ACCOUNTING

NAE NIRAJ
ACADEMY FOR
EXCELLENCE
Preparation
Accounts of Sole
of Finanei..
anclal
Proprietietors
Preparation of Financial Accounts
of Sole Proprietors

Ques 1
Trial Balance for financial the year (FY) ended 31st March 2017 of M/s he..
following details:

Particulars
Debit ( Credit
Purchase & Sales
Debtors & Creditors
10.00.000 12.00 00
5,00.000 4 00.00
Opening Stock
2.00.000
Closing Stock 3,00,000
Other Expenses & Incomes 7.00,000
Fixed Assets & Long Term Liabilities 9.00.000
25,00.000
Capital 6.00.000
21.00.000
52,00.000 52,00,000
Balance of creditor as on 01 April 2016 is '300.000
You are
required to calculate Cost of Goods Sold and Amount Paid to Creditoors

Ques 2
Particulars
Opening Inventory
Purchases 1.00.000
Carriage Inwards 6.72,000
Wages 30.000
Sales 50.0

Returns inward 11.00.000

Returns outward 1,00.000
72.00
Closing Inventory
2.00.000
From the above information,
ended 31st March, 2017 and
prepare a
Trading Account of M/s. ABC Traders for the vear

Pass necessary closing entries in the journal proper of M/s. ABC Traders

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 NIRAJ ACCOUNTING
SNAE a R s c T E S S 5 O R 6DAL
ACADEMY FOR
EXCELLENCE Preparation of Financial
Accounts of Sole
Proprietors
Ques
3
ses
evenue, Expenses and Gross Profit Balances of
M/s ABC Traders for the year ended on
2016 were as follows:
31st March
4,20,000, Salaries 1,10,000, Discount (Cr.), '18,000, Discount
Profit
Debts 17,000, Depreciation 65,000, Legal Charges 25,000, Consultancy (Dr.) 19,000,
Fees
00.
32, Audit Fees 1,000, Electricity Charges '17,000, Telephone, Postage and T'elegrams
.12.000, Stationery 27,000, Interest paid on Loans 70,000.
Quamare Profit and Loss Account of M/s ABC Traders for the
year ended on 31 st March,
9016. Show necessary cloSing entries in the Journal Proper of M/s. ABC Traders also.

Ques 4

On 1st Jan. 2017 Provision for Doubtful Debts existed at ' 40,000. Trade Receivables on
1 12.2017 were 15,00,000; Bad Debts totalled 1,00,000, not accounted yet. It is required
to write off the bad debts and create a provision equal to 5% of the Trade receivables' balances.

show how you would compute the amount debited to the Profit and Loss Account.

Ques 5
The following is the Trial Balance of C. Wanchoo on 31st Dec. 2017.

Trial Balance on 31st December, 2017

Particulars
Capital Account 10,00,000
Inventory Account 2.00,000
Cash in hand 1,44,000
Machinery Account 7,36,000
Purchases Account 18,20,000
Wages Account 10,00,000o
Salaries Account 10,00,000
Discount Allowed A/c 50,000
Discount Received A/c 30,000
Sundry Office Expenses Account 6,00,000
Sales Account 50,00,00o
Sums owing by customer (Trade receivables) 8,50,000
Trade payables (sums owing to suppliers) 3,70,000
Total 64,00,00o 64,00,000
Value of Closing Inventory on 31st Dec. 2017 was 2,70,000

Prepare closing entries for the above items and Prepare Trading and Profit and Loss
Account.

