NCERT Solution for Class 11 Accountancy Chapter 9 - Financial Statements - 1

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NCERT Solution For Class 11 Commerce Accountancy Chapter 9 â€“ Financial Statements â€“ 1 furnishes us with an all-inclusive data to all the concepts. As the students would have to learn the basic fundamentals about the subject of Accountancy in Class 11, this curriculum is a comprehensive study material, which explains the concepts in a great way.

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Short Answers for NCERT Accountancy Solutions Class 11 Chapter 9

1. What are the objectives of preparing financial statements?

Financial statements are prepared with the following objective:

1. Determine the financial position of a business.

2. Ascertain the financial performance of the business.

3. To measure the changes in financial position of a business.

4. To compare financial performance of business both intra and inter farm wise.

2. What is the purpose of preparing trading and profit and loss account?

Trading account is prepared for the following purpose:

1. To determine the gross profit or loss in a financial year or period.

2. Determine the ratio of gross profit to sales.

3. To determine ratio of direct expense to sales.

Profit and Loss account is prepared for the following purpose:

1. Determining net profit or loss incurred by the business

2. To comply with statutory requirements such as Company act or Partnership Act

3. Explain the concept of cost of goods sold.

Costs incurred in production of goods that are sold by company is known as Cost of Goods Sold or COGS

No goods left out: In this case all goods are sold out. Hence, it can be calculated as:

Cost of goods sold = Purchases + Direct Expenses

Presence of a closing stock: There can be some stock that are yet to get sold at the end of accounting period. At that time it can be calculated as:

Cost of goods sold = Purchases + Direct Expenses â€“ Closing Stock

Presence of an Opening stock: Stock that is carried forward at the beginning of the accounting period from the previous accounting period is considered as opening stock and is calculated as:

Cost of goods sold = Opening Stock + Purchases + Direct Expenses â€“ Closing Stock

4. What is a balance sheet? What are its characteristics?

A statement prepared to determine assets and values of a business on a particular date is known as Balance Sheet. Debits represent the assets while credits signify the liabilities.

It has the following characteristics:

1. Reflects financial position of a business.

2. It is dependent on other statements such as trading and P & L account.

3. It is prepared at the end of an accounting period.

4. The balance of both sides should tally.

5. Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure:

(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.

(b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.

(c) Registration fees paid at the time of purchase of a building

(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.

(e) Depreciation charged on a plant.

(f) The expenditure incurred in erecting a platform on which a machine will be fixed.

(g) Advertising expenditure, the benefits of which will last for four years.

 Basis of Difference Capital Expenditure Revenue Expenditure Meaning Expenditure beared for acquiring or improving an asset. Expenses beared for running daily business activities Term Long Term, can span many accounting periods Short term limited to an accounting period Benefits Benefits can be achieved across many accounting periods Benefits can be availed only in the current year Nature Non-recurring Recurring Shown in It is shown in Income Statement and Balance Sheet It is shown in Income statement

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(a) Capital expenditure

(b) Revenue expenditure

(c) Capital expenditure

(d) Capital expenditure

(e) Revenue expenditure

(f) Capital expenditure

(g) Deferred revenue expenditure

6. What is an operating profit?

Operating profit referred to as EBIT, is an accounting metric that measures, the profits a company generates from its core business functions. It does not take into account interest deduction and exclusion of tax from calculation. The following equation is used to calculate the operating profit.

The following equation can be used to represent

Operating Profit = Net Profit + Non-Operating Expenses â€“ Non Operating Incomes

Long Answers for NCERT Accountancy Solutions Class 11 Chapter 9

1. What are financial statements? What information do they provide?

Statements that contain financial information about business which can satisfy the information requirements of internal and external users are known as financial statements. It serve as a source of financial information that caters to diverse information requirement of users. It is prepared with the purpose of representing a true and fair view of business.

To do so it requires the creation of three statements namely, trading and profit and loss account and balance sheet.

