1.

Particulars Dr Cr
Bad debts 2,100
Discount allowed 1,100
Discount Received 900
Debtors 53,000
Creditors 40,000
Provision for bad debts 2,500
Provision for discount allowed 1,500
Provision for discount received 1,000

Additional information
a. There was a further bad debt of ₹ 1,000.
b. During the year sales of ₹ 8,000 omitted to be recorded.
c. Make a Provision for bad debts @ 5% on debtors.
d. Make a Provision for discount @ 2%.
Show the extract of Profit & Loss Account & Balance Sheet for the above
adjustments.

2. Below is the trial balance of Shah Ltd as on 31st December 2023.

Debit Balance Credit Balance
Drawings 1,500 Capital Account
50,000
Adjusted Purchases 6,99,200 Loan from Desai @9%
Salaries 4,500 (taken at 1st July 2022)
20,000
Carriage on purchases 400 Sales
7,20,000
Carriage on sales 500 Discount
500
Rates and Insurance 400 Sundry Creditors
20,000
Buildings 27,000
Furniture 6,000
Sundry Debtors 8,000
Cash in hand 250
Cash at Bank 1,500
st
Stock on 31 Dec 23 61,250

8,10,500
8,10,500
Additional information:
1. Rates have been prepaid to the extent of ₹ 175.
2. Bad debts ₹ 500 have to written off. A provision for doubtful debts @
5% on debtors is necessary.
3. Building has to be depreciated at 2% and Furniture @ 10%.
 4. The manager is entitled to a commission of 5% of net profits before
charging such commission.
3. On 1-1-2021 M/s A & Co. had a provision for bad debts of ₹ 10,880.
The bad debts during the year 2021 amounted to ₹ 9,040.
The debtors as at 31-12-2021 were ₹ 2,24,000.
Provision for bad debts @ 5% is maintained by the business.
Bad debts during 2022 and 2023 were ₹ 11,680 and t 14,160
respectively.
The sundry debtors as at 31-12-22 and 31-12-23 were ₹ 2,88,000 and ₹
1,36,000 respectively.
Prepare necessary Ledger Accounts in the books of M/s. A & Co. Also
show how these would appear in the Profit and Loss Account and
Balance Sheet for the years 2021 to 2023.
4. From the following Trial Balance of Hari and additional information
prepare Trading and Profit & Loss Account for the year ended 31st
March, 2023 and a Balance Sheet as on that date:
Particulars Dr Cr
Capital 1,00,000
Furniture 20,000
Purchases 1,50,000
Debtors 2,00,000
Interest Earned 4,000
Salaries 30,000
Sales 3,21,000
Purchase Returns 5,000
Wages 20,000
Rent 15,000
Sales Return 10,000
Bad debt written off 7,000
Creditors 1,20,000
Drawings 24,000
Provision for bad debts 6,000
Printing and Stationary 8,000
Insurance 12,000
Opening stock 50,000
Office Expenses 12,000
Provision for depreciation 2,000
Additional Information:
(1) Depreciate Furniture by 10% on original cost;
(2) A provision for Doubtful Debts is to be created to the extent of 5%
 on Sundry Debtors;
(3) Salaries for the month of March, 2023 amounting to ₹ 3,000 were
unpaid which must be provided for. However salaries included ₹ 2,000
paid in advance;
(4) Insurance amounting to ₹ 2,000 is prepaid;
(5) Provide for outstanding office expenses ₹ 8,000;
(6) Stock used for private purpose ₹ 6,000;
(7) Closing Stock-in-Trade ₹ 60,000.
5. From the following Trial Balance of K. Katrak as on 31-3-2023. Prepare
