Accounts from Incomplete Records Chapter 23 DK Goel Solutions

DK Goel Accountancy Class 11 Solutions Chapter 23 Accounts from Incomplete Records which is outlined by expert Accountancy teachers from the latest version of DK Goel Class 11 Accountancy textbooks. We at BYJU’S provide DK Goel Solutions to assist students to comprehend all the theories in particular. There are numerous concepts in Accountancy, but the concepts of Trial Balance, Depreciation and Bank Reconciliation Statement (BRS) are required.

DK Goel Accountancy Class 11 Solutions – Chapter 23

Question 1

Atul does not keep proper records of his business. He gives you the following information:

(₹)

Opening Capital

2,00,000

Closing Capital

2,50,000

Drawings made during the year

60,000

Capital added during the year

75,000

Calculate profit or loss for the year.

Solution:

Profit or Loss

Particulars

End of the year capital

2,50,000

Add: Drawings for a year

60,000

Less: Extra capital submitted during the year

75,000

Capital adjusted at the year-end

2,35,000

Less: Capital at the year start

2,00,000

Profit for the year

35,000

Question 2

Mr. Joshi started a business with a capital of ₹ 5,00,000. At the end of the year his position was:

(₹)

Cash in hand

15,000

Cash at bank

70,000

Sundry Debtors

1,20,000

Stock

2,40,000

Furniture

75,000

Machinery

2,00,000

Sundry creditors at this date totalled ₹ 80,000. During the year he introduced a further capital of ₹ 1,50,000 and withdrew for household expenses ₹ 90,000.

You are required to calculate profit or loss during the year.

Solution:

Statement of Affairs

Liabilities

Assets

Sundry Creditors

80,000

Cash in Hand

15,000

Capital (Balancing Figure)

6,40,000

Cash at Bank

70,000

Sundry Debtors

1,20,000

Stock

2,40,000

Furniture

75,000

Machinery

2,00,000

7,20,000

7,20,000

Profit or Loss

Particulars

End of the year capital

6,40,000

Add: Drawings for the year

90,000

Less: Extra capital submitted during the year

1,50,000

Capital adjusted at the year-end

5,80,000

Less: Capital at the year start

5,00,000

Profit for the year

80,000

Question 3

Mr. Vasudev does not keep proper records of his business. He provided the following information. You are required to prepare a statement showing the profit or loss for the year.

(₹)

Owner’s Equity at the beginning of the year

15,00,000

Bills Receivable

60,000

Cash in hand

80,000

Furniture

9,00,000

Building

10,00,000

Creditors

6,00,000

Stock in trade

2,00,000

Further capital introduced

3,20,000

Drawings made during the period

80,000

Solution:

Statement of Affairs

Liabilities

Assets

Creditors

6,00,000

Cash in Hand

80,000

Capital (Balancing Figure)

16,40,000

Furniture

9,00,000

Stock in trade

2,00,000

Building

10,00,000

Bills Receivable

60,000

22,40,000

22,40,000

Profit or Loss

Particulars

End of the year capital

16,40,000

Add: Drawings for the year

80,000

Less: Extra capital submitted during the year

3,20,000

Capital adjusted at the year-end

14,00,000

Less: Capital at the year start

15,00,000

Loss for the year

1,00,000

Question 4

Tulsi started business on 1st April 2016 with a capital of ₹ 4,50,000. On 31st March 2017 her position was as under:

(₹)

Cash

99,000

Bills Receivable

75,000

Stock

48,000

Land and Building

1,80,000

Furniture

50,000

She owed ₹ 45,000 to her friend Parvati on that date. She withdrew ₹ 8,000 per month for household purposes. Ascertain her profit or loss for the year ended 31st March 2017.

Solution:

Statement of Affairs

Liabilities

Assets

Loan from Friend

45,000

Cash

99,000

Capital (Balancing Figure)

4,07,000

Bills Receivable

75,000

Stock

48,000

Land and Building

1,80,000

Furniture

50,000

4,52,000

4,52,000

Profit or Loss

Particulars

End of the year capital

4,07,000

Add: Drawings for the year (8,000 × 12)

96,000

Less: Extra capital submitted during the year

Capital adjusted at the year-end

5,03,000

Less: Capital at the year start

4,50,000

Profit for the year

53,000

Question 5 (A)

From the following information, calculate capital at the beginning :

Capital at the end of the year

24,00,000

Drawing Made during the year: ₹ 10,000 per month

Fresh Capital introduced during the year

4,00,000

Profit of the current year

6,60,000

Solution:

Profit or Loss

Particulars

End of the year capital

24,00,000

Add: Drawings for the year (10,000 × 12)

1,20,000

Less: Extra capital submitted during the year

4,00,000

Capital adjusted at the year-end

21,20,000

Less: Capital at the year start (Balancing Figure)

14,60,000

Profit for the year

6,60,000

Question 5 (B)

Calculate Closing Capital:

Opening Capital ₹ 90,000; Profit for the year ₹ 25,000; Drawings ₹ 17,000. During the year proprietor sold ornaments of his wife for ₹ 40,000 and invested the same in business.

Solution:

Closing Capital + Drawings – Additional Capital – Opening Capital = Profits

Closing Capital = Opening Capital+ Additional Capital + Profits – Drawings

Closing Capital = 90,000 + 40,000 + 25,000 – 17,000

Closing Capital = Rs 1,38,000

Question 6

Suchitra started business on 1st April, 2013 with a Capital of ₹ 50,00,000. On 31st March, 2014 her total Assets were ₹ 60,00,000 and Creditors were 3,00,000. She withdrew during the year for her personal expenses ₹ 10,000 per month up to 30th June, 2013 and thereafter ₹ 15,000 per month up to 31st March, 2014. During the year she sold her personal investments of ₹ 80,000 at 5% loss and introduced that amount in the business.

You are required to prepare a Statement of Profit or Loss for the year ending 31st March 2014.

Solution:

Profit or Loss

Particulars

End of the year capital (60,00,000 – 3,00,000)

57,00,000

Add: Drawings for the year

(10,000 × 3 + 15,000 × 9)

1,65,000

Less: Extra capital submitted during the year (WN)

76,000

Capital adjusted at the year-end

57,89,000

Less: Capital at the year start

50,00,000

Profit for the year

7,89,000

Working Note: Evaluating additional capital submitted for the year

Investments value = ₹ 80,000

Loss = 80,000 × 5% = ₹ 4,000

Sale Value of Investments (Aditional Capital) = ₹ 76,000

Question 7

Following incomplete information is available from records maintained by Mr. X:

1-4-2016

31-3-2017

Cash

1,000

1,500

Bank

8,000

10,000

Debtors

10,000

12,000

Stock

7,000

6,000

Machinery

20,000

20,000

Creditors

11,000

10,000

Bank Loan

12,000

12,000

During the year Mr. X introduced in the business the amount realised on the sale of ₹ 10,000 investments at the premium of 5%. Personal expenses of Mr. X paid from business account amounted to ₹ 1,250 per month. Prepare a statement to calculate Profit (or Loss) during the year.

Solution:

Statement of Affairs as on April 01, 2016

Liabilities

Assets

Creditors

11,000

Cash

1,000

Bank Loan

12,000

Bank

8,000

Capital (Balancing Figure)

23,000

Debtors

10,000

Stock

7,000

Machinery

20,000

46,000

46,000

Statement of Affairs as on 31st March, 2017

Liabilities

Assets

Creditors

10,000

Cash

1,500

Bank Loan

12,000

Bank

10,000

Capital (Balancing Figure)

27,500

Debtors

12,000

Stock

6,000

Machinery

20,000

49,500

49,500

Profit or Loss for the year ended 31st March, 2017

Particulars

End of the year capital

27,500

Add: Drawings for the year(1,250 × 12)

15,000

Less: Extra capital submitted during the year (WN)

10,500

Capital adjusted at the year-end

32,000

Less: Capital at the year starting

23,000

Profit for the year

9,000

Working Note: Evaluating additional capital submitted for the year

Value of Investments = 10,000

Premium = 500 (10,000 × 5%)

Sale Value of Investments (Aditional Capital) = ₹ 10,500

Question 8

Raghuveer keeps incomplete records. His position was as follows:

31st March, 2016

31st March, 2017

Cash in Hand

2,000

3,000

Cash at Bank

30,000

20,000

Stock-in-Trade

2,00,000

1,90,000

Sundry Debtors

85,000

1,40,000

Plant & Machinery

1,50,000

2,70,000

Fixtures and Fittings

18,000

15,000

Sundry Creditors

2,20,000

2,90,000

During the year, Raghuveer introduced ₹ 50,000 as further capital in the business and withdrew ₹ 7,500 per month. From the above information, show Profit or Loss for the year ended 31st March, 2017.

Solution:

Statement of Affairs as on 31st March, 2016

Liabilities

Assets

Sundry Creditors

2,20,000

Cash in Hand

2,000

Capital (Balancing Figure)

2,65,000

Cash at Bank

30,000

Stock-in-Trade

2,00,000

Sundry Debtors

85,000

Plant & Machinery

1,50,000

Fixtures & Fittings

18,000

4,85,000

4,85,000

Statement of Affairs as on 31st March, 2017

Liabilities

Assets

Sundry Creditors

2,90,000

Cash in Hand

3,000

Capital (Balancing Figure)

3,48,000

Cash at Bank

20,000

Stock-in-Trade

1,90,000

Sundry Debtors

1,40,000

Plant & Machinery

2,70,000

Fixtures & Fittings

15,000

6,38,000

6,38,000

Profit or Loss

Particulars

End of the year capital

3,48,000

Add: Drawings for the year (7,500 × 12)

90,000

Less: Extra capital submitted during the year

50,000

Capital adjusted at the year-end

3,88,000

Less: Capital at the year starting

2,65,000

Profit for the year

1,23,000

Question 9

On 1st April 2014, Mr, Ghosh started business with a capital of ₹ 5,00,000. He kept his books on single entry basis. Soon after he purchased furniture for ₹ 40,000 and purchased goods for ₹ 3,00,000. During the year he borrowed ₹ 1,00,000 from his brother and introduced further capital of his own amounting to ₹ 80,000.

On 31st March, 2015, there were sundry debtors amounting to ₹ 2,20,000 and creditors amounted to ₹ 1,40,000. Stock was valued at ₹ 4,50,000. Cash in hand ₹ 15,400 and Bank Overdraft ₹ 40,000

During the year Mr. Ghosh withdrew ₹ 2,000 per week for his family expenses. You are informed that included in sundry debtors is an irrecoverable amount of ₹ 5,000. He also took goods from the business for his personal use amounting to ₹ 4,000.

