Assignment

1. Journalise the following transactions

2008 Rs.
June1. Started business with cash 45,000
2. Cash paid into bank 25,000
3. Purchase of furniture and payments by cheque 5,000
4. Goods purchased for cash 15,000
5. Sold goods for cash 8,500
8. Sold goods on credit to Arvind 4,000
10. Goods purchased on credit from Amritlal 7,000
12. Goods returned to Amritlal 1,000
15. Goods returned by Arvind 200
18. Cash received from Arvind 4,000
25. Paid telephone bill 400
29. Stationery purchased 200
30. Rent paid 1,000
30. Salaries paid 2,500

2. Journalise the following transactions:

2008
Jan 1 Commenced business with a capital of Rs.4,50,000
4 Opened current account with SBI Rs.1,50,000
7 Purchased furniture for Rs.50,000 through cheque.
10 Cash purchases Rs.15,000
15 Goods purchased from X Rs.20,000
20 Paid to X in full settlement Rs.19,000
24 Commission received Rs.2,500

3. Journalize the following transactions:

2002
April 1st Bought machinery for Rs.2,40,000 for cash from Ram.
April 2nd Installed the above machine, charges paid being Rs.3,100.
April 3rd Withdrew cash from bank Rs.5,000 for office use.
April 5th Paid salaries to staff Rs.1,700
April 7th Sold goods to Shyam Rs.7,500.
April 8th Shyam paid cash Rs.3,000 for partial settlement.

4. Journalise the following transaction in the books of Mr. Rahul:

2002 Rs.
March 1 Started business with cash 10,000
2 Purchased furniture and payment by cheque 2,000
3 Withdrew from bank for private use 500
4 Cash paid to Lal in full settlement of his account (6,000) 5,940
5 Paid for stationery Rs.200 and salaries Rs.2,000

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 1
 5. Journalise the following transactions:
2004
January 1 Purchased goods for cash 5,000
3 Sold goods for cash 8,000
4 Purchased goods from Bose 2,000
6 Sold goods to Kavitha 3,000
9 Cash paid to Bose 1,600
11 Received cash from Kavitha 2,500
13 Sold goods to Bose for cash 1,800
14 Purchased goods from Kavitha for cash 1,800
19 Paid rent 400
20 Received interest 200
22 Received Commission 100
24 Goods returned to Bose 200
25 Goods returned by Kavitha 150
29 Purchased furniture from Mr. Ramu and Co. 1,500
31 Paid Salary 1,800

Trial Balance

1. Prepare the Trial Balance from the following:

Rs.
Purchases 82,800
Buildings 30,000
Wages 68,000
Fuel 2,000
Creditors 18,000
Bills payable 700
Discount received 100
Sales 1,93,000
Insurance 1,300
Income Tax 3,700
Opening stock 18,000
Commission paid 300
Debtors 19,000
Bad debts 800
Salaries 25,000
Printing and stationary 7,600
Postage and Telegrams 3,400
Bills receivable 6,900
Cash at bank 13,000
Capital 70,000

2. From the following particulars prepare Trial Balance:

Rs. Rs.
Capital 60,000 Repairs 500
Drawings 6,000 Bad debts 1,000
Purchases 25,000 Discount allowed 1,000
Debtors 4,000 Commission received 4,000
Creditors 3,000 Insurance 1,000
Bills payable 2,000 General expenses 2,000

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 2
 Sales 50,000 Depreciation 3,000
Carriage inwards 1,000 Furniture 10,000
Carriage outwards 2,000 Land and buildings 32,000
Wages 5,000 Bills receivable 3,000
Salaries 10,000 Fixed deposit with SBI 6,000
Advertisement 1,000 Opening stock 4,000
Power 1,000
Postage 500

3. The following are the balances extracted from the books of Ramu on 31-12-2004. Prepare
Trial Balance.

Rs.
Capital 30,000
Drawings 5,000
Furniture 2,600
Bank Overdraft 4,200
Creditors 11,000
Premises 20,000
Stock 22,000
Debtors 18,000
Rent (Cr.) 1,000
Discount (Dr.) 1,600
Discount (Cr.) 2,000
Purchases 1,10,000
Sales 1,50,000
Returns inwards 2,000
Wages 2,000
Salaries 9,000
General expenses 4,000
Commission 2,200
Carriage 1,800
Reserve for bad and doubtful debts 2,000

Final Accounts

1. Prepare Trading and Profit and Loss account and a Balance Sheet of Shyam Sundar as on
31-12-2005 from the following Trial Balance and Adjustments:

Dr. Rs. Cr. Rs.

