PROJECT ON FINAL ACCOUNTS

1. From the following balances, prepare the trading and profit and loss account and
balance sheet as on March 31, 2017.
Debit Balances Amount Credit Balances Amount
Rs. Rs.
Drawings- 6,300- Capital- 1,50,000-
Cash at bank- 13,870- Discount received- 2,980-
Bills receivable- 1,860- Loans- 15,000-
Loan and Building- 42,580- Purchases return 1,450-
Furniture- 5,130- Sales- 2,81,500-
Discount allowed- 3,960- Reserve for bad debts- 4,650-
Bank charges- 100- Creditors- 18,670-
Salaries- 6,420-
Purchases- 1,99,080-
Stock (opening)- 60,220-
Sales return- 1,870-
Carriage- 5,170-
Rent and Taxes- 7,680-
General expenses- 3,630-
Plant and Machinery- 31,640-
Book debts- 82,740-
Bad debts- 1,250-
Insurance 750
4,74,250 4,74,250
Adjustments
1. Closing stock Rs. 70,000
2. Create a reserve for bad and doubtful debts @ 10% on book debts
3. Insurance prepaid Rs. 50
4. Rent outstanding Rs. 150
5. Interest on loan is due @ 6% p.a.

2. The following were the balances extracted from the books of Yogita as on March 31,
2017:
Debit Balances- Amount- Credit Balances- Amount
Cash in hand- 540- Sales - 98,780-
Cash at bank- 2,630- Return outwards- 500-
Purchases- 40,675- Capital - 62,000-
Return inwards- 680- Sundry creditors- 6,300-
Wages - 8,480- Rent- 9,000-
Fuel and Power- 4,730-
Carriage on sales- 3200-
Carriage on purchases- 2040-
Opening stock - 5,760-
Building - 32,000-
Freehold land- 10,000-
Machinery- 20,000-
Salaries- 15,000-
Patents- 7,500-
General expenses- 3,000-
Insurance- 600-
Drawings- 5,245-
Sundry debtors- 14,500-
 Taking into account the following adjustments prepare trading and profit and loss
account and balance sheet as on March 31, 2017:
(a) Stock in hand on March 31, 2017, was Rs. 6,800.
(b) Machinery is to be depreciated at the rate of 10% and patents @ 20%.
(c) Salaries for the month of March, 2017 amounting to Rs. 1,500 were outstanding.
(d) Insurance includes a premium of Rs. 170 on a policy expiring on September 30, 2017.
(e) Further bad debts are Rs. 725. Create a provision @ 5% on debtors.
(f) Rent receivable Rs. 1,000.

3. The following balances were extracted from the books of Shri R. Lal on March 31,
2017:

Account Title Amount- Account Title Amount

Rs. Rs.-
Capital- 1,00,000- Rent (Cr.)- 2,100-
Drawings- 17,600- Railway freight on sales- 16,940-
Purchases- 80,000- Carriage inwards- 2,310-
Sales- 1,40,370- Office expenses- 1,340-
Purchases return - 2,820- Printing and Stationery- 660-
Stock on April 01, 2016 11,460- Postage and Telegram- 820-

Bad debts- 1,400- Sundry debtors- 62,070-

doubtful debts reserve- 3,240- Sundry creditors- 18,920-
April 01, 2016-
Cash in bank- 12,400-
Rates and Insurance- 1,300- Cash in hand- 2,210-
Discount (Cr.)- 190- Office furniture- 3,500-
Bills receivable - 1,240- Salaries and Commission- 9,870-
Sales returns- 4,240- Addition to buildings- 7,000-
Wages- 6,280-

Buildings - 25,000-

Prepare the trading and profit and loss account and a balance sheet as on March 31,
2017 after keeping in view the following adjustments:
(i) Depreciate old building by Rs. 625 and addition to building at 2% and office
furniture at 5%.
(ii) Write-off further bad debts Rs. 570.
(iii) Increase the bad debts reserve to 6% of debtors.
(iv) On March 31, 2017 Rs. 570 are outstanding for salary.
(v) Rent receivable Rs. 200 on March 31, 2017.
(vi) Interest on capital at 5% to be charged.
(vii) Unexpired insurance Rs. 240.
(viii) Stock was valued at Rs. 14,290 on March 31, 2017.
4. Prepare the trading profit and loss account of M/s Mohit Traders as on 31 March-
2017 and draw necessary Journal entries and balance sheet as on that date.

Debit Balances- Amount- Credit Balances- Amount

Opening stock- 24,000- Sales- 4,00,000-

Purchases- - 1,60,000- Return outwards- 2,000-
Cash- in hand- 16,000- Capital- 1,50,000-
Cash- at bank- 32,000- Creditors- 64,000-
Return- inwards- 4,000- Bills payable- 20,000-
Wages- - 22,000- Commission received- 4,000-
Fuel- and Power- 18,000-
Carriage inwards- 6,000-
Insurance 8,000
Buildings- 1,00,000-
Plant- 80,000-
Patents 30,000-
Salaries- 28,000-
Furniture 12,000
Drawings- 18,000
Rent 2,000
Debtors- 80,000-
6,40,000- 6,40,000-

Adjustments-
(a) Salaries outstanding 12,000-
-(b) Wages outstanding 6,000-
-(c) Commission is accrued 2,400-
-(d) Depreciation on building 5% and plant 3%-
-(e) Insurance paid in advance 700-
-(f) Closing stock 12,000-

