New Fully Prepared Accounts Notes For The Year 2009 - 10 New

H.S.
C OMTEX CLASSES
6TH YEAR
CH. 1. VALUATION OF GOODWILL [Q. 2

(A): 5 MARKS]
Note: - One practical problem on Valuation of Goodwill carrying 5 marks and
one theory question on Computer Awareness carrying 5 marks will be asked
in Q. 2 of the Board Paper in option to one practical problem on Depreciation
carrying 10 marks. The students may either attempt problem on Depreciation
or Goodwill and theory question on Computer Awareness.
Valuation of Goodwill: - As prescribed in the syllabus, the value of goodwill
as on a particular date is ascertained by using any one of the following
methods:
i. The Average Profit Method and
INTRODUCTION
Goodwill is an intangible (non – visible) fixed asset having a realisable
(economic) value. It is the reputation of business. Valuation of goodwill is
very important in the case of admission, retirement and death of partners.
DEFINITION OF GOODWILL
Eric L. Kohler defined goodwill as under:
“Goodwill is the excess of the price paid for the business as a whole over
the book value or over the computed value of all tangible assets
purchased. Normally, goodwill thus acquired is only one type appearing on
book of account and in financial statement.”
We can define goodwill as under:

“Goodwill is a monetary value of the reputation of a concern in terms of its future
earning capacity.”
PROBLEMS
1. The profits of the firm for the last five years are 2002 Rs. 20,000; 2003 Rs.
16,000; 2004 Rs. 24,000; 2005 Rs. 8000; 2006 Rs. 12,000. Calculate the
goodwill of the firm. [Ans. Rs. 16,000]
2. Mona, Reena and Sona have been carrying on a partnership business and good
will of their firm is to be valued at three years purchase of the average profit
for the last five years. The profit and losses for the last five years have been.
1st Year Rs. 16,000, 2nd Year, 15,000, 3rd Year, 8,000(Loss), 4th Year, 7,000, 5th
Year, 10,000. [Ans. Rs. 24,000]
3. Calculate the good will from the following information goodwill is valued at
three years purchase of average profit of the last six years. Profit and losses of
the business in the last six years are as follows,
1st year, Rs, 40,000(Profit)
2nd Year, Rs, 60,000(Profit)
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H.S.C OMTEX CLASSES
6TH YEAR
3rd Year, Rs, 10,000(Loss)
4th Year, Rs, 50,000(Profit)
5th Year, Rs, 30,000 (Loss)
6th Year, Rs, 80,000(Profit)
[Ans. Rs. 95,000]

4. Calculate the value of goodwill according to average profit method. Goodwill is
valued at three years purchase of last four year average profit. The profits and
losses for the
st
1 Year Rs, 10,000(Profit) last four years
are.
2nd Year Rs, 12,000(Profit)
3rd Year Rs, 4,000(Loss)
4th Year Rs, 18,000(Profit)
[Ans. Rs.
27,000]
5. The profit of a firm for the four years from 1991 to 1994 where_
1991 Rs, 40,000
1992 Rs, 45,000
1993 Rs, 55,000
1994 Rs, 53,000
Calculate the goodwill of the firm at 2yrs. Purchase of the average profit for
the last three years.
[Ans. Rs. 1, 02,000]
6. Mr. X a businessperson has earned the following profits in the last five years.
1995 1, 05,800
1994 1, 02,600
1993 98,400
1992 96,800
1991 95,500
Value goodwill of Mr. X on the basis of three years purchase of average of the
past five years.
[Ans. Rs. 2, 99,460]
7. Good will is valued at three years purchase of last five years average profit.
The profits for the last five years are
1st Year 4,800(p)
2nd Year 7,200(L)
3rd Year 10,000(L)
4th Year 3,000(P)