Shyam Sundar ‘s capital 93,230
Sales 1,26,177
Sundry creditors 22,680
Purchase returns 3,172
Bills payable 6,422
Plant and Machinery 55,000
Fixtures and fittings 1,720
Factory fuel and power 542

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 3
 Office Salaries 3,745
Lighting (Factory) 392
Travelling expenses 925
Carriage on sales 960
Cash at bank 2,245
Cash in hand 68
Sundry debtors 47,800
Purchases 83,290
Manufacturing wages 9,915
Rents and taxes 1,765
Office expenses 2,778
Carriage on purchases 897
Discount 422
Drawings account 6,820
Stock on 1-4-2004 21,725
Manufacturing expenses 2,680
Sales returns 7,422
Insurance 570
2,51,681 2,51,681

Adjustments:
(a) Depreciation – 5% of Plant and Machinery and 10% fixtures and fittings.
(b) Reserve bad debts 2 ½% on sundry debtors
(c) Outstanding rent Rs.150
(d) Insurance unexpired on 31st March Rs.70
(e) Outstanding wages and salaries Rs.800 and Rs.350 respectively.
(f) Stock 31st March 2005 Rs.16, 580

2. Prepare Trading and Profit and Loss a/c and a Balance Sheet as on 31.3.2005 from the
following Trial Balance :
Debit Rs. Credit Rs.
Salaries 6,000 Capital 25,000
Purchases 26,000 Sales 47,000
Trade expenses 1,000 Discount 200
Wages 7,800 Creditors 21,000
Carriage on purchases 400 Bills payable 6,800
Office expenses 500
Commission 600
Bad debts 1,200
Debtors 30,000
Furniture 3,000
Machinery 10,000
Bills receivable 2,000
Insurance 400
Opening stock 7,000
Cash in hand 500
Cash at bank 3,600
1,00,000 1,00,000

Adjustments:

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 4
 (a) Closing stock Rs.11,000
(b) Outstanding wages Rs.2,000
(c) Prepaid insurance Rs.50
(d) Provide for reserve on doubtful debts 5% on debtors.
(e) Depreciate machinery and furniture @ 5%.

3. The following Trial Balance has been taken from the books of Mr. Aravind as on 31st
December 2000. You are required to prepare the Trading and profit and loss account for
the year ended 31-12-2000 and the Balance Sheet as on that date.

Debit balances Rs. Credit Balances Rs.

Cash in hand 540 Sales 98,780
Cash at Bank 2,630 Return outwards 500
Purchases 40,675 Capital 62,000
Return inwards 680 Sundry creditors 6,300
Wages 8,480 Rent 9,000
Fuel 4,730
Carriage on purchases 2,040
Carriage on sales 3,200
Stock (1.1.2000) 5,760
Buildings 32,000
Land 10,000
Machinery 20,000
Patents 7,500
Salaries 15,000
General expenses 3,000
Insurance 600
Drawings 5,745
Sundry debtors 14,000
1,76,580 1,76,580

Adjustments:
(a) Stock on hand on 31.12.2000, Rs.6,800
(b) Machinery is to be depreciated at the rate of 10% and patents at the rate of 20%.
(c) Outstanding salaries Rs.1,500
(d) Prepaid insurance Rs.170.
(e) Rent receivable Rs.1,000
(f) Bad debts Rs.725.