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 ACCOUNTING
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Ques 6
YOUR SUCCESS IS OLR GOAL
NIRAJ
ACADEMY FOR
EXCELLENCE
Preparation of
Accounts of Sole

31st March, 2017

ancial

oprietors OURS

Ques 8

Bros. as on
Given below Trial Balance of M/s Dayal
Debit Balances
Particulars
Credit Balances
Ma

Capital A/c 3,00,000

T 00.000 Ca
Land and Building
14% Term Loan
Loan from M/s. D & Co. 4,20,000
4,00,000
460,000
Trade receivables 20,000
Cash in hand 6,00,00O
Inventories in Trade 2,00,000 FT
Furniture 40,000
Trade payables 1,00,000
|Advances to Suppliers
Net Profit 60,000
1,00,000 Ques

Shri
| Drawings 17,00,000
17,00,000
2017. Par
31st March,
Prepare Balance Sheet as on

Ca
Pur
Ques 7
January, 2017 was as follows: op-
The balance sheet of Thapar on 1sthapar o Amount |Assets TrE
Liabilities Amount 14
O
Trade payables
15,00,000 Plant & Machinery
Furniture & Fixture
|30,00,000 S
Expenses Payable 1,50,000 3,00,000
50,00,000 Trade receivables
14,00,000
Capital Cash at Bank
6,50,000
Inventories 13,000,00
66,50,00o
of 15,30,000. This
66,50,000
was
Loss Account revealed a net profit
During 2017, his Profit and
after allowing for the following:

(a) Interest on capital@ 6%% p.a. Pr

Furniture and Fixtures@5%.
Plant and Machinery @10% and on

(b) Depreciation on

of the trade receivables as at 31lst December,

(c) A provision for Doubtful Debts @ 5%
2017.
for (1)
Loss Account he had forgotten to provide
But while preparing the Profit and the extent of
and (2) prepaid insurance to
outstanding expenses totaling '1,80,000
20,000.
o n 31st December, 2017
were:
His current assets and liabilities
Cash at Bank 10,35,000 and
Inventories 14,50,000; Trade receivables 20,00,000;
for domesticuse.
the year he withdrew 6,00,000
Trade payables 11,40,000. During

Draw up his Balance Sheet at the end of the year.

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 ACCOUNTING
NIRAJ
ACADEMY FOR Preparation of Financial
NAE aRscess soRGOAL
EXCELLENCE
Accounts of Sole Proprietors
Ques8
BALANCE SHEET
As at 31st December, 2017
Liabilities |Assets
Mahendra & Sons 5,60,000 Cash in hand 43,000|
Capital
20,00,000 Cash at Bank 2,67,500
|Trade receivables 7,49,500

|Closing Inventory 9,00,000o

|Machinery and Equipment 6,00,00o|
25,60,000| 25,60,000
Deom the above g v e n b a l a n c e s h e e t p r e p a r e t h e r e l e v a n t o p e n i n g e n t r y .

Ques 9

Mittal gives you the following Trial Balance and some other information:
Shri
Trial Balances as on 31st March, 2016
Particulars
Dr. Cr.

8,70,00o
Capital
Purchases and Sales 6,05,000 12,10,000
Opening Inventory 72,000
Trade receivables and
Trade payables
90,000 1,70,000
Bank Loan (loan taken at year end) 2,00,000o
14%
Overdrafts (overdraft taken at year end) 1,12,000
2,70,00o
Salaries
Advertisements 1,10,000
Other expenses 60,000
Returns 40,000 30,000
Furniture 4,50,000
Building 8,90,000
Cash in Hand 5,000
25,92,00o 25,92,000
Closing Inventory on 31st March, 2017 was valued at '1,00,000.

Prepare final accounts of Shri Mittal for the year ended 31st March, 2017.

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 ACCOUNTING
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Ques 10
YoUR SUcCESS S OuR GOAI
NIRAJ
ACADEMY FOR
EXCELLENCE
Preparation of Fina
A c c o u n t s of Sole
Proj ncial
orietors SNG YouR S

Q u e s 122

trial balance and

some other information:
r. Mohan gives you the following n The follow-

31st March, 2017

Gavaskaar

Balance a s on
Trial Viswanath

P a r t i c u l a

Particulars Cash in
Capital 6,50,000 Cash a t i

Sales
Purchases 4,30,00o 9,70,000 Sundry D
Stock on

Opening Inventory 1,10,000

Freights Inward 40,000 Furnitu

Office ec
Salaries 2,10,000
Other Administration Expenses 1,50,000 Building

Motor C
Furniture 3,50,000
Trade receivables and Trade payables 2,10,000 1,90,000 Sundry