The financial statements related to gross/net profit or loss, the assets and liabilities. The users of information can be the following:

Current Owners: These internal users would like to know the profits in the previous accounting period and current position of the assets and liabilities.

Government: Government is an external user and want to know the financial position of a business so that stakeholderâ€™s rights are protected.

Prospective Owner: These external users would like to know the past profits and financial position and also the future performance of the business to make an informed decision whether to invest in the business or not

2. What are closing entries? Give four examples of closing entries.

A journal entry that is made at the end of an accounting period that transfers balances from the temporary accounts to a permanent account is known as closing entries. Some examples are here as follows:

1. The purchases returns are closed by transferring the balance in purchases account. Following entries are made:

Purchases return A/c

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To Purchases A/c

2. Sales return account is closed by transfer of balance to sales account. Entries will be

Sales A/c

Dr

To Sales return A/c

3. Purchases account closed by transferring to debit side of trading and P & L Account

Dr

To Purchases A/c

4. Sales account closed by transferring balance to credit side of trading and P & L account.

Sales A/c

Dr.

3. Discuss the need of preparing a balance sheet.

Balance sheet needs to be prepared due to following reasons:

1. To show financial position of business.

2. To show much assets and liabilities a business has

3. It serves as information source for internal and external users

4. It acts as a reference for balances that need to be carried forward

5. To gather an idea about the liquidity of the firm or business

6. Helps management in planning and controlling business operations.

4. What is meant by Grouping and Marshalling of assets and liabilities? Explain the ways in which a balance sheet may be marshalled.

Grouping refers to including assets and liabilities of similar nature under o common heading. For example different types of creditors can be placed in one heading. Similarly work in progress, raw material and finished goods can be placed.

Marshalling refers to arranging of assets and liabilities in order of liquidity and permanence.

In order of Liquidity: It shows how easily an asset can be converted into cash or a liability can be paid off. The asset examples arranged as follows:

1. Cash

2. Bank

3. Debtors

In order of permanence: In this system the most important asset or a liability gets the top position in balance sheet and remaining assets are arranged in reducing level of permanence: For e.g.

1. Debtors

2. Bank

3. Cash

Similarly, liabilities in order of permanence is as follows:

1.Capital

2. Long term loan

3. Creditors

Numerical Answers for NCERT Accountancy Solutions Class 11 Chapter 9

1. From the following balances taken from the books of Simmi and Vimmi Ltd.

for the year ending March 31, 2017, calculate the gross profit.

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Closing stock 2,50,000

Net sales during the year 40,00,000

Net purchases during the year 15,00,000

Opening stock 15,00,000

Direct expenses 80,000

The gross profit is calculated below:

 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 15,00,000 Net Sales 40,00,000 Net Purchases 15,00,000 Closing Stock 2,50,000 Direct Expenses 80,000 Gross Profit 11,70,000 42,50,000 42,50,000

Therefore, the Gross Profit is â‚¹ 11, 70,000.

2. From the following balances extracted from the books of M/s Ahuja and Nanda. Calculate the amount of:

(a) Cost of goods available for sale

(b) Cost of goods sold during the year

(c) Gross Profit

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Opening stock 25,000

Credit purchases 7,50,000

Cash purchases 3,00,000

Credit sales 12,00,000

Cash sales 4,00,000

Wages 1,00,000

Salaries 1,40,000

Closing stock 30,000

Sales return 50,000

Purchases return 10,000

a)Â Cost of Goods Sold Available for Sales

Or

Cost of Goods ManufacturedÂ = Opening Stock + Net Purchases + Wages

= 25,000 + 10, 40,000Â + 1, 00,000

= â‚¹ 11, 65,000

(b)Â Cost of Goods SoldÂ = Opening Stock + Net Purchases + Wages â€“ Closing Stock

= 25,000 + 10, 40,000Â + 1, 00,000 â€“ 30,000

= â‚¹ 11, 35,000

Or

Cost of Goods SoldÂ = Net Sales â€“ Gross Profit

= 15, 50,000 â€“ 4, 15,000

= â‚¹ 11, 35,000

(c)

 Trading Account Dr. Cr. ParticularsÂ Amount â‚¹ Particulars Amount â‚¹ Opening Stock 25,000 Sales Purchases Add: Credit Sales 12,00,000 Add: Credit Purchases 7,50,000 Add: Cash Sales 4,00,000 Add: Cash Purchases 3,00,000 16,00,000 10,50,000 Less: Sales Return (50,000) 15,50,000 Less: Purchases Return (10,000) 10,40,000 Wages 1,00,000 Closing Stock 30,000 Gross Profit 4,15,000 15,80,000 15,80,000

3. Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv and Sons for the year ended March 31, 2017.

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Opening stock 50,000

Net sales 11,00,000

Net purchases 6,00,000

Direct expenses 60,000

Selling and distribution expenses 65,000

Loss due to fire 20,000

Closing stock 70,000

The solution is as follows:

 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 50,000 Net Sales 11,00,000 Net Purchases 6,00,000 Closing Stock 70,000 Direct Expenses 60,000 Gross Profit 4,60,000 11,70,000 11,70,000
 Operating Profit = Sales â€“ (Opening Stock + Net Purchases + Direct Expenses + Administration Expenses + Selling and Distribution Expenses) + Closing Stock Â = 11,00,000 â€“ (50,000 + 6,00,000 + 60,000 + 45,000 + 65,000) + 70,000 Â = â‚¹ 3,50,000

4. Operating profit earned by M/s Arora and Sachdeva in 2016-17 was â‚¹ 17, 00,000. Its non-operating incomes were â‚¹ 1, 50,000 and non-operating expenses were â‚¹ 3, 75,000. Calculate the amount of net profit earned by the firm.

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Net Profit = Operating Profit + Non-operating Income â€“ Non-operating Expenses

= 17, 00,000 + 1, 50,000 â€“ 3, 75,000

= â‚¹ 14, 75,000

Net profit earned by M/S Arora and Sachdeva in 2016â€“17 is â‚¹ 14, 75,000

5. The following are the extracts from the trial balance of M/s Bhola and Sons as on March 31, 2017

 Account title Debit â‚¹ Credit â‚¹ Opening Stock 2,00,000 Â Purchases 8,10,000 Â Sales Â 10,10,000 Â 10,10,000 10,10,000 Â Â Â

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(Only relevant items)

Closing Stock as on date was valued at â‚¹ 3, 00,000.

You are required to record the necessary journal entries and show how the above items will appear in the trading and profit and loss account and balance sheet of M/s Bhola and Sons.

 Books of M/sÂ BholaÂ and Sons Journal Date Particulars L.F. Debit Amount â‚¹ Credit Amount â‚¹ 2017 Â Â Mar.31 Trading A/c Dr. 10,10,000 Â To Opening Stock A/c 2,00,000 To Purchases A/c 8,10,000 (Balances from Purchases Account and Stock Account transferred to Trading Account) Mar.31 Sales A/c Dr. 10,10,000 Closing Stock A/c 3,00,000 To Trading A/c 13,10,000 (Balance from sales and closing stock transferred to Trading Account) Â Mar.31 Trading A/c Dr. 3,00,000 To Profit and Loss (Gross Profit) A/c 3,00,000 (Balance of Trading Account (gross profit) transferred to Profit and Loss Account)
 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 2,00,000 Sales 10,10,000 Purchases 8,10,000 Closing Stock 3,00,000 Profit and Loss A/c â€“ Gross Profit 3,00,000 13,10,000 13,10,000
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Closing Stock 3,00,000

6. Prepare trading and profit and loss account and balance sheet, as on March 31, 2017:

 Account Title Amount â‚¹ Account Title Amount â‚¹ Machinery 27,000 Capital 60,000 Sundry debtors 21,600 Bills payable 2,800 Drawings 2,700 Sundry creditors 1,400 Purchases 58,500 Sales 73,500 Wages 15,000 Â Â Sundry expenses 600 Â Â Rent and taxes 1,350 Â Â Carriage inwards 450 Â Â Bank 4,500 Â Â Openings stock 6,000 Â Â

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Closing stock, as on March 31, 2017 â‚¹ 22,400

Trading and profit and loss account and balance sheet is prepared as follows:

 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 6,000 Sales 73,500 Purchases 58,500 Closing Stock 22,400 Wages 15,000 Carriage Inwards 450 Profit and Loss (Gross Profit) 15,950 95,900 95,900
 Profit and Loss AccountÂ as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Sundry Expenses 600 Trading (Gross Profit) 15,950 Rent and Taxes 1,350 Net Profit 14,000 15,950 15,950
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 60,000 Fixed AssetsÂ Add: Net Profit 14,000 Machinery 27,000 74,000 Less: Drawings 2,700 71,300 Current AssetsÂ Bank 4,500 Sundry Creditors 1,400 Closing Stock 22,400 Bills Payable 2,800 Sundry Debtors 21,600 75,500 75,500

7. The following trial balance is extracted from the books of M/s Ram on March 31, 2017. You are required to prepare trading and profit and loss account and the balance sheet as on date:

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 Account title Amount â‚¹ Account title Amount â‚¹ Debtors 12,000 Apprenticeship premium 5,000 Purchases 50,000 Loan 10,000 Coal, gas and water 6,000 Bank overdraft 1,000 Factory wages 11,000 Sales 80,000 Salaries 9,000 Creditors 13,000 Rent 4,000 Capital 20,000 Discount 3,000 Â Â Advertisement 500 Â Â Drawings 1,000 Â Â Loan 6,000 Â Â Petty cash 500 Â Â Sales return 1,000 Â Â Machinery 5,000 Â Â Land and building 10,000 Â Â Income tax 100 Â Â Furniture 9,900 Â Â

Trading and profit and loss account and balance sheet is prepared as follows:

 Trading Account as on March 31, 2017 Dr. Â Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Purchases 50,000 Sales 80,000 Coal, Gas and Water 6,000 Less: Sales Return 1,000 79,000 Factory Wages 11,000 Profit and Loss (Gross Profit) 12,000 79,000 79,000
 Profit and Loss Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Salaries 9,000 Trading (Gross Profit) 12,000 Rent 4,000 Apprenticeship Premium 5,000 Discount 3,000 Advertisement 500 Net Profit 500 17,000 17,000
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 20,000 Machinery 5,000 Add: Profit and Loss (Net Profit) 500 Land and Building 10,000 20,500 Furniture 9,900 Less: Drawings (1,000) Loan (Given) 6,000 Less: Income Tax (100) 19,400 Debtors 12,000 Petty Cash 500 Loan (Taken) 10,000 Creditors 13,000 Bank Overdraft 1,000 43,400 43,400

8. The following is the trial balance of Manju Chawla on March 31, 2017. You are required to prepare trading and profit and loss account and a balance sheet as on date:

 Account title Debit Amount â‚¹ Credit Amount â‚¹ Opening stock 10,000 Â Purchases and sales 40,000 80,000 Returns 200 600 Productive wages 6,000 Â Dock and Clearing charges 4,000 Â Donation and charity 600 Â Delivery van expenses 6,000 Â Lighting 500 Â Sales tax collected Â 1,000 Bad debts 600 Â Misc. incomes Â 6,000 Rent from tenants Â 2,000 Royalty 4,000 Â Capital Â 40,000 Drawings 2,000 Â Debtors and Creditors 6,000 7,000 Cash 3,000 Â Investment 6,000 Â Patents 4,000 Â Land and Machinery 43,000 Â

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Closing stock â‚¹ 2,000.

Trading and profit and loss account and balance sheet is prepared as follows:

 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 10,000 Sales 80,000 Purchases 40,000 Less: Sales Returns (200) 79,800 Less: Purchases Returns (600) 39,400 Productive Wages 6,000 Closing Stock 2,000 Dock and Clearing Charges 4,000 Royalty 4,000 Profit and Loss (Gross Profit) 18,400 81,800 81,800
 Profit and Loss AccountÂ as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Donation and Charity 600 Trading (Gross Profit) 18,400 Delivery Van Expenses 6,000 Misc. Incomes 6,000 Lighting 500 Rent from Tenants 2,000 Bad Debts 600 Net Profit 18,700 26,400 26,400
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 40,000 Patents 4,000 Add: Profit and Loss (Net Profit) 18,700 Land and Machinery 43,000 58,700 Investment 6,000 Less: Drawings (2,000) 56,700 Debtors 6,700 Cash 3,000 Sales Tax Collected 1,000 Closing Stock 2,000 Creditors 7,000 64,700 64,700

9. The following is the Trial Balance of Mr. Deepak as on March 31, 2017. You are required to prepare trading account, profit and loss account and a balance sheet as on date:

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 Account title Debit Amount â‚¹ Account title Credit Amount â‚¹ Drawings 36,000 Capital 2,50,000 Insurance 3,000 Bills payable 3,600 General expenses 29,000 Creditors 50,000 Rent and taxes 14,400 Discount received 10,400 Lighting (factory) 2,800 Purchases return 8,000 Travelling expenses 7,400 Sales 4,40,000 Cash in hand 12,600 Â Â Bills receivable 5,000 Â Â Sundry debtors 1,04,000 Â Â Furniture 16,000 Â Â Plant and Machinery 1,80,000 Â Â Opening stock 40,000 Â Â Purchases 1,60,000 Â Â Sales return 6,000 Â Â Carriage inwards 7,200 Â Â Carriage outwards 1,600 Â Â Wages 84,000 Â Â Salaries 53,000 Â Â

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Closing stock â‚¹ 35,000.

The trading account, profit and loss account and a balance sheet are prepared below:

 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 40,000 Sales 4,40,000 Purchases 1,60,000 Less: Sales Return 6,000 4,34,000 Less: Purchases Return (8,000) 1,52,000 Closing Stock 35,000 Lighting (Factory) 2,800 Carriage Inwards 7,200 Wages 84,000 Profit and Loss (Gross Profit) 1,83,000 4,69,000 4,69,000
 Profit and Loss Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Insurance 3,000 Trading (Gross Profit) 1,83,000 General Expenses 29,000 Discount Received 10,400 Rent and Taxes 14,400 Travelling Expenses 7,400 Carriage Outwards 1,600 Salaries 53,000 Net Profit 85,000 1,93,400 1,93,400
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 2,50,000 Plant and Machinery 1,80,000 Add: Net Profit 85,000 Furniture 16,000 3,35,000 Sundry Debtors 1,04,000 Less: Drawings (36,000) 2,99,000 Closing Stock 35,000 Bills Receivable 5,000 Creditors 50,000 Cash in Hand 12,600 Bills Payable 3,600 3,52,600 3,52,600

10. Prepare trading and profit and loss account and balance sheet from the following particulars as on March 31, 2017.

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 Account Title Debit Amount â‚¹ Credit Amount â‚¹ Purchases and Sales 3,52,000 5,60,000 Return inwards and Return outwards 9,600 12,000 Carriage inwards 7,000 Â Carriage outwards 3,360 Â Fuel and power 24,800 Â Opening stock 57,600 Â Bad debts 9,950 Â Debtors and Creditors 1,31,200 48,000 Capital Â 3,48,000 Investment 32,000 Â Interest on investment Â 3,200 Loan Â 16,000 Repairs 2,400 Â General expenses 17,000 Â Wages and salaries 28,800 Â Land and buildings 2,88,000 Â Cash in hand 32,000 Â Miscellaneous receipts Â 160 Sales tax collected Â 8,350

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Closing stock â‚¹ 30,000.

Trading and profit and loss account and balance sheet for the question is posted below:

 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 57,600 Sales 5,60,000 Purchases 3,52,000 Less: Return Inwards (9,600) 5,50,400 Less: Return Outwards (12,000) 3,40,000 Closing Stock 30,000 Carriage Inwards 7,000 Fuel and Power 24,800 Wages and Salaries 28,800 Profit and Loss (Gross Profit) 1,22,200 5,80,400 5,80,400
 Profit and Loss AccountÂ as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Carriage Outwards 3,360 Trading (Gross Profit) 1,22,200 Bad Debts 9,950 Interest on Investment 3,200 Repairs 2,400 Miscellaneous Receipts 160 General Expenses 17,000 Net Profit 92,850 1,25,560 1,25,560
 Balance Sheet as on March 31,2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 3,48,000 Land and Building 2,88,000 Add: Net Profit 92,850 4,40,850 Investment 32,000 Debtors 1,31,200 Loan 16,000 Closing Stock 30,000 Creditors 48,000 Cash in Hand 32,000 Sales Tax Collected 8,350 5,13,200 5,13,200

11. From the following trial balance of Mr. A. Lal, prepare trading, profit and loss account and balance sheet as on March 31, 2017.

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 Account Title Debit Amount â‚¹ Credit Amount â‚¹ Stock as on April 01, 2016 16,000 Â Purchases and Sales 67,600 1,12,000 Returns inwards and outwards 4,600 3,200 Carriage inwards 1,400 Â General expenses 2,400 Â Bad debts 600 Â Discount received Â 1,400 Bank over draft Â 10,000 Interest on bank overdraft 600 Â Commission received Â 1,800 Insurance and taxes 4,000 Â Scooter expenses 200 Â Salaries 8,800 Â Cash in hand 4,000 Â Scooter 8,000 Â Furniture 5,200 Â Building 65,000 Â Debtors and Creditors 6,000 16,000 Capital Â 50,000

Closing stock â‚¹ 15,000.

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Trading and profit and loss account and balance sheet for the question is posted below:

 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 16,000 Sales 1,12,000 Purchases 67,600 Less: Sales Return Inwards (4,600) 1,07,400 Less: Return Outwards (3,200) 64,400 Closing Stock 15,000 Carriage Inwards 1,400 Profit and Loss (Gross Profit) 40,600 1,22,400 1,22,400
 Profit and Loss AccountÂ as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ General Expenses 2,400 Trading (Gross Profit) 40,600 Bad Debts 600 Discount Received 1,400 Interest on Bank Overdraft 600 Commission Received 1,800 Insurance and Taxes 4,000 Scooter Expenses 200 Salaries 8,800 Net Profit 27,200 43,800 43,800
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 50,000 Building 65,000 Add: Net Profit 27,200 77,200 Furniture 5,200 Scooter 8,000 Creditors 16,000 Debtors 6,000 Bank Overdraft 10,000 Closing Stock 15,000 Cash in Hand 4,000 1,03,200 1,03,200

12. Prepare trading and profit and loss account and balance sheet of M/s Royal Traders from the following balances as on March 31, 2017.

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 Debit balances Amount â‚¹ Credit balances Amount â‚¹ Stock 20,000 Sales 2,45,000 Cash 5,000 Creditors 10,000 Bank 10,000 Bills payable 4,000 Carriage on purchases 1,500 Capital 2,00,000 Purchases 1,90,000 Â Â Drawings 9,000 Â Â Wages 55,000 Â Â Machinery 1,00,000 Â Â Debtors 27,000 Â Â Postage 300 Â Â Sundry expenses 1,700 Â Â Rent 4,500 Â Â Furniture 35,000 Â Â

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Closing stock â‚¹ 8,000.

Trading and profit and loss account and balance sheet is prepared below:

 Trading Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 20,000 Sales 2,45,000 Purchases 1,90,000 Closing Stock 8,000 Carriage on Purchases 1,500 Profit and Loss (Gross Loss) 13,500 Wages 55,000 2,66,500 2,66,500
 Profit and Loss Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Trading (Gross Loss) 13,500 Postage 300 Sundry Expenses 1,700 Rent 4,500 Net Loss 20,000 20,000 20,000
 Balance Sheet of M/s Royal Traders as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 2,00,000 Machinery 1,00,000 Less: Net Loss (20,000) Furniture 35,000 Less: Drawings (9,000) 1,71,000 Debtors 27,000 Closing Stock 8,000 Creditors 10,000 Bank 10,000 Bills Payable 4,000 Cash 5,000 1,85,000 1,85,000

13. Prepare trading and profit and loss account from the following particulars of M/s Neema Traders as on March 31, 2017.

 Account Title Debit Amount â‚¹ Account Title Credit Amount â‚¹ Buildings 23,000 Sales 1,80,000 Plant 16,930 Loan 8,000 Carriage inwards 1,000 Bills payable 2,520 Wages 3,300 Bank overdraft 4,720 Purchases 1,64,000 Creditors 8,000 Sales return 1,820 Capital 2,36,000 Opening stock 9,000 Purchases return 1,910 Machinery 2,10,940 Â Â Insurance 1,610 Â Â Interest 1,100 Â Â Bad debts 250 Â Â Postage 300 Â Â Discount 1,000 Â Â Salaries 3,000 Â Â Debtors 3,900 Â Â

Â Stock on March 31, 2017 â‚¹ 16,000.

Trading and profit and loss account and balance sheet is prepared below:

 Trading Account as on March 31, 2017 Dr. Cr. Liabilities Amount â‚¹ Assets Amount â‚¹ Opening Stock 9,000 Sales 1,80,000 Purchases 1,64,000 Less: Sales Return (1,820) 1,78,180 Less: Purchases Return (1,910) 1,62,090 Closing Stock 16,000 Carriage Inwards 1,000 Wages 3,300 Profit and Loss (Gross Profit) 18,790 1,94,180 1,94,180
 Profit and Loss Account as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Insurance 1,610 Trading (Gross Profit) 18,790 Interest 1,100 Bad Debts 250 Postage 300 Discount 1,000 Salaries 3,000 Net Profit 11,530 18,790 18,790
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 2,36,000 Building 23,000 Add: Net Profit 11,530 2,47,530 Plant 16,930 Machinery 2,10,940 Loan 8,000 Debtors 3,900 Creditors 8,000 Closing Stock 16,000 Bills Payable 2,520 Bank Overdraft 4,720 2,70,770 2,70,770

14. From the following balances of M/s Nilu Sarees as on March 31, 2017. Prepare trading and profit and loss account and balance sheet as on date.

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 Account Title Debit Amount â‚¹ Account Title Credit Amount â‚¹ Opening stock 10,000 Sales 2,28,000 Purchases 78,000 Capital 70,000 Carriage inwards 2,500 Interest 7,000 Salaries 30,000 Commission 8,000 Commission 10,000 Creditors 28,000 Wages 11,000 Bills payable 2,370 Rent and taxes 2,800 Â Â Repairs 5,000 Â Â Telephone expenses 1,400 Â Â Legal charges 1,500 Â Â Sundry expenses 2,500 Â Â cash in hand 12,000 Â Â Debtors 30,000 Â Â Machinery 60,000 Â Â Investments 90,000 Â Â Drawings 18,000 Â Â

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Closing stock, as on March 31, 2017 â‚¹ 22,000.

 Trading Account of M/sÂ NiluÂ SareesÂ as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 10,000 Sales 2,28,000 Purchases 78,000 Closing Stock 22,000 Carriage Inwards 2,500 Wages 11,000 Profit and Loss (Gross Profit) 1,48,500 2,50,000 2,50,000
 Profit and Loss AccountÂ as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Salaries 30,000 Trading (Gross Profit) 1,48,500 Commission 10,000 Interest 7,000 Rent and Taxes 2,800 Commission 8,000 Repairs 5,000 Telephone Expenses 1,400 Legal Charges 1,500 Sundry Expenses 2,500 Net Profit 1,10,300 1,63,500 1,63,500
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 70,000 Machinery 60,000 Add: Net Profit 1,10,300 Investments 90,000 1,80,300 Debtors 30,000 Less: Drawings (18,000) 1,62,300 Closing Stock 22,000 Cash in Hand 12,000 Creditors 28,000 Bills Payable 2,370 Suspense 21,330 2,14,000 2,14,000

15. Prepare trading and profit and loss account of M/s Sports Equipments for the year ended March 31, 2017 and balance sheet as on that date:

 Account Title Debit Amount â‚¹ Credit Amount â‚¹ Opening stock 50,000 Â Purchases and sales 3,50,000 4,21,000 Sales returns 5,000 Â Capital Â 3,00,000 Commission Â 4,000 Creditors Â 1,00,000 Bank overdraft Â 28,000 Cash in hand 32,000 Â Furniture 1,28,000 Â Debtors 1,40,000 Â Plants 60,000 Â Carriage on purchases 12,000 Â Wages 8,000 Â Rent 15,000 Â Bad debts 7,000 Â Drawings 24,000 Â Stationery 6,000 Â Travelling expenses 2,000 Â Insurance 7,000 Â Discount 5,000 Â Office expenses 2,000 Â

Â

Closing stock as on March 31, 2017 â‚¹ 2,500

Trading and profit and loss account and balance sheet is prepared below:

 Trading Account as on March 31, 2017 Dr. Â Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Opening Stock 50,000 Sales 4,21,000 Purchases 3,50,000 Less: Sales Return 5,000 4,16,000 Carriage on Purchases 12,000 Closing Stock 2,500 Wages 8,000 Profit and Loss (Gross Loss) 1,500 4,20,000 4,20,000
 Profit and Loss AccountÂ as on March 31, 2017 Dr. Cr. Particulars Amount â‚¹ Particulars Amount â‚¹ Trading (Gross Loss) 1,500 Commission 4,000 Rent 15,000 Net Loss 41,500 Bad Debts 7,000 Stationery 6,000 Travelling Expenses 2,000 Insurance 7,000 Discount 5,000 Office Expenses 2,000 45,500 45,500
 Balance Sheet as on March 31, 2017 Liabilities Amount â‚¹ Assets Amount â‚¹ Capital 3,00,000 Plants 60,000 Less: Net Loss (41,500) Furniture 1,28,000 Less: Drawings (24,000) 2,34,500 Debtors 1,40,000 Closing Stock 2,500 Creditors 1,00,000 Cash in Hand 32,000 Bank Overdraft 28,000 3,62,500 3,62,500

Concepts covered in this chapter â€“

• Stakeholders and Their Information Requirements
• Distinction between Capital and Revenue
• Expenditure
• Receipts
• Importance of Distinction between Capital and Revenue
• Financial Statements
• Trading and Profit and Loss Account
• Relevant Items in Trading and Profit and Loss Account
• Closing Entries

Conclusion

NCERT Solutions for Class 11 Accountancy Chapter 9 provides a wide degree of illustrative examples, which assist the students to comprehend and learn quickly. The above mentioned are the illustrations for the Class 11 CBSE syllabus. For more solutions and study materials of NCERT solutions for Class 11 Accountancy, visit BYJUâ€™S or download the app for more information.