You are required to calculate his profit or loss during the year.

Solution:

Statement of Affairs

Liabilities

Assets

Loan from Brother

1,00,000

Cash in Hand

15,400

Creditors

1,40,000

Furniture

40,000

Bank Overdraft

40,000

Sundry Debtors

2,20,000

Capital (Balancing Figure)

4,40,400

Less: Bad Debts

5,000

2,15,000

Stock

4,50,000

7,20,400

7,20,400

Profit or Loss

Particulars

End of the year capital

4,40,400

Add: Drawings for the year (2,000 × 52) + (4,000)

1,08,000

Less: Extra capital submitted during the year

80,000

Capital adjusted at the year-end

4,68,400

Less: Capital adjusted at the year-end

5,00,000

Loss for the year

31,600

Question 10

The Capital of Sh. Madhusudan on 1st April, 2016 was ₹ 5,00,000 and on 31st March, 2017 was ₹ 4,80,000. He has informed you that he withdrew from the business ₹ 8,000 per month for his private use. He paid ₹ 20,000 for his income-tax and the installment of the loan of his personal house at the rate of ₹ 15,000 per month from the business. He had also sold his shares of Reliance Company costing ₹ 1,00,000 at a profit of 20% and invested half of this amount in the business. Calculate the profit or loss of the business.

Solution:

Profit or Loss

Particulars

End of the year capital

4,80,000

Add: Drawings for the year(WN1)

2,96,000

Less: Extra capital submitted during the year (WN2)

60,000

Capital adjusted at the year-end

7,16,000

Less: Capital at the year starting

5,00,000

Profit for the year

2,16,000

Working Note 1: Drawing Evaluation

Withdrawn Cash = ₹ 96,000 (8,000 × 12)

Income Tax Paymen = ₹ 20,000

Personal Loan Instalment = ₹ 1,80,000 (15,000 × 12) = ₹ 2,96,000

Working Notes 2: Additional Capital Evaluation

Value of Shares = ₹ 1,00,000

Add: Profit = ₹ 20,000

Sale Value = ₹ 1,20,000

Aditional Capital ( \(\frac{1,20,000}{2}\) ) = ₹ 60,000

Question 11

Charu do not keep proper books of accounts. Prepare the statement of profit or loss for the year ending 31-3-2017 from the following information:

1-4-2016

31-3-2017

Cash in hand

10,000

36,000

Debtors

20,000

80,000

Creditors

10,000

46,000

Bills Receivable

20,000

24,000

Bills Payable

4,000

42,000

Car

80,000

Stock

40,000

30,000

Furniture

8,000

48,000

Investment

40,000

50,000

Bank balance

1,00,000

90,000

The following adjustments are to be made:

(a) Proprietor withdrew cash ₹ 5,000 per month for private use.

(b) Depreciation @ 5% on Car and @ 10% on furniture.

(c) Outstanding Rent ₹ 6,000.

(d) Fresh Capital introduced during the year ₹ 30,000.

Solution:

Statement of Affairs as on 31st March, 2016

Liabilities

Assets

Creditors

10,000

Cash in Hand

10,000

Bills Payable

4,000

Cash at Bank

1,00,000

Capital (Balancing Figure)

2,24,000

Stock

40,000

Debtors

20,000

Bills Receivable

20,000

Furniture

8,000

Investment

40,000

2,38,000

2,38,000

Statement of Affairs as on 31st March, 2017

Liabilities

Assets

Creditors

46,000

Cash in Hand

36,000

Bills Payable

42,000

Cash at Bank

90,000

Capital (Balancing Figure)

3,50,000

Stock

30,000

Debtors

80,000

Bills Receivable

24,000

Furniture

48,000

Investment

50,000

Car

80,000

4,38,000

4,38,000

Profit or Loss

Particulars

End of the year capital

3,50,000

Add: Drawings for the year(5,000 12)

60,000

Less: Extra capital submitted during the year

30,000

Capital adjusted at the year-end

3,80,000

Less: Capital at the year starting

2,24,000

Profit Before Adjustment

1,56,000

Less: Car Depreciation

4,000

Less: Furniture Depreciation

4,800

Less: Rent Outstanding Rent

6,000

Profit for the year

1,41,200

Final Statement of Affairs as on 31st March, 2017

Liabilities

Assets

Opening Capital

2,24,000

Cash in Hand

36,000

Add: Net Profit

1,41,200

Cash at Bank

90,000

Add: Fresh Capital

30,000

Stock

30,000

Less: Drawings

60,000

3,35,200

Debtors

80,000

Creditors

46,000

Bills Receivable

24,000

Bills Payable

42,000

Investment

50,000

Outstanding Rent

6,000

Furniture

48,000

Less: Depreciation

4,800

43,200

Car

80,000

Less: Depreciation

4,000

76,000

4,29,200

4,29,200

Question 12

Ashok keeps incomplete records. The position of his business on 1st April, 2016 was as follows:

Cash in Hand ₹ 2,200; Cash at Bank ₹ 5,400; Stock ₹ 25,100; Sundry Debtors ₹ 18,700; Furniture ₹ 6,000; Sundry Creditors ₹ 13,500.

His position on 31st March, 2017 was as follows:

Cash in Hand ₹ 1,500; Cash at Bank ₹ 8,400; B/R ₹ 3,300; Stock ₹ 26,000; Sundry Debtors ₹ 24,600; Furniture ₹ 8,000; Sundry Creditors ₹ 14,200.

During the year he had withdrawn from the business ₹ 18,000, of which ₹ 9,200 were spent in purchasing a Typewriter for the business.

(a) Depreciate furniture and typewriter by 10%.

(b) Write off ₹ 600 as Bad-Debts.

(c) Make a provision of 5% on Debtors for doubtful debts.

Calculate the profit or loss of his business for the year ended 31st March, 2017 and prepare a final statement of affairs, after the above adjustments.

Solution:

Statement of Affairs as on 31st March, 2016

Liabilities

Assets

Sundry Creditors

13,500

Cash in Hand

2,200

Capital (Balancing Figure)

43,900

Cash at Bank

5,400

Stock

25,100

Sundry Debtors

18,700

Furniture

6,000

57,400

57,400

Statement of Affairs as on 31st March,as on 31st March, 2017

Liabilities

Assets

Sundry Creditors

14,200

Cash in Hand

1,500

Capital (Balancing Figure)

66,800

Cash at Bank

8,400

Stock

26,000

Sundry Debtors

24,600

Bills Receivable

3,300

Furniture

8,000

Typewriter

9,200

81,000

81,000

Profit or Loss as of 31st March, 2017

Particulars

End of the year capital

66,800

Add: Drawings for the year(18,000 – 9,200)

8,800

Less: Extra capital submitted during the year

Capital adjusted at the year-end

75,600

Less: Capital at the year starting

43,900

Profit Before Adjustment

31,700

Less: Furniture Depreciation

800

Less: Typewriter Depreciation

920

Less: Bad Debts

600

Less: Provision for Doubtful Debts

1,200

Profit for the year

28,180

Final Statement of Affairs as on 31st March, 2017

Liabilities

Assets

Creditors

14,200

Cash in Hand

1,500

Opening Capital

43,900

Cash at Bank

8,400

Add: Net Profit

28,180

Stock

26,000

Less: Drawings

8,800

63,280

Bills Receivable

3,300

Sundry Debtors

24,600

Less: Bad Debts

600

Less: Provision for Bad Debts

1,200

22,800

Furniture

8,000

Less: Depreciation

800

7,200

Typewriter

9,200

Less: Depreciation

920

8,280

77,480

77,480

Question 13

From the details given below find out the Credit Sales and Total Sales :

Opening Debtors

60,000

Closing Debtors

75,000

Discount allowed

4,400

Sales Return

12,000

Bad-Debts

5,600

Provision for Bad-Debts

3,800

B/R received from Debtors

16,000

B/R dishonoured

4,000

B/R discounted

10,000

Discounted bills dishonoured

3,000

Cash Sales

1,05,000

Cash received from Debtors (including ₹ 6,000 against a debt previously written off)

3,08,000

Cheques received from Debtors

Solution:

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

60,000

Cash A/c

3,02,000

Bill Receivable A/c

4,000

Sales Return A/c

12,000

Bank A/c

3,000

Bad-Debts A/c

5,600

Sales A/c (Credit)

3,80,000

Bill Receivable A/c

16,000

Discount Allowed

4,400

Bank A/c

32,000

Balance c/d

75,000

4,47,000

4,47,000

Total Sales = Credit Sales + Cash Sales

Total Sales = 3,80,000 + 1,05,000 = ₹ 4,85,000

Question 14

Find out the Credit Purchases from the details given below:

Balance of Creditors on 1st April 2006

32,000

Balance of Creditors on 31st March, 2007

46,000

Cash paid to Creditors

2,20,000

Cheques issued to Creditors

60,000

Purchases Returns

10,000

Discount received from Creditors

6,600

Cash Purchases

1,15,000

B/P accepted

16,000

B/P Dishonoured

2,000

B/R endorsed to Creditors

7,000

Endorsed B/R dishonoured

3,000

Solution:

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

2,20,000

Balance b/d

32,000

Discount Received A/c

6,600

Bills Payable A/c

2,000

Bills Payable A/c

16,000

Bills Receivable A/c

3,000

Purchases Return A/c

10,000

Purchases A/c (Credit)

3,28,600

Bills Receivable A/c

7,000

Bank A/c

60,000

Balance c/d

46,000

3,65,600

3,56,600

Question 15

Anand Mohan has kept incomplete books. From the following particulars, prepare his Final Accounts for the year ending 31st March, 2012 :

Receipts:- Received from Debtors ₹ 37,000; Fresh Capital brought in cash ₹ 20,000; Commission received ₹ 2,800; Cash Sales ₹ 95,000.

Payments:- Paid to Creditors ₹ 35,000; Cash Purchases ₹ 26,500; Ornaments for his wife ₹ 22,000; Wages ₹ 18,800; Rent ₹ 8,400; Salary ₹ 12,000.

His Other Assets and Liabilities:-

31st March, 2011

(₹)

31st March, 2012

(₹)

Debtors

15,600

18,000

Creditors

15,400

13,000

Machinery

36,000

36,000

Stock

28,000

21,200

Cash

5,000

Adjustments :-

(1) Unpaid wages ₹1,500.

(2) Provide for Doubtful Debts at 5% on Debtors.

Solution:

Trading Account as on 31st March, 2012

Dr.

Cr.

Particulars

Particulars

Opening Stock

28,000

Sales (Cash + Credit)

1,34,400

Purchases (Cash + Credit)

59,100

Closing Stock

21,200

Wages

18,800

Add: Outstanding

1,500

20,300

Gross Profit

48,200

1,55,600

1,55,600

Balance Sheet as on 31st March, 2012

Dr.

Cr.

Liabilities

Assets

Capital

69,200

Cash in Hand

37,100

Add: Additional Capital

20,000

Closing Stock

21,200

Less: Drawings

22,000

Debtors

18,000

Add: Net Profit

29,700

96,900

Less: Bad Debts

900

17,100

Creditors

13,000

Machinery

36,000

Unpaid Wages

1,500

1,11,400

1,11,400

Working Notes:

Balance Sheet at the end of 31st March, 2011

Dr.

Cr.

Liabilities

Assets

Creditors

15,400

Debtors

15,600

Capital (Balancing figure)

69,200

Machinery

36,000

Stock

28,000

Cash

5,000

84,600

84,600

Profit & Loss Account as on 31st March, 2012

Dr.

Cr.

Particulars

Particulars

Salary

12,000

Gross Profit

48,200

Rent

8,400

Commission

2,800

Bad Debts

900

Net Profit

29,700

51,000

51,000

Balance c/d

37,100

1,59,800

1,59,800

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

15,600

Cash A/c

37,000

Sales A/c

39,400

Balance c/d

18,000

55,000

55,000

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

35,000

Balance b/d

15,400

Balance c/d

13,000

Purchases A/c

32,600

48,000

48,000

Question 16

Mukesh Khanna has not kept proper books. However, he gives you the following information relating to the year 2011-12:

(₹)

(₹)

To Balance b/d

8,100

By Payment to Creditors

56,200

To Received from Debtors

75,000

By Carriage

1,270

To Cash Sales

52,000

By Salaries

24,000

To Sales of Old Newspapers

420

By Rent

16,000

To Loan from Mrs. Khanna

@ 15%p.a. on 1st July, 2011

8,000

By Purchases of Cycle for his son

1,500

By Furniture Purchased

12,000

By Balance c/d

32,550

1,43,520

1,43,520

The following balances existed on 1st April, 2011 – Debtors ₹ 24,200; Furniture ₹ 18,000; Stock ₹ 30,000; Creditors ₹ 18,000.

The following balances existed on 31st March, 2012 – Debtors ₹ 20,800; Furniture ₹ 30,000; Stock ₹ 35,950; Creditors ₹ 34,600.

Adjustments:-

(1) Depreciate Furniture by 10%.

(2) Provide upto-date interest on Mrs. Khanna’s Loan.

Prepare trading and Profit and Loss A/c for the year ending 31st March, 2012 and a Balance Sheet as at that date.

Solution:

Trading Account as on 31st March, 2012

Dr.

Cr.

Particulars

Particulars

Opening Stock

30,000

Sales (Cash + Credit)

1,23,600

Purchases (Credit)

72,800

Closing Stock

35,950

Carriage

1,270

Gross Profit

55,480

1,59,550

1,59,550

Profit & Loss Account as on 31st March, 2012

Dr.

Cr.

Particulars

Particulars

Salary

24,000

Gross Profit

55,480

Rent

16,000

Sale of Old Newspapers

420

Depreciation on Furniture

3,000

Outstanding Interest on Loan (for 9 months)

900

Net Profit

12,000

55̮,900

55,900

Balance Sheet as on 31st March, 2012

Dr.

Cr.

Liabilities

Assets

Capital

62,300

Cash in Hand

32,550

Less: Drawings

1,500

Closing Stock

35,950

Add: Net Profit

12,000

72,800

Furniture

18,000

Creditors

34,600

Add: Additions

12,000

Unpaid Interest on Loan

900

Less: Depreciation

3,000

27,000

Loan from Mrs Khanna

8,000

Debtors

20,800

1,16,300

1,16,300

Working Notes:

Balance Sheet as on 31st March, 2011

Dr.

Cr.

Liabilities

Assets

Creditors

18,000

Debtors

24,200

Capital (Balancing figure)

62,300

Furniture

18,000

Stock

30,000

Cash

8,100

80,300

80,300

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

24,200

Cash A/c

75,000

Sales A/c

71,600

Balance c/d

20,800

95,800

95,800

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

56,200

Balance b/d

18,000

Balance c/d

34,600

Purchases A/c

72,800

90,800

90,800

Question 17

Mr. Asif Ali, a retail trader, who keeps Incomplete Records gives you the following information for the year 2011-12:

(₹)

(₹)

Received from Debtors

38,000

Bank Overdraft on 1-4-2011

2,500

Cash Sales

26,500

Paid to Creditors

31,200

Miscellaneous Income

300

Carriage inwards

800

Salaries

12,400

Advertisement

700

Cash Purchases

16,000

Balance at Bank on 31-3-2012

1,200

64,800

64,800

The Assets and Liabilities were as follows:

31st March 2011

31st March 2012

Stock

15,000

12,000

Fixed Assets

25,000

25,000

Sundry Debtors

12,000

?

8,600

?

Other Informations:

(1) Credit Sales during the year were ₹ 35,100.

(2) Sales returns ₹ 800.

(3) Credit Purchases during the year were ₹ 30,000.

(4) Discount allowed to Debtors ₹ 300.

(5) Discount received from Creditors ₹ 130.

Adjustments:-

(1) Make a provision for doubtful debts @ 5% on Debtors.

(2) Also make a provision for discount @ 2% on Debtors.

Prepare his Trading, P & L A/c and a Balance Sheet as at 31st March, 2012.

Solution:

Trading Account for the year ended 31st March, 2012

Dr.

Cr.

Particulars

Particulars

Opening Stock

15,000

Sales (Cash + Credit – Returns)

60,800

Purchases (Credit)

46,000

Closing Stock

12,000

Carriage

800

Gross Profit

11,000

72,800

72,800

Profit & Loss Account

Dr.

Cr.

Particulars

Particulars

Salary

12,400

Gross Profit

11,000

Advertisement

700

Miscellaneous Income

300

Provision for Doubtful Debts

400

Discount Received

130

Provision for Discount on Debtors

152

Net Loss

2,522

Discount Allowed

300

13,952

13,952

Balance Sheet as on 31st March, 2012

Dr.

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

40,900

Cash at Bank

1,200

Less: Net Loss

2,522

38,378

Debtors

8,000

Creditors

7,270

Less: Provision for DD

400

Less: Provision for Discount

152

7,448

Fixed Assets

25,000

Closing Stock

12,000

45,648

45,648

Working Notes:

Balance Sheet as on 31st March, 2011

Dr.

Cr.

Liabilities

Assets

Creditors

8,600

Debtors

12,000

Bank Overdraft

2,500

Fixed Assets

25,000

Capital (Balancing figure)

40,900

Stock

15,000

52,000

52,000

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

12,000

Cash A/c

38,000

Sales A/c

35,100

Sales Return A/c

800

Discount Allowed A/c

300

Balance c/d

8,000

47,100

47,100

Creditors Account

Dr.

Cr.

Particulars

Particulars

Discount Received A/c

130

Balance b/d

8,600

Cash A/c

31,200

Purchases A/c

30,000

Balance c/d

7,270

38,600

38,600

Question 18

Lalit Mohan keeps incomplete records. From the following information provided by him, prepare a Trading and Profit & Loss Account for the year ended 31st March, 2015 and a Balance Sheet as at that date:

31st March, 2014

31st March, 2015

Sundry Debtors

15,000

24,400

Stock

32,000

55,000

Cash

8,400

21,700

Sundry Creditors

22,000

?

Prepaid Expenses

Nil

3,600

Unpaid Expenses

1,500

2,200

Furniture

20,000

32,000

Summary of cash transactions during the year:

Receipts from Debtors

2,00,000

Payment to Creditors

1,64,000

Carriage Inwards

3,300

Payment for Life Insurance Premium

15,000

Sundry Expenses

40,000

Furniture purchased for cash

12,000

You are informed that there was a considerable amount of cash sales during the year. Credit purchases during the year amounted to ₹ 1,80,000. Provide 5% for doubtful debts on debtors.

Solution:

Trading Account as on 31st March, 2015

Dr.

Cr.

Particulars

Particulars

Opening Stock

32,000

Sales (Cash + Credit)

2,57,000

Purchases (Credit)

1,80,000

Closing Stock

55,000

Carriage

3,300

Gross Profit

96,700

3,12,000

3,12,000

Profit & Loss Account as on 31st March, 2015

Dr.

Cr.

Particulars

Particulars

Sundry Expenses

40,000

Gross Profit

96,700

Provision for Doubtful Debts

1,220

Prepaid Expenses

3,600

Unpaid Expenses (2,200 – 1,500)

700

Net Profit

58,380

1,00,300

1,00,300

Balance Sheet as on 31st March, 2015

Dr.

Cr.

Liabilities

Assets

Capital

51,900

Cash in Hand

21,700

Less: Drawings

15,000

Debtors

24,400

Add: Net Profit

58,380

95,280

Less: Provision for DD

1,220

23,180

Creditors

38,000

Prepaid Expenses

3,600

Unpaid Expenses

2,200

Closing Stock

55,000

Furniture

32,000

1,35,480

1,35,480

Working Notes:

Balance Sheet as on 31st March, 2014

Dr.

Cr.

Liabilities

Assets

Creditors

22,000

Debtors

15,000

Expenses Unpaid

1,500

Stock

32,000

Capital (Balancing figure)

51,900

Cash

8,400

Furniture

20,000

75,400

75,400

Cash Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

8,400

Creditors A/c

1,64,000

Debtors A/c

2,00,000

Carriage A/c

3,300

Sales A/c (Balancing Figure)

47,600

Drawings A/c (Life Insurance Premium)

15,000

Sundry Expenses A/c

40,000

Furniture A/c

12,000

Balance c/d

21,700

2,56,000

2,56,000

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

1,64,000

Balance b/d

22,000

Balance c/d

38,000

Purchases A/c

1,80,000

2,02,000

2,02,000

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

15,000

Cash A/c

2,00,000

Sales A/c

2,09,400

Balance c/d

24,400

2,24,400

2,24,400

Question 19

Vardhman commenced business on 1st April, 2008, with a capital of ₹ 50,000. He immediately purchased furniture for ₹ 20,000. During the year he received from his uncle a gift of ₹ 3,000 and he borrowed from his father a sum of ₹ 5,000. He had withdrawn ₹ 600 per month for his household expenses. He had no Bank account and all dealings were in cash. He did not maintain any books but following information is given :

Sales (including cash sales ₹ 30,000)

1,00,000

Purchases (including cash purchases ₹ 10,000)

75,000

Carriage inwards

700

Wages

300

Discount allowed to debtors

800

Salaries

6,200

Bad-Debts written off

1,500

Trade expenses

1,200

Advertisements

2,200

He used goods worth ₹ 1,300 for personal purposes and paid ₹ 500 to his son for examination and college fees.

On 31st March, 2009, his Debtors were worth ₹ 21,000 and Creditors ₹ 15,000. Stock in trade was valued at ₹ 10,000. Furniture to be depreciated by 10% p.a.

Prepare trading and Profit and Loss Account for the year ended on 31st March, 2009, and Balance Sheet as at 31st March, 2009.

Solution:

Trading Account for the year ended 31st March, 2009

Dr.

Cr.

Particulars

Particulars

Purchases (Cash + Credit – Drawings)

73,700

Sales (Cash + Credit)

1,00,000

Carriage Inwards

700

Closing Stock

10,000

Wages

300

Gross Profit

35,300

1,10,000

1,10,000

Profit & Loss Account for the year ended 31st March, 2009

Dr.

Cr.

Particulars

Particulars

Discount Allowed

800

Gross Profit

35,300

Salaries

6,200

Bad Debts

1,500

Trade Expenses

1,200

Advertisement

2,200

Depreciation on Furniture

2,000

Net Profit

21,400

35,300

35,300

Balance Sheet as on 31st March, 2009

Dr.

Cr.

Liabilities

Assets

Capital

50,000

Cash in Hand

36,400

Gift from Uncle

3,000

Debtors

21,000

Less: Drawings

(12 × 600 + 1,300 + 500)

9,000

Closing Stock

10,000

Add: Net Profit

21,400

65,400

Furniture (Less Depreciation)

18,000

Creditors

15,000

Loan from Father

5,000

85,400

85,400

Working Notes:

Cash Account

Dr.

Cr.

Particulars

Particulars

Capital A/c

50,000

Furniture A/c

20,000

Gift from Uncle

3,000

Drawings A/c (12×600+500)

7,700

Loan from Father A/c

5,000

Purchases A/c

10,000

Sales A/c

30,000

Carriage Inwards A/c

700

Debtors A/c

46,700

Wages A/c

300

Salaries A/c

6,200

Trade Expenses A/c

1,200

Advertisement A/c

2,200

Creditors A/c

50,000

Balance c/d

36,400

1,34,700

1,34,700

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

50,000

Purchases A/c

65,000

Balance c/d

15,000

65,000

65,000

Debtors Account

Dr.

Cr.

Particulars

Particulars

Sales A/c

70,000

Discount Allowed A/c

800

Bad Debts A/c

1,500

Cash A/c

46,700

Balance c/d

21,000

2,24,400

2,24,400

Question 20

Calculate the value of Closing Stock from the following particulars:

Purchases

93,000

Wages

20,000

Sales

1,20,000

Carriage Outwards

3,200

Opening Stock

16,000

Rate of Gross Profit on Cost

25%

Solution:

Gross Profit Rate (on cost) = 25%

Gross Profit Rate (on sales) = 20%

Gross Profit = 20% of 1,20,000 = ₹ 24,000

Gross Profit = Net Sales – Cost of Goods Sold

₹ 24,000 = ₹ 1,20,000 – Cost of Goods Sold

Cost of Goods Sold = ₹ 1,20,000 – ₹ 24,000 = ₹ 96,000

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

₹ 96,000 = ₹ 16,000 + ₹ 93,000 +₹ 20,000 – Closing Stock

Closing Stock = ₹16,000 + ₹ 93,000 + ₹ 20,000 – ₹ 96,000 = ₹ 33,000

Question 21

Calculate the value of Opening Stock from the following:

Sales

2,05,000

Sales Returns

5,000

Purchases

1,24,000

Purchases Returns

4,000

Carriage Inwards

8,000

Closing Stock

36,000

Rate of Gross Profit on Sales

40%

Solution:

Rate of Gross Profit (on sales) = 40%

Gross Profit = 40% of (2,05,000 – 5,000) = ₹ 80,000

Gross Profit = Net Sales – Cost of Goods Sold

₹ 80,000 = ₹ 2,00,000 – Cost of Goods Sold

Cost of Goods Sold = ₹2,00,000 –₹ 80,000 = ₹ 1,20,000

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

₹1,20,000 = Opening Stock + (₹1,24,000 – ₹4,000) + ₹8,000 – ₹36,000

Opening Stock = ₹1,20,000 – ₹1,20,000 – ₹8,000 + ₹36,000 = ₹28,000

Question 22

Chakravarti does not maintain proper books of accounts. Following information is obtained from his books for the year ended 31st March, 2008:

Cash Transactions:

Received from Debtors

72,000

Staff Salary

4,500

Paid to Creditors

56,000

Wages

15,000

Drawings

5,000

Office Expenses

2,000

Received from Cash Sales

30,000

Rent

3,500

Life Insurance Premium

800

Cash in hand on 31-3-2008

16,700

Assets and Liabilities:

1-4-2007

31-3-2008

Debtors

24,000

56,000

Creditors

30,000

40,000

Outstanding Salaries

500

450

Outstanding Wages

1,000

1,200

The Stock on 31st March, 2008 was valued at ₹ 20,000 but Chakravarti has no record of the Stock on 1st April, 2007. However, he informs you that he sells his goods at cost plus 25%.

Prepare his Cash Book, Trading and P & L A/c for the year ended 31st March, 2008 and a Balance Sheet as at that date.

Solution:

Trading Account as on 31st March, 2008

Dr.

Cr.

Particulars

Particulars

Opening Stock

46,000

Sales (Cash + Credit)

1,34,000

Purchases (Credit)

66,000

Closing Stock

20,000

Wages

15,000

Outstanding Wages

200

Gross Profit

26,800

1,54,000

1,54,000

Profit & Loss Account as on 31st March, 2008

Dr.

Cr.

Particulars

Particulars

Staff Salaries

4,500

Gross Profit

26,800

Office Expenses

2,000

Outstanding Salary

50

Rent

3,500

Net Profit

16,850

26,850

26,850

Balance Sheet as on 31st March, 2008

Dr.

Cr.

Liabilities

Assets

Capital

40,000

Cash in Hand

16,700

Less: Drawings

5,800

Debtors

56,000

Add: Net Profit

16,850

51,050

Closing Stock

20,000

Creditors

40,000

Outstanding Salary

450

Outstanding Wages

1,200

92,700

92,700

Working Notes:

Balance Sheet as on 31st March, 2007

Dr.

Cr.

Liabilities

Assets

Creditors

30,000

Debtors

24,000

Outstanding Salaries

500

Stock

46,000

Outstanding Wages

1,000

Cash

1,500

Capital (Balancing figure)

40,000

71,500

71,500

Cash Account

Dr.

Cr.

Particulars

Particulars

Balance b/d (Balancing Figure)

1,500

Creditors A/c

56,000

Debtors A/c

72,000

Drawings A/c

5,000

Sales A/c

30,000

Drawings A/c (Life Insurance Premium)

800

Staff Salary

4,500

Wages

15,000

Office Expenses

2,000

Rent

3,500

Balance c/d

16,700

1,03,500

1,03,500

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

56,000

Balance b/d

30,000

Balance c/d

40,000

Purchases A/c

66,000

96,000

96,000

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

24,000

Cash A/c

72,000

Sales A/c

1,04,000

Balance c/d

56,000

1,28,000

1,28,000

Rate of Gross Profit (on cost) = 25%

Rate of Gross Profit (on sales) = 20%

Gross Profit = 20% of (30,000 + 1,04,000) = ₹ 26,800

Gross Profit = Net Sales – Cost of Goods Sold

₹ 26,800 = ₹1,34,000 – Cost of Goods Sold

Cost of Goods Sold = ₹1,34,000 – ₹26,800 = ₹ 1,07,200

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

₹1,07,200 = Opening Stock + ₹66,000 + (₹15,000 +₹200) – ₹20,000

Opening Stock = ₹1,07,200 – ₹66,000 – ₹15,200 + ₹20,000 = ₹ 46,000

Question 23

Mr. Gopal Das has only a Bank Pass Book and does not keep any other books of accounts. From the following information prepare his Final Accounts for the year ended 31st March, 2015.

An analysis of the Pass Book shows:-

Total amount received from Debtors and deposited with the Bank ₹ 2,20,000; Payment to Creditors ₹ 1,82,000; Salaries ₹ 6,000; Rent paid ₹ 4,800; Advertisement ₹ 2,000; Printing ₹ 800; Personal Expenses ₹ 4,000; Payment for Furniture ₹ 12,000; Balance at Bank on 31st March, 2015, ₹ 21,000.

Other Assets and Liabilities were as follows:

1-4-2014

31-3-2015

Sundry Debtors

30,000

42,000

Sundry Creditors

20,000

15,000

Stock

34,000

?

Salary Outstanding

400

500

Mr. Gopal Das takes 20% profit on sales.

Solution:

Trading Account as on March 31, 2015

Dr.

Cr.

Particulars

Particulars

Opening Stock

34,000

Sales (Credit)

2,32,000

Purchases (Credit)

1,77,000

Closing Stock

25,400

Gross Profit

46,400

2,57,400

2,57,400

Profit & Loss Account as on March 31, 2015

Dr.

Cr.

Particulars

Particulars

Salaries

6,000

Gross Profit

46,400

Outstanding Salary

100

Rent

4,800

Advertisement

2,000

Printing

800

Net Profit

32,700

46,400

46,400

Balance Sheet as on March 31, 2015

Dr.

Cr.

Liabilities

Assets

Capital

56,200

Debtors

42,000

Less: Drawings

4,000

Stock

25,400

Add: Net Profit

32,700

84,900

Bank

21,000

Creditors

15,000

Furniture

12,000

Outstanding Salary

500

1,00,400

1,00,400

Working Notes:

Balance Sheet as on March 31, 2014

Dr.

Cr.

Liabilities

Assets

Creditors

20,000

Debtors

30,000

Outstanding Salaries

400

Stock

34,000

Capital

(Balancing figure)

56,200

Bank

12,600

76,600

76,600

Bank Account

Dr.

Cr.

Particulars

Particulars

Balance b/d (Balancing Figure)

12,600

Creditors A/c

1,82,000

Debtors A/c

2,20,000

Salary A/c

6,000

Rent A/c

4,800

Advertisement A/c

2,000

Printing A/c

800

Drawings A/c

4,000

Furniture A/c

12,000

Balance c/d

21,000

2,32,600

2,32,600

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

30,000

Bank A/c

2,20,000

Sales A/c

2,32,000

Balance c/d

42,000

2,62,000

2,62,000

Creditors Account

Dr.

Cr.

Particulars

Particulars

Bank A/c

1,82,000

Balance b/d

20,000

Balance c/d

15,000

Purchases A/c

1,77,000

1,97,000

1,97,000

Rate of Gross Profit (on sales) = 20%

Gross Profit = 20% of 2,32,000 = ₹46,400

Gross Profit = Net Sales – Cost of Goods Sold

₹46,400 = ₹2,32,000 – Cost of Goods Sold

Cost of Goods Sold =₹ 2,32,000 – ₹46,400 = ₹ 1,85,600

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

₹1,85,600 = ₹34,000 + ₹1,77,000 – Closing Stock

Closing Stock = ₹34,000 + ₹1,77,000 – ₹1,85,600 = ₹ 25,400

Question 24

Ravi, who keeps his books on Single Entry System, had his capital on 31st March, 2016 ₹ 20,000 and on 1st April, 2015 was ₹ 16,700. He further informs that during the year, he withdrew for his personal expenses ₹ 9,400. He also sold his personal investment of ₹ 10,000 at 15% premium and brought that money into the business.

Prepare a statement of Profit or Loss.

Solution:

Statement of Profit/Loss

Particulars

Closing Capital

20,000

Less: Opening Capital

(16,700)

Less: Additional Capital

(11,500)

Add: Drawings

9,400

Profit for the Year

1,200

Question 25

Mohan commenced business on 1st April, 2012 with a capital of ₹ 50,000. On 1st January, 2013, he introduced ₹ 25,000 into business of which ₹ 10,000 was borrowed from Ram. His position on 31st March, 2013 was as under:

Assets: Cash in hand ₹ 4,000; Bank (Cr.) ₹ 6,500; Debtors ₹ 24,000; B/R ₹ 18,600.

Stock ₹ 25,400; Furniture ₹ 15,000; Prepaid expenses ₹ 1,000.

Liabilities : Creditors ₹ 13,500; B/P ₹ 4,800; Ram’s Loan ₹ 10,000; Outstanding expenses ₹ 700.

Actual drawings were not known but his living expenses are ₹ 1,000 p.m. Depreciate furniture by 10%. Interest on loan is due @ 12% p.a.

Ascertain his profit or loss for the year 2012-13 & prepare final statement of affairs.

Solution:

Statement of Affairs as on March 31, 2013

Liabilities

Assets

Bank Overdraft

6,500

Bills Receivable

18,600

Creditors

13,500

Cash in Hand

4,000

Bills Payable

4,800

Stock

25,400

Ram’s Loan

10,000

Debtors

24,000

Outstanding Expenses

700

Furniture

15,000

Capital (Balancing Figure)

52,500

Prepaid Expenses

1,000

88,000

88,000

Profit or Loss as on March 31, 2013

Particulars

End of the year capital

52,500

Add: Drawings for the year

12,000

Less: Extra capital submitted during the year (25,000 – 10,000)

15,000

Capital adjusted at the year-end

49,500

Less: Capital at the year starting

50,000

Loss Before Adjustment

(500)

Less: Furniture Depreciation

1,500

Less: Loan Interest Outstanding

300

Loss for the year

(2,300)

Final Statement of Affairs as on March 31, 2013

Liabilities

Assets

Creditors

13,500

Cash in Hand

4,000

Opening Capital

50,000

Debtors

24,000

Add: Additional Capital

15,000

Bills Receivable

18,600

Less: Net Loss

2,300

Stock

25,400

Less: Drawings

12,000

50,700

Furniture

15,000

Loan from Ram

10,000

Less: Depreciation

1,500

13,500

Bank Overdraft

6,500

Prepaid Expenses

1,000

Bills Payable

4,800

Outstanding Expenses

700

Outstanding Interest on Loan

300

86,500

86,500

Question 26

On April 1st, 2016, X started a business with ₹ 40,000 as his capital. On March 31st, 2017, his position was as follows:

(₹)

Creditors

30,000

Bills Payable

10,000

Bank

10,000

Debtors

50,000

Stock

40,000

Plant

68,000

Furniture

12,000

During the year 2016-17 X drew ₹ 24,000. On 1st October 2016, he introduced further capital amounting to ₹ 30,000. You are required to ascertain profit or loss made by him during the year 2016-17.

Adjustments:

(a) Plant is to be depreciated at 10%.

(b) A Provision of 5% is to be made against debtors.

Also prepare the Statement of Affairs as on March 31st 2017.

Solution:

Statement of Affairs as on March 31, 2017

Liabilities

Assets

Bills Payable

10,000

Bank

10,000

Creditors

30,000

Plant

68,000

Capital (Balancing Figure)

1,40,000

Stock

40,000

Debtors

50,000

Furniture

12,000

1,80,000

1,80,000

Profit or Loss as on March 31, 2017

Particulars

End of the year capital

1,40,000

Add: Drawings for the year

24,000

Less: Extra capital submitted during the year

30,000

Capital adjusted at the year-end

1,34,000

Less: Capital at the year starting

40,000

Profit Before Adjustment

94,000

Less: Plant Depreciation

6,800

Less: Doubtful Debts Provision

2,500

Profit for the year

84,700

Final Statement of Affairs as on March 31, 2017

Liabilities

Assets

Creditors

30,000

Bank

10,000

Opening Capital

40,000

Furniture

12,000

Add: Additional Capital

30,000

Stock

40,000

Add: Net Profit

84,700

Debtors

50,000

Less: Drawings

24,000

1,30,700

Less: Provision for Bad Debts

2,500

47,500

Bills Payable

10,000

Plant

68,000

Less: Depreciation

6,800

61,200

1,70,700

1,70,700

Question 27

From the following information relating to the business of Mr. X who keeps books by single entry ascertain the profit or loss for the year ended 31st March, 2017:

1-4-2016

31-3-2017

Machinery

16,000

16,000

Furniture

4,000

4,000

Stock

14,000

10,000

Sundry Debtors

8,000

9,000

Bank Balance

400

3,600

Sundry Creditors

10,000

7,000

Mr. X withdrew ₹ 4,100 during the year to meet his household expenses. He introduced ₹ 600 as fresh capital. Machinery and furniture to be depreciated by 10% and 5% per annum respectively.

Solution:

Statement of Affairs as on April 01, 2016

Liabilities

Assets

Creditors

10,000

Cash at Bank

400

Capital (Balancing Figure)

32,400

Machinery

16,000

Stock

14,000

Debtors

8,000

Furniture

4,000

42,400

42,400

Statement of Affairs as on March 31, 2017

Liabilities

Assets

Creditors

7,000

Cash at Bank

3,600

Capital (Balancing Figure)

35,600

Machinery

16,000

Stock

10,000

Debtors

9,000

Furniture

4,000

42,600

42,600

Profit or Loss as on March 31, 2017

Particulars

End of the year capital

35,600

Add: Drawings for the year

4,100

Less: Extra capital submitted during the year

600

Capital adjusted at the year-end

39,100

Less: Capital at the year starting

32,400

Profit Before Adjustment

6,700

Less: Machinery Depreciation

1,600

Less: FurnitureDepreciation

200

Profit for the year

4,900

Question 28

Mr. A does not keep proper records of his business. Following information is available from records kept by him:

1-4-2016

31-3-2017

Cash

20,000

18,000

Bank

30,000

33,000

Debtors

17,000

25,000

Stock

40,000

60,000

Fixed Assets

29,000

29,000

Creditors

52,000

32,000

Loan

10,000

25,000

Mr. A withdrew from the business ₹ 3,000 per month upto 30th September 2016 and thereafter ₹ 4,000 per month as drawings. ₹ 50,000 realised by the proprietor as maturity value of National Saving Certificates was invested in the business.

Prepare a statement showing net profit (or net loss) for the year.

Solution:

Statement of Affairs as on April 01, 2016

Liabilities

Assets

Creditors

52,000

Cash in Hand

20,000

Loan

10,000

Cash at Bank

30,000

Capital

74,000

Debtors

17,000

(Balancing Figure)

Stock

40,000

Fixed Assets

29,000

1,36,000

1,36,000

Statement of Affairs as on March 31, 2017

Liabilities

Assets

Creditors

32,000

Cash in Hand

18,000

Loan

25,000

Cash at Bank

33,000

Capital

1,08,000

Debtors

25,000

(Balancing Figure)

Stock

60,000

Fixed Assets

29,000

1,65,000

1,65,000

Profit or Loss as on March 31, 2017

Particulars

End of the year capital

1,08,000

Add: Drawings for the year (3,000 × 6 + 4,000 × 6)

42,000

Less: Extra capital submitted during the year

50,000

Capital adjusted at the year-end

1,00,000

Less: Capital at the year starting

74,000

Profit for the year

26,000

Question 29

Mr. White does not keep his books properly. Following information is available from his books.

1-4-2015

31-3-2016

Sundry Creditors

45,000

93,000

Loan from wife

66,000

57,000

S. Debtors

22,500

Land & Building

89,600

90,000

Cash in hand

7,500

8,700

Bank overdraft

25,000

Furniture

1,300

1,300

Stock

34,000

25,000

During the year Mr. White sold his private car for ₹ 50,000 and invested this amount into the business. He withdrew from the business ₹ 1,500 per month upto 31st October, 2015 and thereafter ₹ 4,500 per month as drawings. You are required to prepare a statement of profit or loss and a statement of affairs as of March 31, 2016.

Solution:

Statement of Affairs as on April 01, 2015

Liabilities

Assets

Loan from Wife

66,000

Cash in Hand

7,500

Creditors

45,000

Furniture

1,300

Bank Overdraft

25,000

Stock

34,000

Capital (Balancing Figure)

18,900

Debtors

22,500

Land & Building

89,600

1,54,900

1,54,900

Statement of Affairs as on March 31, 2016

Liabilities

Assets

Creditors

93,000

Cash in Hand

8,700

Loan from Wife

57,000

Furniture

1,300

Stock

25,000

Land & Building

90,000

Capital Overdrawn (Balancing Figure)

25,000

1,50,000

1,50,000

Profit or Loss as on March 31, 2016

Particulars

End of the year capital

(25,000)

Add: Drawings for the year (1,500 × 7 + 4,500 × 5)

33,000

Less: Extra capital submitted during the year

50,000

Capital adjusted at the year-end

(42,000)

Less: Capital at the year starting

(18,900)

Loss for the year

(60,900)

Question 30

X who keeps incomplete records, gives you the following information:

1st April, 2016

31st March, 2017

Stock in hand

18,700

20,400

Debtors

12,000

14,000

Creditors

9,000

1,500

Bills Receivable

4,000

5,000

Bills Payable

1,000

200

Furniture

600

600

Building

12,000

12,000

Bank Balance

4,350

3,350

(Overdraft)

You are also given the following information:

(i) A provision of ₹ 1,450 is required for bad and doubtful debts.

(ii) Depreciation @ 5% is to be written off on Building and furniture.

(iii) Wages outstanding ₹ 3,000; salaries outstanding ₹ 1,200.

(iv) Insurance has been prepaid to the extent of ₹ 250.

(v) Legal Expenses outstanding ₹ 700.

(vi) Drawings of Mr. X during the year were ₹ 7,520.

Prepare a statement of Profit as on 31st March, 2017, and a final statement of affairs as at that date.

Solution:

Statement of Affairs as on March 31, 2016

Liabilities

Assets

Bills Payable

1,000

Cash at Bank

4,350

Creditors

9,000

Stock

18,700

Capital (Balancing Figure)

41,650

Debtors

12,000

Bills Receivable

4,000

Furniture

600

Building

12,000

51,650

51,650

Statement of Affairs as on March 31, 2017

Liabilities

Assets

Bills Payable

200

Stock

20,400

Creditors

1,500

Debtors

14,000

Bank Overdraft

3,350

Bills Receivable

5,000

Capital (Balancing Figure)

46,950

Furniture

600

Building

12,000

52,000

52,000

Profit or Loss as on March 31, 2017

Particulars

End of the year capital

46,950

Add: Drawings for the year

7,520

Less: Extra capital submitted during the year

Capital adjusted at the year-end

54,470

Less: Capital at the year starting

41,650

Profit Before Adjustment

12,820

Less: Furniture Depreciation

30

Less: Building Depreciation

600

Less: Provision for Doubtful Debts

1,450

Less: Wages Outstanding

3,000

Less: Salaries Outstanding

1,200

Less: Legal Expenses Outstanding

00

Add: Prepaid Insurance

250

Profit for the year

6,090

Final Statement of Affairs as on March 31, 2017

Liabilities

Assets

Creditors

1,500

Prepaid Insurance

250

Opening Capital

41,650

Bills Receivable

5,000

Add: Net Profit

6,090

Stock

20,400

Less: Drawings

7,520

40,220

Furniture

600

Outstanding Wages

3,000

Less: Depreciation

30

570

Outstanding Salaries

1,200

Debtors

14,000

Bills Payable

200

Less: Provision for Bad Debts

1,450

12,550

Bank Overdraft

3,350

Building

12,000

Outstanding Legal Expenses

700

Less: Depreciation

600

11,400

50,170

50,170

Question 31

The following information is available from Sachin, who maintains books of accounts on single entry system:

1st April, 2016

31st March, 2017

Cash and Bank

20,000

21,000

Sundry Debtors

17,000

25,000

Stock

40,000

60,000

Furniture

29,000

29,000

Sundry Creditors

32,000

22,000

10% Loan from Mrs. Sachin

30,000

30,000

Sachin withdrew ₹ 5,000 from the business every month for meeting his household expenses. During the year, he sold investments held by him privately for ₹ 35,000 and invested the amount in his business.

At the end of the year 2016-17, it was found that full year’s interest on loan from Mrs. Sachin had not been paid. Depreciation @ 10% per annum was to be provided on furniture for the full year. Shop assistant was to be given a share of 5% on the profits ascertained before charging such share.

Calculate profit earned during the year ended 31st March, 2017 by Sachin.

Solution:

Statement of Affairs as on April 01, 2016

Liabilities

Assets

10% Loan from Mrs. Sachin

30,000

Cash and Bank

20,000

Creditors

32,000

Debtors

17,000

Capital (Balancing Figure)

44,000

Stock

40,000

Furniture

29,000

1,06,000

1,06,000

Statement of Affairs as on March 31, 2017

Liabilities

Assets

10% Loan from Mrs. Sachin

30,000

Cash at Bank

21,000

Creditors

22,000

Debtors

25,000

Capital (Balancing Figure)

83,000

Stock

60,000

Furniture

29,000

1,35,000

1,35,000

Profit or Loss as on March 31, 2017

Particulars

End of the year capital

83,000

Add: Drawings for the year(5,000 × 12)

60,000

Less: Extra capital submitted during the year

35,000

Capital adjusted at the year-end

1,08,000

Less: Capital at the year starting

44,000

Profit Before Adjustment

64,000

Less: Furniture Depreciation

2,900

Less: Loan interest Outstanding

3,000

58,100

Less: Share of Shop Assistant(58,100 × 5/100)

2,905

Profit for the year

55,195

Statement of Affairs as on March 31,2017

Liabilities

Assets

Opening Capital

44,000

Cash at Bank

21,000

Add: Net Profit

55,195

Debtors

25,000

Add: Extra Capital added

35,000

Stock

60,000

Less: Drawings

60,000

74,195

Furniture

29,000

Creditors

22,000

Less: Depreciation

2,900

26,100

Shop’s Assistant Share

2,905

10% Loan from Sachin

30,000

Add: Interest Outstanding

3,000

33,000

1,32,100

1,32,100

Question 32

A retail Trader has not kept proper books of accounts. Ascertain his profit or loss for the year ending 31st March, 2017, and prepare a final statement of affairs from the following information:

1st April, 2016

31st March, 2017

Cash Balance

3,500

4,100

Bank Balance

Dr. 6,000

Cr. 15,000

Stock

22,000

36,400

Sundry Debtors

18,800

34,500

Sundry Creditors

12,100

8,000

Loan from X

10,000

Bills Receivable

4,000

Fixed Assets

40,000

60,000

He withdrew from the business ₹ 1,500 per month for his personal use and ₹ 8,000 for giving a personal loan to his brother. He also used a house for his personal purposes, the rent of which at the rate of ₹ 900 per month and electricity charges at an average rate of ₹ 250 per month were paid from the business account.

He had received a lottery prize of ₹ 25,000, out of which he invested half the amount in business.

He has not paid two months’ salary to his clerk @ ₹ 1,200 per month, but insurance premium @ ₹ 600 per annum was paid on 1st October, 2016 to run for one year.

Loan from X was taken on 1st July, 2016 on which interest was unpaid @ 18% p.a.

Fixed assets are to be depreciated @ 10% p.a.

Solution:

Statement of Affairs as on April 01, 2016

Liabilities

Assets

Creditors

12,100

Cash at Bank

6,000

Capital (Balancing Figure)

82,200

Stock

22,000

Debtors

18,800

Bills Receivable

4,000

Fixed Assets

40,000

Cash in Hand

3,500

94,300

94,300

Statement of Affairs as on March 31, 2017

Liabilities

Assets

Loan from X

10,000

Stock

36,400

Creditors

8,000

Debtors

34,500

Bank Overdraft

15,000

Cash

4,100

Capital (Balancing Figure)

1,02,000

Fixed Assets

60,000

1,35,000

1,35,000

Profit or Loss as on March 31, 2017

Particulars

End of the year capital

1,02,000

Add: Drawings for the year (WN)

39,800

Less: Extra capital submitted during the year ( \(\frac{25,000}{2}\) )

12,500

Capital adjusted at the year-end

1,29,300

Less: Capital at the year starting

82,200

Profit Before Adjustment

47,100

Less: Fixed Assets Depreciation

6,000

Less: Loan interest Outstanding

1,350

Less: Salary Outstanding

2,400

Add: Prepaid Insurance

300

Profit for the year

37,650

Final Statement of Affairs as on March 31, 2017

Liabilities

Assets

Creditors

8,000

Cash

4,100

Opening Capital

82,200

Stock

36,400

Add: Additional Capital

12,500

Debtors

34,500

Add: Net Profit

37,650

Prepaid Insurance

300

Less: Drawings

39,800

92,550

Fixed Assets

60,000

Outstanding Salary

2,400

Less: Depreciation

6,000

54,000

Loan from X

10,000

Bank Overdraft

15,000

Outstanding Interest on Loan

1,350

1,29,300

1,29,300

Working Note: Drawings Evaluation

Cash Withdrawn = ₹ 18,000

Loan to Brother = ₹ 8,000

Rent = ₹ 10,800

Electricity Charges = ₹ 3,000

= ₹ 39,800

Question 33

Gopal keeps incomplete records. On 1st April, 2016, his position was as follows:

Liabilities

Assets

Bank Overdraft

7,500

Cash

6,400

Sundry Creditors

15,000

Stock

52,000

Capital

1,64,500

Sundry Debtors

28,000

Fixed Assets

1,00,000

Prepaid Expenses

600

1,87,000

1,87,000

His position on 31st March, 2017 was as follows:

Cash in hand ₹ 3,000; Cash at Bank ₹ 5,000; Stock ₹ 44,000; Debtors ₹ 21,000; Fixed Assets ₹ 80,000; Creditors ₹ 22,000.

You are informed that Gopal has taken stocks worth ₹ 4,500 for his private use and that he has been regularly transferring ₹ 2,000 per month from his business banking account by way of drawings. Out of his drawings he spent ₹ 15,000 for purchasing a Scooter for the business on 1st October, 2016.

You are requested to find out his profit or loss and to prepare the Statement of Affairs after considering the following :

1. Depreciate Fixed Assets and Scooter by 10% p.a.

2. Write off Bad-Debts ₹ 1,000 and provide 5% for doubtful debts on Sundry Debtors.

3. Commission earned but not received by him was ₹ 2,500.

Solution:

Statement of Affairs as on March 31, 2017

Liabilities

Assets

Creditors

22,000

Cash at Bank

5,000

Capital (Balancing Figure)

1,46,000

Cash in Hand

3,000

Stock

44,000

Debtors

21,000

Fixed Assets

80,000

Scooter

15,000

1,68,000

1,68,000

Profit or Loss as on March 31, 2017

Particulars

End of the year capital

1,46,000

Add: Drawings for the year

(24,000 + 4,500 – 15,000)

13,500

Less: Extra capital submitted during the year

Capital adjusted at the year-end

1,59,500

Less: Capital at the year starting

1,64,500

Loss Before Adjustment

(5,000)

Less: Fixed Assets Depreciation on

8,000

Less: Scooter Depreciation

750

Less: Bad Debts

1,000

Less: Provision for Doubtful Debts

1,000

Add: Accrued Commission

2,500

Loss for the year

(13,250)

Final Statement of Affairs as on March 31, 2017

Liabilities

Assets

Creditors

22,000

Cash in Hand

3,000

Opening Capital

1,64,500

Cash at Bank

5,000

Less: Net Loss

13,250

Stock

44,000

Less: Drawings

13,500

1,37,750

Debtors

21,000

Less: Bad Debts

1,000

Less: Provision for Bad Debts

1,000

19,000

Fixed Assets

80,000

Less: Depreciation

8,000

72,000

Scooter

15,000

Less: Depreciation

750

14,250

Accrued Commission

2,500

1,59,750

1,59,750

Question 34

A retail trader did not keep his books on the double entry system. Following balances were obtained from his books:

1st April 2013

31st March 2014

Sundry Debtors

32,000

38,800

Sundry Creditors

20,300

24,600

Cash

6,000

Stock

22,000

28,000

Office Equipments

8,000

8,000

Machinery

30,000

40,000

Following further details of the transactions for the year ended 31st March, 2014 are available from his incomplete records:

Sales (including Cash Sales ₹ 62,000)

1,20,000

Purchases (including Cash Purchases ₹ 25,000)

72,000

Salaries

16,500

Drawings

8,500

Rent, Taxes & Insurance

7,100

Bad-Debts written off

2,400

You are required to prepare his Trading, P & L A/c and Balance Sheet after considering the following:

1. ₹ 1,500 are outstanding for salaries.

2. Insurance was unexpired to the extent of ₹ 800.

3. Goods worth ₹ 2,000 were used by the proprietor for personal use.

Solution:

Trading Account as on March 31, 2014

Dr.

Cr.

Particulars

Particulars

Opening Stock

22,000

Sales (Cash + Credit)

1,20,000

Purchases (Cash + Credit – Drawings)

70,000

Closing Stock

28,000

Gross Profit

56,000

1,48,000

1,48,000

Profit & Loss Account as on March 31, 2014

Dr.

Cr.

Particulars

Particulars

Salaries

16,500

Gross Profit

56,000

Add: Outstanding

1,500

18,000

Rent, Rates & Insurance

7,100

Less: Prepaid

800

6,300

Bad Debts

2,400

Net Profit

29,300

56,000

56,000

Balance Sheet as on March 31, 2014

Dr.

Cr.

Liabilities

Assets

Capital

77,700

Debtors

38,800

Less: Drawings

10,500

Cash

7,000

Add: Net Profit

29,300

96,500

Stock

28,000

Closing Creditors

24,600

Office Equipment

8,000

Outstanding Salary

1,500

Machinery

40,000

Unexpired Insurance

800

1,22,600

1,22,600

Working Notes:

Balance Sheet as on March 31, 2013

Dr.

Cr.

Liabilities

Assets

Creditors

20,300

Debtors

32,000

Capital (Balancing figure)

77,700

Cash

6,000

Stock

22,000

Office Equipments

8,000

Machinery

30,000

98,000

98,000

Cash Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

6,000

Creditors A/c

42,700

Debtors A/c

48,800

Purchases A/c

25,000

Sales A/c

62,000

Salary A/c

16,500

Drawings

8,500

Rent, Rates & Insurance

7,100

Machinery A/c

10,000

Balance c/d

Balancing Figure)

7,000

1,16,800

1,16,800

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

32,000

Cash A/c

48,800

Sales A/c

58,000

Bad-Debts A/c

2,400

Balance c/d

38,800

90,000

90,000

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

42,700

Balance b/d

20,300

Balance c/d

24,600

Purchases A/c

47,000

67,300

67,300

Question 35

Mr. Manoj keeps incomplete records. During the year 2014-15 the analysis of his cash book was as under:-

(₹

Receipts from Debtors

6,20,200

Bank Overdraft (1-4-2014)

16,500

Cash Sales

2,08,000

Salaries

22,000

Additional Capital introduced

50,000

Rent

11,000

Miscellaneous receipts

1,800

Payment to Creditors

5,20,000

Bank Overdraft (31-3-2015)

2,500

Furniture purchased (1-10-2014)

75,000

Cash Purchases

2,10,000

General Expenses

8,000

Drawings

20,000

8,82,500

8,82,500

Assets and Liabilities as on:

1st April, 2014

31st March, 2015

Sundry Debtors

62,000

?

Sundry Creditors

46,000

30,000

Stock

58,000

72,000

Furniture

25,000

?

Other Informations:

(i) Credit sales during the year were ₹ 7,00,000

(ii) Sales Returns were ₹ 10,000

(iii) Discount allowed to debtors ₹ 8,400

(iv) Discount received from creditors ₹ 6,000

(v) Bad-debts written off during the year ₹ 11,400

Adjustments:

(i) Write off further bad-debts ₹ 2,000.

(ii) Provide 5% for doubtful debts and 2% for discount on debtors and creditors.

(iii) Charge 10% p.a. depreciation on furniture.

(iv) One month salaries and one month rent was outstanding.

Prepare Trading and Profit & Loss Account for the year ended 31st March, 2015 and a Balance Sheet as at that date.

Solution:

Trading Account as on March 31, 2015

Dr.

Cr.

Particulars

Particulars

Opening Stock

58,000

Sales (Cash + Credit – Returns)

8,98,000

Purchases (Cash + Credit)

7,20,000

Closing Stock

72,000

Gross Profit

1,92,000

9,70,000

9,70,000

Profit & Loss Account as on March 31, 2015

Dr.

Cr.

Particulars

Particulars

Salaries

22,000

Gross Profit

1,92,000

Add: Outstanding

2,000

24,000

Provision for Discount on Creditors

600

Rent

11,000

Miscellaneous Receipts

1,800

Add: Outstanding

1,000

12,000

Discount Received

6,000

General Expenses

8,000

Bad Debts (2,000 + 11,400)

13,400

Add: Provision for Doubtful Debts

5,500

18,900

Provision for Discount on Debtors

2,090

Discount Allowed

8,400

Depreciation on Furniture (2,500 + 3,750)

6,250

Net Profit

1,20,760

2,00,400

2,00,400

Balance Sheet as on March 31, 2015

Dr.

Cr.

Liabilities

Assets

Capital (82,500 + 50,000)

1,32,500

Debtors (1,12,000 – 2,000 –5,500 – 2,090)

1,02,410

Less: Drawings

20,000

Stock

72,000

Add: Net Profit

1,20,760

2,33,260

Furniture (25,000 + 75,000 – 6,250)

93,750

Closing Creditors (30,000 – 600)

29,400

Outstanding Salary

2,000

Outstanding Rent

1,000

Bank Overdraft

2,500

2,68,160

2,68,160

Working Notes:

Balance Sheet as on March 31, 2014

Dr.

Cr.

Liabilities

Assets

Creditors

46,000

Debtors

62,000

Loan

16,500

Stock

58,000

Capital (Balancing figure)

82,500

Furniture

25,000

1,45,000

1,45,000

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

62,000

Cash A/c

6,20,200

Sales A/c

7,00,000

Sales Return A/c

10,000

Discount Allowed A/c

8,400

Bad Debts A/c

11,400

Balance c/d

1,12,000

7,62,000

7,62,000

Creditor Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

5,20,000

Balance b/d

46,000

Discount Received A/c

6,000

Purchases A/c

5,10,000

Balance c/d

30,000

5,56,000

5,56,000

Question 36

Sh. Param Bhushan does not maintain proper books of accounts. From the following, prepare his trading and profit & loss account for the year ended 31st March, 2015, together with balance sheet as at that date:

Liabilities

(₹)

Assets

(₹)

Sundry Creditors

80,000

Cash

22,000

Outstanding Salaries

4,000

Sundry Debtors

1,50,000

Capital

8,08,000

Stock

1,20,000

Plant and Machinery

2,00,000

Freehold Premises

4,00,000

8,92,000

8,92,000

Cash book analysis shows the following:

Payment to Creditors

4,00,000

Staff Salaries

76,000

Rent Paid

17,300

General Expenses (including insurance premium of

₹ 2,400 paid on 1st January 2015 to run for one year)

8,700

Personal Withdrawals

12,000

Received from Debtors

5,50,000

Cash Sales

1,10,000

Purchase of Computers (on 1st January, 2015)

40,000

Purchase of Furniture (on 1st January, 2015)

60,000

The following further information is available:

Closing Stock ₹ 1,35,000; Closing Debtors ₹ 1,92,000; Closing Creditors ₹ 72,000; Outstanding Salaries at the end ₹ 6,000; General Expenses include ₹ 5,000 for house rent of Sh. Param Bhushan and Cash Sale include ₹ 30,000 for sale of his personal jewellery.

Create a provision of \(2\frac{1}{2}\)% for doubtful debts and depreciate plant and machinery by 10% p.a. and computers and furniture by 20% p.a. Also provide 5% for group incentive commission to staff on net profit after charging such commission.

Solution:

Trading Account as on March 31, 2015

Dr.

Cr.

Particulars

Particulars

Opening Stock

1,20,000

Sales (Cash + Credit)

6,72,000

Purchases (Credit)

3,92,000

Closing Stock

1,35,000

Gross Profit

2,95,000

8,07,000

8,07,000

Profit & Loss Account as on March 31, 2015

Dr.

Cr.

Particulars

Particulars

Staff Salaries

76,000

Gross Profit

2,95,000

Rent Paid

17,300

General Expenses

1,300

Insurance Premium

600

Outstanding Salaries (6,000 – 2,000)

2,000

Provision for Doubtful Debts

4,800

Depreciation on

Plant & Machinery

20,000

Computer

2,000

Furniture

3,000

25,000

Staff Commission

8,000

Net Profit

1,60,000

2,95,000

2,95,000

Balance Sheet as on March 31, 2015

Dr.

Cr.

Liabilities

Assets

Capital (8,08,000 + 30,000)

8,38,000

Cash

68,000

Less: Drawings

17,000

Debtors (1,92,000 – 4,800)

1,87,200

Add: Net Profit

1,60,000

9,81,000

Stock

1,35,000

Closing Creditors

72,000

Plant & Machinery (2,00,000 – 20,000)

1,80,000

Outstanding Salary

6,000

Computer (40,000 – 2,000)

38,000

Staff Commission Payable

8,000

Furniture (60,000 – 3,000)

57,000

Freehold Premises

4,00,000

Prepaid Insurance Premium

1,800

10,67,000

10,67,000

Working Notes:

Cash Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

22,000

Creditors A/c

4,00,000

Debtors A/c

5,50,000

Staff Salaries

76,000

Sales A/c

80,000

Rent

17,300

Capital A/c

30,000

General Expenses

3,700

Drawings (12,000 + 5,000)

17,000

Computer

40,000

Furniture

60,000

Balance c/d

(Balancing Figure)

68,000

6,82,000

6,82,000

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

1,50,000

Cash A/c

5,50,000

Sales A/c

5,92,000

Balance c/d

1,92,000

7,42,000

7,42,000

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

4,00,000

Balance b/d

80,000

Balance c/d

72,000

Purchases A/c

3,92,000

4,72,000

4,72,000

Question 37

From the following particulars, ascertain the value of Opening Stock:-

Purchases

60,000

Wages

3,000

Sales

1,05,000

Carriage Outwards

1,200

Closing Stock

20,000

Rate of Gross Profit on cost of goods sold

50%

Solution:

Gross Profit Rate (on cost) = 50%

Gross Profit Rate (on sales) = 33.33%

Gross Profit = 33.33% of (1,05,000) = ₹ 35,000

Gross Profit = Net Sales – Cost of Goods Sold

₹ 35,000 =₹ 1,05,000 – Cost of Goods Sold

Similarly, Cost of Goods Sold =₹ 1,05,000 – ₹35,000 = ₹ 70,000

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

₹ 70,000 = Opening Stock + ₹60,000 + ₹3,000 – ₹20,000

Opening Stock = ₹70,000 – ₹60,000 – ₹3,000 + ₹20,000 = ₹27,000

Question 38

Mr. Bhardwaj has kept incomplete records. He submits to you the following information:

Sundry Creditors

18,000

Cash at Bank

7,600

Capital

82,000

Sundry Debtors

42,400

Stock

20,000

Machinery

30,000

1,00,000

1,00,000

Bhardwaj banks all receipts and makes all payments only by means of cheques. Following is the analysis of his bank transactions:

Receipt from Debtors

96,400

Payment to Creditors

62,500

Payment of Freight & Carriage

2,000

Payment of Office Expenses

10,800

Drawings

12,200

Sundry Debtors on 31st March, 2015 were ₹ 36,000 and Sundry Creditors were ₹ 25,000. No information is available regarding stock-in-trade on 31st March, 2015, but it is ascertained that Mr. Bhardwaj takes 20% profit on Sales. Prepare Bhardwaj’s Bank A/c, Trading and Profit & Loss A/c and a Balance Sheet as at 31st March, 2015.

Solution:

Trading Account as on 31st december, 2007

Dr.

Cr.

Particulars

Particulars

Opening Stock

20,000

Sales (Credit)

90,000

Purchases (Credit)

69,500

Closing Stock

19,500

Freight & Carriage

2,000

Gross Profit

18,000

1,09,500

1,09,500

Profit & Loss Account as on 31st december, 2007

Dr.

Cr.

Particulars

Particulars

Office Expenses

10,800

Gross Profit

18,000

Net Profit

7,200

18,000

18,000

Balance Sheet as on 31st December, 2007

Dr.

Cr.

Liabilities

Assets

Capital

82,000

Cash at Bank

16,500

Less: Drawings

12,200

Debtors

36,000

Add: Net Profit

7,200

77,000

Stock

19,500

Closing Creditors

25,000

Machinery

30,000

1,02,000

1,02,000

Working Notes:

Bank Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

7,600

Creditors A/c

62,500

Debtors A/c

96,400

Freight & Carriage A/c

2,000

Office Expenses A/c

10,800

Drawings A/c

12,200

Balance c/d

(Balancing Figure)

16,500

1,04,000

1,04,000

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

42,400

Bank A/c

96,400

Sales A/c

90,000

Balance c/d

36,000

1,32,400

1,32,400

Creditors Account

Dr.

Cr.

Particulars

Particulars

Bank A/c

62,500

Balance b/d

18,000

Balance c/d

25,000

Purchases A/c

69,500

87,500

87,500

Rate of Gross Profit (on sales) = 20%

Gross Profit = 20% of 90,000 = 18,000

Gross Profit = Net Sales – Cost of Goods Sold

₹18,000 =₹ 90,000 – Cost of Goods Sold

Cost of Goods Sold = ₹90,000 – ₹18,000 = ₹ 72,000

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

₹72,000 = ₹20,000 +₹ 69,500 + ₹2,000 – Closing Stock

Closing Stock = ₹20,000 + ₹69,500 + ₹2,000 – ₹72,000 = ₹19,500

Question 39

From the following records kept on single entry basis, prepare final accounts assuming that ratio of gross profit to sales is 25%:

1-1-2007

31-12-2007

Cash at Bank

1,400

1,800

Debtors

?

2,400

Stock

?

1,700

Fixed Assets

10,000

10,000

Creditors

1,600

?

Loan

1,000

800

Transactions during the year 2007:

Collections from debtors

9,300

Cash Sales

1,000

Credit Sales

9,000

Payment to Creditors

6,100

Cash Purchases

1,600

Credit Purchase

6,400

Drawings

1,000

Business Expenses

1,000

Discount Received

200

Discount Allowed

100

Solution:

Trading Account as on 31st december, 2007

Dr.

Cr.

Particulars

Particulars

Opening Stock

1,200

Sales (Cash + Credit)

10,000

Purchases (Cash + Credit)

8,000

Closing Stock

1,700

Gross Profit

2,500

11,700

11,700

Profit & Loss Account as on 31st december, 2007

Dr.

Cr.

Particulars

Particulars

Business Expenses

1,000

Gross Profit

2,500

Discount Allowed

100

Discount Received

200

Net Profit

1,600

2,700

2,700

Balance Sheet as on 31st december, 2007

Dr.

Cr.

Liabilities

Assets

Capital

12,800

Cash at Bank

1,800

Less: Drawings

1,000

Debtors

2,400

Add: Net Profit

1,600

13,400

Stock

1,700

Closing Creditors

1,700

Fixed Assets

10,000

Loan

800

15,900

15,900

Working Notes:

Balance Sheet as on January01, 2007

Dr.

Cr.

Liabilities

Assets

Creditors

1,600

Cash at Bank

1,400

Loan

1,000

Debtors

2,800

Capital (Balancing figure)

12,800

Stock

1,200

Fixed Assets

10,000

15,400

15,400

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

2,800

Cash A/c

9,300

Sales A/c

9,000

Discount Allowed A/c

100

Balance c/d

2,400

11,800

11,800

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

6,100

Balance b/d

1,600

Discount Received A/c

200

Purchases A/c

6,400

Balance c/d

1,700

8,000

8,000

Rate of Gross Profit (on sales) = 25%

Gross Profit = 25% of (1,000 + 9,000) = ₹2,500

Gross Profit = Net Sales – Cost of Goods Sold

₹2,500 = ₹10,000 – Cost of Goods Sold

Cost of Goods Sold = ₹10,000 – ₹2,500 = ₹ 7,500

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

₹7,500 = Opening Stock + ( ₹1,600 + ₹6,400) + 0 – ₹1,700

Opening Stock = ₹7,500 – ₹8,000 + ₹1,700 = ₹ 1,200

Question 40

Sonam keeps his books on single entry and provides you with the following information:

31-12-2006

31-12-2007

Furniture and Fitting

50,000

60,000

Stock

30,000

10,000

Sundry Debtors

60,000

70,000

Sundry Creditors

20,000

NIL

Prepaid Expenses

NIL

2,000

Outstanding Expenses

6,000

10,000

Cash in hand

11,000

3,000

Receipts and Payments in 2007:

Receipts from Debtors

2,10,000

Paid to Creditors

1,00,000

Cartage

20,000

Drawings

1,20,000

Sundry Expenses

1,60,000

Furniture Purchased for Cash

10,000

Prepare Trading and Profit & Loss Account for the year ended 31 December, 2007 after providing for bad debts at 10%.

There was a considerable amount of Cash Sales.

Solution:

Trading Account as on March 31, 2007

Dr.

Cr.

Particulars

Particulars

Opening Stock

30,000

Sales (Cash + Credit)

4,12,000

Purchases (Credit)

80,000

Closing Stock

10,000

Cartage

20,000

Gross Profit

2,92,000

4,13,000

4,13,000

Profit & Loss Account as on March 31, 2007

Dr.

Cr.

Particulars

Particulars

Sundry Expenses

1,60,000

Gross Profit

2,92,000

Provision for Bad Debts

7,000

Prepaid Expenses

2,000

Outstanding Expenses

4,000

Net Profit

1,23,000

2,94,000

2,94,000

Balance Sheet as on March 31, 2007

Dr.

Cr.

Liabilities

Assets

Capital

1,25,000

Furniture & Fittings

60,000

Less: Drawings

1,20,000

Stock

10,000

Add: Net Profit

1,23,000

1,28,000

Debtors (70,000 – 7,000)

63,000

Outstanding Expenses

10,000

Prepaid Expenses

2,000

Cash in hand

3,000

1,38,000

1,38,000

Working Notes:

Balance Sheet as on March 31, 2006

Dr.

Cr.

Liabilities

Assets

Creditors

20,000

Furniture & Fittings

50,000

Outstanding Expenses

6,000

Stock

30,000

Capital (Balancing figure)

1,25,000

Debtors

60,000

Cash in hand

11,000

1,51,000

1,51,000

Cash Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

11,000

Creditors A/c

1,00,000

Debtors A/c

2,10,000

Cartage A/c

20,000

Sales A/c (Balancing Figure)

1,92,000

Drawings A/c

1,20,000

Sundry Expenses A/c

1,60,000

Furniture A/c

10,000

Balance c/d

3,000

4,13,000

4,13,000

Debtors Account

Dr.

Cr.

Particulars

Particulars

Balance b/d

60,000

Cash A/c

2,10,000

Sales A/c

2,20,000

Balance c/d

70,000

2,80,000

2,80,000

Creditors Account

Dr.

Cr.

Particulars

Particulars

Cash A/c

1,00,000

Balance b/d

20,000

Purchases A/c

80,000

1,00,000

1,00,000

Question 41

Ascertain the value of Closing Stock from the following:

Stock in the beginning

18,000

Purchases

69,000

Sales

1,02,000

Sales Return

2,000

Freight

10,000

Rate of G.P. on cost is 25%.

Solution:

Rate of Gross Profit (on cost) = 25%

Rate of Gross Profit (on sales) = 20%

Gross Profit = 20% of 1,00,000 = ₹20,000

Gross Profit = Net Sales – Cost of Goods Sold

₹20,000 = ₹1,00,000 – Cost of Goods Sold

Cost of Goods Sold = ₹1,00,000 – ₹20,000 = ₹ 80,000

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

₹80,000 = ₹18,000 + ₹69,000 + ₹10,000 – Closing Stock

Closing Stock = ₹18,000 + ₹69,000 + ₹10,000 – ₹80,000 = ₹ 17,000

Also Check: DK Goel Solution for Chapter 24 Introduction to Computers
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