
8,000
Cash
1,22,000
Advertisement Expenses
60,000
Miscellaneous Income
12,000
Patents
48,000
   

Adjustments:
(i) Closing Stock ₹ 7,50,000.
(ii) Depreciate Machinery by 10% and Furniture by 20%.
(iii) Wages ₹ 50,000 and salaries ₹ 20,000 are outstanding.
(iv) Write off ₹ 50,000 as further Bad Debts and create 5% Provision for Doubtful Debts. Also, create a reserve for discount on Debtors @ 2%.
(v) Investments were made on 1st July, 2018 and no interest has been received so far.

Answer:

Financial statements of Mr. Niranjan

Trading Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

4,50,000

Sales

43,50,000

 

Purchases

29,50,000

 

Less: Sales Return

(70,000)

42,80,000

Less: Purchases Return

(40,000)

29,10,000

Closing Stock

7,50,000

Wages

4,00,000

 

 

 

Add: Outstanding wages

50,000

4,50,000

 

 

Gross Profit (Balancing Figure)

12,20,000

 

 

 

 

 

 

 

50,30,000

 

50,30,000

 

 

 

 

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Rent

50,000

Gross Profit

12,20,000

Salaries

2,40,000

 

 

 

Add: Outstanding Salaries

20,000

2,60,000

 

 

Bad Debts

10,000

 

Interest Accrued on Investment

 

Add: Further Bad Debts

50,000

 

(5,00,000 × 6% × 9/12)

22,500

Add: Provision for Doubtful Debts

17,500


77,500

Miscellaneous Receipts

12,000

Advertisement expenses

60,000

 

 

Provision for discount on debtors

6,650

 

 

Insurances

15,000

 

 

Trade Expenses

20,000

 

 

Depreciation on:

 

 

 

Machinery

24,000

 

 

 

Furniture

3000

27,000

 

 

Net Profit (Balancing Figure)

7,38,350

 

 

 

12,54,500

 

12,54,500

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

12,00,000

 

Fixed Assets

 

Less: Drawings

(2,10,000)

 

Patents

48,000

Add: Net Profit

7,38,350

17,28,350

Plant and Machinery

2,40,000

 

Current Liabilities

 

Less: 10% Depreciation

(24,000)

2,16,000

Sundry Creditors

1,90,000

Furniture

15,000

 

Wages Outstanding

50,000

Less: 20% Depreciation

(3,000)

12,000

Salaries Outstanding

20,000

6% Investment

5,00,000

 

Bills Payable

8000

Add: Accrued Interest

22,500

5,22,500

 

 

Current Assets

 

 

 

Closing Stock

7,50,000

 

 

Debtors

4,00,000

 

 

 

Less: Further Bad Debts

(50,000)

 

 

 

Less: Provision for Doubtful Debts

(17,500)

 

 

 

 

3,32,500

 

 

 

Less: Provision for Discount

(6,650)

3,25,850

 

 

Cash

1,22,000

 

19,96,350

 

19,96,350

 

 

 

 

Page No 19.68:

Question 8:

From the following Trial Balance of Mahesh, prepare his Final Accounts for the year ended 31st March, 2019:

 
Heads of Accounts
Debit Balances
(₹)
Credit Balances
(₹)
Purchases  
2,50,000
Sales  
5,00,000
Returns Inward  
12,000
...
Returns Outward  
10,000
Carriage  
8,000
Wages  
60,000
Miscellaneous Expenses  
2,000
Insurance  
1,200
Repairs  
8,000
Debtors  
1,15,000
Creditors  
1,00,000
Printing and Stationery  
6,000
Advertisement  
15,000
Bills Receivable  
4,000
Bills Payable  
2,000
Opening Stock  
30,000
Cash in Hand  
12,000
Interest on Bank Loan  
2,800
Machinery  
2,80,000
Furniture  
34,000
Drawings  
20,000
Commission  
1,000
12% Bank Loan  
30,000
Capital  
2,40,000
Rent Received  
5,000
Cash at Bank  
28,000
Total  
8,88,000
8,88,000
       

Additional Information:
(i) Closing Stock on 31st March, 2019 was ₹ 21,000.
(ii) Rent of ₹ 1,200 has been received in advance.
(iii) Outstanding liability for Miscellaneous expenses ₹ 12,000.
(iv) Commission earned during the year but not received was ₹ 2,100.
(v) Goods costing ₹ 2,000 were taken by the proprietor for his personal use but entry was not passed in the books of account.

