Problem No.

1
Mr. Arunkumar had a small business enterprise. He has given the trial balance as at 31st
March 2022.
Particulars Debit (Rs) Credit (Rs.)
Mr. Arunkumar’s Capital 1,00,000
Machinery 36,000
Depreciation on machinery 4,000
Repairs to machinery 5,200
Wages 54,000
Salaries 21,000
Income tax of Mr. Arunkumar 1,000
Cash in hand 4,000
Land & Building 1,49,000
Depreciation on building 5,000
Purchases 2,50,000
Purchase returns 3,000
Sales 4,98,000
Citi Bank 7,600
Accrued Income 3,000
Salaries outstanding 4,000
Bills receivables 30,000
Provision for doubtful debts 10,000
Bills payable 16,000
Bad debts 2,000
Discount on purchases 7,080
Debtors 70,000
Creditors 62,520
Opening stock 74,000
7,08,200 7,08,200

Additional information:
(1) Stock as on 31st March 2022 was valued at Rs. 60,000
(2) Write off further Rs. 6,000 as bad debt and maintain a provision of 5% on
doubtful debt.
(3) Goods costing Rs. 10,000 were sent on approval basis to a customer for Rs.
12,000 on 30th March, 2022.
This was recorded as actual sales.
(4) Rs. 2,400 paid as rent for office was debited to Landlord’s Account 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.
(Trading Account Gross Profit Rs. 1,81,000; Profit and Loss Account Net Profit Rs.
1,20,000
Balance Sheet total Rs. 3,39,120)
 Problem No. 2
Mr. Oswal maintains his accounts on Mercantile basis. The following Trial Balance has
st
been prepared from his books as at 31 March, 2022 after making necessary adjustments for
outstanding and accrued items as well as depreciation:
Trial Balance
st
as at 31 March, 2022

Particulars Dr. Cr.

(Rs) (Rs.)
Plant and Machinery 2,12,500
Sundry Creditors 2,64,000
Sales 6,50,000
Purchases 4,20,000
Salaries 40,000
Prepaid Insurance 370
Advance Rent 2,000
Outstanding Salary 6,000
Advance Salary 2,500
Electricity Charges 2,650
Furniture and Fixtures 72,000
Opening Stock 50,000
Outstanding Electricity Charges 450
Insurance 1,200
Rent 10,000
Miscellaneous Expenses 14,000
Cash in hand 3,000
Investments 80,000
Drawings 24,000
Dividend from Investments 8,000
Accrued Dividend from Investments 1,500
Depreciation on Plant and Machinery 37,500
Depreciation on Furniture 8,000
Capital Account 2,11,970
Telephone Charges 6,000
Sundry Debtors 1,70,500
Stationery and Printing 1,200
Cash at Bank 65,000
Interest on Loan 8,000
Interest Due but not paid on loan 1,500
Loan Account 90,000
12,31,920 12,31,920
Additional Information:
(i) Salaries include Rs. 10,000 towards renovation of Proprietor’s residence.
(ii) Closing Stock amounted to Rs. 75,000.
 Mr. Oswal, however, request you to prepare a Trading and Profit & Loss Account for the year
ended 1st March, 2022 and a Balance Sheet as on that date following cash basis of
accounting.
(Trading Account: Gross Profit Rs. 2,55,000; P& L Account Net Profit Rs. 1,46,030;
Balance Sheet Total: 6,78,000)
Problem No. 3
The following Trail Balance has been extracted from the books of Mr. Harikumar as on
31.3.2022.
Trial Balance as on 31.3.2022