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H.S.C OMTEX CLASSES
6TH YEAR
5th Year 5,000(L)
[Ans. 0]
Note: - Since the company’s average profit is negative. Therefore the firm’s
goodwill is zero.
8. Compute the goodwill the following case good will is valued at three years
purchase of average profit of five years. The Profit of the five years were_
1st Year 5,800
2nd Year 7,400
3rd Year 20,000
4th Year 3,500
5th Year 7,300
[Ans. Rs. 26,400]
9. Sales of trader for 3years ended 30th June 1995 are as follows
199 Rs, 5,
5 50,000
199 Rs, 5,
4 46,000
199 Rs, 5,
3 25,000
The profit margin for the 3 years ended 30 th June 1995 was 10%, 12%, 12%
respectively. For the purpose of selling the business of the trader, goodwill is to
be valued at 2years purchase of the average profit of the last 3years. Find the
value of good will. [Ans. Rs. 1, 22,680]
10.From the following particulars, value good will of 2yrs. Purchase of last 5 years.
Year Turn Net
ended over profit
31-12- 5,15,00 5%
1990 0
6%
31-12- 5,45,60
1991 0 7%
31-12- 5,35,80 7.5%

1992 0 7%
31-12- 5,40,90
1993 0
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H.S.C OMTEX CLASSES
6TH YEAR
31-12- 5,60,80
1994 0
[Ans. Rs.
70,326]
11.A firm with an average capital employed of Rs. 1, 60,000 is expected to earn
Rs, 40,000 per annum in future. Calculate goodwill at three times the super
profit taking the normal rate of return as 15%. [Ans. Rs. 48,000]
12.Capital employed on 31st December, 1990 was Rs, 1, 00,000/-. The Profits
earned by the business for the last 5 years where.
1986 30,000
1987 40,000
1988 50,000
1989 40,000
1990 60,000
Normal rate of return is 15%. Good will is valued at 3 years purchase of the super
profits of the business. Find out the value of goodwill.
[Ans. Rs. 87,000]
13.The books of a business showed that the capital employed on 31st December,
1992 was Rs.1, 00,000/-. Profits for the last five years are_1988, 1989, 1990,
1991 & 1992 were Rs, 60,000, Rs, 55,000, Rs, 75,000, Rs, 85,000 & Rs, 65,000
respectively. Goodwill is valued at 2 years purchase of the Super profit of the
business. NRR is 10%. [Ans. Rs. 1, 16,000]
14.M/s XYZ partnership firm earned net profit during the last four years were Rs,
7,000. Rs, 13,000. Rs, 12,000 and Rs, 8,000. The capital investment made in
the firm was Rs, 50,000. N.R.R on capital is 15%. The remuneration of the
partners during the period is Rs, 500 p.a. Good will is valued at 2 Yrs purchase
of Average super profit of the above mentioned years. [Ans. Rs. 4,000]
15.M/s Vijay trading company earned net profit during the last four years was
follows.
1st Yea Rs, 57,000
r
2nd Rs, 44,000

Year
3rd Rs, 61,000

Year
4th Rs, 58,000

Year
The capital investment made by the company is Rs, 1, 50,000. Normal Rate of
return on capital is 20%. The remuneration of the partners during this period is
Rs, 500 p.m. Good will is valued at 2years purchase of Average Super profit of
above mentioned period. [Ans. Rs. 38,000]
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H.S.C OMTEX CLASSES
6TH YEAR
16.The average net profit expected in the business by ABC firm is Rs, 36,000 per
year. The average capital employed in the business by the firm is Rs, 2,
00,000. The Rate of interest expected from capital invested in the business is
10%. The remuneration of the partners is estimated to Rs, 6,000 P.a. Calculate
the value of goodwill based on 2years purchase of super profit. [Ans. Rs.
20,000]
17.M/s Rajesh Trading company earned net profit during the last four years were
Rs, 15,000, Rs, 28,000, Rs, 30,000 & Rs, 40,000. The capital investment made
by the company is 1, 00,000. Normal rate of return on capital is 15 %. The
remuneration of the partners during this period is Rs, 1,000p.a. Good will is
valued at 2 years purchase of average super profit of the above mentioned
period. [Ans. Rs. 24,500]
18.The present average net profit of Braful, Shobha partnership firm before
detecting partner’s remuneration is Rs, 27,000 p.a. The capital employed in
the business by the partner Braful Rs, 1, 00,000 & Shobha Rs, 50,000. The
profit expected from the total capital invested is 10% p.a. The total
remuneration is estimated to be Rs, 6,000 per annum. Find out the value of
goodwill on the basis of 2years purchase of super profit. [Ans. Rs. 12,000]
19.The following balance sheet of Kantilal, Chandrakant.