Answer:

Financial Statement of Mahesh

Trading Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening stock

30,000

 

 

 

Purchases                                      2,50,000   Sales

5,00,000

 

   Less: Drawings

(2,000)

 

Less: Return Inwards

(12,000)

4,88,000

Less: Return Outwards

(10,000)

2,38,000

Closing Stock

21,000

Carriage

8,000

 

 

Wages

60,000

 

 

Gross Profit (Balancing Figure)

1,73,000

 

 

 

 

 

 

 

5,09,000

 

5,09,000

 

 

 

 

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Miscellaneous expenses

2,000

 

Gross Profit

1,73,000

Add: Outstanding Miscellaneous Expenses

12,000

14,000

Commission

1,000

 

Insurance

1,200

Add: Accrued Commission

2,100

3,100

Repairs

8,000

Rent Received

5,000

 

Advertisement

15,000

Less: Advance Rent

1,200

3,800

Interest on Bank Loan

2,800

 

 

 

Add: Interest Outstanding

800

3,600

 

 

Printing and Stationary

6,000

 

 

Net Profit (Balancing Figure)

1,32,100

 

 

 

 

 

 

 

1,79,900

 

1,79,900

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

2,40,000

 

Fixed Assets

 

Less: Drawings

(22,000)

 

Machinery

2,80,000

Add: Net Profit

1,32,100

3,50,100

Furniture

34,000

10% Loan from Bank

30,000

 

Current Assets

 

Add: Outstanding Interest

800

30,800

Closing Stock

21,000

Current Liabilities

 

Debtors

1,15,000

Creditors

1,00,000

Bills Receivable

4,000

Bills Payable

2,000

Cash at Bank

28,000

Advance Rent

1,200

Cash in Hand

12,000

Outstanding Trade Expenses

12,000

Commission Accrued

2,100

 

4,96,100

 

4,96,100

 

 

 

 

 

Working Notes:

Calculation of Outstanding Interest on Loan

Interest on loan (30,000 × 12%)

3,600

Less: Interest Paid

(2,800)

Interest Outstanding on Loan

800

 



Page No 19.69:

Question 9:

Following balances were extracted from the books of Vijay on 31st March, 2019:
 

Particulars
Particulars
Capital
2,45,000
Loan
78,800
Drawings
20,000
Sales
6,53,600
General Expenses
47,400
Purchases
4,70,000
Building
1,10,000
Motor Car
20,000
Machinery
93,400
Provision for Doubtful Debts
9,000
Stock on 1st April, 2018
1,62,000
Commission (Cr.)
13,200
Insurance
13,150
Car Expenses
18,000
Wages
72,000
Bills Payable
38,500
Debtors
62,800
Cash
800
Creditors
25,000
Bank Overdraft
33,000
Bad Debts
5,500
Charity
1,050

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date after giving effect to the following adjustments:
(a) Stock as on 31st March, 2019 was valued at ₹ 2,30,000.
(b) Write off further ₹ 1,800 as Bad Debts and maintain the Provision for Doubtful Debts at 5%.
(c) Depreciate Machinery at 10%.
(d) Provide ₹ 7,000 as outstanding interest on loan.