Trading Account, Profit and Loss Account for the year ended 31-3-2023,
and a Balance Sheet as on that date after making necessary adjustments:
Trial Balance
Particulars Amount Particulars Amount
Drawings 12,000 Capital 60,000
Furniture& Fixtures 4,000 Return Outward 2,000
Plant& Machinery 30,000 Sales 1, 30,000
Opening Stock 20,000 Creditors 12,000
Purchases 80,000 Loan @ 6% p.a taken
Salaries & Wages 22,400 from M Mehta on
Debtors 20,400 01.10.2022 10,000
Return Inward 5,000 Discount 600
Postage& Telegrams 1,500
Rent, rates & taxes 3,600
Bad debts written off 400
Trade Expenses 200
Interest on Loan from Mehta 150
Insurance 800
Travelling Expenses 500
Sundry Expenses 300
Cash-in-hand 3,050
Cash at bank 10,300
2,14,600 2,14,600
Adjustments:
(1) Closing stock was valued at ₹ 21,000.
(2) Of the debtors ₹ 400 are bad and should be written off. Create a
reserve for bad debts at 5% on Sundry Debtors and a reserve for
discount on Debtors at 2.5%.
(3) Salaries ₹ 800 for March,23 were not paid.
(4) Interest on Capital is to be calculated at 6% p.a. and on drawings ₹
330.
 (5) Prepaid Insurance amounted to ₹ 100.
(6) Depreciate Furniture & Fixture by 5% and plant and machinery by
10%.
6. From the following trial balance and information, prepare Trading and
Profit and Loss Account of Mr. Rishabh for the year ended 31st March,
2023 and a Balance Sheet as on that date:
Particulars Dr Cr
Capital 1,00,000
Drawings 12,000
Land and Building 90,000
Plant and Machinery 20,000
Furniture 5,000
Sales 1,40,000
Return Outward 4,000
Debtors 18,400
Loan from Gajanand on01.07.22@ 6% 30,000
Purchases 80,000
Return Inward 5,000
Carriage outward 10,000
Sundry expenses 600
Printing and Stationary 500
Insurance expenses 1,000
Provision for bad& doubtful debts 1000
Provision for discount on debtors 380
Bad debts 400
Profit on textile Dept. 10,000
Stock of general goods on 01.04.22 21,300
Salaries& Wages 18,500
Creditors 12,000
Trade Expenses 800
Stock of textile goods on 31.03.2023 8,000
Cash at Bank 4,600
Cash-in-hand 1,280
2,97,380
2,97,380
Additional Information:
(i) Stock of General goods on 31.3.23 valued at ₹ 27,300.
(ii) Fire occurred on 23rd March, 2023 and ₹ 10,000 worth of general goods
were destroyed. The Insurance Company accepted claim for ₹ 6,000 only and
paid the claim money on 10th April, 2023.
(iii) Bad Debts amounting to ₹ 400 are to be written off. Provision for Bad and
Doubtful debts is to be made at 5% and for discount at 2% on debtors Make a
provision of 2% on creditors for discount.
(iv) Received ₹ 6,000 worth of goods on 27th March, 2023 but the invoice of
purchase was not recorded in Purchase Book.
(v) Rishabh took away goods worth ₹ 2,000 for personal use but no record was
made thereof.
(vi) Charge depreciation at 296 on Land and Buildings, 2096 on Plant and
Machinery and 596 on Furniture.
(vii) Insurance prepaid amounts to ₹ 200.
7. The following Trial Balance has been prepared from the books of Mr. Sexena as on
31st March, 2013 after making necessary adjustments for depreciation on Fixed
Assets, outstanding and accrued items and difference under Suspense Account

