STUDENT’ S DETAILS

NAME: -
PH. NO.: -
ID NO.: -
JOINING DATE: -

B Block 327,328 J.J Colony Bawana Delhi-110039

Nearby Navjyoti……………………………………………………
 JOURNAL ENTRY

Traditional Approach Modern Approach

Traditional Approach

1. Personal Account
✓ Natural P.A: - It relates to Transactions of human beings like
Ram, Ajay etc.

✓ Artificial (legal) P.A: - Government, Companies (private or

Limited), Clubs, Cooperative, Societies.
✓ Representative P.A: - Outstanding Liabilities, Prepaid Account,
Capital Account, Drawings Account.

2. Impersonal Account: -
✓ Real Account: - Land & Building, Investment, Fixed Deposits
etc.

✓ Nominal Account: - Expenses, Income.

 Modern Approach

Ist Rule IInd Rule

Assets Capital

Liability
Expenses
Revenue

Losses Income

Gain
 ASSET

Fixed Assets Current Assets Investment

Fixed Assets
Definition: - A fixes Assets refer to long-term tangible assets that are used
in the operations of a business.

Tangible Fixed Assets Intangible Fixed Assets

Definition: - Tangible fixed Assets are Intangible Fixed Assets are
Those Assets, which can see and touch. Those Assets, which cannot see
Example: - and touch.
• Furniture • Goodwill
• Machinery • License
• Land & Building • Trademark
• Business Premises • Logo
• Vehicles Etc. • Patents Etc.
 Current Assets
Definition: - Current Assets are a company’s short-term assets, those that can
be liquidated quickly and used for a company’s immediate needs.
Example: -
• Cash & Cash Equivalent
• Stock Inventory
• Pre-paid liabilities
• Liquid Assets
• Debtors
• Bank
• Bills Receivable

Investment
Definition: - An Asset or item acquired with the goal of generating income or
appreciation.
Example: -
• Stock
• Bonds
• Fixed Deposited
• Shares
• Debenture Etc.
 Expenses
Definition: - a Cost that businesses incur in running their operation.

Direct Expenses Indirect Expenses

Definition: - those which rely on the Definition: - Those expenses
Manufacture and sale of productions cannot be directly to any
Or services by a company. Activity since these are completely
Example: - incurred while operating a business
1. Purchase or as a part of a business.
2. Carriage on Purchase Example: -
3. Carriage Inward ➢ Salary
4. Carriage ➢ Office Rent
5. Freight Inward ➢ Electricity bill
6. Factory rent ➢ Carriage outward
7. factory Expenses & Insurance ➢ Freight outward
8. Fuel, Heating & Lighting ➢ Repair
9. Gas, Water & Oil ➢ Discount allowed
10. Manufacture Expenses ➢ Commission
11. Wages ➢ General expense
12. Wages & Salary ➢ Bad debts
➢ Depreciation
➢ Provision
 Loss
Definition: - The Amount of money which is lost by a business.

Capital
Definition: - The Capital means the assets and cash in a business. Capital
may either be cash, machinery, receivable accounts, property, or house.
Capital may also reflect the capital gained in a business or the assets of the
owner in a company.

Liability
Definition: - Liability is a term in accounting that is used to describe any
kind pf financial obligation that a business has to pay at the end of an
accounting period to a person or a business.

Short-Term Long-Term
Definition: - Short -Term Liabilities are Definition: - Long-Term liabi-
Within a year whereas long term liabilities -lities are due more than one
Are due after one year or more than that. Year in the future.
 Example: -

1. Bank Loan
2. Creditors
3. Advance Received
4. Outstanding expenses
5. Bills Payable

Revenue
The money generated from normal business operations, calculated as the
average sales price times the number of units sold.
Example: -
Cost of goods sales – sales return

Income

Commission Received
Interest Received
Rent Received
Bad debts Recover
 GOODS AND SERVICES TAX

State GST Central GST Inter – State GST

Same state Other - State

Journal Entries (In case of Intra-state supply of goods and services i.e. sales
within the same state):
1. For purchase of goods:
2. For sale of goods:

3. For purchase return:

4. For sales return:

5. For purchase of fixed assets:

6. For expenses paid:

7. For income received:

8. For goods withdrawn by the proprietor for personal use:

9. For goods given away as free samples/loss of goods by fire/theft:

10. For setting off Input CGST against Output CGST:

11. For setting off Input SGST against Output SGST:

12. For payment of GST:

Pass journal entries for the following transactions in the books of Sahil Ltd.
assuming that both parties belong to the same state and CGST @6% and SGST
@6% are levied:
1. Purchased goods for ₹1,80,000 from Akanksha & Co.
2. Sold goods for ₹3,50,000 to Nupur Store.
3. Returned goods to Akanksha & Co. for ₹20,000.
4. Nupur Store returned goods for ₹16,000.
5. Paid for Printing and Stationary ₹10,000.
6. Goods withdrawn by the proprietor for personal use ₹40,000.
7. Goods destroyed by fire ₹30,000.
8. Payment made of balance of GST.
Working Note:
Total Input CGST = 10,800 – 1,200 + 600 – 1,200 -900 = ₹6,000
Total Input SGST = 10,800 – 1,200 + 600 – 1,200 -900 = ₹6,000
Total Input CGST = 21,000 – 960 = ₹20,040
Total Input SGST = 21,000 – 960 = ₹20,040
Net CGST Paid = 20,040 – 6,000 = 14,040
Net SGST Paid = 20,040 – 6,000 = 14,040