Answer:

Financial Statement of Vijay Kumar

Trading Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

()

Particulars

Amount

()

Opening Stock

1,62,000

Sales

6,53,600

Purchases

4,70,000

Closing Stock                     

2,30,000

Wages

72,000

 

 

Gross Profit (Balancing Figure)

1,79,600

 

 

 

8,83,600

 

8,83,600

 

 

 

 

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

()

Particulars

Amount

()

Taxes and Insurance

13,150

Gross Profit

1,79,600

Bad Debts

5,500

 

Commission                              

13,200

Add: Further Bad Debts

1,800

 

 

 

Add: Provision for Doubtful Debts

3,050

 

 

 

 

10,350

 

 

 

Less: Exiting Provision

9,000

1,350

 

 

Car Expenses

18,000

 

 

Charity

1,050

 

 

Depreciation on Machinery

9,340

 

 

Outstanding Interest on Loan

7,000

 

 

General Expenses

47,400

 

 

Net Profit (Balancing Figure)

95,510

 

 

 

1,92,800

 

1,92,800

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

()

Assets

Amount

()

Capital            

2,45,000

 

Fixed Assets

 

Add: Net Profit        

95,510

 

Building

1,10,000

Less: Drawings

(20,000)

3,20,510

Machinery

93,400

 

Loan

78,800

 

Less:10% Depreciation

9,340

84,060

Add: Outstanding Interest

7,000

85,800

Motor Car

20,000

Current Liabilities

 

Current Assets

 

Creditors

25,000

Closing Stock

2,30,000

Bills Payable

38,500

Debtors

62,800

 

Bank Overdraft

33,000

Less: Bad Debts

(1,800)

 

 

 

Less: 5% Provision for Doubtful Debts

(3,050)

57,950

 

 

Cash

800

 

5,02,810

 

5,02,810

 

 

 

 



Page No 19.70:

Question 10:

From the following Trial Balance and other information, prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date:
 

Particulars
Dr.
(₹)
Cr.
(₹)
Sundry Debtors  
3,20,000
Stock on 1st April, 2018  
2,20,000
Cash in Hand  
350
Cash at Bank  
15,450
Plant and Machinery  
1,75,000
Sundry Creditors  
1,06,500
General Expenses  
10,750
Sales  
13,45,000
Salaries  
22,250
Carriage Outwards  
4,000
Rent  
9,000
Bills Payable  
75,000
Purchases  
11,88,700
Discounts  
11,000
Premises  
3,45,000
Capital on 1st April, 2018  
7,95,000
Total  
23,21,500
23,21,500
       

Stock on 31st March, 2019 was ₹ 1,24,500. Rent was unpaid to the extent of ₹ 850 and ₹ 1,500 were outstanding for General Expenses; ₹ 4,000 are to be written off as bad debts out of the above debtors; and 5% is to be provided for doubtful debts. Depreciate Plant and Machinery by 10% and Premises by 2%.
Manager is entitled to a commission of 5% on net profit after charging his commission.

Answer:

Financial Statement

Trading Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

()

Particulars

Amount

()

Opening Stock

2,20,000

Sales

13,45,000

Purchases

11,88,700

Closing Stock

1,24,500

Gross Profit (Balancing Figure)

60,800

 

 

 

14,69,500

 

14,69,500

 

 

 

 

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

 

 

Cr.

Particulars

Amount

()

Particulars

Amount

()

Rent

9,000

 

Gross Profit

60,800

Add: Outstanding Rent

850

9,850

Net Loss (Balancing Figure)

42,750

General Expenses

10,750

 

 

 

Add: Outstanding General Expenses

1,500

12,250

 

 

Bad Debts

4,000

 

 

 

Add: Provision for Debts

15,800

19,800

 

 

Depreciation on

 

 

 

Plant and Machinery

17,500

 

 

 

Business Premises

6,900

24,400

 

 

Salaries

22,250

 

 

Carriage Outwards

4,000

 

 

Discount

11,000

 

 

 

1,03,550

 

1,03,550

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

()

Assets

Amount

()

Capital

7,95,000

 

Fixed Assets

 

Less: Net Loss

(42,750)

7,52,250

Plant and Machinery

1,75,000

 

Current Liabilities

 

Less: 10% Depreciation

(17,500)

1,57,500

Sundry Creditors

1,06,500

Premises

3,45,000

 

Bills Payable

75,000

Less: 2% Depreciation

(6,900)