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

Debit balances Amount Credit balances Amount

Rs. Rs.
Opening stock- 40,000- Capital 2,70,000
Rent 2,000 Creditors- 50,000-
Plant and Machinery- 1,20,000- Bills payable 50,000
Land and Buildings- 2,55,000- Loan- 1,10,000-
Power- 3,500- Discount 1,500
Purchases 75,000 Sales 1,50,000
Sales return 2,500 Provision for bad debts- 1,000-
Telegram and Postage- 400- General reserves- 50,000-
Wages - 4,500-
Salary 2,500
Insurance 3,200
Discount 1,000
Repair and Renewals- 2,000-
Legal charges- 700-
Trade taxes- 1,200-
Debtors 75,000
Investment- 65,000-
Bad debts- 2,000-
Trade expenses 4,500-
 Commission 1,250-
Travelling expenses- 1,230-
Drawings- 20,020-

6,82,500- 6,82,500-

Adjustments
1. Closing stock for the year was Rs. 35,500.
2. Depreciation charged on plant and machinery 5% and land and building 6%.
3. Interest on drawing @ 6% and Interest on loan @ 5%.
4. Interest on investments @ 4%.
5. Further bad debts 2,500 and make provision for doubtful debts on debtors 5%.
6. Discount on debtors @ 2%.
7. Salary outstanding Rs. 200.
8. Wages outstanding Rs. 100.
9. Insurance prepaid Rs. 500.
You are required to make trading and profit and loss account and a balance sheet on
March 31, 2017

6. From the following balances of M/s Keshav Bros. You are required to prepare trading
and- profit and loss account and a balance sheet of March 31, 2017.
Debit balances Amount Credit balances Amount
Rs. Rs.
Plant and Machinery- 1,30,000- Sales- 3,00,000-
Debtors- 50,000- Return outwards- 2,500-
Interest - 2,000- Creditors- 2,50,000-
Wages- 1,200- Bills payable- 70,000-
Salary- 2,500- Provision for bad debts- 1,550-
Carriage inwards- 500- Capital- 2,20,000-
Carriage outwards- 700- Rent received- 10,380-
Return inwards- 2,000- Commission received- 16,000-
Factory rent 1,450
Office rent- 2,300-
Insurance 780
Furniture 22,500
Buildings- 2,80,000-
Bills receivable- 3,000-
Cash in hand- 22,500-
Cash at bank- 35,000-
Commission- 500-
Opening stock- 60,000-
Purchases- 2,50,000-
Bad debts- 3,500-
8,70,430 8,70,430
Adjustment
(i) Provision for bad debts @ 5% and further bad debts Rs. 2,000.
(ii) Rent received in advance Rs. 6,000.
(iii) Prepaid insurance Rs. 200.-
(iv) Depreciation on furniture @ 5%, plant and machinery @ 6%, building @ 7%.

7. The following information have been taken from the trial balance of M/s Fair Brothers
Ltd. You are required to prepare the trading and profit and loss account and a
balance sheet as at March 31, 2017.

Debit Balances- Amount Credit balances- Amount

Rs. Rs.-
Cash- 20,000- Sales- 3,61,000-
Wages- - 45,050- Loan 12% (1.7.2016)- 40,000-
Return- outwards 4,800- Discount received- 1,060-
Bad- debts- 4,620- Return (Purchase)- 390-
Salaries- - 16,000- Creditors- 60,610-
Octroi- - 1,000- Capital- 75,000-
Charity- - 250-
Machinery- - 32,000-
Debtors (Including a 60,000
dishonoured bill of
Rs.-1,600)-
Stock- 81,600-
Purchases- 2,60,590-
Repairs 3,350
Interest on loan 1,200
Sales tax- 1,600
Insurance 2,000
Rent 4,000