Journal Entries (In case of Inter-state supply of goods and services i.e.
sales from one state to another state):

1. For purchase of goods:

2. For sale of goods:

3. For purchase return:

4. For sales return:

5. For purchase of fixed assets:

6. For expenses paid:

7. For income received:

8. For setting off Input IGST against Output IGST:

Pass journal entries for the following transactions in the books of Sahil Ltd. of
Noida, Uttar Pradesh assuming CGST @6% and SGST @6% are levied:
1. Purchased goods for ₹6,00,000 from Sayeba & Co. of Patna, Bihar.
2. Purchased goods for ₹1,00,000 from Gaurav Store of Varanasi, Uttar Pradesh.
3. Sold goods costing ₹1,60,000 to Ishika of Ranchi, Jharkhand at a profit of 25%
on cost less 10% Trade Discount.
4. Sold goods costing ₹5,00,000 to Shubham of Allahabad, Uttar Pradesh at a
profit of 60% on cost less 15% Trade Discount against cheque which was
deposited into the bank.
5. Paid for Advertisement ₹16,000.
6. Purchased a computer for office use for ₹60,000 and payment was made by
cheque.
7. Proprietor withdrew ₹20,000 for his personal use.
8. Payment made of the balance amount of GST.
 FAIR TAX
INSTITUTE
Question 1. Journalise the following transactions of Singh Enterprises, Delhi:
2022 Transactions `
Jan 1 Started business with cash 50,000
Jan 2 Deposited cheque from saving account in form’s 2,00,000
account
Jan 3 Received cash from Ram 50,000
Jan 4 Purchased goods for cash 15,000
Jan 11 Sold goods to M/s. Hari Sales, Delhi 12,000
Jan 13 Paid to Ram Avtar 40,000
Jan 17 Received from M/s. Hari Sales 10,000
Jan 20 Bought furniture from S.R. Furnitures against Cash 22,400
(including CGST and SGST)
Jan 27 Paid rent 28,000
Jan 30 Paid salary 50,000

CGST and SGST @ 6% each is levied on Intra-state sale and purchase.

Question 2. Journalise the following transactions of Rakesh Agencies, Delhi

(Proprietor Shri Rakesh):
2022 Transactions `
Jan 1 Rakesh commenced business with cash 50,000
Jan 2 Purchased goods for cash 10,000
Jan 3 Purchased goods from Mohan, Delhi on credit 6,000
 Jan 4 Opened bank account with Bank of India 10,000
Jan 13 Purchased furniture for office 2,000
Jan 20 Sold goods to Ram, Delhi on credit 8,000
Jan 24 Cash sales 5,000
Jan 28 Paid to Mohan on account 3,500
Jan 30 Ram returns goods 3,000
Jan 30 Paid Salaries 500
Jan 30 Rejected and returned 10% of goods supplied by 9,000
Mohan

CGST and SGST is levied @ 6% each on intra-state sale and purchase. IGST is
levied @12% on inter-state sale and purchase.

Question 3. Journalise the following transactions of Ram Delhi:

Jan 1 Ram commenced business with cash 30,000
Jan 2 Open a bank account with Union Bank by cheque 21,000
from saving account
Jan 3 Purchased goods from Rahul in cash 10,000
Jan 7 Withdrew cash from bank for office use 3,000
Jan 10 Sold goods to Hari, Delhi on credit 5,000
Jan 15 Purchased goods from Shyam, Meerut (UP) 15,000
3,000
Jan 20 Cash sales
14,750
Jan 25 Paid to Shyam
250
Discount Received
10,000
Jan 31 Paid Salaries
CGST and SGST is levied @ 6% each on intra-state sale and purchase. IGST is
levied @12% on inter-state sale and purchase.
Question 4. Following transactions of Ramesh Delhi for Jan, 2022 are given
below. Journalise them.