Particulars Dr Particulars C
. r.
(R (R
s) s)
Purchase 6,80,000 Sales 8,38,200
Sundry Debtors 96,000 Capital Account 1,97,000
Drawings 36,000 Sundry Creditors 1,14,000
Bad Debts 2,000 Outstanding Salary 2,500
Furniture & Fixtures 81,000 Sale of Old Papers 1,500
Office Equipments 54,000 Bank Overdraft (UBI) 60,000
Salaries 24,000
Advanced Salary 1,500
Carriage Inward 6,500
Miscellaneous Expenses 12,000
Travelling Expenses 6,500
Stationery & Printing 1,500
Rent 18,000
Electricity & Telephone 6,800
Cash In Hand 5,900
Cash at Bank (SBI) 53,000
Stock (1.4.2012) 50,000
Repairs 7,500
Motor Car 56,000
Depreciation:
Furniture 9,0
00
Office Equipment 6,0 15,000
00
12,13,200 12,13,200
Additional Information:
1. Sales includes Rs. 60,000 towards goods for cash on account of a joint venture with Mr.
Reddy who incurred Rs. 800 as forwarding expenses. The joint venture earned a profit of
Rs. 15,000 to which Mr. Reddy is entitled to 60%
2. Motor car account represents an old motor car which was replaced on 1.4.2021 by a new
motor car costing Rs. 1,20,000 with an additional cash payment of Rs. 40,000 laying debited
to Purchase Account.
3. 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.
4. Sundry Debtors include 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.
5. Sundry Debtors include Rs. 4,000 as due from Mr. Trivedi and Sundry Creditors include
Rs. 7,000 as payable to him.
6. On 31.3.2022 outstanding rent amounted to Rs. 6,000 and you are informed that 50% of
the total rent is attributable towards Harikumar’s resident.
7. Depreciation to be provided on motor car @ 20% (excluding sold item).
Mr. Harikumar requests you to prepare a Trading and Profit & Loss Account for the year
ended 31.3.2022 and a Balance Sheet as on that date.

Trading Account: Gross Profit Rs. 1,56,700

Profit and Loss Account: Net Profit Rs. 76,900
Balance Sheet: 4,58,400

The following balances were extracted from the books of Modern Traders as at 31st March,
2017:-

Particulars (₹) Particulars (₹)

85,00
Capital Account Printing and Stationery 800
0
Drawings Account 5,000 Sundry Creditors 23,000
40,00
Plant and Machinery Sales 1,20,000
0
15,00
Stock on 1-4-2016 Postage 800
0
82,00
Purchases Bad-Debts 400
0
20,60 Provision for Doubtful
Sundry Debtors 800
0 Debts
Furniture 5,000 Discount received 400
Freight Inward 2,000 Rent Revenue 1,200
Carriage Outward 500 Insurance 700
Rent, Rates and Taxes 4,600 Salaries 20,000
Wages 1,300
Cash in Hand 6,200
Cash at Bank 25,500

Prepare Final Accounts for the year ended 31st March, 2017 after taking into account the
following:
(i) Stock on 31st March, 2017 was valued at ₹ 15,000.
(ii) Goods costing ₹ 6,000 were sent to a customer on "Sale on Return basis" for ₹ 7,200 on
26th March, 2017 and had been recorded in the books as actual sales.
(iii) Provision for Doubtful Debts is to be maintained at 5% of the Debtors.
(iv) Prepaid Insurance was ₹ 100.
(v) Provide Depreciation on Plant and Machinery @ 10% and on Furniture @ 5%.
GP 33500 NP 3280 BS 106280

The following Trial Balance has been extracted from the books of Shri Santosh Kumar as at
31st March, 2017:-
Dr. Cr.
Particulars
(₹) (₹)
Plant and Machinery 1,00,000
Furniture 12,000
Capital Account 1,91,000
Household Expenses 16,000
Sales 4,68,000
Loose Tools 20,000
Goodwill 10,000
Opening Stock (1-4-2016) 20,000
Returns Outward 4,000
Discount 6,000
Purchases 2,12,000
Returns Inwards 8,000
Wages 1,00,000
Salaries 60,000
Outstanding Salaries 5,000
Investments at 10% p.a. 6,000
Interest on Investments 300
Sundry Creditors 24,000
Miscellaneous Receipts 2,000
Carriage Inwards 12,000
General Expenses and Insurance 39,000
Advertisement Expenses 15,000
Postage 4,000
Sundry Debtors 56,000
B. Barua 2,000
Cash Balance 14,000
Bank 3,200
Suspense Account 2,500