Loan fr-
Returns 20,000
| Discounts 19,000 12,000 9,000
Provisi

Bad Debts ,000 Purcha

|Investments in Government Securities 1,00,00O Purch-

Cash in Hand and Cash at Bank 1,87,000o Sales

Other Information:
18,31,000|18,31,000 Sales

Salar
Rent
Closing Inventory was 1,80,000;
( Inter
(ii) Depreciate Furniture @ 10% p.a. Rate-
Prepare Trading and Profit and Loss Account for the year ended on 31.3.2016 and Bai.
lance Dis
Sheet of Mr. Mohan as on that date. Disc
Frer
Ques 11 Car
The Balance Sheet of Mr. Popatlal, a merchant on 311st March, 2017 stood as below: Dra
Pri
Amount |Assets Amount Ele
Liabilities
In
2,40,000 Fixed Assets 1,25,600 G
Capital
Trade payables 1,64,000 Inventories 2,06,400
Bank Overdraft 1,46,000 Trade receivables 1,88,000
Less: Provision (6,200) 1,81,800
Cash 36,200
5,50,000o 5,50,000
Show opening journal entry on 1st April, 2017 in the books of Mr. Popatlal

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 ACCOUNTING
NIRAJ
ACADEMY FOR Preparation of Financial
AN A E EXCELLENCE
aRsCCESS5OUR GOAL Accounts of Sole Proprietors
Q u e s1 .
the schedule of balances as on 31.3.17 extracted from the books of Shri
Thefollowingi s
follow carries on businesS under the same name and style of M/S Gavaskar
Gavaskar, Bomba
at
Viswanath
&& Co.,
r. r.
Particulars

C a s hi n h a n d 14,000
Cash at bank 26,000
Sundry Debtors
8,60,000
S t o c ko n 1.4.2016

6,20,000
Furniture fixtures
2,14,000
Office equipment
1,60,000
Buildings
6,00,000
MotorCar 2,00,000
Sundry Creditors
4,30,000
Loan from Viswanath
3,00,000
tfor bad debts 30,000
Provision
Purchases 14,00,0000
Purchase Returns
26,000
23,00,000
Sales
Sales Returns 42,000
Salaries 1,10,000
Rent for Godown 55,000
loan from Viswanath 27,000
Interest on
Rates &Taxes 21,000
allowed to Debtors 24,000
Discount
received from Creditors
Discount 16,000
Freight on purchases 12,000
Carriage Outwards 20,000
Drawings 1,20,000
SCUR A
Printing and Stationery 18,000
Electricity Charges 22,000
Insurance Premium 55,000
General office expenses 30,000
Bad Debts 20,000
Bank charges 16,000
Motor car expenses 36,000
Capital A/c 16,20,000
TOTAL 47,22,000 47,22,0000

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 ACCOUNTING
Preparation of Financi
SNAE
NIRAJ
ACADEMY FOR
EXCELLENCE Accounts of Sole Propriet
oUR SUCCE5S 5 OUn GOAL

Prepare Trading and Profit

and Loss Account
1or

date after making

year ended
provision for the
the 31st Marcho
followine:
rietors
017 and
the Balance Sheet a s at that
5 percent; (b) Furniture:and
used for business by
1. Depreciate: (a) Building during the year for '14,000 xtures
One steel table purchased was sold
by 10 percent;
wrongly credited to Sales Account, for
s a m e price but the
sale proceeds were Ofic
typewriter during the year for
equipment by 15 percent;
Purchase ofa
debited to purchase; and (d) Motor car by 20%
.
40,000 has been wrongly
was 4,40,000.
of the year
2. Value of stock at the close

godown is outstanding.
3. Two month's rent for
Viswanath is payable at 12 percent per annum, this lna.
4. Interest on loan from was
taken on 1.5.2016.
of Sundry Debtors
Reserve for bad debts is to
be maintained at 5 percent
5. towards proprietor's life insurance
includes '40,000 paid po
6. Insurance premium the period from 1.4.2016 to 30y
and the balance of the insurance charges cover
30.6.17