April 1 Ramesh started business with cash 1,00,000

April 2 Open a current account and deposited cash 70,000
April 3 Bought goods for cash 5,000
April 4 Sold goods to Krishna, Panipat (Haryana) on credit 1,500
April 13 Bought goods from Atul, Karnal on credit 2,250
April 20 Received from Krishan 1,450
Allowed him discount 50
April 24 Paid cash to Shyam 2,150
Discount allowed by him 100
April 28 Cash sales for the month 8,000
April 30 Paid rent 500
April 30 Paid salary 10,000
CGST and SGST is levied @ 6% each on intra-state sale and purchase. IGST is
levied @12% on inter-state sale and purchase.
Question 5. Journalise the following transactions of Satish, Noida (UP):
Jan 1 Started business with cash 40000
Jan 2 Opened Bank Account by cheque from saving 60000
account
Jan 3 Bought goods from M/S. Singh & CO., Delhi 20000
Jan 4 Introduce additional capital by cheque 5000
Jan 4 Purchased computer against cheque from computer 15000
mart, Noida
Jan 6 Paid for postage 150
Jan 8 Sold goods for cash 4000
Jan 9 Sold goods to M/s Sharda & CO. Delhi 10000
Jan 15 Paid to M/s Singh & CO. 19500
Discount allowed by them 500
 Jan 25 Sold goods to M/S Ray & Co., Kolkata 5600
Jan 27 Received cheque M/s Sharda & CO. in full settlement
of amount due from them 9750
Jan 31 Paid electricity charges
Paid rent of building by cheque. Half of the building 1000
Jan 31 is used by the proprietor for residential use. 5000
Jan 31 Drew for private use
3500

CGST and SGST is levied @ 6% each on intra-state sale and purchase. IGST is
levied @ 12% on inter-state sale and purchase.

Question .6 Following are the transactions of R. Singh & Co., Kanpur (UP) forthe
month of July, 2022. You are required to Journalise them:

2022
July1 Started business with cash 80,000
July 1 Cash paid into bank 50,000
July 1 Bought stationery of Rs. 300 plus CGST and SGST @
6% each for cash
July 2 Bought goods of RS. 21000 plus CGST and SGST
@6% each for cash
July 5 Sold goods of RS. 7500 plus CGST and SGST @6%
each for cash
July 6 Bought office furniture of RS. 5000 plus CGST and
SGST @6% each from Banerjee Bros.
July 11 Sold goods of RS 10000 plus CGST and SGST @6%to
Ramesh & Co.
July 12 Received cheque from Mahindra from the amount
July 16 Sold goods of RS. 5000 plus IGST @ 6% each to
Mahindra
July 20 Bought goods of RS. 20000 plus IGST @12% for cash
from S. Seth & Bros., Delhi
July 23 Bought goods of RS. 2250 plus IGST @12% for cash
from S. Narain & Co., Ludhiana (Punjab)
 July 26 Ramesh & Co. paid on account 2,500
July 28 Paid to S. Seth & Bros. by cheque in full settlement 22,000
July 31 Rent is due to S. Sharma but not yet paid. 1,000

Question 7. Record the following transactions in the Journal of AshokaFurniture

Traders, Ludhiana (Punjab):
2022
Jan 1 Started business with cash 50,000
Jan 2 Opened a current account by personal cheque 3,50,000
Jan 10 Purchased machinery against cheque 1,00,000
Jan 15 Paid wages for installation of machinery 2,000
Jan 20 Purchased timber from Singh & Co., Ludhiana
(Punjab) of the list price of RS. 20000 allowed 10%
trade discount
Jan 25 Out of above, timber used for furnishing the office 5,000
Jan 31 Sold timber to Rakesh of the list price of RS. 10000
and allowed him trade discount @ 10%
Feb 10 Issued to Singh & Co. a cheque in full settlement 21,000
Feb 15 Receive from Rakesh in full settlement 20,000
Feb 20 Paid wages 10,000
Feb 28 Issued a cheque for RS. 5000 in favour of the 15,000
landlord for rent o February
CGST and SGST is levied @ 6% each on intra-state sale and purchase. IGST is
levied @ 12% on inter-state sale and purchase.

Question 8. Enter the following transactions in the Journal of Suresh whotrades

in ready-made garments:
2022 Amount
April 1 Suresh paid into bank 60,000
April 2 He bought goods cheque 24,000
April 3 Sold to Mukesh & co. 6,700
April 4 Sold goods for cash 10,000
April 5 Paid sundry expense in cash 3,000
 April 8 Paid for office furniture and fitting by cheque 4,000
April 9 Bought goods from Ramesh & Bros. Faridabad 10,600
April 10 (Haryana) 18,700
April 11 Sold to Mahendra of Delhi 1,500
April 12 Returned goods to Ramesh & Bros. 9,000
April 14 Issued cheque to Ramesh & Bros. in full settlement 4,900
April 30 Sold goods for cash 200
April 30 Bank charged interest 50,000
April 30 Borrowed from Ridhi @ 10% per annum interest 6,000
April 30 Received from Mahendra on account 2,000
April 30 Sold household furniture and paid the amount into 6,500
business
April 30 Sold goods costing RS. 5000 to Amrita for cash at a
profit of 20% on cost less 20% trade discount.