7,06,000 7,06,000

The following additional information is available:-

(I) Stock on 31st March, 2017 was ₹ 30,800.
(II) Depreciation is to be charged on Plant and Machinery at 5% and Furniture at 6%. Loose
Tools are revalued at ₹ 16,000.
(III) Create a provision of 2% for Discount on Debtors.
(IV) Salary of ₹ 2,000 paid to Shri B. Barua, a temporary employee, stands debited to his
personal account and it is to be corrected.
(V) Write off 1/5th of advertisement expenses.
You are to prepare Trading and Profit & Loss Account for the year ended 31st March, 2017
and a Balance Sheet as at that date.
GP 150800 NP 40560 BS 250260

From the following Trial Balance of Sh. Swamy Narain, prepare Trading and Profit & Loss
Account for the year ended 31st March 2018 and a Balance Sheet as at that date :

Dr. Balances ₹ Cr. Balances ₹

Opening Stock 50,000 Capital 20,00,000
Purchases 5,30,000 Sales 12,50,000
General Expenses 45,000 Sundry Creditors 1,36,000
Stationery 6,000 Trade Charges due but not paid 5,000
Wages 2,15,000 Outstanding Rent 4,000
Trade Charges 25,000 Bank Balance 45,000
Rent 44,000
Charity 5,000
Advertisement
30,000
Expenses
Carriage on Sales 12,000
Bills Receivables 30,000
Sundry Debtors 2,20,000
Cash Discount 16,000
Cash in Hand 22,000
Furniture 1,00,000
Advance for Furniture 40,000
Plant & Machinery 6,00,000
Building 14,50,00
0
34,40,00 34,40,000
0

Adjustments:
(i) Stock on 31 March, 2018 was valued at ₹ 60,000.
(ii) A new machine was installed during the year costing ₹ 2,00,000 but it was not recorded
in the books. Wages paid for its installation ₹ 10,000 have been debited to Wages Account.
(iii) An advance of ₹ 10,000 given alongwith purchase order was wrongly recorded in
purchases.
(iv) General expenses include ₹ 20,000 paid for Wages.
(v) Wages include a sum of ₹ 50,000 spent on the erection of a Scooter Stand for employees.
(vi) Advance for Furniture is for furniture at proprietor's residence.
(vii) Depreciate Furniture at 15%, Plant & Machinery at 20% and Building at 10%.
(viii) Carry forward 2/3 of Advertisement Expenses as unexpired.
(ix) A B/R of ₹ 20,000 was discounted with bank on 15 Nov. 2017, but not yet matured.
GP 565000 NP 95000BS 2445000

Following is the Trial Balance as on 31st March 2016. Prepare Trading and Profit and Loss
Account and Balance Sheet :-

Debit Credit
Particulars
(₹) (₹)
Stock (1st April 2015) 8,000
Sales 2,20,000
Purchases 1,26,000
Productive Wages 56,500
Salaries 16,000
Stores Consumed 6,050
Carriage 3,050
Rent and Rates 5,200
Insurance 1,320
Machinery 52,000
Building 67,000
Capital less Drawings 1,45,600
Sundry Debtors 44,000
Sundry Creditors 20,000
Secured Loan 15,000
Furniture 3,350
General Expenses 2,600
Cash in hand 1,930
Bad Debts 1,020
Bank 6,580
Total 4,00,600 4,00,600
Additional Information :
(a) Stock on 31st March 2016 is ₹ 20,600.
(b) Depreciate machinery @ 10% p.a.
(c) Make a Provision @ 5% for Doubtful Debts.
(d) Provide 212%212% for discount on sundry debtors.
(e) Rent and Rates include security deposit of ₹ 400.
(f) Insurance prepaid ₹ 120.
GP 41000 NP 6935 BS 187535

From the following Trial Balance and other information prepare Trading and Profit and Loss
Account for the year ended 31st March 2016 and Balance Sheet as at that date.