Ques 13
ended 31st March, 2016 includee
account for the year
Crimpson Ltd.'s profit and loss
the following information:

57,500
(i) Depreciation
21,000
written off
(ii) Bad debts
18,000
(ii) Increase in provision for doubtful
debts
(iv) Proposed dividend
15,000
20,000
(v) Retained profit for the year
4,000
(vi) Liability for tax

YOUR S OUR GCAL

above are
-

(a) transfer to provisions; (b) transfer

State which one of the items (i) to (vi)
nor reserves.

(c) neither related to provisions

to reserves; and

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 NIRAJ
ACCOUNTING
ACADEMY FOR
Preparation of Financial
NAE oURSUCCESS 5 O L R GOAL
EXCELLENCE
Accounts of Sole Proprietors
Q u e s1 4

Gallowing particulars extracted from the books of Ganguli, prepare trading and proit
prom rcount and balance sheet as at 31st March, 2016 after making the necessary
loss
a n d

adjustments:

P a r t i c u l a r s
Particulars
capital
account (C 5,40,500.00 Interest received 72,50.00
Gangulis
Stock on 1.4.2015
2,34,000.00 Cash with Traders Bank Ltd. 40,000.00o

Sales
14,48,000.00 Discounts received 14,950.00
ales return 43,000.00 nvestments (at 5%) as on
1.4.2015 25,000.00

Purchases 12,15,500.00 Furniture as on 1-4-2015 9,000.00

Purchases r e t u r n 29,000.00 Discounts allowed 37,700.0o

Carriage inwards 93,000.00 General expenses 19,600.00

Rent 28,500.00 Audit fees 3,500.00

Salaries 46,500.00 Fire insurance premium 3,000.00

Sundrydebtors 1,20,000.00 Travelling expenses 11,650.00

Sundry creditors 74,000.00 Postage and telegrams 4,350.00

Loan from Dena Bank Ltd. (at 1,00,000.00 Cash in hand 1,900.00
12%)
Deposits at 10% as on 1-4
Interest paid 4,500.002015
4.500.0o
(Dr.) 1,50,000.00

Printing and Advertising 17,000.00 Drawings 50,000.00

Advertisement 56,000.00
Adjustments:
2016 is 3,93,000. This includes goods returned
(1) Value of stock as on 31st March,
2016 to the value of 15,000 for which no entry has
by customers o n 31st March,
been passed in the books.

(2) Purchases include furniture purchased on 1st January, 2016 for '10,000.
should be provided on furniture at 10% per annum.
(3) Depreciation
as follows:
4 The loan account from Dena bank in the books of Ganguli appears
Amount Date Particulars Amount
Date Particulars
100,000 01.04.05By Balance b/d 50,000
31.03.16 To Balance c/d
| 31.03.16 By Bank 50,000

1,00,000| 1,00,000

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 ACCOUNTING
NAE NIRAJ
ACADEMY FOR
EXCELLENCE
Preparatior of
Accounts of Sole
Fin
ncial
(5) Sundry debtors include 20,000 due irom kobert and sundry crecli

10,000 due to him.

to Dena bank.
Proprietonclude
(6) Interest paid include 3,000 paid

Interest received represents 1,000 from the sundry debtors and the
(7)
investments and deposits.
balance on
and tor interest receivable.
(8) Provide for interest payable to Dena bank able on investme
and deposits. tments
debts at 5% o n the balance under sundm.
Make provision for doubtful
(9)
such provision need to be
made for the deposits. debtors. No

Ques 15
workers who w e r e paid 30,000 n
& Co. employs a team of eight
.