April 30 Sold goods costing RS. 20000 to sunil at a profit of

20% on sale less 20% trade discount and paid
cartage RS. 150 (to be charged from customer)
CGST and SGST is levied @ 6% each on intra-state sale and purchase. IGST is
levied @ 12% on inter-state sale and purchase.
Question 9. D. Chadha commenced business on 1st January, 2022. His transactions for
themonth are given below. Journalise them.
2022
Jan 1 Commenced business with cash 25000
Jan 2 Opened bank account with cheque from his savings account 225000
Jan 3 Bought goods from Ramesh & Co., Delhi, paid CGST and SGST @ 54000
6% each
Jan 3 Sold goods to Rajesh f RS. 60000 charged CGST and SGST @ 6%
each
Jan 7 Bought goods RS 65000 from Rahul, Chennai, paid IGST @ 12%
Paid wages in cash
Jan 8 Sold goods to Mahesh, Kochi of RS 60000, charged IGST @ 12 % 8000
Jan 8 Received cheque from Rajesh (Discount allowed RS. 2700) 66000

Jan 10 Paid into bank 66000

Jan 10 Paid to Ramesh & Co. (discoun6t received RS 2700)
Jan 11 Paid rent @ RS 15000 per month for three months up to CGST 51300
and SGST @ 6% each
Jan 12 Paid wages in cash 8000
Jan 15 Paid office expenses in cash 7000
Jan 15 Sold to Mahesh, Delhi goods of RS. 25000 charged CGST and
SGST @ 6% each
Jan 21 Paid office expenses in cash 500
 Jan 22 Paid Rahul by cheque (discount RS. 3200) 61300
Jan 22 Received cheque from Mahesh Kochi (discount RS 1500) 65700
Jan 25 Mahesh, Delhi returned goods (not up to Sample) 2000
Jan 27 Paid wages in cash 10000
Jan 31 Paid office expenses in cash 400
Jan 31 Paid salaries for the month 20000

Question 10.
Record the following transactions in the Journal of Ashoka Furniture Traders:
2022
Jan 1 Started business with cash 50000
Jan 2 Deposited into bank from his saving account 350000
Jan 10 Purchased machinery of RS 15000 was given inn exchange
and Balance was paid by cheque. IGST was levied and charged
@ 12%
Jan 15 Paid installation charges for machinery 2000
Jan 20 Purchased timber from Singh & Co. of the list price of RS
20000 plus CGST and SGST @ 6% each he allowed 10% Trade
discount.
Jan 25 Timber costing RS 5000 was used for furnishing the office
sold furniture to Rakesh of the list price of RS 10000 and
Jan 31 allowed him 105% Trade discount. Charged CGST and SGST @
6% each
Jan 31 Old furniture valued at RS 500 was taken from Rakesh in
exchange. CGST and SGTS @ 6% each was paid.
Feb 10 Sent cheque to Singh &b Co. in full settlement 19000
Feb 15 Received from Rakesh in full settlement 9000
Feb 20 Paid wages 15000
Feb 25 Issued a cheque for RS 5000 in favor of the landlord for rentof
February.
Question: - 1
prepare Trading Account from the following particulars for the year
ended March 31, 2021:
Purchases ₹2,20,000
Sales ₹4,00,000
Direct Expenses ₹70,000
Closing stock ₹30,000
Gross Profit: ₹1,40,000

Question: - 2
prepare Trading Account from the following particulars for the year
ended March 31, 2021:
Opening Stock ₹56,250
Purchases ₹1,57,500
Sales ₹3,05,000
Wages ₹15,750
Carriage₹5,500
Closing stock ₹45,000

Gross Profit: ₹1,15,000

Question 3
Prepare a trading account of Mr.Rachit for the year ended 31st
March 2021:
Opening stock ₹10,000
Purchases ₹1,58,900
Purchases return ₹ 900
Sales 2,62,600
Sales return ₹2,600
Direct expenses ₹5,000
The closing stock was valued at ₹20,000.

Gross Profit: ₹1,07,000

Question: -4
Prepare a trading account of Mr. Mohit from the following figures:
Opening stock ₹5,000
Adjusted Purchases ₹12,500
Sales ₹23,600
Return Inward ₹600
Closing stock ₹3,000
Direct expenses ₹5,000
Gross Profit: ₹5,500

Question: -5
This information is provided by Mr. Neelesh
Stock on 01.04.2020 ₹ 20,000
During the year Sales was₹ 4,06,000;
Purchases ₹2,94,000;
Carriage Inwards ₹ 8,000;
Clearing charges ₹10,000;
Dock Charges ₹2,000
Sales Return ₹6,000;
Purchases Return ₹ 4,000;
Stock on 31,03.2021was ₹ 30,000.
prepare Trading Account for the year ending31.03.2021.
Gross Profit: ₹ 1,00,000
Question: -6
Prepare a Trading Account from the following particulars for the
year ended 31st March 2018
Opening Stock ₹50,000
Purchases ₹1,30,000
Sales ₹3,15,000
Factory rent ₹10,000
Purchases return ₹10,000
Sales return ₹15,000
Wages ₹8,000
Carriage on purchases ₹3,500
Manufacturing Exp. ₹8,900
Custom Duty ₹2,100
Motive power ₹2,000
Dock charges ₹3,000
Coal, Gas, and Water ₹3,000
Factory Manager Salary ₹12,000
Commission on Purchase ₹8,000
Value of Closing stock ₹60,000

Gross Profit: ₹ 1,29,500

Question 7
The following are some of the balances extracted from the ledger of
Mr. Sudarshan as on 31st March 2021. Prepare a trading account.
Stock 1.4.2021 ₹12,500
Purchases ₹1,00,000
Sales ₹1,50,000
Returns outwards ₹5,000
Returns inwards ₹10,000
Salaries ₹4,400
Wages ₹7,500
Rent ₹2,750
Carriage inwards ₹2,500
Carriage outwards ₹750
Power, coal, gas ₹1,000
Stock on 31.3.2021 was valued at ₹34,500.