5,38,060- 5,38,060-

Adjustments
1. Wages include Rs. 4,000 for erection of new machinery on April 01, 2016.
2. Provide 5% depreciation on furniture
3. Salaries unpaid Rs.1,600.
4. Closing stock Rs. 81,850.
5. Create a provision at 5% on debtors.
6. Half the amount of bill is recoverable.
7. Rent is paid up to July 30, 2017.
8. Insurance unexpired Rs. 600.-
8. From the following balance extracted from the books of M/s Hariharan Brother, you
are requiring to prepare the trading and profit and loss account and a balance sheet
as on December 31, 2017.
Debit balance Amount Credit balance Amount
Rs. Rs.
Opening- stock- 16,000- Capital- 1,00,000-
Purchases- - 40,000- Sales- 1,60,000-
Return- inwards- 3,000- Return outwards- 800-
Carriage inwards- 2,400- Apprenticeship premium- 3,000-
Carriage- outwards- 5,000- Bills payable- 5,000-
Wages- 6,600- Creditors- 31,600-
S-alaries 11,000
Rent 2,200
Freight- and Dock- 4,800-
Fire Insurance premium 1,800
Bad debts- 4,200-
Discount- 1,000-
Printing and Stationery- 500-
Rates and Taxes- 700-
Travelling expenses- 300-
Trade expenses- 400-
Business- premises- 1,10,000-
Furniture 5,000
Bills receivable- 7,000-
Debtors- 40,000-
Machine- - 9,000-
Loan 10,000
Investment- 6,000-
Cash in hand- 500-
Cash at bank- 7,000-
Proprietor’s withdrawal 6,000-
3,00,400 3,00,400
Adjustments
1. Closing stock Rs. 14,000.
2. Wages outstanding Rs. 600, Salaries Outstanding Rs. 1,000, Rent outstanding Rs.
200.-
3. Fire Insurance premium includes Rs. 1,200 paid in July 01, 2016 to run for one
year from July 01, 2016 to June 30, 2017.
4. Apprenticeship Premium is for three years paid in advance on January 01, 2016.
5. Stationery bill for Rs. 60 remain unpaid.
6. Depreciation on Premises @ 5%, furniture @ 10%, Machinery @ 10%.
7. Interest on loan given accrued for one year @ 7%
8. Interest on investment @ 5% for half year to December 31, 2016 has accrued.
9. Interest on capital to be allowed at 5% for one year.
10. Interest on drawings to be charged to him ascertained for the year Rs. 160.
9. The following balances have been extracted from the trial balance of M/s Kolkata Ltd.
You are- required to prepare the trading and profit and loss account on dated March
31, 2017. Also prepare balance sheet on that date.-
Debit balances Amount Credit balances Amount
Rs. Rs.
Opening stock- 6,000- Capital- 20,000-
Furniture- - 1,200- Sales- 41,300-
Drawings- - 2,800- Purchases return- 4,000-
Cash- in hand- 3,000- Bank overdraft- 4,000-
Purchases- 24,000- Bad debts provision- 400-
Sales return- 2,000- Creditors- 5,000-
Establishment- expenses- 4,400- Commission- 100-
Bad debts- 1,000- Bills payable- 5,000-
Debtors- - 10,000- Apprenticeship premium- 500-
Carriage- 1,000-
Bills receivable- 6,000-
Bank deposits- 8,000-
Wages- 1,000-
Trade expenses- 500-
Bank- charges- 400-
General expenses- 1,000-
Salaries- 2,000-
Insurance 1,500
Postage- and Telegram- 500-
Rent, Rates and Taxes- 2,000-
Coal, Gas, Water- 2,000-
80,300 80,300

Adjustments
1. Outstanding salaries Rs. 100. Rent and taxes Rs. 200, Wages Rs. 100.
2. Unexpired insurance Rs. 500.
3. Commission is received in advances Rs. 50.
4. Interest Rs. 500 is to be received on bank deposits.
5. Interest on bank overdraft Rs. 750.
6. Depreciation on furniture @ 10%.
7. Closing stock Rs. 9,000.
8. Further bad debts Rs. 200 New provision @ 5% on debtors.
9. Apprenticeship premium received in advance Rs. 100.
10. Interest on drawings @ 6%.
10. Prepare the trading and profit and loss account of M/s Roni Plastic Ltd. from the
-following trial balance and a balance sheet as at March 31, 2017.
Debit balances Amount Credit balances Amount
Rs. Rs.
Drawings- 6,000- Creditors- 16,802-
Sundry- debtors- 38,200- Capital- 60,000-
Carriage outwards- 2,808- Loan on mortgage- 17,000-
Establishment expenses- 16,194- Bad debts provision- 1,420-
Interest on loan- 400- Sales- 2,22,486-
Cash in hand- 6,100- Purchases return- 2,692-
Stock- 11,678- Discount- 880-
Motor- car- 18,000- Bills payable- 5,428-
Cash at bank- 9,110- Rent received- 500-
Land and Buildings- 24,000-
Bad debts- 1,250-
Purchases- 1,34,916-
Sales return- 15,642-
Advertisement- 4,528-
Carriage inward- 7,858-
Rates, taxes, insurance- 7,782-
General expenses- 8,978-
Bills receivable- 13,764-
3,27,208 3,27,208

Adjustments-
1. Depreciation on land and building at @ 5% and Motor vehicle at @ 15%.
2. Interest on loan is @ 5% taken on April 01, 2016.
3. Goods costing Rs1,200 were sent to a customer on sale on return basis for
Rs. 1,400 on March 30, 2017 and has been recorded in the books as actual
sales.
4. Salaries amounting to Rs. 1,400 and Rates amounting to Rs. 800 are due.
5. The bad debts provision is to be brought up to @ 5% on sundry debtors.
6. Closing stock was Rs. 13,700.
7. Goods costing Rs. 1,000 were taken away by the proprietor for his personal
use but
not entry has been made in the books of account.
8. Insurance pre-paid Rs. 350.-
9. Provide the manager’s commission at @ 5% on Net profit after charging such
commission.
11. From the following Trial Balance of M/s Karan on March 31, 2017, prepare a Trading
and Profit and Loss Account and a Balance Sheet:
Particulars Dr. (Rs.) Cr. (Rs.)
Creditors/Debtors 205000 96000
Bills Payable/Bills Receivables 10000 9600
15% Loan 50000
Sales/Purchases 280000 1200000
Discount 4000 3000
Bad Debt Recovered/Bad Debt 5000 14000
Interest on Investments 6000
Interest on Loan 8000 4000
Vehicles 650000 —
Stock 300000 —
10% Investments (Purchased on 30th
September, 2016) 180000 —
Cash in hand 20000 —
Cash at bank 37000 —
Capital /Drawings 9000 450000
Carriage on Purchases 1600 —
Carriage on sales 4400 —
Primary Packing Expenses 2000 —
Rent 3000 7000
Insurance 3600 —
Office & Administrative Expenses 4000 —
Discount 2000 3000
10% Loan 60000 —
Delivery Expenses 4000 —
Selling and Distribution Expenses 10000 —
Income Tax 2000 —
Outstanding Salary 1000
Sales Tax Collected 3000
Apprenticeship Premium 6000
Returns 1000 4000
Live Stock 53000
Commission 10000 12000
1868600 1868600
(I) Additional Information
(a) The cost of closing stock was Rs. 50,000 but the market value was Rs. 40,000.
(b) Rent is due but not yet paid for March 2017 Rs. 500.
(c) Insurance carried forward Rs. 900.
(d) 1/3 of the commission received is in respect of work to be done in next year and
commission paid represents only 1/4 of the actual commission to be paid
during the year.
(e) Vehicles were valued at 90% of the book value.
(f) The Horse worth Rs. 30,000 was donated to a charitable organization.