Balance sheet as on 31st March, 1995
Liabilities Amount Assets Amount
Capital Machinery 50,000
Kantilal 90,000 Building 41,000
Chandraka 70,000 Investments 30,000

nt
44,000 Stock 20,000
Reserve
Fund 38,000 Debtor 66,000
Creditors Bank 30,000
Profit/loss 5,000
A/c
2,42,00 2,42,00
0 0
The net profits of the firm for the year ended 31st March, 1995 were Rs, 15,000
Rs, 25,000 Rs, 26,000. Ascertain the value of good will at 2 years purchase of
the super profit of the 3years taking the normal rate of return on capital
employed is 10%. [Ans. Rs. 4,200]
20.The following is the balance sheet of M/s Anna and Chunna as on 31st March
1995.
Balance sheet as on 31st march, 1995.
Liabilities Amount Assets Amount
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H.S.C OMTEX CLASSES
6TH YEAR
Capital Machine 10,000
ry
Anna 1,64,00 26,000
0 Building
Chunna 56,000
40,000 Plant
Creditors 56,000
35,000 Stock
Profit/ Loss A/c 19,040
3,040 Debtor
75,000
Bank
2, 42, 2, 42,
040 040
Net profits for the past 3years are 1st year Rs, 43,350, 2nd year Rs, 36870, 3rd
year Rs, 32,280
Normal rate of return on capital employed is 10%. Calculate the value of
goodwill at 2years purchase of the average super profit. [Ans. Rs. 33,592]
21.The average annual profit earned by a firm is Rs. 30, 000 including Rs. 2,000
p.a. received as interest on Non – Trading Investment and this average is
expected to continue in the future except for the following.
a. Rent paid in the past for temporary premises at Rs. 500 per month will
no longer have to be paid as the firms own premises are now ready.
b. b. Salaries Rs. 7,000 p.a. paid in the past will increase by 20% in the
future. Calculate goodwill at 3 times the Average Expected Profit.
[Ans. Rs. 97,800]
22.The firm of Mr. X and Mr. Y earned average annual profit of Rs. 60,000. The
profit includes Rs. 5,000 p.a. as interest on non – trading investment. The firm
is expected to maintain the profit except the following.
1. The firm was conducting the business from rented premises. Rent paid Rs. 600
p.a. The premises of the firm are now ready for conducting the business.
2. The business of the firm was managed by one manager who was paid salary of Rs.
6,000 p.a. Mr. X has decided to manage the firm and replace the manager. Services of
Mr. X will be worth Rs. 1,000 p.a.
Calculate Goodwill at 2 years purchase of average profit. [Ans. Rs.
1, 21,200]
1. Priti and Pritam are partners sharing profits and losses in the ratio of 3:2. They
admit Prasad for 1/6th share. For the purpose of admission of Prasad, goodwill
of the firm should be valued on the basis of 3 years purchase of the last 5
years average profit. The profits were. [Ans. Rs. 27,000]
Year 1990 – 1991 – 1992 – 1993 – 1994 –
91 92 93 94 95
Profits 60,000 62,500 45,000( 42,500 80,000
Rs. L)
2. Raghunath’s revenue statements for the 3 years ended 31st Dec. were
as under:
Particulars 1995 1996( 1997(
(Rs.) Rs.) Rs.)
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H.S.C OMTEX CLASSES
6TH YEAR
Sales 50000 70000 100000
Less: Cost of (30000) (50000) (50000)

Sales
20000 20000 50000
Gross Profit
(24000) (10000) (20000)
Less :
(-) 4000 (+)1000 (+)3000
Expenses
0 0
Net Profit
Calculate the value of good will at 2 years purchase of the average

profit, earned in the past 3 years. [Ans. Rs. 24,000]
3. Raj Kumar revenue statements for the 3 years ended 31 Dec. were as
under:
Particulars 1995 1996( 1997(
(Rs.) Rs.) Rs.)
Sales 50000 70000 100000
Less: Cost of (10000) (50000) (50000)