Gross Profit: ₹ 56,000

Question 8
Prepare Trading Account for the year ending 31st March 2021 from
the following information.
Opening stock ₹1,70,000
Purchases return ₹ 10,000
Sales ₹3,50,000
Wages ₹50,000
Sales return ₹ 20,000
Purchases ₹ 1,50,000
Carriage inward ₹ 20,000
Carriage outward ₹ 12,000
Goods sent on consignment ₹20,000
Closing stock ₹1,60,000

Gross Profit: ₹1,30,000

Note: Goods sent on consignment recorded credit side of Trading

Account.
Question 9
Prepare a trading account of Mr. Arham from the following figures.
Opening stock ₹95,000
Cost of goods sold ₹12,50,000
Sales ₹15,00,000
Closing stock ₹89,000
Direct expenses ₹1,20,000
Gross Profit: ₹2,50,000

Question 10
Prepare a trading account of Mr. Arham from the following figures.
Purchases ₹5,40,000
Sales ₹10,40,000
Salaries & wages ₹3,50,000
Returns outward ₹12,000
Trading expenses ₹8,000
Factory expenses ₹11,000
Carriage inwards ₹8,000
Returns inward ₹40,000
Commission on purchase ₹2,000
Opening Stock ₹60,000
Income tax ₹40,000
Dock Charges ₹10,000
Clearing Charges ₹5,000
Closing stock: Market value ₹ 1,35,000 Cost Price ₹ 1,30,000
Gross Profit: ₹5,06,000
Note: As per the conservatism principle of accounting, The
closing stock is valued at cost price or market price whichever is
less.
Question 11
Calculate the cost of goods sold and gross profit from the following
figures.
Opening Stock ₹80,000
Purchases ₹4,40,000
Sales ₹10,40,000
Wages & Salary ₹1,50,000
Returns outward ₹12,000
Office expenses ₹4,000
Factory expenses ₹14,000
Carriage inwards ₹10,000
Returns inward ₹20,000
Dock Charges ₹8,000
Clearing Charges ₹2,000
Packing Charges (Factory) ₹6,000
Packing Charges (Show Room) ₹8,000
Closing stock is valued at ₹ 1,35,000

Gross Profit: ₹ 4,57,000

Question 12
Calculate the gross profit from the following figures.
Cost of goods sold ₹10,00,000
Gross Profit ratio 20%

Gross Profit: ₹ 2,50,000

Gross Profit= (Cost of goods sold × Rate of Gross profit)/100-Rate

of Gross profit.

Gross Profit= (10,00,000×20)/100-20

13. prepare Trading Account from the following particulars for the
year ended March 31, 2021:

Opening stock ₹15,000

Purchases ₹51,000
Sales ₹74,000
Purchase ₹Returns 2,000
Carriage Inward ₹800
Wages ₹5,200
Closing stock ₹16,500

Gross Profit: ₹ 20,500

Question 14
Prepare a trading account of Mr.Krish from the following figures.
Opening stock ₹30,000
Purchases ₹5,00,000
Sales ₹8,00,000
Excise Duty ₹10,000
Import Duty ₹10,000
Railway Freight ₹8,000
Household Expenses ₹20,000
Salaries & wages ₹50,000
Returns outward ₹10,000
Office expenses ₹14,000
Discount on purchase ₹16,000
Trade expenses ₹18,000
Interest received ₹13,000
Factory expenses ₹11,000
Haulage ₹10,000
Carriage inwards ₹8,000
Returns inward ₹20,000
Discount allowed ₹4,000
Commission ₹2,000
Income tax ₹40,000
Dock Charges ₹2,000
Clearing Charges ₹5,000
Closing stock is valued at
Closing stock: Market value ₹ 50,000 Cost Price ₹ 55,000

Gross Profit: ₹ 2,46,000

Note: As per the conservatism principle of accounting, The
closing stock is valued at cost price or market price whichever is less.

Question 15
Calculate the gross profit from the following figures.
Net profit for the year ₹1,25,000
Office expenses ₹24,000
Discount Allowed ₹16,000
Trade expenses ₹15,000
Selling expenses ₹25,000
Administration expenses ₹30,000
Factory expenses ₹25,000
Factory Wages ₹15,000
Commission received ₹15,000
Interest received ₹10,000
Carriage Inward ₹10,000

Gross Profit: ₹ 2,10,000

Note: Gross profit= Net Profit + Indirect Expenses-Indirect Income.
QUESTION: - 1

QUESTION: - 2
QUESTION: - 3
Ans. Gross Profit Rs. 38,400, Net Profit Rs. 20,370, Balance Sheet Rs. 1,64,110
❖ THE FOLLOWINGS ARE THE BALANCES OF ASHOK KUMAR AS ON
30th JUNE, 2003:
DEBIT Rs. CREDIT Rs.