Sengupta
each in the year ending 31st December, 2015. At the start of 2016, the conm
each.
raised salaries by 10% to '33,000 per month
On July 1, 2016 the company hired two trainees at salary of 21,000 per nth ...
each.
The work force is paid salary on the first working day of every month, one moOnth
in
so that the employees receive their salary for January on the first worlim
rking
arrears,

day of February etc.

You are required to calculate:

to the profit and loss for the
(i) Amount of salaries which would be charged year
ar

ended 31st December, 2016.

salaries during 2016
(ii) Amount actually paid as
o n 31st December,
2016.
(ii) Outstanding Salaries a s

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 ACcoUNTING
NIRAJ
ACADEMY FOR
Preparation of Financial
Accounts of Sole Proprietors
EXCELLENCE
SNAE

and Profit and Loss Account for the year ending

auired, prepare Trading
Ques
16 a

ol are re2016 and a

and al
2016
Balance Sheet as on that date from the Trial Balance gven
March,

31st
below:

Particulars
Particulars
Debit Balance:

Tradereceivables 3,50,000.00
Salariess 2,20,000.00

Purchases 12,50,000.00
2015
1st April, 5,00,000.00
inventory

Plant and Machinery 15,70,000.00

Cash in Hand 5,60,000.00
Credit Balance:
3,00,000.00
Wages

B a d Debts
50,000.0o Capital 25,00,00o.00

Furniture and Fixtures Trade payables 9,00,000.00

1,50,000.00

Depreciation
|1.50,000.00Sales 17,00,000.00
the Inventory was valued at '10,00,000.
On 31st
March, 2016

17 Several of his customers

es
is engaged in business of selling magazines.
Mr. Kotriwal Information related to year
advance for subscribing his magazines.
2V money in
March 2017 has been given below
pa
ended 31st
advance from c u s t o m e r s of which 1,50,000
he had a balance of 2,00,000
On 1.4.2016 2017-18. During the year
while remaining pertains to year
related to year 2016-17
is 5,00,000. You a r e required to compute:
2016-17 he made cash sales of

for the year 2016-17.

Total income in advance from customers

Total money received during

the year if the closing balance
account is '1,70,000.

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Ques 18
NIRAJ
ACADEMY FOR
EXCELLENCE
Preparation of
Accounts of Sole
ancial

Proprie
Mr. Birla is a proprietor engaged in business of trading electronics. An exce

as follows: You
are required to compute the missinrom hi
Trading && P&l account is gures.
Trading and P&L A/c for the year
ended 31st March, 2017
Particulars Particulars
To Cost of Goods Sold
45,00,000 By Sales
To Gross Profit c/d
E
26,00,000 By Gross Profit b/d
To Rent A/c D
To Office Expenses 13,00,000 By Miscellaneous Income E
B
To Selling Expenses
Net 2,00,000
To Commission to Manager (on
Profit before charging such
commission)
A
To Net Profit

60,00,00
Commission is charged at the rate of 10%. Selling Expenses amount to 1% of total s
sales.
Ques 19

1,00,000 units were produced in a factory. Per unit material cost was 10 and per unit
labour cost was 5. That apart it was agreed to pay royalty @ 3 per unit to the Japanese
collaborator who supplied technology.
Calculate Manufacturing Cost.

