Double Entry Book Keeping Ts Grewal 2019 for Class 11 Commerce Accountancy Chapter 14 - Financial Statements Of Sole Proprietorship

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

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

Question 3:

From the following information, determine Gross Profit for the year ended 31st March, 2019:

	₹		₹
Opening Stock (1st April, 2018)	25,000	Goods purchased during the year	1,40,000
Freight and Packing	10,000	Closing Stock (31st March, 2019)	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 = ₹45,000

Alternatively,

Trading Account for the year ended March 31, 2019
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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.

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 $33 \frac{1}{3} %$

Answer:

$\begin{array}{l} Calculation of amount of Closing Stock \\ Gross Profit = 33 \frac{1}{3} % on cost = \frac{1}{3} rd on cost \\ ∴ Gross Profit on sales = \frac{1}{4} th on sales \\ And, Sales = Cash Sales + Credit Sales = 60,000+40,000 = Rs 1,00,000 \\ So, Gross Profit =1,00,000 \times \frac{1}{4} = Rs 25,000 \\ Cost of Goods Sold = Sales - Gross Profit \\ = 1,00,000 - 25,000 = Rs 75,000 \\ Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses - Closing Stock \\ 75,000 = 20,000 + 70,000 + 0 - Closing Stock \\ Closing Stock = Rs 15,000 \end{array}$

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)

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.

Question 7:

From the following information, prepare Trading Account for the year ended 31st March, 2019:

	₹		₹
Stock on 1st April, 2018	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, 2019	1,30,000

Net Realisable Value (Market Value) of stock as on 31st March, 2019 was ₹ 1,20,000.

Answer:

Trading Account for the year ended March 31, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
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.

Question 8:

From the following information, prepare Trading Account for the year ended 31st March, 2019:
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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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.

Question 9:

Following balances appear in the Trial Balance of a firm as on 31st March, 2019:

		₹
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 31,2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
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.

Question 10:

From the following information, prepare Trading account for the year ended 31st March, 2019:
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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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.

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:

$\begin{array}{l} Operating Profit = Net Profit - Rent Received - Gain on Sale of Machine + Interest on Loan - Donation \\ = 1, 0 0,000 - 10,000 - 15,000 + 20,000 - 2,000 = Rs 93,000 \end{array}$

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

Question 13:

From the following information, prepare Profit and Loss Account for the year ended 31st March, 2019:

	₹		₹
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	Input IGST A/c	2,000
Output IGST A/c	1,000

Answer:

Profit and Loss Account for the year ended March 31, 2019
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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

Note: ₹1,000 Input IGST after adjusting against Output IGST will be shown on the asset side of the balance sheet.

Question 14:

From the following particulars, prepare Balance Sheet as at 31st March, 2019:

	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, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
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

Question 15:

From the following information, prepare Balance Sheet of a trader as at 31st March, 2019 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, 2019
Liabilities		Amount (₹)	Assets		Amount (₹)
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, 2019
Liabilities		Amount (₹)	Assets		Amount (₹)
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

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 31^st March, 2019
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:

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

Question 17:

Prepare Trading and Profit and Loss Account and Balance Sheet of Jagat Shah as at 31st March, 2019 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, 2018	1,00,000	Cash	40,000
Drawings	40,000	Carriage Outwards	20,000
Wages	1,00,000	Advertising	20,000
Carriage Inwards	5,000	Creditors	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, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
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

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

Question 19:

The following are the balances as on 31st March, 2019 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, 2018	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, 2019 was valued at ₹ 2,40,000.
You are required to prepare Trading Account, Profit and Loss Account and Balance Sheet as at 31st March, 2019.

Answer:

Financial Statement of Bhagwan Das
Trading Account for the year ended March 31, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
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

Question 20:

From the following balances of Anand, prepare Trading Account, Profit and Loss Account, and Balance Sheet as at 31st March, 2019:

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, 2019) was ₹ 1,43,000.

Answer:

Financial Statement of Anand
Trading Account for the year ended March 31, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
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

Question 21:

From the following balances, prepare Final Accounts of M/s Raja & Sons for the year ended 31st March, 2019:
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, 2018) ₹ 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, 2019) ₹ 36,200.

Answer:

Financial Statement of M/s. Raja & Sons
Trading Account for the year ended March 31, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
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

Question 22:

From the following balances, prepare Final Accounts of M/s Mangal & Sons for the year ended 31st March, 2019:
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, 2019 ₹ 15,000.

Answer:

Financial Statement of M/s. Mangal & Sons
Trading Account for the year ended March 31, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
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

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.