(II) Name the accounting concept followed while treating the adjustment (a),
(b) and (d) above?
12. The following balances were extracted from the books of Avika Enterprises on 31st
March 2017.
Particulars Dr. (Rs.) Cr. (Rs.)

Capital — 24,500
Drawings 2,000 —
General Expenses 2,500 —
Buildings 21,000 —
Machinery 9,340 —
Stock (1.4.2016) 16,200 —
Power 2,240 —
Taxes and Insurance 1,315 —
Wages 7,200 —
Debtors and Creditors 6,280 2,500
Charity 105 —
Bad debts 550 —
Bank Overdraft — 11,180
Sales and Purchases 13,500 65,360
Stock (31.03.2017) 23,500 —
Motor Vehicles 2,000 —
Motor Vehicle expenses 500 —
Provision for doubtful debts — 900
Commission — 1,320
Trade expenses 1,280 —
Bills payable — 3,850
Cash 100 —
Total 1,09,610 1,09,610

You are required to:

(i) Prepare final accounts for the year ended March 31, 2017 after giving effect to the
following adjustments:
(a) 1/5th of General expenses and Taxes & Insurance to be charged to factory and
the balance to the office.
(b) Write off a further Bad debt of Rs. 160 and maintain the provision for doubtful
debts at 5% and create a provision for discount on Debtors at 10%.
(c) Depreciate Machinery at 10% and Motor Vehicles by Rs. 240
(d) Provide Rs. 700 for interest on Bank Overdraft to be paid.
(e) Rs. 50 is to be carried forward to next year out of Insurance.
(f) Provide for Manager’s Commission at 10% on the Net Profit after charging such
commission.
(ii) Name the accounting concepts which are followed while treating the adjustment (a),
(b) and (d) above?
13. The following balances were extracted from the books of Anushka Enterprises on
March 31, 2017.
Particulars Amount
(Rs.)
Creditors
Loan from SBI 2,00,000
Sales 2,00,000
Debtors 12,30,000
Dividend Received on Shares 2,00,000
Bad Debt 20,000
Bad Debt Recovered 2,000
Bills Receivables 12,000
Interest on Loan 1,50,000
Goodwill 50,000
Purchases 4,00,000
Stock (1.4.2016) 2,10,000
Cash at Bank 1,00,000
Factory Repairs 3,00,000
Capital 40,000
Audit Fees 7,24,000
Petty Expenses 6,000
Salary 4,000
Life Insurance Premium 70,000
Premises 15,000
Insurance 4,00,000
Sales Returns 25,000
Employees Provident Fund 12,000
Provision for Doubtful Debts 60,000
Delivery Expenses 75,000
Dock Charges (Outward) 8,000
Packing Charges 6,000
Advance Salary 17,000
Warehouse Insurance 30,000
Loss in Exchange 13,000
Bank Charges 9,000
Bonus from Suppliers 5,000
Purchases Returns 3,45,000
Machinery 10,000
Discounting of Bills of Exchange 8,00,000
1,000
You are required to :
(i) Prepare final accounts for the year ended March 31, 2017 after giving effect to the
following adjustments:
(a) Insurance is due but not yet paid for 31 March 2017 Rs. 500.
(b) Salary Unexpired Rs. 900.
(c) Write off a further Bad debts Rs. 2,000 and maintain the provision for bad
debts at 5% on Debtors.
(d) Machinery is to be valued at 90% less than the book value.
(e) Goods kept in warehouse worth Rs. 10,0000 were used for staff welfare.
(f) Half of the Bills Receivable were irrecoverable.
(h) Closing Stock is Rs. 40,000
(ii) Name the accounting concepts which will be followed while treating the adjustment
(a), (b), (c) and (d) above?

14. The following balances were extracted from the books of Ankita Enterprises on March
31, 2017.
Particulars Dr. (Rs.) Cr. (Rs.)
Capital — 1,92,680
Cash — 60
Purchases 17,980 —
Sales — 22,120
Bank 1,770 —
Plant 450 —
Freehold Land 3,000 —
Heating and Lighting 130 —
Bills Receivables — 1,650
Return Inwards — 60
Salaries 2,150 —
Creditors — 63,780
Debtors 11,400 —
Stock (as on 01.04.2016) 6,000 —
Printing 450 —
Bills Payable 3,750 —
Taxes 380 —
Discount Received 890 —
Commission (Dr.) — 800
Trucks 25,000 —
Furniture — 12,000
Wages 2,00,000 —
Drawings — 340
Returns Outward 400 —
2,73,750 2,93,490
You are required to:
(i) Redraft the Trial Balance.
(ii) Prepare final accounts for the year ended March 31, 2017 after giving effect to the
following adjustments:
(a) Taxes are paid for 10 months only.
(b) Creditors worth Rs. 780 have accepted bills payables.
(c) Depreciate furniture by 10%.
(d) Trucks were depreciated to the extent of Rs. 21,000.
(e) Wages includes Rs. 2,000 for the making of Furniture.
(f) Closing Stock is of Rs. 20,000.
(g) Provide for Manager’s Commission at 10% on the Net Profit before charging
such commission.
(h) Land was acquired on 1st April, 2016 by paying a claim at 50% less than
market value to the owner.
(iii) Name the accounting principles which will be followed while treating the adjustment
(a), (c) and (e) above?
(Correct total of Trial Balance Rs. 2,83,620)

15. Prepare a trading and profit and loss account for the year ending March
31, 2017. from the balances extracted of M/s Rahul Sons. Also prepare a
balance sheet at the end of the year.

