Debit & Credit for Purchase & Sales Return

Q.

Prepare the trading and profit and loss account and a balance sheet of M/s Shine Ltd. from the following particulars.

$\begin{array}{cccc}\text{Account Title}& \text{Amt.(Rs)}& \text{Account title}& \text{Amt.(Rs)}\\ \text{Sundry Debtors}& 1,00,000& \text{Bills Payable}& 85,550\\ \text{Bad Debts}& 3,000& \text{Sundry Creditors}& 25,000\\ \text{Trade Expenses}& 2,500& \text{Provision for Bad Debts}& 1,500\\ \text{Printing and Stationery}& 5,000& \text{Return Outwards}& 4,500\\ \text{Rent, Rates and Taxes}& 3,450& \text{Capital}& 2,50,000\\ \text{Freight}& 2,250& \text{Discount Received}& 3,500\\ \text{Sales Return}& 6,000& \text{Interest Received}& 11,260\\ \text{Motor Car}& 25,000& \text{Sales}& 1,00,000\\ \text{Opening Stock}& 75,550& & \\ \text{Furniture and Fixture}& 15,500& & \\ \text{Purchase}& 75,000& & \\ \text{Drawings}& 13,560& & \\ \text{Investments}& 65,500& & \\ \text{Cash in Hand}& 36,000& & \\ \text{Cash at Bank}& 53,000& & \\ & \overline{\underset{–}{\underset{–}{4,81,310}}}& & \overline{\underset{–}{\underset{–}{4,81,310}}}\end{array}$

Adjustments

1. Closing stock was valued Rs. 35, 000.

2. Depreciation charged on furniture and fixture @ 5%.

3. Further bad debts Rs. 1, 000. Make a provision for bad debts @ 5% on sundry debtors.

4. Depreciation charged on motor car @ 10%.

5. Interest on drawings @ 6%.

6. Rent, rates and taxes was outstanding Rs. 200.

7. Discount on debtors 2%.

Q.

Journalise the following transactions in the Book of M/s Beauti Traders. Also post them in the Ledger.
$\begin{array}{ccc}2011& & \left(Rs\right)\\ \text{Dec 1}& \text{Started business with Cash}& 2,00,000\\ \text{Dec 2}& \text{Bought Office Furniture}& 30,000\\ \text{Dec 3}& \text{Paid into bank to open an Current account}& 1,00,000\\ \text{Dec 5}& \text{Purchased a computer and paid by cheque}& 2,50,000\\ \text{Dec 6}& \text{Bought goods on credit from Ritika}& 60,000\\ \text{Dec 8}& \text{Cash Sales}& 2,00,000\\ \text{Dec 9}& \text{Sold goods to Karishna on credit}& 25,000\\ \text{Dec 12}& \text{Cash Paid to Mansi on account}& 30,000\\ \text{Dec 14}& \text{Goods returned to Ritika}& 2,000\\ \text{Dec 15}& \text{Stationery purchased for cash}& 3,000\\ \text{Dec 16}& \text{Paid wages}& 1,000\\ \text{Dec 18}& \text{Goods returned by Karishna}& 2,000\\ \text{Dec 20}& \text{Cheque given to Ritika}& 28,000\\ \text{Dec 22}& \text{Cash Recieved from Karishna on account}& 15,000\\ \text{Dec 24}& \text{Insurance premium paid by cheque}& 4,000\\ \text{Dec 26}& \text{Cheque received from Karishna}& 8,000\\ \text{Dec 28}& \text{Rent paid by cheque}& 3,000\\ \text{Dec 29}& \text{Purchased goods on credit from Meena Traders}& 20,000\\ \text{Dec 26}& \text{Cash sales}& 14,000\\ & & \\ & & \end{array}$

Q. Goods returned by Ram shall be posted on ___ .

1. Debit side of Ram`s account
2. Debit of Sales Return account
3. Debit of Sales account
4. Debit of bank account

Q.

From the following balances extracted from the books of Raga Ltd. prepare a trading and profit and loss account for the year ended December 31, 2011 and a balance sheet as on that date.

$\begin{array}{cccc}\text{Account Title}& \text{Amt. (Rs.)}& \text{Account Title}& \text{Amt. (Rs.)}\\ \text{Drawings}& 20,000& \text{Sales}& 2,20,000\\ \text{Land and Buildings}& 12,000& \text{Capital}& 1,01,110\\ \text{Plant and Machinery}& 40,000& \text{Discount}& 1,260\\ \text{Carriage Inwards}& 100& \text{Apprentice Premium}& 5,230\\ \text{Wages}& 500& \text{Bills Payable}& 1,28,870\\ \text{Salary}& 2,000& \text{Purchase Return}& 10,000\\ \text{Sales Return}& 200& & \\ \text{Bank Charges}& 200& & \\ \text{Coal, Gas and Water}& 1,200& & \\ \text{Purchase}& 1,50,000& & \\ \text{Trade Expenses}& 3,800& & \\ \text{Stock (Opening)}& 76,800& & \\ \text{Cash at Bank}& 50,000& & \\ \text{Rates and Taxes}& 870& & \\ \text{Bills Receivable}& 24,500& & \\ \text{Sundry Debtors}& 54,300& & \\ \text{Cash in Hand}& 30,000& & \\ & \overline{\underset{–}{\underset{–}{4,66,470}}}& & \overline{\underset{–}{\underset{–}{4,66,470}}}\end{array}$

The additional information is as under:

1. Closing stock was valued at the end of the year Rs. 20, 000.

2. Depreciation on plant and machinery charged @ 5% and land and building @ 10%.

3. Discount on debtors @ 3%.

4. Make a provision @ 5% on debtors for bad debts.

5. Salary outstanding was Rs. 100 and wages prepaid was Rs. 40.

6. The manager is entitled a commission of 5% on net profit after charging such commission.

Q.

Prepare a trading and profit and loss account of M/s Green Club Ltd. for the year ending December 31, 2010 from the following figures taken from his trial balance

$\begin{array}{cccc}\text{Account Title}& \text{Amt. (Rs.)}& \text{Account Title}& \text{Amt. (Rs.)}\\ \text{Opening Stock}& 35,000& \text{Sales}& 2,50,000\\ \text{Purchase}& 1,25,000& \text{Purchase Return}& 6,000\\ \text{Return Inwards}& 25,000& \text{Creditors}& 10,000\\ \text{Postage and Telegram}& 600& \text{Bills Payable}& 20,000\\ \text{Salary}& 12,300& \text{Discount}& 1,000\\ \text{Wages}& 3,000& \text{Provision for Bad Debts}& 4,500\\ \text{Rent and Rates}& 1,000& \text{Interest Received}& 5,400\\ \text{Packing and Transport}& 500& \text{Capital}& 75,000\\ \text{General Expenses}& 400& & \\ \text{Insurance}& 4,000& & \\ \text{Debtors}& 50,000& & \\ \text{Cash in Hand}& 20,000& & \\ \text{Cash at Bank}& 40,000& & \\ \text{Machinery}& 20,000& & \\ \text{Lighting and Heating}& 5,000& & \\ \text{Discount}& 3,500& & \\ \text{Bad Debts}& 3,500& & \\ \text{Investment}& 23,100& & \\ & \overline{\underset{–}{\underset{–}{3,71,900}}}& & \overline{\underset{–}{\underset{–}{3,71,900}}}\end{array}$

Adjustments

1. Depreciation charged on machinery @ 5% p.a.

2. Further bad debts Rs. 1, 500, discount on debtors @ 5% and make a provision on debtors @ 6%.

3. Wages prepaid Rs. 1, 000.

4. Interest on investment @ 5% pa.

5. Closing stock Rs. 10, 000.

Q.

Rectify the following errors.

(a) Credit Sales to Mohan Rs. 7, 000 were recorded in purchase book.

(b) Credit Purchase from Rohan Rs. 9, 000 were recorded in the sales book.

(c) Goods returned to Rakesh Rs. 4, 000 were recorded in the sales return book.

(d) Goods returned from Mahesh Rs. 1, 000 were recorded in purchase return book.

Q.

The following information has been extracted from the trial balance of M/s Randhir Transport Corporation.

$\begin{array}{cccc}\text{Debit Balances}& \text{Amount}& \text{Credit Balances}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{Opening Stock}& 40,000& \text{Capital}& 2,70,000\\ \text{Rent}& 2,000& \text{Creditors}& 50,000\\ \text{Plant and Machinery}& 1,20,000& \text{Bills payable}& 50,000\\ \text{Land and Buildings}& 2,55,000& \text{Loan}& 1,10,000\\ \text{Power}& 3,500& \text{Discount}& 1,500\\ \text{Purchases}& 75,000& \text{Sales}& 1,50,000\\ \text{Sales Return}& 2,500& \text{Provision for bad debts}& 1,000\\ \text{Telegram and Postage}& 400& \text{General Expenses}& 50,000\\ \text{Wages}& 4,500& & \\ \text{Salary}& 2,500& & \\ \text{Insurance}& 3,200& & \\ \text{Discount}& 1,000& & \\ \text{Repair and Renewals}& 2,000& & \\ \text{Legal Charges}& 700& & \\ \text{Trade taxes}& 1,200& & \\ \text{Debtors}& 75,000& & \\ \text{Investment}& 65,000& & \\ \text{Bad debts}& 2,000& & \\ \text{Trade expenses}& 4,500& & \\ \text{Commission}& 1,250& & \\ \text{Travelling expenses}& 1,230& & \\ \text{Drawings}& 20,020& & \\ & \overline{\underset{–}{\underset{–}{6,82,500}}}& & \overline{\underset{–}{\underset{–}{6,82,500}}}\end{array}$

Adjustments :

1. Closing stock for the year was Rs 35, 500.

2. Interest on drawing @ 6%, Interest on loan @ 5%, Interest on investments @ 4%.

Or

Below is given the Trial Balance of Mr. Ram as on 31st December, 2012. You are required to prepare Trading and Profit & Loss Account Sheet as on that date.

$\begin{array}{cccc}\text{Particulars}& \text{Amount}& \text{Particulars}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{Opening Stock}& 42,000& \text{Sales}& 4,10,000\\ \text{Purchases}& 2,00,000& \text{Sundry Creditors}& 20,000\\ \text{Plant}& 60,000& \text{Purchase Return}& 8,000\\ \text{Salaries}& 33,000& \text{Purchase Return}& 8,000\\ \text{Wages}& 44,000& \text{Bank}& 24,000\\ \text{Discount}& 2,000& \text{Capital}& 1,50,000\\ \text{Rent}& 27,500& \text{Interest on Investment's}& 700\\ \text{Furniture(Inclusing Furniture of}& & \text{Special Rebate}& 800\\ \text{Rs 500 Purchased on 1st July, 2012)}& 20,000& & \\ \text{Carriage Inward}& 5,800& & \\ \text{Carriage Outward}& 8,200& & \\ \text{Sundry Debtors}& 1,00,000& & \\ \text{Office Expenses}& 6,600& & \\ \text{Cash in Hand}& 5,400& & \\ \text{Investments@14}\%p.a.& 10,000& & \\ \text{Insurance(Paid upto 30th April, 2013)}& 1,500& & \\ \text{Stock on 31st December, 2012}& 60,000& & \\ & \overline{\underset{–}{\underset{–}{6,21,000}}}& & \overline{\underset{–}{\underset{–}{6,21,000}}}\end{array}$

Adjustments :

1. Create a provision for doubtful debts @ 5% on Debtors and 2% for discount on Debtors.

2. Provide up to date interest on investments.

3. Depreciate Plant by 10% p.a. and Furniture by 20% p.a.

Q.

Prove that the accounting equation is satisfied in all the following transactions of Sudhir.
(i) Started business with cash Rs. 1, 00, 000 and goods Rs. 40, 000.
(ii) Bought goods on cash Rs. 30, 000 and on credit for Rs. 20, 000
(iii) Goods costing Rs. 48, 000 sold at a profit of $33\frac{1}{3}$ to Pranav. Half the payment received in cash.
(iv) Purchased furniture for office use Rs. 12, 000 and for household use Rs. 8, 000.
(v) Received cash from Pranav (customer) Rs. 25, 500 and allowed him a discount Rs. 500.
(vi) Creditors of Rs. 5, 000 accepted Rs. 4, 000 and allowed a discount of Rs. 1, 000.

Q.

The following trial balance is extracted from the books of M/s Ram on 31st March, 2016, You are required to prepare trading and profit and loss account and the balance sheet as on date.

$\begin{array}{cccc}\text{Name of Account}& \text{Debit (Rs.)}& \text{Name of Account}& \text{Credit (Rs.)}\\ \text{Debtors}& 12,000& \text{Apprenticeship Premium}& 5,000\\ \text{Purchases}& 50,000& \text{Loan}& 10,000\\ \text{Coal, Gas and Water}& 6,000& \text{Bank Overdraft}& 1,000\\ \text{Factory Wages}& 11,000& \text{Sales}& 80,000\\ \text{Salaries}& 9,000& \text{Creditors}& 13,000\\ \text{Rent}& 4,000& \text{Capital}& 20,000\\ \text{Discount}& 3,000& & \\ \text{Advertisement}& 500& & \\ \text{Drawings}& 1,000& & \\ \text{Loan}& 6,000& & \\ \text{Petty Cash}& 500& & \\ \text{Sales Return}& 1,000& & \\ \text{Machinery}& 5,000& & \\ \text{Land and Building}& 10,000& & \\ \text{Income Tax}& 100& & \\ \text{Furniture}& 9,900& & \end{array}$

Q.

Sales return account is always ___.

1. Debited

2. Credited

3. Either A or B

4. None of the above

Q.

Return of goods to the supplier should be credited to ___.

1. Customer`s account

2. Purchase Return Account

3. Purchases Account

4. Cash account

Q.

Rectify the following errors,

(a) Depreciation provided on machinery Rs. 4, 000 was posted as Rs. 400.

(b) Bad debts are written off Rs. 5, 000 were posted as Rs. 6, 000.

(c) Discount allowed to a debtor Rs. 100 on receiving cash from him was posted as Rs. 60.

(d) Goods are withdrawn by the proprietor for personal use Rs. 800 were posted as Rs. 300.

(e) Bill receivable for Rs. 2, 000 received from a debtor was posted as Rs. 3, 000.

Q.

Rectify the following errors

(a) Credit sales to Mohan Rs. 7, 000 were not recorded.

(b) Credit purchase from Rohan Rs. 9, 000 were not recorded.

(c) Goods returned to Rakesh Rs. 4, 000 were not recorded.

(d) Goods returned from Mahesh Rs. 1, 000 were not recorded.

Q.

Give journal entries to rectify the following errors assuming that suspense account had been opened.

(a) Goods distributed as free sample Rs. 5, 000 were not recorded in the books.

(b) Goods were withdrawn for personal use by the proprietor Rs. 2, 000 were not recorded in the books.

(c) Bill receivable received from a debtor Rs. 6, 000 was not posted to his account.

(d) Total of return inwards book Rs. 1, 200 was posted to return outwards account.

(e) Discount allowed to Reema Rs. 700 on receiving cash from her was recorded in the books as Rs. 70.

Q.

Rectify the following errors.

(a) Depreciation provided on machinery Rs. 4, 000 was not posted.

(b) Bad debts are written off Rs. 5, 000 were not posted.

(c) Discount allowed to a debtor Rs. 100 on receiving cash from him was not posted.

(d) Discount allowed to a debtor Rs. 100 on receiving cash from him was not posted to discount account.

(e) Bill receivable for Rs. 2, 000 received from a debtor was not posted.

Q.

When goods are returned by customer, which account is debited?

1. Purchase

2. Sales

3. Sales return

4. Purchase return

Q.

Goods taken by proprietor for domestic use should be credited to ____________.

1. sales account

2. proprietors personal expenses

3. purchases account

4. expenses account

Q.

The following balances of ledger of M/s Marble Traders on April 1, 2011

$\begin{array}{cc}& \text{Rs}\\ \text{Cash in hand}& 6,000\\ \text{Cash at bank}& 12,000\\ \text{Bills receivable}& 7,000\\ \text{Ramesh (Cr)}& 3,000\\ \text{Stock (Goods)}& 5,400\\ \text{Bills payable}& 2,000\\ \text{Rahul (Dr)}& 9,700\\ \text{Himanshu (Dr)}& 10,000\end{array}$

Transactions during the month were

$\begin{array}{ccc}\text{April}& & \text{Rs}\\ 01& \text{Goods sold to Manish}& 3,000\\ 02& \text{Purchased goods from Ramesh}& 8,000\\ 03& \text{Received cash from Rahul in full settlement}& 9,200\\ 05& \text{Cash received from Himanshu on account}& 4,000\\ 06& \text{Paid to Ramesh by cheque}& 6,000\\ 08& \text{Rent paid by cheque}& 1,200\\ 10& \text{Cash received from Manish}& 3,000\\ 12& \text{Cash sales}& 6,000\\ 14& \text{Goods returned to Ramesh}& 1,000\\ 15& \text{Cash paid to Ramesh in full settlement}& 3,700\\ & \text{Discount received}& 300\\ 18& \text{Goods sold to Kushal}& 10,000\\ 20& \text{Paid trade expenses}& 200\\ 21& \text{Drew for personal use}& 1,000\\ 22& \text{Goods return from Kushal}& 1,200\\ 24& \text{Cash received from Kushal}& 6,000\\ 26& \text{Paid for stationery}& 100\\ 27& \text{Postage charges}& 60\\ 28& \text{Salary Paid}& 2,500\\ 29& \text{Goods purchased from Sheetal Traders}& 7,000\\ 30& \text{Sold goods to Kirit}& 6,000\\ & \text{Goods purchased from Handa Traders}& 5,000\end{array}$

Journalise the above transactions and post them to the ledger.

Q.

Trial balance of Khatau did not agree. He put the difference to a suspense account and discovered the following errors.

(a) Credit sales to Manas Rs. 16, 000 were recorded in the purchase book as Rs. 10, 000 and posted to the debit of Manas as Rs. 1, 000.

(b) Furniture purchased from Noor Rs. 6, 000 was recorded through purchase book as Rs. 5, 000 and posted to the debit of Noor Rs. 2, 000.

(c) Goods returned to Rai Rs. 3, 000 recorded in the sales book as Rs. 1, 000.

(d) Old machinery sold for Rs. 2, 000 to Maneesh recorded through sales book as Rs. 1, 800 and posted to the credit of Manish as Rs. 1, 200.

(e) Total of return inwards book Rs. 2, 800 posted to purchase account.

Rectify the above errors and prepare a suspense account to ascertain the difference in trial balance.

Q.

An accountant, while balancing his books found that there was a difference of Rs. 85.95 in the trial balance. Being required to prepare the final accounts, he placed this difference to a newly opened suspense account which was carried forward to the next year, when the follwing errors were discovered.

(i) Goods bought from a merchant for Rs. 5.50 had been posted to the credit of his account as Rs. 55.

(ii) An item of Rs. 10.62 entered in the sales return book had been posted to the debit of the customer who returned the goods.

(iii) Rs. 60 owing by a customer had been omitted from the schedule of sundry debtors.

(iv) Rs. 2.31 discount received from a creditor had been duly entered in his account but not posted to discount received account.

Give journal entries necessary to correct these errors and prepare the suspense account.

Q.

The following errors were found in the book of Rajan & Sons. Give the necessary entries to correct them.

(i) Repairs made were debited to building account Rs. 100.

(ii) Rs. 200 paid for rent, debited to landlord's account.

(iii) Salary Rs. 250 paid to a clerk due to him has been debited to his personal account.

(iv) Rs. 200 received from Rina & co has been wrongly entered as from Reena & Co.

(v) Rs. 1, 400 paid in cash for a typewriter was charged to office expenses account.

(vi) Credit sales to Mohan Rs. 7, 000 were posted to Karan.

(viii) Credit purchase from Rohan Rs. 9, 000 were posted to Gobind.

(viii) Goods returned to Rakesh Rs. 4, 000 were posted to Naresh.

(ix) Goods returned from Mahesh Rs. 1, 000 were posted to Manish.

(x) Cash sales Rs. 2, 000 were posted to commission account.

Q.

On 31st December 2011, the Pass Book of a merchant shows the credit balance to be 3, 357. The cheques and drafts sent to the bank but not collected and credited amounted to = 790 and three cheques drawn for RS 300, 150 and 200 respectively were not presented for payment till 31st January next year.

Bank has paid a bill payable amounting to = 1, 000 but it has not been entered in the Cash Book and a bill receivable of = 500 which was discounted with the bank was dishonoured by the drawee on due.date.

The bank has charged = 13 as its commission for collecting outstation cheques and has allowed interest = 10 on the trader's balance.

Prepare a Bank Reconciliation Statement and show the balance as shown in the Cash Bank.

Q.

Khan bought goods worth Rs 5, 000 less 20% trade discount on credit from Aziz. Later he found out that out of these goods 50% are defective & hence he returned the same. How shall this transaction of return of goods appear in ledger of Aziz in the books of Khan ?

1. Debit of Rs 4, 000

2. Credit of Rs 5, 000

3. Credit of Rs 4, 000

4. Debit of Rs 2, 000

Q.

Prepare Trading and Profit and Loss account of M/s Sports Equipments for the year ended March 31, 2011 and balance sheet as on that date.
$\begin{array}{ccc}\text{Account Title}& \text{Amt. (Dr.)}& \text{Amt. (Cr.)}\\ \text{Opening Stock}& 50,000& \\ \text{Purchase and Sales}& 3,50,000& 4,21,000\\ \text{Sales Return}& 50,000& \\ \text{Capital}& & 3,00,000\\ \text{Commission}& & 4,000\\ \text{Creditors}& & 1,00,000\\ \text{Bank Overdraft}& & 28,000\\ \text{Cash in Hand}& 32,000& \\ \text{Furniture}& 1,28,000& \\ \text{Debtors}& 1,40,000& \\ \text{Plants}& 60,000& \\ \text{Carriage on Purchase}& 12,000& \\ \text{Wages}& 8,000& \\ \text{Rent}& 15,000& \\ \text{Bad Debts}& 7,000& \\ \text{Drawings}& 24,000& \\ \text{Stationery}& 6,000& \\ \text{Travelling Expenses}& 2,000& \\ \text{Insurance}& 7,000& \\ \text{Discount}& 5,000& \\ \text{Office Expenses}& 2,000& \end{array}$
Closing Stock as on March 31, 2011 Rs. 2500.

Q.

Record the following transactions into proper subsidiary books, then close the subsidiary books on January 31 and post them into Ledger:

$\begin{array}{cc}2011& \left(Rs\right)\\ \text{Jan 1}& \text{Purchased goods from Mahendra of the list price of Rs 40, 000 less}10\%\text{Trade Discount}.\\ \text{Jan.5}& \text{Sold goods to Moti for Rs 10, 000}\\ \text{Jan.6}& \text{Returned goods to Mahendra of list price Rs 5, 000}\\ \text{Jan 7}& \text{Shyam Singh sent goods for Rs 30, 000.}\\ \text{Jan.8}& \text{Sold goods to Harish for Rs 12, 000}.\\ \text{Jan. 19}& \text{Sent goods to Moti for Rs 6, 000}\\ \text{Jan.27}& \text{Sold goods to Mahesh for Rs 8, 000}\end{array}$

Q.

Ascertain the appropriate missing figure by preparing the Total Debtors Account from the following information:

Debtors as at March 31, 2018 Rs. 56, 000,
Debtors as at March 31, 2017 Rs. 48, 000,
Sales returns Rs. 2, 000,
Cash received from debtors Rs. 1, 49, 600,
Bills receivable drawn Rs. 52, 000,
Discount allowed Rs. 2, 000,
Bad debts Rs. 2, 000,
Cheques received from debtors Rs. 20, 000,
Bills Receivable dishonoured Rs. 8, 000,
Cheques dishonoured Rs. 12, 000.

Q.

Rectify the following errors assuming that suspense account was opened. Ascertain the difference in trial balance.

(i) Depreciation provided on machinery Rs. 4, 000 was not posted to depreciation account.

(ii) Bad debts written-off Rs. 5, 000 were not posted to debtor's account.

(iii) Discount allowed to a debtor Rs. 100 on receiving cash from him was not posted to discount allowed account.

(iv) Goods withdrawn by proprietor for personal use Rs. 800 were not posted to drawings account.

(v) Bills receivable for Rs. 2, 000 received from a debtor was not posted to bills receivable account.

Q.

On 1st January, 2009, Nagaji Bros., purchased six machineries for Rs 15, 000 each. Depreciation @10%p.a. on original cost of machines has been provided and accumulated in 'Depreciation Provision Account' on 31st December every year.

On 1st January, 2010 one machine was sold for Rs 12, 500 and on 1st January, 2011, a second machine was also sold for Rs 13, 000.An improved model with a cost oH 28, 000 was purchased on 1st July, 2010 and the arrangement for providing depreciation was kept to be the same as for older machines. Show Machinery a/c, Provision for Depreciation a/c and Machinery Disposal a/c.

Or

Record the following transactions in the Cash Book of Ghasidas :

$\begin{array}{cccccc}2011& \text{Particulars}& \text{(Rs)}& 2011& \text{Particulars}& \text{(Rs)}\\ \text{Jan. 1}& \text{Business commenced}& & \text{Jan. 15}& \text{Paid to B}& 2,800\\ & \text{With cash}& 50,000& & \text{Discount received}& 200\\ \text{Jan. 2}& \text{Deposited into Bank}& \text{20, 000}& \text{Jan. 18}& \text{Cash purchases}& 4,000\\ & \text{Cash purchases}& 5,000& \text{Jan. 20}& \text{Received from C in full}& \\ \text{Jan. 4}& \text{Wages paid}& 25& & \text{Settlement of Rs 1, 000}& 950\\ \text{Jan. 6}& \text{Cash Sales}& 2,000& \text{Jan. 25}& \text{Donation given}& 10\\ & \text{Purchased goods for cash}& 10,000& \text{Jan. 26}& \text{Got Promissory Note from C}& 500\\ \text{Jan. 10}& \text{Sold goods for cash}& & \text{Jan. 27}& \text{Promissory note of C}& \\ & \text{by Cheque}& 4,000& & \text{deposited into Bank and}& \\ \text{Jan. 12}& \text{Purchased goods \& paid}& & & \text{withdrawn from Bank}& \\ & \text{By Cheque}& 3,000& & \text{for official use}& 500\\ & \text{Received from 'A'}& 590& & & \\ & \text{Discount allowed}& 10& & & \end{array}$

Q.

Prepare a Trading and Profit and loss account for year ending December 31, 2010 from the balances extracted to M/s Rahul Sons. Also prepare a balance sheet at the end of the year.

$\begin{array}{cccc}\text{Account Title}& \text{Amt. (Rs.)}& \text{Account Title}& \text{Amt.(Rs)}\\ \text{Opening Stock}& 50,000& \text{Sales}& 1,80,000\\ \text{Wages}& 3,000& \text{Purchase Return}& 2,000\\ \text{Salary}& 8,000& \text{Discount Received}& 500\\ \text{Purchase}& 1,75,000& \text{Provision for Bad Debts}& 2,500\\ \text{Sales Return}& 3,000& \text{Capital}& 3,00,000\\ \text{Sundry Debtors}& 82,000& \text{Bills Payable}& 22,000\\ \text{Discount Allowed}& 1,000& \text{Commission Received}& 4,000\\ \text{Insurance}& 3,200& \text{Rent}& 6,000\\ \text{Rent, Rates and Taxes}& 4,300& \text{Loan}& 34,800\\ \text{Fixtures and Fittings}& 20,000& & \\ \text{Trade Expenses}& 1,500& & \\ \text{Bad Debts}& 2,000& & \\ \text{Drawings}& 32,000& & \\ \text{Repair and Renewals}& 1,600& & \\ \text{Travelling Expenses}& 4,200& & \\ \text{Postage}& 300& & \\ \text{Telegram Expenses}& 200& & \\ \text{Legal Fees}& 500& & \\ \text{Bills Receivable}& 50,000& & \\ \text{Building}& 1,10,000& & \\ & \underset{–}{\underset{–}{\overline{5,51,800}}}& & \underset{–}{\underset{–}{\overline{5,51,800}}}\\ & & & \end{array}$

Adjustments:

1. Commission received in advance Rs. 1, 000.

2. Rent received Rs. 2, 000.

3. Salary outstanding Rs. 1, 000 and insurance prepaid Rs. 800.

4. Further bad debts Rs. 1, 000 and provision for bad debts @5% on debtors and discount on debtors @ 2%.

5. Closing stock Rs. 32, 000.

6. Depreciation on building @ 6% pa.

Q.

Goods worth Rs 1, 00, 000 were sold to Piyush on credit. He returned the goods of the value of Rs 50, 000. Whose account shall be credited & with what amount in this case?

1. Sales return account with Rs 50, 000

2. Piyush`s account with Rs 1, 00, 000

3. Piyush`s account with Rs 50, 000

4. Sales return account with Rs 1, 00, 000