3,38,100

Rent Outstanding

850

Current Assets

 

General Expenses Outstanding

1,500

Closing Stock

1,24,500

 

 

Sundry Debtors

3,20,000

 

 

 

Less: Bad Debts

(4,000)

 

 

 

 

3,16,000

 

 

 

Less: 5% Provision for Doubtful Debts

(15,80)

3,00,200

 

 

Cash at Bank

15,450

 

 

Cash in Hand

350

 

9,36,100

 

9,36,100

 

 

 

 

Note: In the question, Manager Commission is given as 5% on Net Profit after charging commission. But, during the year the firm had a Net Loss of Rs 42,750, therefore, manager commission is not payable.



Page No 19.71:

Question 11:

From the following Trial Balance of Shubho, prepare final accounts for the year ended 31st March, 2019 and Balance Sheet as at that date:

   

 

 

Particulars Dr. Balances
(₹)
Cr. Balances
(₹)
Land and Building 50,000  
Purchases (Adjusted) 2,10,000  
Stock (31st March, 2019) 45,000  
Returns Inward 1,500  
Returns Outward   2,500
Wages 45,300  
Salaries 39,000  
Office Expenses 15,400  
Carriage Inwards 1,200  
Carriage Outwards 2,000  
Discount allowed 750  
Discount received   1,200
Bad Debts 1,200  
Sales   3,85,000
Capital Account   1,15,000
Chatterji's Loan A/c (taken on 1st Oct., 2018 @ 18% p.a.   25,000
Insurance 1,500  
Commission   1,500
Plant and Machinery 50,000  
Furniture and Fixtures 20,000  
Bills Receivable 20,000  
Sundry Debtors 40,000  
Sundry Creditors   25,000
Cash at Bank 16,000  
Office Equipments 12,000  
Bills Payable   12,350
Expenses Payable   3,300
Total 5,70,850 5,70,850
   

The following adjustments be taken care of:
(i) Depreciate Land and Building @ 6%, Plant and Machinery @ 10%, Office equipments @ 20% and Furniture and Fixtures @ 15%.
(ii) Calculate Provision for Doubtful Debts at 2% on Sundry Debtors.
(iii) Insurance premium includes ₹ 250 Insurance Premium paid in advance.
(iv) Provide salary to Shubho ₹ 15,000 p.a.
(v) Outstanding Salaries ₹ 11,500.
(vi) 10% of the final profit is to be transferred to General Reserve.

Answer:

Trading Account
for the year ended March 31, 2019
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Purchases (Adjusted)
2,10,000
 
Sales
3,85,000
 
  Less: Returns
2,500
2,07,500
  Less: Returns
1,500
3,83,500
Carriage Inwards
1,200
 
 
Wages
45,300
 
 
Gross Profit
1,29,500
 
 
 
3,83,500
 
3,83,500
       
 
Profit & Loss Account
for the year ended March 31, 2019
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Carriage Outwards
2,000
Gross Profit
1,29,500
Salaries
39,000
 
Commission
1,500
  Add: Outstanding
11,500
 
Discount
1,200
  Add: Payable to Proprietor
15,000
65,500
 
 
Insurance Premium
1,500
 
 
 
  Less: Prepaid
250
1,250
 
 
Discount
750
 
 
Office Expenses
15,400
 
 
Outstanding Interest on Loan
2,250
 
 
Bad Debts
1,200
 
 
 
  Add: Provision for Doubtful Debts
800
2,000
 
 
Depreciation on:
 
 
 
Furniture & Fixtures
3,000
 
 
 
Land & Building
3,000
 
 
 
Office Equipment
2,400
 
 
 
Plant & Machinery
5,000
13,400
 
 
General Reserve
2,965
 
 
Net Profit
26,685
 
 
 
1,32,200
 
1,32,200
       
 
Balance Sheet
as on March 31, 2019
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Bills Payable
12,350
Furniture & Fixtures
20,000
 
Creditors
25,000
  Less: Depreciation
3,000
17,000
Expenses Payable
3,300
Land & Building
50,000
 