Account Title Amount Account Title Amount

Rs. Rs.-
Stock - 50,000- Sales- 1,80,000-
Wages- - 3,000- Purchases return- 2,000-
Salary- - 8,000- Discount received- 500-
Purchases- - 1,75,000- Provision for doubtful debts- 2,500-
Sales return- 3,000- Capital- 3,00,000-
Sundry Debtors- 82,000- Bills payable- 22,000-
Discount allowed- 1,000- Commission received- 4,000-
Insurance- - 3,200- Rent- 6,000-
Rent- Rates and Taxes- 4,300- Loan- 34,800-
Fixtures- and fittings- 20,000-
Trade expenses- 1,500-
Bad debts- 2,000-
Drawings- 32,000-
Repair and renewals- 1,600-
Travelling expenses- 4,200-
Postage- 300-
Telegram expenses- 200-
Legal fees- 500-
Bills receivable- 50,000-
Building- - 1,10,000-

5,51,800 5,51,800
 Adjustments-
1. Commission received in advance Rs. 1,000.
2. Rent- receivable Rs. 2,000.
3. Salary- outstanding Rs. 1,000 and insurance prepaid Rs. 800.-
4. Further bad debts Rs. 1,000 and provision for doubtful debts @ 5% on
debtors and discount on debtors @ 2%.
5. Closing stock Rs. 32,000.
6. Depreciation on building @ 6% p.a.
16. Prepare a trading and profit and loss account of M/s Green Club Ltd. for the year
ending March 31, 2017 from the following figures taken from his trial balance:

Account Title Amount Account Title Amount

Rs. Rs.-
Opening stock- 35,000- Sales 2,50,000-
Purchases- - 1,25,000- Purchase return- 6,000-
Return- inwards- 25,000- Creditors- 10,000-
Postage- and Telegram- 600- Bills payable- 20,000-
Salary- - 12,300- Discount 1,000-
Wages- - 3,000- Provision for bad debts- 4,500-
Rent and Rates- 1,000- Interest received- 5,400-
Packing- and Transport- 500- Capital- 75,000-
General expense- 400-
Insurance 4,000
Debtors- 50,000-
Cash in hand- 20,000-
Cash at bank- 40,000-
Machinery- 20,000-
Lighting- and Heating- 5,000-
Discount- 3,500
Bad debts- 3,500-
Investment- 23,100-
3,71,900 3,71,900

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% p.a.
5. Closing stock 10,000.
17. The following balances has been extracted from the trial of M/s Runway Shine
Ltd. Prepare a trading and profit and loss account and a balance sheet as on
March 31, 2017.

Account Title Amount Account Title Amount-

Rs. Rs.
Purchases- - 1,50,000- Sales- 2,50,000-
Opening- stock- 50,000 Return outwards- 4,500-
Return- inwards- 2,000- Interest received- 3,500-
Carriage- inwards- 4,500- Discount received- 400-
Cash- in hand- 77,800- Creditors- 1,25,000-
Cash- at bank- 60,800- Bill payable- 6,040-
Wages- - 2,400- Capital 1,00,000-
Printing and Stationery- 4,500-
Discount- - 400-
Bad- debts- 1,500-
Insurance 2,500
Investment- - 32,000-
Debtors- - 53,000-
Bills- receivable- 20,000-
Postage- and Telegraph - 400-
Commission- - 200-
Interest 1,000
Repair 440
Lighting- Charges- 500-
Telephone- charges- 100-
Carriage- outward- 400-
Motor- car- 25,000-

4,89,440 4,89,440

Adjustments
1. Further bad debts Rs. 1,000. Discount on debtors Rs. 500 and make a provision
on debtors @ 5%.
2. Interest received on investment @ 5%.
3. Wages and interest outstanding Rs. 100 and Rs. 200 respectively.
4. Depreciation charged on motor car @ 5% p.a.-
5. Closing Stock Rs. 32,500.
18. From the following Trial Balance, you are required to prepare trading and profit
and loss account for the year ending March 31, 2017 and Balance Sheet on that
date.

Particulars Amount Particulars Amount

Rs. Rs.
Opening stock 25,000 Sales- 7,00,000-
Furniture 16,000 Creditors 72,500-
Purchases 5,55,300- Bank Overdraft 50,000-
Carriage- -Inwards 4,700- Provision for bad and- 2,100-
Bad- debts- 1,800- doubtful debts
Wages 52,000- Discount 500-
Debtors- 80,000- Capital 2,00,000
Sales Return 15,000- Purchases Return 20,000-
Rent 24,000
Miscellaneous Expenses 3,400-
Salaries- 68,000-
Cash- 8,900-
Drawings- - 14,000-
Buildings 1,60,000-
Advertising 10,000-
Interest- on Bank Overdraft 7,000-

10,45,100 10,45,100

Adjustments
1. Closing stock valued at Rs. 36,000.
2. Private purchases amounting to Rs. 5000 debited to purchases account.
3. Provision for doubtful debts @ 5% on debtors.
4. Sign board costing Rs. 4,000 includes in advertising.
5. Depreciate furniture by 10%.
19. From the following information prepare trading and profit and loss account of
M/s Indian sports house for the year ending March 31, 2017.