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, 2019 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, 2018)	1,65,000
Investments	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, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
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, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
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

Question 25:

From the following balances, as on 31st March, 2019, 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, 2018)	20,000

Closing Stock on 31st March, 2019 was valued at ₹ 14,500.

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	(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, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Gross Loss	5,000
Repairs	500
Rent	4,000
Trade Expenses	7,000	Net Loss (Balancing Figure)	18,500
Bad Debts	2,000
	18,500		18,500

Balance Sheet as on March 31, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital	1,00,000		Fixed Assets
Less: Life Insurance Premium	(12,000)		Plant and Machinery	40,000
Less: Net Loss	(18,500)	69,500	Current Assets
Current Liabilities			Closing Stock	14,500
Sundry Creditors		12,000	Sundry Debtors	24,000
Bills Payable		7,000	Bank	10,000
		88,500		88,500

Question 26:

Trial Balance of Chatter Sen on 31st March, 2019 revealed the following balances:

Debit Balances:	₹	Debit Balances (Contd.):	₹
Plant and Machinery	90,000	Rent	2,000
Purchases	58,000	Advertisement	2,000
Sales Return	1,000	Cash at Bank	6,900
Opening Stock	40,000	Credit Balances:
Discount Allowed	350	Capital A/c	1,10,000
Bank Charges	75	Sales	1,27,000
Sundry Debtors	45,000	Purchases Return	1,275
Salaries	6,800	Discount Received	800
Wages	10,000	Loan	5,000
Freight In	750	Sundry Creditors	20,000
Freight Out	1,200

Stock on 31st March, 2019 was valued at ₹ 35,000.
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at the date.

Answer:

Financial Statement of Chatter Sen
Trading Account for the year ended March 31, 2019
Dr.						Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Opening Stock		40,000	Sales	1,27,000
Purchases	58,000		Less: Sales Return	(1,000)	1,26,000
Less: Purchases Return	(1,275)	56,725	Closing Stock		35,000
Wages		10,000
Freight Inwards		750
Gross Profit (Balancing Figure)		53,525
		1,61,000			1,61,000

Profit and Loss Account for the year ended March 31, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Discount Allowed	350	Gross Profit	53,525
Bank Charges	75	Discount Received	800
Salaries	6,800
Freight Outwards	1,200
Rent, Rates and Taxes	2,000
Advertisement	2,000
Net Profit (Balancing Figure)	41,900
	54,325		54,325

Balance Sheet as on March 31, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital	1,10,000		Fixed Assets
Add: Net Profit	41,900	1,51,900	Plant and Machinery	90,000
Liabilities			Current Assets
Sundry Creditors		20,000	Closing Stock	35,000
Loan		5,000	Sundry Debtors	45,000
			Cash at Bank	6,900
		1,76,900		1,76,900

Question 27:

Following Trial Balance is extracted from the books of a merchant on 31st March, 2019:

Debit Balances:	₹	Debit Balances (Contd.):	₹
Furniture and Fittings	6,400	Insurance	12,500
Motor Vehicles	62,500	General Charges	7,820
Building	75,900	Salaries	33,000
Bad Debts	1,250	Credit Balances:
Sundry Debtors	38,000	Capital	1,28,900
Stock on 1st April, 2018	34,600	Bills Payable	2,000
Purchases	55,750	Sundry Creditors	25,000
Sales Return	2,000	Sales	1,54,500
Advertising	4,500	Bank Overdraft	28,500
Interest	1,180	Purchases Return	1,250
Cash in Hand	6,500	Commission	1,750

Stock in Hand on 31st March, 2019 was valued at ₹ 32,500.
From the above, prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date.

Answer:

Trading Account for the year ended March 31, 2018
Dr.						Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
Opening Stock		34,600	Sales	1,54,500
Purchases	55,750		Less: Sales Return	(2,000)	1,52,500
Less: Purchases Return	(1,250)	54,500	Closing Stock		32,500
Gross Profit (Balancing Figure)		95,900
		1,85,000			1,85,000

Profit And Loss Account for the year ended March 31, 2018
Dr.				Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Taxes and Insurance	12,500	Gross Profit	95,900
General Charges	7,820	Commission	1,750
Salaries	33,000
Bad Debts	1,250
Advertising	4,500
Interest	1,180
Net Profit (Balancing Figure)	37,400
	97,650		97,650

Balance Sheet as on March 31, 2018
Liabilities		Amount (Rs)	Assets	Amount (Rs)
Capital	1,28,900		Fixed Assets
Add: Net Profit	37,400	1,66,300	Building	75,900
Current Liabilities			Furniture and Fittings	6,400
Sundry Creditors		25,000	Motor Vehicles	62,500
Bank Overdraft		28,500	Current Assets
Bills Payable		2,000	Closing Stock	32,500
			Sundry Debtors	38,000
			Cash in Hand	6,500
		2,21,800		2,21,800

Question 28:

The following balances were extracted from the books of Harish Chandra on 31st March, 2019:

	₹		₹
Drawings	15,000	Capital	2,45,000
Life Insurance Premium	5,000	Loan	78,800
General Expenses	25,000	Sales	6,53,600
Building	1,10,000	Purchases	4,70,000
Machinery	93,400	Motor Car	20,000
Stock on 1st April, 2018	1,62,000	Reserve Fund (Cr.)	9,000
Power	22,400	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
Input CGST A/c	15,000	Charity	1,050
Input SGST A/c	15,000	Bad Debts	5,500
Output IGST A/c	30,000

Stock on 31st March, 2019 was valued at ₹ 2,35,000.
Prepare final accounts for the year ended 31st March, 2019.

Answer:

Financial Statement of Harish Chandra
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	2,35,000
Power	22,400
Wages	72,000
Gross Profit (Balancing Figure)	1,62,200
	8,88,600		8,88,600

Profit and Loss Account for the year ended March 31, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
General Expenses	25,000	Gross Profit	1,62,200
Taxes and Insurance	13,150	Commission	13,200
Bad Debts	5,500
Car Expenses	18,000
Charity	1,050
Net Profit (Balancing Figure)	1,12,700
	1,75,400		1,75,400

Balance Sheet as on March 31, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital	2,45,000		Fixed Assets
Add: Net Profit	1,12,700		Building	1,10,000
Less: Life Insurance Premium	(5,000)		Machinery	93,400
Less: Drawings	(15,000)	3,37,700	Motor Car	20,000
Reserve Fund		9,000	Current Assets
Loan		78,800	Closing Stock	2,35,000
Current Liabilities			Debtors	62,800
Bank Overdraft		33,000	Cash	800
Bills Payable		38,500
Creditors		25,000
		5,22,000		5,22,000

Working Note:
(1) GST Set off
Output IGST-Input CGST-Input SGST= 30,000-15,000-15,000=Nil

GST Payable/Receivable=Nil

Hence, Computation of GST won't affect the Balance Sheet.

Question 29:

From the following Trial Balance and additional information of Mr. Gaurav, a proprietor, prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date:

Particulars		Dr. Balance (₹)	Cr. Balance (₹)
Building		1,60,000	…
Wages		26,000	…
Machinery		16,000	…
Salaries and Wages		41,600	…
Debtors		38,700	…
Capital		…	2,23,100
Purchases		56,500	…
Sales		…	1,00,700
Creditors		…	12,500
Income Tax		2,000	…
Drawings		500	…
Input CGST A/c		10,000	…
Input SGST A/c		10,000	…
Output CGST A/c		…	12,500
Output SGST A/c		…	12,500
	Total	3,61,300	3,61,300

Closing Stock at cost ₹ 1,00,000 but its market value is ₹ 88,500.

Answer:

Financial Statement of Mr. Gaurav
Trading Account for the year ended March 31, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Purchases	56,500	Sales	1,00,700
Wages	26,000	Closing Stock	88,500
Gross Profit (Balancing Figure)	1,06,700
	1,89,200		1,89,200

Profit and Loss Account for the year ended March 31, 2019
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Salaries and Wages	41,600	Gross Profit	1,06,700
Net Profit (Balancing Figure)	65,100
	1,06,700		1,06,700

Balance Sheet as on March 31, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital	2,23,100		Fixed Assets
Add: Net Profit	65,100		Building	1,60,000
Less: Drawings	(500)		Machinery	16,000
Less: Income Tax	(2,000)	2,85,700	Current Assets
Current Liabilities			Closing Stock	88,500
Creditors GST Payable *(WN 1)*		12,500 5,000	Debtors	38,700
		3,03,200		3,03,200

Working Notes:
(1) GST Set off
First: Output CGST-Input CGST= 12,500-10,000=2,500
Second: Output SGST-Input SGST= 12,500-10,000=2,500

GST Payable=Output CGST+Output SGST=2,500+2,500=5,000

(2) Closing Stock has been taken at its Market Price (i.e. Rs 88,500) and not on its Cost. This is because, as per the Principle of Conservatism, Closing Stock is taken at Cost or Market Price whichever is less.

Double Entry Book Keeping Ts Grewal 2019 for Class 11 Commerce Accountancy Chapter 14 - Financial Statements Of Sole Proprietorship

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