Cash in hand 540 Sales 98,780

Cash at bank 2,630 Returns outwards 500
Purchases 40,675 Capital 62,000
Returns inward 680 Sundry creditors 6,300
Wages 8,480 Rent 9,000
Fuel and power 4,730
Carriage on sales 3,200
Carriage on purchases 2,040
Stock 5,760
Buildings 22,000
Freehold land 10,000
Machinery 20,000
Investment 10,000
Patents 7,500
Salaries 15,000
General expenses 3,000
Insurance 600
Drawings 5,245
Sundry debtors 14,500

TAKING INTO ACCOUNT THE FOLLOWING ADJUSTMENTS, PREPARE THE TRADING AND
PROFIT LOSS ACCOUNT AND BALANCE SHEET AS ON 30th JUNE, 2007.

I. Stock on hand on 30th June, 2007 is Rs.6, 800.

II. Machinery is to be depreciated @ 10% and patents @ 20%.
III. Salaries for the month for June, 2007 amounting to Rs.1, 500
were unpaid.
IV. Insurance includes the premium of Rs.170 on a policy expiring
on 31st December 2007.
V. Bad debts are Rs.725.
VI. Rent received in advance Rs.1, 000.
VII. Interest on investment of Rs.2, 000 is accrued
 ❖ SHRI PREM IS A MERCHANT .THE FOLLOWING TRIAL BALANCE
ARE MERCHANTS FROM HIS BOOK:

Dr Rs. Cr. Rs.

DRAWINGS 2,500 CAPITAL 30,000
BUILDINGS 12,000 BAD-DEBTS PROVISION 500
OPENING STOCKS 7,834 CREDITORS 11,133
MACHINERY 4,338 6% LOANS 5,000
FURNITURE CARRIAGE 1,140 BANK OVERDRAFT 543
INWARD 952 SALES 61,725
PURCHASES 33,437
GENERAL EXP. 1,766
RENT & TAXES 770
ADVERTISEMENTS 3,716
DEBTORS 17,860
SALARIES 10,862
SALES RETURNS 683
CASH 100
BAD DEBTS 100
INSURANCE 326
WAGES 9,975
DEPRICIATION 542

1,08,901 1,08,901

BEFORE PREPARING THE FINAL ACCOUNTS, FOLOWING ADJUSTMENTS ARE

NECESSARY.

I. BRING PROVISION FOR BAD DOUBTFULL DEBTS ON DEBTORS AT 5%.

II. ONE YEAR’S INTEREST IS OUTSTANDING ON LOANS.
III. INSURANCE PREPAID IS Rs.100.
 ❖ PREPARE TRADING, PROFIT AND LOSS ACCOUNT AND BALANCE
SHEET FROM THE FOLLOWING PARTICULARS AS ON 31st
DECEMBER, 2008:

PARTICULARS Dr. Cr.

CASH IN HAND 2,000
CASH AT BANK 18,000
PURCHASES AND SALES 2,20,000 3,50,000
RETURN INWARDS 6,0000
RETURN OUTWARDS 7,500
CARRIAGE ON PURCHASES 4,400
CARRIAGE ONSALES 2,100
FUEL AND POWER 15,500
STOCK (1-01-2008) 36,000
BAD DEBTS 6,200
BAD DEBTS PROVISION 2,500
DEBTORS AND CREDITORS 82,000 30,000
CAPITAL 2,15,000
INVESTMENT 20,000
INTEREST ON INVESTMENT 2,000
LOAN FROM X @ 18% p.a. 10,000
REPAIRS 1,520
GENERAL EXPENSES 10,600
LAND AND BUILDINGS 1,80,000
SALARIES 18,000
MISCELLANEOUS 120
SALES TAX COLLECTED 5,200
6,22,320 6,22,320

Information:
I. WRITE OFF Rs.2,000 AS BAD DEBTS AND PROVISION FOR DOUBTFULL
DEBTS IS TO BE MAINTAINED AT 5% ON DEBTORS.
II. LOAN FROM X WAS TAKEN 1st MAY, 2008 .NO INTEREST HAS BEEN PAID
SO FAR.
III. INCLUDED IN GENERAL EXP. IS INSURANCE PREMIUM Rs.1, 200 PAID
FOR ONE YEAR ENDING 31st MARCH, 2009.
IV. 1/3 OF WAGES AND SALARIES IS TO BE CHARGED TO TRADING A/c AND
BALANCE TO P&L A/c.
V. CLOSING STOCK WAS VALUED AT Rs.50, 000.
 BALANCE SHEET (31st DEC., 2008)

NOTE:
I. SALES TAX COLLECTED IS LIABLITY BECAUSE IT HAS BEEN COLLECTED FROM THE CUSTOMERS
AND IS PAYBLE TO THE GOVT.
II. INTEREST ON LOAN WILL BE CALCULATED FOR EIGHT MONTHS.