Account Title Amount Account Title Amount

Rs. Rs.

Drawings- 20,000- Capital- 2,00,000-

Sundry debtors- 80,000- Return outwards- 2,000-
Bad debts - 1,000- Bank overdraft- 12,000-
Trade Expenses- 2,400- Provision for bad debts- 4,000-
Printing and Stationery- 2,000- - Sundry creditors- 60,000-
Rent Rates and Taxes- 5,000- Bills payable 15,400-
Freight 4,000- Sales- 2,76,000-
Return inwards- 7,000-
Opening stock- 25,000-
Purchases- 1,80,000-
Furniture and Fixture- -20,000-
Plant- and Machinery- -1,00,000-
Bills- receivable - 14,000-
Wages- - 10,000-
Cash in hand- 6,000-
Discount- allowed- 2,000-
Investments- 40,000-
Motor- car- 51,000-

- 5,69,400- 5,69,400-

Adjustments-
1. Closing stock was Rs. 45,000.
2. Provision- for doubtful debts is to be maintained @ 2% on debtors.
3. Depreciation charged on: furniture and fixture @ 5%, plant and
Machinery @ 6% and motor car @ 10%.
4. A Machine of Rs. 30,000 was purchased on October 01, 2016.
5. The manager is entitling to a commission of @ 10% of the net profit
after charging such commission.
20. Prepare the trading and profit and loss account and a balance sheet of M/s Shine
Ltd. from the following particulars.

Account Title Amount Account Title Amount

Rs. Rs.
Sundry debtors- 1,00,000- Bills payable 85,550-
Bad debts- 3,000- Sundry creditors- 25,000-
Trade expense-s 2,500- Provision for bad debts- 1,500-
Printing and Stationary- 5,000- Return outwards- 4,500 -
Rent, Rates and Taxes- 3,450- Capital- 2,50,000-
Freight- 2,250- Discount received- 3,500 -
Sales return- 6,000- Interest received- 11,260 -
Motor car- 25,000- Sales 1,00,000 -
Opening- stock- 75,550-
Furniture- and Fixture- 15,500-
Purchases- 75,000-
Drawings- 13,560-
Investments- 65,500-
Cash in hand- 36,000-
Cash in bank- 53,000-

4,81,310 4,81,310

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 drawing @ 6%.
6. Rent, rates and taxes was outstanding Rs.200.
7. Discount on debtors 2%.
21. Following balances have been extracted from the trial balance of M/s Keshav
Electronics Ltd. You are required to prepare the trading and profit and loss
account and a balance sheet as on March 31, 2017.

Account Title Amount Account Title Amount

Rs. Rs.
Opening- stock- 2,26,000- Sales- 6,80,000-
Purchases- - 4,40,000- Return outwards- 15,000-
Drawings- 75,000- Creditors- 50,000-
Building- s- 1,00,000- Bills payable 63,700-
Motor- van- 30,000- Interest receivced- 20,000-
Freight inwards- 3,400- Capital- 3,50,000-
Sales- return- 10,000-
Trade- expense- 3,300-
Heat and Power- 8,000-
Salary- and Wages- 5,000-
Legal- expense- 3,000-
Postage- and Telegram- 1,000-
Bad debts- 6,500-
Cash- in hand- 79,000-
Cash- at bank- 98,000-
Sundry- debtors- 25,000-
Investments- - 40,000-
Insurance 3,500
Machinery- - 22,000-

11,78,700 11,78,700

The following additional information is available:

1. Stock on March 31, 2017 was Rs. 30,000.
2. Depreciation is to be charged on building at 5% and motor van at 10%.
3. Provision for doubtful debts is to be maintained at 5% on Sundry
Debtors.
4. Unexpired insurance was Rs. 600.-
5. The Manager is entitled to a commission @ 5% on net profit after
charging such commission.
22. From the following balances extracted from the books of Raga Ltd. prepare a
trading and profit and loss account for the year ended March 31, 2017 and a
balance sheet as on that date.

Account Title Amount Account Title Amount

Rs. Rs.
Drawings 20,000- Sales- 2,20,000-
Land- and Buildings- 12,000- Capital- 1,01,110-
Plant- and Machinery- 40,000- Discount- 1,260-
Carriage- inwards- 100- Apprentice premium- 5,230-
Wages- - 500- Bills payable 1,28,870-
Salary- 2,000- Purchases return- 10,000-
Sales- return- 200-
Bank charges- 200-
Coal,- Gas and Water- 1,200-
purchases 1,50,000
Trade- Expenses- 3,800-
Stock- (Opening)- 76,800-
Cash- at bank- 50,000-
Rates- and Taxes- 870-
Bills- receivable 24,500-
Sundry- debtors- 54,300-
Cash- in hand- 30,000-