Ques 20
Mr.Vimal runs a factory which produces soaps. Following details were available in respect
ect
for the year ended on 31.3.2016:
ofhis manufacturing activities
Opening Work-in-Process (10,000 units) 16,000
Closing Work-in-Process (12,000 units) 20,000
Opening inventory of Raw Materials 1,70,000
1,90,000
Closing inventory of Raw Materials
Purchases 8,20,000

Hire charges of machine @ 0.60 per unit manufactured

Hire charges of factory 2,20,000
Direct wages-Contracted 0.80 per unit manufactured and
@0.40 per unit of Closing w.I.P.
Repairs and Maintenance 1,80,000

Units produced 5,00,000 units

Prepare a Manufacturing Account of Mr. Vimal for the year ended 31.3.2016.
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 NIRAJ
ACCOUNTING
ACADEMY FOR
Preparation of Financial
SNAE RCTEsS 0OAL
EXCELLENCE
Accounts of Sole Proprietors

Q u e s2 1

tns a factory which produces motor spares of export quality. The following details
tr, Pankd about his manutacturing expenses for the year ended on 31.3.2016.
Were
o b t a i n e d a b

Particulars

- Opening Amount
W.I.P - Closing
3,90,000.00
5,07,000.00
Purchases
12,10,000.00
Raw Materials

- Opening
3,02,000.00
- Closing

- Returned
3,10,000.00
18,000.00
- Indirect material

- Direct
16,000.00o
Wages 2,10,000.00
- Indirect
48,000.00
Direct expenses Royalty on production 1,30,000.00
Repairs and maintenance 2,30,000.00
Depreciation on factory shed 40,000.00
Depreciation on plant & 60,000.000
machinery
selling Price
By-product at 20,000.00
You are required to prepare Manufacturing Account of Mr. Pankaj for the year ended on
31.3.2016.

Ques 22

Following are the Manufacturing A/c, Creditors A/c and Trading A/c provided by Ms. Shivi
related to 2016-17. There are certain figures missing from these accounts.

CCE
Raw Material A/c
Date Particulars Amount Date Particulars Amount
To Opening Stock 1,00,000 By Raw Material XXX

Consumed
To Creditors XXX By Closing Stock XXX

Creditors A/c
Date Particulars AmountDate Particulars Amount
To Bank 22,00,000 By Balance b/d 15,00,000
|To Balance c/d 6,00,000

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 ACCOUNTING
NAE NIRAJ
ACADEMY FOR
EXCELLENCE
Preparation of Financiat
Accounts

Manufacturing A/lo
of Sole
Proprietor.
Date Particulars
Amount
Date Particulars Amount
Materials xXX By Trading
To Raw
Consumed
17,94,000
3,50,000O
To WagesS
To Depreciation 2,00,000

To Direct Expenses 2,44,000

Additional Information:

'10,00,000 has been omitted. Machinery are chargeable.

1)Purchase machinery worth
of at a
depreciation rate of 10%.

2) Wages include the following

Paid to Factory Workers 3,00,000

Paid to labour at office '50,000

3) Direct Expenses include following:

30% pertained to office.

Electricity charges of 80,000 of which
Fuel Charges of 20,000

Freight Inwards of 35,000

Delivery charges to customers - 20,000.

You are required to prepare revised Manufacturing A/c, and Raw Material A/c.

Ques 23

The following is the Trial Balance of T on 31st March, 2018

Dr. Cr.

Capital 6,00,000
Drawings 70,000
Fixed Assets (Opening) 1,40,000
Fixed Assets (Additions 01.10.2018) 2,00,000
Opening Stock 60,000
Purchases 16,00,000o
Purchases Returns 69,000
Sales 22,00,000
Sales Returns 99,000

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 ACCOUNTINGG
NIRAJ
ACADEMY FOR Preparation of Financial
NAE YouR
SUCCESS
S OLR GOAL
EXCELLENCE
Accounts of Sole Proprietors
Debtors
2,50,000
CreditorsS
2,20,000

Expenses 50,000
with Bank 2,00,000
Fixed Deposit
Interest on Fixed Deposit 20,000
8,000
Cash
Suspense A/c 2,000

Depreciation 14,000
Rent (17
months upto 31.8.2018) 17,000
Investments 12% (01.8.2017) 2,50,000
Bank Balance 1,69,000
31,19,000 31,19,000