Capital
1,15,000
 
  Less: Depreciation
3,000
47,000
  Add: Salary Payable
15,000
 
Debtors
40,000
 
  Add: Net Profit
26,685
1,56,685
  Less: Provision
800
39,200
Chatterji’s Loan
25,000
 
Plant & Machinery
50,000
 
  Add: Outstanding Interest
2,250
27,250
  Less: Depreciation
5,000
45,000
General Reserve
2,965
Office Equipment
12,000
 
Outstanding Salaries
11,500
  Less: Depreciation
2,400
9,600
 
 
Bills Receivable
20,000
 
 
Closing Stock
45,000
 
 
Cash at Bank
16,000
 
 
Prepaid Insurance
250
 
2,39,050
                
2,39,050
       



Page No 19.72:

Question 12:

Following is the Trial Balance as on 31st March, 2019. Prepare Trading and Profit and Loss Account and Balance Sheet:

       
Particulars Dr.
(₹)
Cr.
(₹)
Stock on 1st April, 2018 8,000  
Sales   2,20,000
Purchases 1,26,000  
Productive Wages 56,500  
Salaries 16,000  
Stores Consumed 6,050  
Carriage 3,050  
Rent 5,200  
Insurance 1,320  
Machinery 52,000  
Building 67,000  
Capital Less Drawings   1,45,600
Sundry Debtors 44,000  
Sundry Creditors   20,000
Secured Loan   16,000
Furniture 3,350  
General Expenses 2,600  
Cash in Hand 1,930  
Bad Debts 1,020  
Bank 6,580  
Input CGST 3,000  
Input SGST 3,000  
Output CGST   2,500
Output SGST   2,500
Total 4,06,600 4,06,600
   
       
Stock on 31st March, 2019, ₹ 20,600.
You are to make adjustments in respect of the following:
(a) Depreciate Machinery at 10% p.a.
(b) Make a provision @ 5% for Doubtful Debts.
(c) Provide discount on debtors @ 212%.
(d) Rent includes Rent deposit of ₹ 400.
(e) Insurance Prepaid ₹ 120.

Answer:

Trading Account
for the year ended March 31, 2019
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
8,000
Sales
2,20,000
Purchases
1,26,000
Closing Stock
20,600
Carriage
3,050
 
 
Productive Wages
56,500
 
 
Stores Consumed
6,050
 
 
Gross Profit
41,000
 
 
 
2,40,600
 
2,40,600
       
 
Profit & Loss Account
for the year ended March 31, 2019
Dr.    
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Salaries
16,000
Gross Profit
41,000
Insurance Premium
1,320
 
 
 
  Less: Prepaid
120
1,200
 
 
Depreciation on Machinery
5,200
 
 
Rent
5,200
 
 
 
  Less: Deposit
400
4,800
 
 
Bad Debts
1,020
 
 
 
  Add: Provision for Doubtful Debts
2,200
 
 
 
  Add: Provision for Discount
1,045
4,265
 
 
General Expenses
2,600
 
 
Net Profit
6,935
 
 
 
1,32,200
 
1,32,200
 
 
 
 
 
Balance Sheet
as on March 31, 2019
Dr.    
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
20,000
Bank
6,580
Secured Loan
16,000
Building
67,000
Capital
1,45,600
 
Closing Stock
20,600
  Add: Net Profit
6,935
1,52,535
Cash in Hand
1,930
 
 
Debtors
44,000
 
 
 
  Less: Provision for DD
2,200
 
 
 
  Less: Provision for Discount
1,045
40,755
 
 
Machinery
52,000
 
 
 
  Less: Depreciation
5,200
46,800
 
 
Furniture
3,350
 
 
Prepaid Insurance
120
 
 
Rent Deposit
400
 
 
Input CGST
500
 
 
Input SGST
500
 
1,88,535
                
1,88,535
       



Page No 19.73:

Question 13:

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date from the following Trial Balance:
 