- 4,66,470- 4,66,470-

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 at 5% and land and
building at 10%.
3. Discount on debtors at 3%.
4. Make- a provision at 5% on debtors for doubtful 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.
23. From the following balances of M/s Jyoti Exports, prepare trading and profit and
loss account for the year ended March 31, 2017 and balance sheet as on this
date.
Account Title Debit Amount Account Title Credit Amount
Sundry debtors- 9,600- Sundry creditors- 2,500-
Opening stock- 22,800- Sales- 72,670-
Purchases- 34,800- Purchases returns - 2,430-
Carriage inwards- 450- Bills payable - 15,600-
Wages - 1,770- Capital- 42,000-
Office rent- 820-
Insurance 1,440
Factory rent 390
Cleaning charges- 940-
Salary- 1,590-
Building- 24,000-
Plant and Machinery- 3,600-
Cash in hand- 2,160-
Gas and Water- 240-
Octroi- 60-
Furniture 20,540
Patents- 10,000-

1,35,200 1,35,200

1. Closing stock Rs. 10,000.

2. To provision for doubtful debts is to be maintained at 5 per cent on sundry
debtors.
3. Wages amounting to Rs. 500 and salary amounting to Rs. 350 are
outstanding.
4. Factory rent prepaid Rs. 100.
5. Depreciation charged on Plant and Machinery @ 5% and Building @ 10%.
6. Outstanding insurance Rs.100.
24. The following balances have been extracted from the books of M/s Green
House for the year ended March 31, 2017, prepare trading and profit and loss
account and balance sheet as on this date.

Account Title- Amount Rs. Account Title Amount Rs.

Purchases- 80,000- Capital- 2,10,000-
Bank balance- 11,000- Bills payable- 6,500-
Wages- 34,000- Sales- 2,00,000-
Debtors- 70,300- Creditors- 50,000-
Cash in hand- 1,200- Return outwards- 4,000-
Legal expenses- 4,000-
Building- 60,000-
Machinery- 120,000-
Bills receivable 7,000-
Office expenses- 3,000-
Opening stock- 45,000-
Gas and fuel- 2,700-
Freight and Carriage- 3,500-
Factory lighting- 5,000-
Office furniture- 5,000-
Patent right - 18,800-

4,70,500 4,70,500
 Adjustments:
(a) Machinery is depreciated at 10% and buildings depreciated at 6%.
(b) Interest on capital @ 4%.
(c) Outstanding wages Rs. 50.
(d) Closing stock Rs. 50,000.
25. From the following balances extracted from the book of M/s Manju Chawla on
March 31, 2017. You are requested to prepare the trading and profit and loss
account and a balance sheet as on this date.

Account Title Amount Amount

Rs. Rs.
Opening stock - 10,000-
Purchases and Sales- 40,000- 80,000-
Returns- 200- 600-
Wages- 6,000-
Dock and cleaning charges- 4,000-
Lighting- 500-
Misc. Income- 6,000-
Rent 2,000
Capital- 40,000-
Drawings- 2,000-
Debtors and Creditors- 6,000- 7,000-
Cash- 3,000-
Investment- 6,000-
Patent- 4,000-
Land and Machinery- 43,000-
Donations and Charity- 600-
Sales tax collected- 1,000-
Furniture 11,300
1,36,600- 1,36,600-

Closing stock was Rs. 2,000.

(a) Interest on drawings @ 7% and interest on capital @ 5%.
(b) Land and Machinery is depreciated at 5%.
(c) Interest on investment @ 6%.
(d) Unexpired rent Rs.100.
(e) Charge 5% depreciation on furniture.
26. The following balances were extracted from the books of M/s Panch Sheel Garments
on March 31, 2017.

Account Title Debit Rs. Account Title Credit Rs.

Opening stock- 16,000- Sales- 1,12,000-
Purchases- 67,600- Return outwards- 3,200-
Return Inwards- 4,600- Discount- 1,400-
Carriage inwards- 1,400- Bank overdraft- 10,000-
General expenses- 2,400- Commission- 1,800-
Insurance- 4,000- Creditors- 16,000-
Scooter expenses- 200- Capital- 50,000-
Salary- 8,800-
Cash in hand- 4,000-
Scooter- 8,000-
Furniture 5,200
Buildings- 65,000-
Debtors- 6,000-
Wages- 1,200-

1,94,400 1,94,400

Prepare the trading and profit and loss account for the year ended March 31,
2017 and a balance sheet as on that date.
(a) Unexpired insurance Rs. 1,000.
(b) Salary due but not paid Rs. 1800.
(c) Wages outstanding Rs. 200.
(d) Interest on capital 5%.
(e) Scooter is depreciated @ 5%.
(f) Furniture is depreciated Rs.@ 10%.
(g) Closing stock was Rs. 15,000.

27. Prepare the trading and profit and loss account and balance sheet of M/s Control
Device India on March 31, 2017 from the following balance as on that date.
Account Title Debit Credit
Drawings and Capital- 19,530- 67,500-
Purchase and Sales- 45,000- 1,12,500-
Salary and Commission- 25,470- 1,575-
Carriage- 2,700-
Plant and Machinery- 27,000-
Furniture- 6,750-
Opening stock- 42,300-
Insurnace premium 2,700
Interest 7,425
Bank overdraft- 24,660-
Rent and Taxes- 2,160-
Wages- 11,215-
Returns 2,385 1,440
Carriage outwards- 1,485-
Debtors and Creditors- 36,000- 58,500-
General expenses- 6,975-
Octroi - 530-
Investment- 41,400-

2,73,600- 2,73,600-
 a) Closing stock was valued Rs. 20,000.
b) Interest on capital @ 10%.
c) Interest on drawings @ 5%.
d) Wages outstanding Rs. 50.
e) Outstanding salary Rs. 20.
f) Provide a depreciation @ 5% on plant and machinery.
g) Make a 5% provision on debtors.

28. Premium Co. Ltd. Has an authorised Capital of 6,00,000 in equity shares of 10
each. Its Trial balance on 31-3-2019 is given below:

Debit Balances Amount Credit Balances Amount

Calls-in-arrears 7,500 Called-up capital 4,00,000

Premises 3,00,000 Sales 4.15,000
Plant & Machinery 3,30,000 General reserve 25,000
Interim Dividend 32,053 P&LA/C 14,500
Tax on interim 5,200 Creditors 50,000
dividend
Stock (1.4.2018) 75,000 6% Debentures 3,00,000
Fixtures 7,200 Bills payable 38,000
Debtors 87,000 Bad debts provision (1-4-2018) 3,500
Goodwill 25,000
Cash in hand 1,007
Cash at Bank 39,900
Purchases 1,85,000
Preliminary expenses 5,000
Wages 84,865
General expenses 16,835
Freight & Carriage 13,115
Salary 14,500
Directors Fees 5,725
Bad Debts 2,100
Debenture Interest 9,000
12,46,000 12,46,000
Adjustments:
(a) Depreciate plant & Machinery by 10%
(b) Write off preliminary expenses 500
(c) Provide for debenture interest due
(d) Provide for RDD at 5%
(e) Of the debtors 500 are further bad
(f) Closing stock 95,000.
Prepare income statement for the year ended 31.3.2019 and Balance sheet as at that date
as per law.
29. From the following Trial balance of PQS Ltd. as on 31st March 2020, prepare the
company's Final Accounts after considering the following adjustments:
Adjustments:
(a) Closing Stock 1,20,000.
(b) Depreciate Building by 10%
(c) Accrued interest on investments 12,000
(d) Make provision for taxation 25,000
(e) Transfer 25,000 to reserve fund.
(f) Write off bad debts 10,000.
Trial balance as on 31.3.2020
Debit Balances Amount Credit Balances Amount
Furniture 40,000 Called-up capital 3,00,000
Buildings 80,000 Reserve Fund 1,50,000
Wages 50,000 Creditors 1,80,000
Debtors 1,60,000 Sales 3,80,000
Investments 60,000 Returns 10,000
Interim Dividend 30,000 Bills Payable 20,000
Audit Fees 10,000 P & L Appropriation A/c 20,000
Directors Fees 15,000 Forfeited Shares A/c 10,000
Freight Charges 15,000
Stationery 12,000
Purchases 2,40,000
Returns 20,000
Bills Receivable 50,000
Machinery 80,000
Cash at Bank 58,000
Calls-in-arrears 20,000
Goodwill 50,000
Stock (1.4.2019) 60,000
Salaries 20,000
10,70,000 10,70,000

30. RI Ltd. has an authorised capital of 10,000 equity shares of 10 each and 300,
5% preference shares of 100 each. From the following adjustments and the trial
balance, prepare its final accounts for the year ended 31st March 2019.
Adjustments:
(a) Closing Stock on 31-3-2019 32,630.
(b) Provision for bad debts to be increased to 750.
(c) A dividend of 10% on Equity Capital is proposed.
(d) Depreciate Vehicle @ 20% on cost price.
(e) Provide for balance of preference dividend.
(f) 3,000 to be transferred to general reserve.
(g) Provide for manager's commission at 5% on profits remaining after charging such
commission.
 Debit Balances Amount Credit Balances Amount
Purchases 1,10,670 Equity Share Capital 1,00,000
Stock (1.4.2018) 29,415 5% Preference Share Capital 20,000
Preference Dividend (up to 500 Sales 1,60,800
30-09-2018)
Wages 16,328 Interest (Tax deducted at 600
Source 600)
Motor Vehicle Expenses 5,895 Creditors 25,650
Motor Vehicle 9,240 P & L A/c (01-04-2018) 6,954
(cost 18,000)
Debtors 28,370
Rates & Insurance 1,217
Land (Cost) 88,000
Directors Fees 3,000
Bad Debts 770
Investments 5,800
Salaries 7,890
Balance at Bank 8,179
3,15,004 3,15,004

31. Following is the trial balance of Metro Company Ltd. as on 31st March 2020. The
company had 20,000 shares of 100 each as registered capital.

Debit Balances Amount Credit Balances Amount

Calls-in-arrears 16,000 Shares (2,000 shares of 2,00,000
100 each)
Buildings 80,000 Reserve Fund 2,50,000
Wages 30,000 Fixed Deposits 1,00,000
Machinery 89,000 Sales 1,00,000
Furniture 80,000 Creditors 1,50,000
Purchases 2,10,000 Bills Payable 90,000
Salary 60,000 Returns 27,000
Debtors 2,20,000 Profit & Loss A/c 27,000
Bills Receivable 61,000 Debentures 1,00,000
Directors Fees 20,000
Returns 15,000
Freight 10,000
Manufacturing Expenses 5,000
Opening Stock 65,000
Interim Dividend 25,000
Audit Fees 15,000
Tools 38,000
Preliminary Expenses 60,000
Interest on Debentures 14,000
Investments 2,50,000
Goodwill 52,000
Insurance & Taxes 20,000
Printing & Stationery 15,000
Cash & Bank Balances 12,000
14,62,000 14,62,000
Adjustments
(a) Directors proposed a total dividend of 25%
(b) Write of 25% of preliminary expenses and 10% of goodwill
(c) Depreciate buildings by 2% and furniture by 5%
(d) Transfer 60,000 to reserve fund.
(e) Insurance prepaid 1,500.
(f) Closing Stock 80,000
Prepare the company's Final Accounts.