Stock on 31St March, 2018 was valued at 1,00,000. Depreciation is to be provided

A scrutiny of the books
at 10% per annum on fixed assets purchased during the year.
revealed the
following matters:
of account
(0 20,000 drawn from bank was debited to Drawings account, but out of this
amount withdrawn 12,000 was used in the business for day-to-day expenses.
books of account
() Purchase of goods worth " 16,000 was not recorded in the
but the goods w e r e included in stock.
upto 31.03.2018,
Journal and the
Purchase returns of" 1,000 w a s recorded in Sales Return
(i) amount was correctly posted to the Party's A/c on the correct side.
2018.
(iv) Expenses include 6,000 in respect of the period after 31St March,
of (i) to (iv) and prepare the Final
Give the necessary Journal Entries in respect
2018.
Accounts for the year ended 31St March,

Ques 24

the trial balance of Hari as at 31st December, 2017:

The following is

Dr. Cr.

Hari's capital account

76,690
Stock 1st January, 2017
46,800
3,89,6000
Sales
8,600
Returns inward
3,21,700
Purchases
5,800
Returns outward
Carriage inwards 19,600
Rent & taxes 4,700
9,300
Salaries & wages

CA CS CMA NIRAJ AGARWAL

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 ACCOUNTING
NAE Preparatior of Financial
NIRAJ
ACADEMY FOR
EXCELLENCE
Accounts of Sole
YOR SUCCESSS OLR GOAL

Sundry debtors 24,000

Proprietor
Sundry creditors 14,800
Bank loan@ 14% p.a. 20,000
Bank interest 1,100
Printing and stationary expenses 14,400
Bank balance 8,000
Discount earned 4,440
Furniture 8 fittings 5,,000

Discount allowed 1,800

General expenses 11,450
Insurance ,300

Postage & telegram expenses 2,330

380
Cash balance
870
Travelling expenses
Drawings 30,000
5,11,330 5,11,330

The following adjustments are to be made:

(1) Included amongst the debtors is 3,000 due from Ram and included among the
creditors 1,000 due to him.
(2) Provision for bad and doubtful debts be created at 5% and for discount@ 2%
on sundry debtors.

on furniture & fittings 10% shall be written off.

(3) Depreciation
to 600 had been recorded in the
(4) Personal purchases of Hari amounting
purchases day book.

(5) Interest on bank loan shall be provided for the whole year.

A quarter of the amount of printing and stationary expenses is to be carried

(6)
forward to the next year.

invoice amounting to 400 had been omitted from the

(7) Credit purchase
books.

Stock 31.12.2017 was 78,600.

(8) on

and loss account for the year ended 31.12.2017

and (i)
Prepare (i) Trading & profit
Balance sheet as on 31st December, 2017.

AGARWA
NIRAJ
CMA
CA CS
15|P age G walKAE

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 ACCOUNTING
NIRAJ
ACADEMY FOR Preparation of Financial
NAE vouRsucCESS
SOLR
G0AL
EXCELLENCE
Accounts of Sole Proprietors
Q u e s2 5

ving are the balances as at 31st March, 2017 extracted from the books of Mr.
low
The.

xYZ

Plant and Machinery 19,550 | Bad debts recovered 450

Furniture and Fittings 10,250 Salaries 22,550

Bank Overdraft
80,000| Salaries payable 2,450
Capital Account 65,000 Prepaid rent 300

Drawings 8,000 Rent 4,300

Purchases 1,60,000 | Carriage inward 1,125
Opening Stock
32,250Carriage outward 1,350
Wages 12,165 Sales 2,15,300
Provision for doubtful debts 3,200 Advertisement Expenses 3,350
Provision for Discount on Printing and Stationery 1,250
debtors 1,375 Cash in hand 1,450
Sundry Debtors
1,20,000| Cash at bank 3,125
Sundry Creditors 47,500 Office Expenses 10,160
Bad debts 1,100 Interest paid on loan 3,000
Additional Information:

1. Purchases include sales return of 2,575 and sales include purchases return of
1,725.
2. Goods withdrawn by Mr. XYZ for own consumption 3,500 included in
purchases.
3. Wages paid in the month of April for installation of plant and machinery
amounting to 450 were included in wages account.
4 Free samples distributed for publicity costing 825.
5. Create a provision for doubtful debts @ 5% and provision for discount on
debtors @ 2.5%.
6. Depreciation is to be provided on plant and machinery @ 15% p.a. and on
furniture and fittings 10% p.a.
7. Bank overdraft is secured against hypothecation of stock. Bank overdraft
outstanding as on 31.3.2017 has been considered as 80% of real value of stock
(deducting 20% as margin) and after adjusting the marginal value 80% of the
same has been allowed to draw as an overdraft.
Prepare a Trading and Profit and Loss Account for the year ended 31 st March, 2017,
and a Balance Sheet as on that date. Also show the rectification entries.

6|P age
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 ACCOUNTING
NAE YOUR SUCCESS 5 OLR GOAL
NIRAJ
ACADEMY FOR
EXCELLENCE
Preparation
Accounts off
of ancial
Sole
Propri etotu
Ques 26
The following are the balances extracted from the b0oks of Shri Rag
31.03.2018, who carries on business under the name and style of
of M/shram
Associates at Chennai:
am M/s Raghu as
and
Particulars Debit Credit
Capital A/c 14,11,400
12,00,000
Purchases
Purchase Returns 18,000
Sales 15,00,000
Sales Returns 24,000
Freight Inwards 62,000
Carriage Outwards 8,500
Rent of Godown 55,000
Rates and Taxes 24,000
Salaries 72,000
Discount allowed 7,500
Discount received 12,000
Drawings 20,000
Printing and Stationery 6,000
Insurance premium 48,000
Electricity charges 14,000
General expenses 11,000
Bank charges 3,800
Bad debts 12,200
Repairs the Motor vehicle 13,000
Interest on loan 4,400
Provision for Bad-debts 10,000
A
Loan from Mr. Rajan
60,000
Sundry creditors 62,000
Motor vehicles 1,00,000
Land and Buildings 5,00,000
Office equipment 2,00,000
Furniture and FixtureS 50,000D
Stock as on 31.03.2017 3,20,000
Sundry debtors 2,80,000
Cash at Bank 22,000
Cash in Hand 16,000
| Total
30,73,400 30,73,400

17|Page CA CS CMA
NIRAJ AGAR

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 NIRAJ
ACCOUNTING
SNAEEXCELLENCE
aUR
SUCCES5
5 OLR GOAL
ACADEMY FOR Preparation of Financial
Accounts of Sole Proprietors
Trading and Profit and Loss Account for the year ended 31.03.2018 and the
Prepare
Sheet
Balance S h e e t as at that date after making
provision for the following:
enreciate Building by 5%, Furniture and Fixtures by 10%, Office Equipment by
Car by 20%.
15% and Motor
l Value of stock at the close of the year was 4,10,0oo
cl One month rent for godown is outstanding.
Interest on loan from Rajan is payable @ 10% per annum. This loan was taken on
01.07.2017

el Reserve for bad debts is to be maintained at 5% of Sundry debtors.

Insurance premium includes 42,000 paid towards proprietor's life insurance

Dolicy and the balance of the insurance charges cover the period from 01 04.2017
to 30.06.2018.

Ques 27

Mr. Fazhil is a proprietor in business of trading. An abstract of his Trading and P&L
account is as follows:

Trading and P&L A/c for the year ended 31st March, 2018

Particulars Particulars
To Cost of Goods sold 22,00,000 By Sales 45,00,000
To Gross Profit C/d 45,00.000
By Gross Profit B/d
To Salaries paid 12,00,000 By Other Income 45,000
To General Expenses 6,00,000
To Selling Expenses ?
To Commission to Manager
(On net profit before charging
such commission) 1.00,00O
To Net Profit

Selling expenses amount to 1% of total Sales

IOu are required to compute the missing figures.

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