4. From the following Trial Balance, prepare Trading and Profit and Loss Account of
Abhimanyu for the year ending 31st December 2005 and a Balance Sheet as on that date.
You are also to consider the following adjustments:
(1) Stock on 31st December 2005 amounted to Rs.52, 000
(2) Provide Rs.5, 000 for outstanding wages and Rs.500 for outstanding rent
(3) Drawings amounting to Rs.10, 000 has been debited to capital account.
(4) Charge interest @ 5% p. a. on capital and Rs.300 on drawings.
(5) Goods distributed as samples amounted to Rs.2, 000.
(6) Depreciate freehold premises @ 5%.

Dr. Rs. Cr. Rs.

Stock on 1st January 23,000

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 5
 Purchases and returns 75,100 300
Cash in hand 1,700
Bank 11,330
Freehold property 19,300
Printing and Stationery 820
Trade expenses 560
Commission received 1,650
10% investments (January 1st) 2,000
Interest on the above 100
Sundry debtors and Creditors 18,000 14,835
Wages 12,500
Salaries 7,000
Capital 57,000
Income tax 800
Discount allowed and received 3,150 2,300
Sales and returns 275 1,04,475
Bills receivable 1,600
Office furniture 1,525
Rent, rates and insurance 2,000
1,80,660 1,80,660

5. From the following Trial Balance, Prepare the Trading Profit and Loss Account and the
Balance Sheet on 31-12-2004.
Debit Balance Rs. Credit Balance Rs.
Drawings 6,000 Capital 60,000
Trading expenses 2,500 Sundry creditors 43,000
Rent 2,000 Bills payable 4,000
Traveling expenses 4,700 Commission 4,000
Returns 1,000 Returns 1,100
Salaries 9,500 Sales 1,58,000
Purchases 80,000 Overdraft 6,000
Duty and clearing charges 3,500
Sundry debtors 51,000
Bills receivable 5,000
Loan to Ramu 42,000
Plant and Machinery 8,500
Opening stock 47,000
Cash in hand 900
Cash at Bank 12,500
2,76,100 2,76,100

Adjustments:
(i) Closing Stock Rs.60,000
(ii) Allow interest on capital at 10%
(iii) Provide depreciation on machinery at 10% p.a.
(iv) Commission received in advance Rs.500
(v) Outstanding salaries Rs.1,600
(vi) Write off bad debts Rs.1,000 and provide 5% as reserve for bad debts on debtors.
(vii) Interest to be received Rs.200.

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 6
6. From the following Trial Balance of Ravi, prepare final accounts for the year ended 31-
3-2005:
Debit balance Rs. Credit Balance Rs.
Drawings 4,500 Capital 24,000
Purchases 20,000 Sales 30,500
Sales returns 1,500 Discounts 1,900
Opening stock 8,000 Creditors 10,000
Salaries 4,200 Bills payable 2,500
Wages 1,200
Rent 350
Bad debts 400
Discounts 700
Debtors 14,000
Cash in hand 6,200
Insurance 400
Trade expenses 300
Printing 150
Furniture 2,000
Machinery 5,000
68,900 68,900

Adjustments:
(a) Closing Stock Rs.7, 000
(b) Prepaid Insurance Rs.60
(c) Outstanding salary Rs.500, wages Rs.200
(d) Make a provision for doubtful debts at 5% on debtors.
(e) Calculate interest on capital at 5% and on drawings at 6%
(f) Depreciate machinery at 5% and furniture at 10%

7. From the following Trial Balance, you are required to prepare final accounts for the year
ended 31-12-2005 :
Particulars Debit Rs. Credit Rs.
Land & Buildings 20,000 -
Goodwill 40,000 -
Plant and Machinery 30,000 -
Loose Tools 1,000 -
Opening stock 20,000 -
Capital and drawings 7,500 70,000
Bills receivable and Bills payable 7,500 8,000
Purchase and sales 30,000 1,15,000
Carriage inwards 1,000 -
Salaries 14,000 -
Wages 15,000 -
Debtors and Creditors 20,000 36,000
Cash at Bank 15,000 -
Cash on hand 2,000 -
Furniture 3,000 -
Insurance 2,000 -
Returns 750 1,000
Bad debts 1,250

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 7
 2,30,000 2,30,000

Adjustments :
(a) Depreciate Plant & Machinery by 10%.
(b) Pre-paid insurance Rs.1,500
(c) Provide 5% on debtors against bad and doubtful debts and 2% against discount on
debtors.
(d) Closing stock was valued at Rs.20,000.

8. From the following ledger balances of Anand, prepare Trading and Profit and Loss
Account for the year ended 31-12-2005 and a Balance Sheet as at that date, after making
the necessary adjustments:

Debit balances Rs. Credit Balances Rs.

Cash in hand 540 Sales 98,780
Cash at Bank 2,630 Returns outward 500
Purchases 40,675 Anand’s Capital 71,000
Returns Inward 680 Creditors 6,300
Wages 10,480
Fuel 4,730
Patents 7,500
Salaries 15,000
Sundry expenses 3,000
Insurance 600
Drawings 5,245
Debtors 14,500
Carriage outwards 3,200
Carriage inwards 2,040
Opening Stock 5,760
Premises 30,000
Land 10,000
Machinery 20,000

Adjustments:
(a) Closing stock on 31-3-2005 Rs.5, 800
(b) Depreciate machinery and patents by 10% and 20% respectively.
(c) Outstanding salaries Rs.1, 500
(d) Unexpired Insurance Rs.300
(e) Provide 5% for doubtful debts
(f) A fire occurred on 25th March 2005 in the godown and stock of the value of Rs.
1, 000 was destroyed. It was fully insured and the insurance company admitted the
claim in full.
(g) Rs.2, 000 is to be transferred to reserve fund out of profits if any.

9. From the following balances and adjustments prepare Final Accounts as on 31-3-2005.
Rs. Rs.
Purchases 65,000 Debtors discount Reserve 2,000
Bank overdraft 8,000 Sales returns 2,000
Sales 1,20,000 Plant and Machinery 20,000
Opening stock 15,000 Sundry Creditors 18,000

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 8
 Capital Account 60,000 Land & Buildings 50,000
Bad debts reserve 2,500 Salaries 4,000
Purchase returns 1,500 Factory expenses 600
Wages 600 Carriage 800
Bills Payable 10,000 General expenses 400
Insurance 600 Commission 200
Advertising expenses 1,500 Sundry Debtors 15,000
Bills Receivable 19,000 Bad debts 400
Cash in hand 600 Discount (Dr.) 300
Goodwill 20,000 Creditor discount reserve 800
Drawings Account 2,400

(a) Closing Stock Rs.25,000

(b) Outstanding wages and salaries are Rs.800 and Rs.2,400.
(c) Prepaid insurance Rs.150.
(d) Bad debts to be written off Rs.600 and provide bad debts reserve @ 5% on
Debtors.
(e) Provide 2% discount reserve on debtors and creditors.
(f) Depreciation is to be calculated 10% on Plant and Machinery, 5% on Land and
Buildings.

10. On 1st January, 1995, a firm purchased plant and machinery costing Rs. 52,000. It is
estimated that its working life is 5 years and at the end of which it will Fetch Rs. 2,000.
Show plant and machinery account for 5 years, if depreciation is charged according to
straight line method and diminishing balance methods.

11. A company whose accounting year is calendar year purchased on 1-4-1997 Machinery
costing Rs. 60,000. It further purchased Machinery on 1st October, 1997 costing Rs.
40,000 and on 1st July, 1998 costing Rs. 20,000. On 1-1-1999 one third Machinery which
was installed on 1-4-1997 became obsolete and was sold for Rs. 6,000. Show how
Machinery account would appear in the books of the company. The depreciation be
charged at 10% on written down value method & straight line method

Theory questions

1 Define Accounting, state its functions. How does it differ from Book Keeping
2 State the persons who should be interested in accounting information
3 Discuss briefly the principles ( concepts and conventions )
4 Explain the different categories in which the accounting transactions can be classified.
Also state the rule of “debit” and “credit” in this connection
5 What is a Trial Balance? Explain its objectives.
6 What are Final Accounts? What purpose do they serve?
7 What is mean of Depreciation? What are the methods of depreciation ? What are the
factors effecting of depreciation?

Prepared by Mr A Kotishwar, Associate Professor & HOD,

Department of MBA, CMR College of Engineering & Technology, Page 9