Particulars
Dr.
(₹)
Cr.
(₹)
Capital  
1,00,000
Cash  
15,000
Bank Loan  
20,000
Purchases  
1,20,000
Sales  
1,50,000
Sales Return  
10,000
Purchases Return   20,000
Establishment Expenses  
22,000
Taxes and Insurance  
5,000
...
Bad Debts  
5,000
Provision for Doubtful Debts  
7,000
Debtors  
50,000
Creditors  
20,000
Commission  
5,000
Deposits  
40,000
Opening Stock  
30,000
Drawings  
14,000
Furniture  
6,000
Bills Receivable  
32,000
Bills Payable  
25,000
Input CGST  
10,000
...
Input SGST  
10,000
Output CGST  
8,000
Output SGST   8,000
Output IGST  
6,000
Total  
3,69,000
3,69,000
       

Adjustments:
(i) Taxes ₹ 3,000 are outstanding but Insurance ₹ 500 is prepaid.
(ii) Commission ₹ 1,000 received in advance for the next year.
(iii) Interest ₹ 2,100 is to be received on Deposits and Interest on Bank Loan ₹ 3,000 is to be paid.
(iv) Provision for Doubtful Debts to be maintained at ₹ 10,000.
(v) Depreciate Furniture by 10%.
(vi) Stock on 31st March, 2019 is ₹ 45,000.
(vii) A fire occurred on 1st April, 2019 destroying goods costing ₹ 10,000. These goods were purchased paying CGST and SGST @ 6% each.

Answer:

Financial Statements

Trading Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

30,000

Sales

1,50,000

 

Purchases

1,20,000

 

Less: Return

(10,000)

1,40,000

Less: Return

(20,000)


1,00,000

Closing Stock

45,000

Gross Profit (Balancing Figure)

55,000

 

 

 

1,85,000

 

1,85,000

 

 

 

 

 

Profit and Loss Account

for the year ended March 31, 2019

Dr.

 

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Taxes and Insurance

5,000

 

Gross Profit

55,000

Add: Outstanding Taxes

3,000

 

Commission

5,000

 

Less: Prepaid Insurance

(500)

7,500

Less: Advance Commission

(1,000)

4,000

 

 

Interest Accrued on Investment

2,100

Bad Debts

5,000

 

 

 

Add: Bad Debts Reserve

10,000

 

 

 

Less: Existing Reserve

(10,000)

5,000

 

 

Depreciation on Furniture

600

 

 

Outstanding Interest on Loan

3,000

 

 

Establishment Charges

25,000

 

 

Net Profit (Balancing Figure)

20,000

 

 

 

61,100

 

61,100

 

 

 

 

 

Balance Sheet

as on March 31, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

1,00,000

 

Investments (Deposits)

40,000

 

Less: Drawings

(14,000)

 

Add: Accrued Interest

2,100

42,100

Add: Net Profit

20,000

1,06,000

Furniture

6,000

 

Bank Loan

20,000

 

Less: 10% Depreciation

(600)

5,400

Add: Interest Outstanding

3,000

23,000

Sundry Debtors

50,000

 

Sundry Creditors

20,000

Less: Provision for Doubtful Debts

(10,000)

40,000

Advance Commission
Bills Payable
 

1,000
25,000
 

Bills Receivable
Prepaid Insurance
Closing Stock

32,000
500
45,000

Taxes Outstanding
GST Payable (WN 2)

3,000
2,000

Cash in Hand
 

15,000
 

 

 

 

 

 

1,80,000

 

1,80,000

 

 

 

 


Working Notes:
(1) Loss of stock by fire has ocurred on 1st April, 2019. Hence, it will not affect the Balance Sheet dated 31st March, 2019.

(2)GST Set off
First:CGST Payable/(Receivable)=Output CGST-Input CGST=8,000-10,000=(2,000)
Second:SGST Payable/(Receivable)=Output SGST-Input SGST=8,000-10,000=(2,000)
Third:IGST Payable/(Receivable)=Output IGST-Input CGST-Input SGST=6,000-2,000-2,000=2,000

Final:GST Payable=Output IGST=2,000
                                       



Page No 19.74: