Which of the following is a part of balance sheet of a business entity-Rent paidMachinerySalaries payableProvision for taxOwner-s equityDepreciationClosing stockSalesGross profit

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Balance Sheet

Which of the ...

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Which of the following is a part of balance sheet of a business entity?

Rent paid

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Machinery

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Salaries payable

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Provision for tax

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Owner's equity

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Depreciation

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Closing stock

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Sales

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Gross profit

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State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Q. From the following Trial Balance of M/s. Ram Lal and Sons, prepare Trading, Profit and Loss Account for the year ending 31st March, 2018 and a Balance Sheet as on that date:


Heads of Accounts	Dr. (₹)	Cr. (₹)
Drawings	15,000
Capital		3,50,000
Plant and Machinery	2,05,000
Debtors	50,000
Creditors		28,000
Returns Inward	8,000
Returns Outward		7,000
Discount Allowed	7,000
Discount Received		6,000
Commission	15,000
Interest on Bank Loan	12,000
Furniture	55,000
Provision for Doubtful Debts		13,000
Wages	50,000
Salaries	45,000
Advertisement	15,000
Rent and Taxes	13,000
Purchases	2,60,000
Sales		4,00,000
Stock on 1st April, 2017	70,000
Carriage	5,000
Land and Building	98,000
Cash in Hand	8,000
Cash at Bank	20,000
10% Bank Loan as on 1st April, 2017		1,50,000
Input CGST	9,000
Input SGST	9,000
Output IGST		15,000
Total	9,69,000	9,69,000

Adjustments:
(i) The cost of stock on 31st March, 2018 was ₹37,000. However, its market value was ₹35,000.
(ii) Wages outstanding were ₹6,000 and salaries outstanding were ₹5,000 on 31st March, 2018.
(iii) Depreciate Land and Building @ 2

\frac{1}{2}

%, Plant and Machinery @ 10% p.a. and Furniture @ 15 p.a.
(iv) Purchase includes purchase of machinery for ₹10,000 on 1st October, 2017.
(v) Debtors include bad debts of ₹2,000. Maintain a provision for doubtful debts @ 10% on Debtors.

Q. State whether the following statement are True or False.

Credit balance of profit and loss account shows net profit of the business.

Q. From the following Trial Balance extracted from the books of S. Sujan Singh, prepare a Trading and Profit & Loss Account for the year ended 31st March, 2016 and a Balance Sheet as at that date:

	Dr. (₹)	Cr. (₹)
Capital Account		90,000
Drawings Account	6,480
Land and Buildings	25,000
Plant & Machinery	14,270
Furniture & Fixtures	1,250
Carriage (Inwards)	4,370
Wages	21,470
Salaries	4,670
Bad-Debts Provision (as on 1st April, 2015)		2,470
Sales		91,230
Sales Returns	1,760
Bank Charges	140
Coal, Gas and Water	720
Rates & Taxes	840
Discount Account (Balance)		120
Purchases	42,160
Purchases Returns		8,460
Bills Receivable	1,270
Trade Expenses	1,990
Sundry Debtors	37,800
Sundry Creditors		12,170
Stock (1st April, 2015)	26,420
Miscellaneous Receipt		500
Fire Insurance	490
Cash at Bank	13,000
Cash in Hand	850
	2,04,950	2,04,950

Adjustments:-
1. Carry forward the following unexpired amounts:-

(i) Fire Insurance	₹ 125
(ii) Rates and Taxes	₹ 240

2. Transfer to Building Account ₹ 3,000 from purchases and ₹ 2,000 from wages, representing cost of material and labour spent on additions to Building made during the year.
3. Charge Depreciation on Land and Buildings at 2.5% and on Plant & Machinery at 10%.
4. Make a Provision of 5% on Sundry Debtors for Bad-debts.
5. Charge 5% Interest on Capital but not on Drawings.
6. The value of Stock as on 31st March, 2016 was ₹ 29,390.

Q. A and B are carrying on business in partnership and sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2019 stood as:


Liabilities		₹	Assets	₹
Creditors		11,800	Cash	1,500
A's Capital	51,450		Stock	28,000
B's Capital	36,750	88,200	Debtors	19,500
			Furniture	2,500
			Machinery	48,500


		1,00,000		1,00,000

They admit C into partnership on 1st April, 2019 and give him 1/8th share in future profits on the following terms:
(a) Goodwill of the firm be valued at twice the average of the last three years' profits which amounted to ₹ 21,000; ₹ 24,000 and ₹ 25,560.
(b) C is to bring cash for the amount of his share of goodwill.
(c) C is to bring cash ₹ 15,000 as his capital.
Pass Journal entries recording these transactions, draw out the Balance Sheet of the new firm and determine new profit-sharing ratio.

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