On the subsequent scrutiny following mistakes were noticed:

(i) A new machinery was purchase for ` 50,000 but the amount was wrongly
posted to Furniture Account as ` 5,000.
(ii) Cash received from Debtors ` 5,600 was omitted to be posted in the ledger.
(iii) Goods withdrawn by the proprietor for personal use but no entry was
passed ` 5,000.
(iv) Sales included ` 30,000 as goods sold cash on behalf of Mr. Thakurlal who
allowed 15% commission on such sales for which effect is to be given.
You are further told that:-
(a) Closing stock on physical verification amounted to ` 47,500.
(b) Depreciation on Machineries and Furniture has been provided @ 15% and
10%, respectively, on reducing balancing system.
Full year’s depreciation is provided on addition.
You are requested to prepare a Trading and Profit & Loss Account for the
year ended 31st March 2013 and a Balance Sheet as on that date so as to
represent a True and Correct picture.
8.

Additional Information:
(i) Sales includes ` 60,000 towards goods for cash on account of a joint venture with Mr.
Reddy who incurred ` 800 as forwarding expenses. The joint venture earned a profit of `
15,000 to which Mr. Reddy is entitled to 60%
(ii) The motor car account represents an old motor car which was replaced on 1.4.2012 by a
new motor car costing ` 1,20,000 with an additional cash payment of ` 40,000 laying debited
to Purchase Account.
(iii) UBI has allowed an overdraft limit against hypothecation of stocks keeping a margin of
20%. The present balance is the maximum as permitted by the Bank.
(iv) Sundry Debtors include ` 4,000 as due from Mr. Trivedi and Sundry Creditors include `
7,000 as payable to him.
(v) On 31.3.2013 outstanding rent amounted to ` 6,000 and you are informed that 50% of the
total rent is attributable towards Agarwal’s resident.
(vi) Depreciation to be provided on motor car @ 20% (excluding sold item).
Mr. Agarwal requests you to prepare a Trading and Profit & Loss Account for the year ended
31.3.2013 and a Balance Sheet as on that date.
9.
 Prepare Manufacturing, Trading and Profit and Loss account for the year
ended on 31st December, 2023 and Balance Sheet as at that date of Shri
S. Singh, manufacturers, from the following Trial Balance & information.
Trial Balance as at 31st December, 2023
Particulars Amount Amount
Advertising 1,660
Bad debts 1,210
Bad debts provision 2,000
Bank Charges 240
Capital Acc of Singh 70,000
Current Acc of Singh 3,246
Drawings Acc of Singh 16,000
Discount 824
Factory Power 7,228
Furniture 1,800
General expenses-factory 410
General expenses-office 692
Insurance 1,804
Light& Heat 964
Plant & Machinery 01.01.17 30,000
Plant & Machinary 30-06-17 4,000
Purchases 67,336
Packing and Transport 2,170
Rent& Rates 2,972
Repairs to plant 1,570
Salaries –Office 7,380
Sales 1,58,348
Stock 01.Jan 2017
(a) Raw Material 10,460
(b) Finished goods 14,760
(c) Work-in-process 3,340
Wages-Factory 41,400
Debtors 21,200
Creditors 12,300
Cash-at bank 7,852
Cash-in-Hand 350
2,46,718 2,46,718
Additional Information:
Stock on 31st December, 2017 were:
  Raw-materials ₹ 7,120
 Work-in-progress ₹ 3,480
 Finished goods ₹ 19,300
 Packing materials ₹ 250
The following liabilities are to be provided for:

 Factory power ₹ 1,124

 Rent & Rates ₹ 772
 Light & Heat ₹ 320
 General expenses – Factory ₹ 50
 General expenses – Office ₹ 80
Insurance prepaid ₹ 340
Provide depreciation at 10% p.a. on Plant and machinery and 5% p.a. on
furniture. Increase Bad debts provision by ₹ 1,000.
Five sixth of Rent & Rates, Light & Heat, and Insurance are to be allocated to
the Factory and one sixth to the office.

10.
11.
Additional information:
(1) Stock as on 31st March 2013 was valued at ` 60,000
(2) Write off further ` 6,000 as bad debt and maintain a provision of 5% on doubtful debt.

(3) Goods costing ` 10,000 were sent on approval basis to a customer for ` 12,000 on 30th
March, 2013. This was recorded as actual sales.
(4) ` 2,400 paid as rent for office was debited to Landlord’s A/c and was included in debtors.
(5) General Manager is to be given commission at 10% of net profits after charging his
commission.
(6) Works manager is to be given a commission at 12% of net profit before charging General
Manager’s commission and his own.
You are required to prepare final accounts in the books of Mr. Arvindkumar
12.
Mr. Abhay has requested you to help him in tallying his trial balance and also prepare his
final accounts. On investigation of his books you get the following information:
(i) Closing Stock on 31st March 2013 was ` 45,000 at cost and could sell over this value.
(ii) Depreciation of ` 13,500 needs to be provided for the year.
(iii) A withdrawal slip indicated a cash withdrawal of ` 15,000 which was charged as
drawing. However, it was noticed that ` 11,000 was used for business purpose only and
was entered as expenses in cash book.
(iv) Goods worth ` 19,000 were purchased on 24th March 2013 and sold on 29th March 2013
for `23,750. Sales were recorded correctly, but purchase invoice was missed out.
(v) Purchase returns of ` 1,500 were routed through sales return. Party’s A/c was correctly
posted.
(vi) Expenses include ` 3,750 related to the period after 31st March 2013.
(vii) Purchase book was over-cast by ` 1,000. Posting to suppliers’ A/c is correct.
(viii) Advertising will be useful for generating revenue for 5 years.
13.
Additional Information:

(i) Salaries include ` 10,000 towards renovation of Proprietor’s residence.

(ii) Closing Stock amounted to ` 75,000.
Mr. Oswal, however, request you to prepare a Trading and Profit & Loss Account for the
year ended 31st March, 2013 and a Balance Sheet as on that date following cash basis of
accounting.