❖ THE FOLLOWING IS THE TRIAL BALANCE OF RAJ AS ON 31st

DECEMBER, 2008:
PARTICULARS Dr. Rs. Cr. Rs.
CAPITAL 25,000
BUILDING 30,000
FURNITURE 2,640
SCOOTER 4,000
RETURNS INWARD AND
RETURN OUTWARD 2,300 1,600
STOCK ON 1st jan,2008 8,000
PURCHASE AND SALES 33,800 56,040
BAD DEBTS 300
CARRIAGE INWARD 700
GENERAL EXP. 1,200
BAD DEBTS PROVISION 700
BANK LOAN 5,000
INTEREST ON BANK LOAN 300
COMMISION 900
INSURANCE AND TAXES 2,0000
SCOOTER EXPENSES 2,600
SALARIES 4,400
CASH IN HAND 2,000
DEBTORS AND CREDITORS 3,000 8,000
97,240 97,240

YOU ARE REQUIRED TO PREPARE FINAL ACCOUNTS FOR THE YEAR ENDING 31
DEC 1981 TAKING INTO ACCOUNT THE FOLLOWING ADJUSTMENTS
I. CLOSING STOCK ON 31/12/2008 WAS VAULED AT Rs.4, 340.
II. COMMISSION INCLUED Rs.300 BEING COMMISSION RECEVIED IN ADVANCE.
III. SALARIES HAVE BEEN PAID FOR 11 MONTHS.
IV. BANK LOAN HAS BEEN TAKEN AT 10% P.A INTEREST.
V. DEPRECIATE BUILDING BY 5% AND SCOOTER BY 15%.
VI. WRITE OFF Rs.200 AS FURTHER BAD DEBTS AND MAINTAIN BAD DEBTS
PROVISION AT 5% ON DEBTORS.
VII. SCOOTER IS USED FOR BUSINESS AS WELL AS FOR PRIVATE PURPOSE
EQUALLY.
007A
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❖ From The following Trial Balance of Sovera Medicos prepare a Profit and
Loss account for the year ended December 31,2001.
Trial Balance
Particulars Dr (Rs) Cr (Rs)
Capital 2,50,000
Inventory (on Jan 1,2001) 60,000
Accounts Receivable 1,00,000
Accounts payable 70,000
Sales 6,00,000
Purchases 3,70,000
Sales Returns 20,000
Purchases Returns 10,000
Discount Received 10,000
Bills Payable 40,000
Rent Payable 10,000
Insurance 10,000
Drawings 20,000
Land and Buildings 1,50,000
Freehold Property 50,000
Plant and Machinery 50,000
Petty Expenses 6,000
Cash at Bank 20,000
Furniture 30,000
Freight 20,000
Wages 15,000
Salaries 15,000
Advertising 10,000
Postage and Telephones 10,000
General 34,000
Expenses

Total 9,90,000 9,90,000

Adjustments:
1. Inventory was valued on 31ST December ,19X1 AT RS 95,000
2. Depreciate Plant and Machinery by 15% and furniture by 10%
3. Provide for interest on capital at 10% and interest on drawing at 6%
4. Provide for following outstanding expenses:
Wages RS 10,000
Salaries RS 7,000
General RS 5,000
Expenses
5. Insurance was prepaid to the extent of RS 3,000.
6. A sum of RS2,000 was earned by the of discount, but not yet received and hence not included in
accounts.
7. A sum of RS 3,000 represents rent received in advance but not yet due.
8. A provision of 2% is required on debtors towards bad and doubtful debts.
9. A provision of 50% towards taxation on profits (before taxation) is required.
❖ The following is The Trial Balance of Kamal Enterprises for the year ended
31st December, 2006.You are required to prepare a Profit and a Loss account
and Balance Sheet after taking into account the adjustments given below.
Trial Balance
Dr. Cr.
Particulars Rs Particulars Rs
Cash in hand 500 Sales 1,50,300
Cash at bank 1,200 Purchase returns 5,000
Office furniture 6,000 Accounts payable 12,000
Accounts receivable 15,000 Bills payable 8,000
Commissions 1,200 Discount received 1,000
Bills receivables 3,500 Dividend received 2,000
Power and Fuel 6,000 Rent received 3,500
Plant and Machinery 24,000 Capital 27,000
Office expenses 2,000
Carriage inwards 1,200
Carriage outwards 3,500
Rent, Rates and Taxes 1,700
Leasehold premises 25,000
Wages 30,000
Salaries 7,000
Opening Inventory 12,000
Sales returns 2,000
Purchases 60,000
Drawings 7,000
2,08,800 2,08,00

Adjustments:
1. Closing Inventory as on 31-12-2006, RS 18,000.
2. Depreciate Plant and Machinery at 10%.
3. Salaries outstanding RS 1,000, Power and Fuel outstanding RS 2,000.
4. RS5,000 was spent on Plant and Machinery but wrongly included in
wages.
5. to provide for bed and doubtful debts for RS 1,500.
6. Discount earned but not received RS100.
7. Commission due but not recorded RS200.
8. Rent received includes RS500received in advance.
❖ The following is the Trial Balance of Rajan Jeweller’s as on December
31,2005.