Debit Credit
Heads of Accounts
(₹) (₹)
Sundry Debtors 32,000
Stock (1st April 2015) 22,000
Cash in hand 35
Cash at bank 1,545
Plant and Machinery 17,500
Sundry Creditors 10,650
Trade Expenses 1,075
Sales 1,34,500
Salaries 2,225
Carriage Outwards 400
Rent 900
Bills Payable 7,500
Purchases 1,18,870
Discounts 1,100
Premises 34,500
Capital (1st April 2015) 79,500
Total 2,32,150 2,32,150

Additional Information:
Stock on 31st March 2016 was ₹ 12,450. Rent was unpaid to the extent of ₹ 85 and ₹ 150
were outstanding for Trade Expenses. ₹ 400 are to be written off as bad debts out of the
above debtors, and 5% is to be provided for doubtful debts. Depreciate plant and machinery
10% and premises by 2%. Manager is entitled a commission of 5% on net profit after
charging his commission.
GP 6080 NL 4275 BS 93610

Following are balances from the trial balance of Ritesh Traders as at 31st March 2019:

Particulars ₹ Particulars ₹
Opening Stock 5,620 Interest on Securities 6,400
Purchases 1,54,200 Land and Building 10,00,000
Sales 3,74,800 Securities 6,00,000
Wages 1,26,000 Cash in Hand 25,600
Carriage Inward 900 Bank Overdraft 3,40,000
Freight on Purchase 4,900 Discount Allowed 1,500
Salaries 8,000 Discount Received 420
Insurance 2,800 Bill Payable 4,000
Repair to Machinery 1,400 Loan (Cr.) 11,000
Drawings 5,600 Bills Receivable 7,000
Customer's A/c 15,800 Capital Account 13,47,600
Postage 500 Suppliers A/c 40,000
Trade Expenses 1,000 X's Loan (Cr.) 18,600
Plant and Machinery 1,82,000

Prepare Trading and Profit & Loss Account for the year ended 31st March 2019 and Balance
Sheet as at that date after taking into account the following adjustments :
(i) Closing Stock was valued at ₹ 19,000.
(ii) Depreciation to be provided on Land and Building @ 5% p.a. and on Plant & Machinery
@ 10% p.a.
(iii) Write off ₹ 2,000 as Bad debt.
(iv) Insurance was prepaid ₹ 700.
(v) Create provision for doubtful debts @ 5% on debtors.
(vi) Wages include ₹ 4,800 for installation of a new machinery.

GP 106980 NP 27930 BS 1783530

Prepare Trading and Profit and Loss Account and Balance Sheet from the following Trial
Balance and information as on 31st March, 2019:

Debit Credit
Name of Account
(₹) (₹)
Drawings and Capital 15,000 3,25,000
Plant and Machinery 2,00,000 –
Motor Vehicle 1,50,000 –
Return Inward and Outward 25,000 37,000
Stock on 1st April, 2018 82,000 –
Purchases and Sales 4,40,000 6,75,000
Carriage Inward 6,000 –
Trade Expenses 2,500 –
Bad Debts 4,250 –
Provision for Doubtful Debts – 6,000
Commission – 4,000
Rent, Rates & Taxes 12,000 –
Salaries and Wages 24,000 –
Debtors and Creditors 70,000 55,000
Fuel and Water 4,750 –
Cash in Hand 16,500 –
Cash at Bank 50,000 –

Total 11,02,000 11,02,000

Adjustments:
(i) Closing Stock was valued at ₹ 1,12,500.
(ii) Commission include ₹ 1,200 being commission received in advance.
(iii) Salaries and wages is outstanding for the month of Feb. & March, 2019.
(iv) Depreciate Plant & Machinery by 15% and Motor Vehicle by 20%.
(v) Write off ₹ 500 as further Bad Debts and maintain provision for doubtful debts at 1% on
debtors.
GP 266750 NP 166805 BS 537805

The following balances were taken from the books of Shri R. Lal as at 31st March, 2017.

Particulars (₹) Particulars (₹)

Capital 1,00,000 Rent (Cr.) 2,100
Drawing 17,600 Railway Freight on sales 16,940
Purchases 80,000 Carriage Inwards 2,310
Sales 1,40,370 Office Expenses 1,340
Purchase Returns 2,820 Printing & Stationery 660
Stock on 1.4.2016 11,460 Postage 820
Bad Debts 1,400 Sundry Debtors 62,070
Bad Debts Provision on
3,240 Sundry Creditors 18,920
1.4.2016
Rates & Insurance 1,300 Cash at Bank 12,400
Discount (Cr.) 190 Cash in Hand 2,210
Bills Receivable 1,240 Office Furniture 3,500
Sales Returns 4,240 Salaries & Commission 9,870
Wages 6,280 Addition to Building 7,000
Building 25,000

Prepare Trading and Profit & Loss A/c and a Balance Sheet as at 31st March, 2017, after
keeping in view the following adjustments:
(i) Depreciate old Building at 2 1/2% and addition to Building at 2% and Office Furniture at
5%.
(ii) Write off further Bad-debts ₹ 570.
(iii) Increase the Bad-debts Provision to 6% of Debtors.
(iv) On 31st March, 2017 ₹ 570 are outstanding for salary.
(v) Rent receivable ₹ 200 on 31st March, 2017.
(vi) Interest on capital at 5% to be charged.
(vii) Unexpired Insurance ₹ 240.
(viii) Stock was valued at ₹ 14,290 on 31st March, 2017.

From the following balances extracted from the books of Karan and the additional
information, prepare the trading and profit and loss account for the year ended 31st March,
2010 and also show the balance sheet as at that date:
Debit Credit
Particulars Balance Balance
(₹'000) (₹'000)
Stock on 1st April, 2009 625 –
Purchases and Sales 903 1,372
Returns 22 13
Capital Account – 300
Drawings 45 –
Land and Buildings 300 –
Furniture and Fittings 80 –
Trade Debtors and Trade Creditors 250 450
Cash in hand 35 –
Investments 100 –
Interest – 5
Commission – 30
Direct Expenses 75 –
Postage, Stationery and Telephone 25 –
Fire Insurance Premium 20 –
Salaries 90 –
Bank Overdraft – 400
2,570 2,570

Additional Information:
(i) Closing stock on 31st March, 2010 is valued at ₹ 6,50,000. Goods worth ₹ 5,000 are
reported to have been taken away by the proprietor for his personal use at home during the
year.
(ii) Interest on investments ₹ 5,000 is yet to be received while ₹ 10,000 of the commission
received is yet to be earned.
(iii) ₹ 5,000 of the fire insurance premium paid is in respect of the quarter ending 30th June,
2010.
(iv) Salaries ₹ 10,000 for March, 2010 and bank overdraft interest estimated at ₹ 20,000 are
yet to be recorded as outstanding charges.
(v) Depreciation is to be provided on land and buildings @ 5% per annum and on furniture
and fittings @ 10% per annum.
(vi) Make a provision for doubtful debts @ 5% of trade debtors.

The following is the trial balance of Mr. Amar Chand as at 31st March, 2016:-

Dr. Cr.
Particulars
(₹) (₹)
Stock on 1st April, 2015 62,000 -
Purchases and Sales 3,15,000 4,48,000
Returns 3,700 2,500
Sundry Debtors and Creditors 80,000 43,000
Bills Receivable and Payable 12,100 4,300
Drawings and Capital 30,000 2,00,000
Cash in Hand 24,800 -
Balance with Bank of Tokyo 32,800 -
Discount 2,600 3,800
Carriage on Purchases 7,500 -
Carriage on Sales 1,200 -
Bad-Debts 2,400 -
Bad-Debts Provision - 3,000
Furniture on 1st April, 2015 10,000 -
New Furniture purchased on 1st January, 2016 6,000 -
Rent 10,000 -
Salaries 25,000 -
Commission - 2,400
Repairs 2,300 -
Insurance (Annual Premium paid on 1st Jan., 2016) 3,600 -
Salaries Outstanding - 5,000
Sales Van 75,000
Sales Van Expenses 6,000
7,12,000 7,12,000

Taking into account the following adjustments, prepare Trading and Profit & Loss Account
and the Balance Sheet as at 31st March, 2016:-
1. Stock on 31st March, 2016 was valued at ₹ 46,000.
2. Depreciate Furniture at 15% p.a. and Sales Van at 20% p.a.
3. A sum of ₹ 200 is due for repairs.
4. Write off ₹ 2,000 as further bad-debts and create a provision for doubtful debts @ 5% on
Debtors. Also provide 2% for discount on Debtors.
5. Rent is paid at the rate of ₹ 1,000 per month.
6. Allow 8% interest on Capital and charge ₹ 1,500 as interest on Drawings.

From the following balances extracted from the books of Sharma, prepare the Trading and
Profit & Loss Account for the year ended 31st March 2019 and Balance Sheet as at that date
after taking into consideration the adjustments given below:
Trial Balance
as at 31st March, 2019
Dr. Cr.
Particulars
(₹) (₹)
Drawing and Capital 7,500 50,000
Purchases and Sales 72,100 95,000
Returns 1,300 2,700
Sundry Debtors and Creditors 18,200 35,750
Stock (1.04.2018) 19,800 -
Bad Debts 3,000 -
Bill Receivable and Payable 12,000 23,000
Cash in Hand 300 -
Office Expenses 6,210 -
Sales Van 15,000 -
Sales Van Expenses 1,400 -
Discount - 2,910
Rent and Taxes 10,700 -
Telephone Charges 1,050 -
Postage 950 -
Furniture 5,000 -
Printing and Stationery 2,750 -
Commission 8,400 -
Carriage Inwards 3,200 -
Salaries and Wages 20,500

2,09,360 2,09,360

Adjustments:
(i) Closing Stock was valued at ₹ 61,700.
(ii) Depreciate Furniture and Machinery @10% p.a. and Sale Van @20% p.a.
(iii) Outstanding Rent amounted to ₹ 900.
(iv) Bad Debts ₹ 200.
(v) Make a provision for Doubtful Debts @5% on Debtors.
(vi) Charge one-fourth of salaries and wages to the Trading Account.
(vii) A new machinery was purchased on credit and installed on 31st December 2018
costing ₹ 15,000. No entry for the same has yet been passed in the books.

Prepare a trading and profit & loss account of M/s Green Club Ltd. for the year and a Balance
Sheet as at that date from the following figures taken from their trial balance:
Debit Balances (₹) Credit Balances (₹)
Opening Stock 1,25,000 Sales 2,50,000
Purchases 35,000 Purchase Return 6,000
Return inward 25,000 Creditors 55,000
Postage 600 Capital 50,000
Salary 12,300 Discount received 1,000
Wages 3,000 Provision for bad debts 4,500
Rent and rates 1,000 Commission received 5,400
Packing and transport 500
General expenses 400
Insurance 4,000
Debtors 50,000
Cash in hand 20,000
Closing Stock 40,000
Machinery 20,000
Lighting 5,000
Discount 3,500
Bad debts 3,500
Investments 23,100
3,71,900 3,71,900

Adjustments:-
(i) Depreciation charged on Machinery @ 5% p.a.
(ii) Further Bad-debts ₹ 1,500, provision for discount on debtors @ 5% and provision for
Doubtful Debts on debtors @ 6%.
(iii) Wages prepaid ₹ 1,000.
(iv) Interest on investments @ 5% p.a.