Faculty of Management and Law, Nepal Open University

Accountancy and Taxation, BBS 1st year

Questions for Assignment

From the under mentioned trial balance of Nepal AAMA Company Ltd., prepare trading
account, profit and loss account, and profit and loss appropriation account for the year ended
31st December 2022 and balance sheet as on that date.

Particulars Debit Rs. Particulars Credit Rs.

Opening stock 30,000 Equity share capital 2,00,000
Rent, rates and taxes 6,900 (1,000 shares of Rs.100 each)
Purchases 60,000 5% Debenture 50,000
Discount allowed 1,500 Sales 1,50,000
Fuel and power 2,570 Creditors 6,000
Land and building 1,45,000 Bank overdraft 1,200
Carriage inward 1,175 Discount received 2,200
Sundry debtors 20,000 Transfer fees 1,000
Goodwill 28,000 Return outward 1,000
Plant and machinery 50,000 Outstanding rent 1,000
Loose tools 6,000 Profit and loss account 10,000
Advertisement 3,000
General expenses 4,400
Bad debts 1,030
Debenture interest 1,250
Wages 24,575
Office expenses 13,000
Insurance 1,000
Cash and bank balance 23,000
4,22,400 4,22,400

Additional information:
i) Authorized capital Rs. 3,00,000.
ii) Closing stock Rs. 55,000.
iii) Depreciate plant and machinery by 10% and appreciate land and building by 5% p.a.
iv) Wages outstanding Rs. 5,000 and debenture interest due Rs. 1,250.
v) Prepaid insurance Rs. 500.
vi) Write off goodwill Rs. 14,000.
vii) Propose final dividend at 10% and Transfer to general reserve Rs. 10,000.