Dr. Cr.
Particulars RS Particulars RS
Opening Inventory 72,000 Capital 5,00,000
Purchases 2,25,000 Sales 3,50,000
Furniture 15,000 Purchase returns 1,800
Motor car 30,000 Murthy 32,000
Buildings 4,25,000 Varadan 24,000
Gangappa 12,000 Commission 7,500
Gourishankar 20,000
Mathews 18,000
Advertisements 22,000
RepaiRs and maintenance 13,000
General expenses 16,000
Insurance 7,000
Cash in hand 3,500
Cash at bank 6,000
Salaries 30,000
9,15,300 9,15,300

Note:
To arrive at accounts receivables and accounts payables you have to add
necessary ledger accounts.

You are required you draft Profit and Loss accounts and Balance sheet as on
31st December 2005.

1. Closing Inventory as at 31.12.2005, Rs 80,000.

2. Interest on capital at 6%.
3. Prepaid advertisements RS2,000.
4. Goods used for domestic purpose RS 1,800.
5. Outstanding salaries RS3,000.
6. Depreciation on buildings at 5%, furniture 5%, and Motor car at 10%.
❖ The following is the Trial Balance of Raman Traders as on 31st December
,2006.

Trial Balance
Dr Cr
Particulars RS Particulars RS
Cash on hand 1,500 Sales 2,50,000
Cash at bank 3,000 Returns outwards 2,000
Purchases 1,10,000 Capital 56,000
Returns inwards 1,500 Accounts payable 30,000
Wages 20,000
Power and Fuel 8,000
Carriage outwards 6,000
Carriage inwards 5,000
Opening Inventory 6,000
Land 10,000
Buildings 80,000
Machinery 30,000
Patents 15,000
Salaries 12,000
Sundry expenses 6,000
Insurance 1,000
Drawings 8,000
Accounts receivable 15,000
Total 3,38,000 3,38,000

You are required to prepare a Trading and Profit and Loss account for the year
ended 31.12.2006 and a Balance as at 31.12. 2006.Adjustments to be made are
given below.
1. Closing Inventory as at 31.12.2006, RS20,000.
2. provisions for bad and doubtful receivables at 5% on debtors.
3. Outstanding salaries RS 5,000, outstanding wages RS 3,000.
4. Depreciation at 10% on all assets.
❖ Prepare Trading and Profit and Loss account and Balance sheet from the
following data of Premier and Company.
Trial Balance as on 31.12.2005

Particulars Debit Credit

RS RS
Sales 3,00,000
Plant and Machinery 1,20,000
Rent, Rates and Taxes 20,000
Sales Return 30,000
Freight 4,000
Accounts Receivable 70,000
Opening Inventory 1,20,000
Purchases 2,30,000
Discount Paid 5,000
Interest on Bank Loan 5,000
Salaries 70,000
Cash in Hand 5,000
Purchase Returns 10,000
Bank Loan 1,50,000
Capital 1,81,500
Accounts payable 40,000
Bills payable 26,000
Legal charges 500
General Expenses 8,000
Cash at Bank 20,000
Total 7,07,500 7,07,500

Adjustments:
1. Provision for bad and doubtful receivables @5% on accounts receivables
2. Interest on Bank Loan outstanding RS 7,000
3. Closing Inventory as on 31.12.2005 RS 1,20,000.
❖ From the following Trial Balance of Sun shine and Company prepare
Trading, Profit, and Loss Account and Balance sheet.
Trial Balance as on 31.12.2004
Particulars Debit Credit
RS RS
Capital 25,000
Loans 5,000
Sales 35,000
Accounts Payable 4,000
Bills Payable 5,000
Purchase Returns 2,000
Dividends Payable 3,000
Plant and Machinery 13,000
Buildings 17,000
Receivables 9,650
Purchases 18,000
Discount Allowed 1,200
Wages 7,000
Salaries 3,000
Travelling Expenses 750
Freight 200
Insurance 300
Commission Paid 100
Cash on Hand 100
Bank 1,600
Repairs 500
Interest on Loans 600
Opening Inventory 6,000

Total 79,000 79,000

Additional Data:

1. Closing Inventory RS 8,000

2. Depreciation on Plant and Machinery at 15% and 10% on Buildings
3. Provision for doubtful receivables RS 500
4. Insurance Prepaid Rs 50, Outstanding rent Rs 100
❖ From the following trial balance of Evergreen and company prepare trading
and profit and loss account and balance sheet.

Trial balance as on December 31,2003

Particulars debit credit
RS RS
Cash in hand 2,400
Purchases 2,40,000
Stock as on 1-1-20x1 70,000
Debtors 1,00,000
Plant and machinery 1,20,000
Furniture 30,000
Bills receivable 40,000
Rent and taxes 20,000
Wages 32,000
Salaries 37,600
Capital 2,00,000
Bills payable 44,000
Creditors 48,000
Sales 4,00,000
Total 6,92,000 6,92,000

Additional Information:
1. Closing Inventory as on 31st December 2003, RS 50,000
2. Outstanding wages RS 5,000
3. Depreciation on Plant and Machinery at 10% and Furniture at 5%