Sales
40000 20000 50000
Gross Profit
(22000) (10000) (20000)
Less :
(+)2200 (+)1000 (+)3000
Expenses
0 0 0
Net Profit
Calculate the value of good will at 2 years purchase of the average profit,
earned in the past 3 years. [Ans. Rs. 41,334]
HOME WORK SECTION

1. Mahipati and Ganpati are partners sharing profits and losses in the ratio of 4:3.
They admitted in partnership Shripati for 1/8 share. For the purpose of
admission of Shripati, goodwill of the firm should be valued on the basis of 2
years purchase of the last 5 years average profit.
1991 – Rs.
92 75,000
1992 – Rs.
93 1,00,000
1993 – Rs.
94 1,25,000
1994 – Rs.
95 85,000
1995 – Rs.
96 1,15,000
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H.S.C OMTEX CLASSES
6TH YEAR
Calculate the goodwill of the firm. [Ans. Rs. 2,00,000]
2. Jaya and Maya are carrying on a business in partnership for last 12 years.
Goodwill of the firm is to be valued at 3 ½ years purchase of the average profit
of last 6 years.
2000- Rs.
01 2,20,000(Profi
2001- t)
02 Rs.
2002- 1,20,000(Loss
03 )
2003- Rs.
04 2,60,000(Profi
2004- t)
05 Rs.
2005- 1,80,000(Loss
06 )
2006- Rs.
07 2,90,000(Profi
t)
Rs.
3,20,000(Profi
t)
Rs.
2,10,000(Profi
t)
You are required to calculate the value of Goodwill of the firm. [Ans. Rs.
4,55,000]
[Note: - Last 6 years are to be counted in reverse order of years given.
Therefore, profit given for the year (2000 – 01) is to be ignored].
3. Vijay and Azim carrying on a business in partnership for last 5 years. Goodwill
of the firm is to be valued at 3 years purchases of the average profits of last 5
years.
The profits and losses for the last 5 years were:
1996-97 (Profit) Rs.
1997-98 32,000
1998-99 (Profit) Rs.
1999-2000 30,000
2000-01 (Loss) Rs.
16,000
(Profit) Rs.
14,000
(Profit) Rs.
20,000
You are required to calculate the value of goodwill of the firm. [Ans. Rs.
48,000]
4. The following is the Balance Sheet of Ashok and Nayan:
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H.S.C OMTEX CLASSES
6TH YEAR
Balance Sheet as on 31st March 2007.
Liabilities Amou Assets Amou
nt nt
Capital Plant and 1,78,0

Machinery 00
Ashok 1,00,0
00 Furniture 62,000
Nayan
1,20,0 Stock 48,000
General 00
Reserve Debtors 40,000
78,000
Profit & Loss A/c Bank 35,000
56,000
Sundry Prepaid 27,000
Creditors 36,000 Expenses
3,90,0 3,90,0
00 00
The trading result for the last four years was 2003 – 04: Rs. 65,000 (Profit), 2004 –
05: Rs. 5,000(loss),
2005 – 06: Rs. 78,000 (Profit) and 2006 – 07: Rs. 92,000 (Profit).
Calculate the value of goodwill of the firm at 2 ½ years’ purchases of the super
profit considering the
Normal rate of return on the capital employed is 13%. [Ans. Rs.
24,975]
5. Calculate the value of goodwill of the firm from the following information:
i. Total capital employed in the business Rs. 4,00,000.
ii.Net profits of the firm or the past three years were Rs. 53,800, Rs.
45,350, Rs. 56,250.
iii.Normal rate of return at 10%.
iv.Goodwill is to be valued at three years purchase of super profit.
[Ans. Rs. 35,400]
1. Following is the Balance Sheet of Mr. Atul as on 31st March, 1993:

nt nt
Capital 77,500 Fixed Assets 85,000
General 22,500 Current Assets 50,000

Reserve
40,000 Prepaid 10,000
Creditors Advertisement
5,000
Bills Payable
1,45,0 1,45,0
00 00
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H.S.C OMTEX CLASSES
6TH YEAR
The net profits for the last three years were Rs. 19,500; Rs. 22,500; Rs.
30,000.
Calculate the value of goodwill at two times of super profit, taking into
consideration the standard rate of return on the capital employed is 15%.
[Ans. Rs. 21,000]
Note: Capital Employed = Partners’ Capital + General Reserve + Accumulated
Profit – Unadjusted losses – Expenses yet to be written off.
IMPORTANT POINTS TO REMEMBER
1. Any Number which is followed by the word Years Purchase /
Times / Thrice / Twice are considered as number of years
purchase.
2. If Number of Years of purchase is not given then assume it as 1
years purchase.
3. If there is a continuous loss in the Firm then the Good will of the
Firm would be Zero (0).
4. If the total Profits/ Loss are negative then also the goodwill will
be Zero.
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H.S.C OMTEX CLASSES
6TH YEAR
CH. 2. COMPUTER AWARENESS [Q. 2 (B): 5

MARKS]
Answer the following questions
1. What is the computer hardware?
Ans. Computer hardware refers to physical components like input devices, central
processing unit and output devices of a computer system.
2. Explain about the components of computer hardware?

Ans. The computer hardware comprises of the following components.
i. Input devices: - The data is required to be transmitted to computer for
processing. It is done with the help of input devices like punch card reader,
paper tape reader, mark and character reader, keyboard, speech recognizer
etc.
ii. Central processing Unit: - This unit processes raw data according to the
instructions given to the computer. It has mainly three parts. Control unit,
Arithmetic / Logic unit and memory unit.
iii. Output devices: - The processed data is to be made available to the user in the
form required by him. For this purpose the following devices are used. Printers,
visual display unit etc. This is necessary to provide back up storage. It may be in
the form magnetic tapes, magnetic dises, floppies, C.D.s etc.
3. Write a short note on – second generation computers.

Ans. The computers of the second generation: - We are initially characterised by
either magnetic drum or magnetic core storage later on they used transistors in
place of vacuum tubes the transistors being small in size occupied lesser space
and power. They were less expensive and generated less heat as compared to the
vacuum tubes. The computer became compact. These computers were also
applied in other field such as scientific and mathematical application in addition to
application in the fields of business and industry. The United states of America had
more than 5000 computers. Some of the important second generation computers
are IBM – 1620, IBM – 1401, IBM – 7094, CDC – 1604, CDC – 3600, RCA – 501 and
UNIVAC – 1108 of these the most popular model of the second generation was IBM – 1401.
4. Write short notes on ‘Third Generation Computers’ (1965 – 71)

Ans. In the early sixties integrated circuits were developed which were later on
used in computers. Integrated circuits (I.C.) improved secondary stage devices,
new input – output devices such as Visual Display Unit (V.D.U) and high speed
printers. These computers came to be known as Mini computers. I.C.’s were more
efficient and they were having much higher speed than transistors. Because of the
I.C.’s it became possible to have lot of functions from computers. They had a very
large memory. Also many computer languages were introduced.
5. Write short note on “Fourth Generation of Computers” (1971 – 85)

Ans. In 1971, Intel corporation developed and I.C. which was a revolutionary in a
computer world. Later in 1974, another breed of computer known as Micro
computers came into existence and which became popular during the fourth
phase. The computer which used large scale integrated circuits used micro –
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H.S.C OMTEX CLASSES
6TH YEAR
processor chips like 8080, 8085, 8086, 6800, 68000 of this 8086 and 68000 are 16
Bit chips and rest are 8 Bit chips. It reduced the size and increased the number of
functions. Secondary devices are further developed. These computers left no field
in human life uncovered. Some of the important models of fourth generation are
Intel 4004, Apple I & II, DCM Spectrum, 2X – Spectrum, BBC’s ACCOM, IBM
Compatibles etc. and sinclairs ZX – 81.
6. Write a short notes on – First generation Computers.

Ans. The first generation computers were voluminous computers in which
electronic valves were used. They were built by using vacuum tube. As the
vacuum tubes were used as an electronic component, the computers were very
large in size. ENIAC was the first computer of this category. Thus, the computer
from ANIAC to IBM – 650 belongs to this generation. The data manipulation
capacity of ENIAC was thirty times more than the previous computers vacuum
tubes were replaced by the transistors. Transistors were very small in size and
weighs as compared to vacuum tubes and consumed very low power.
7. Write short notes on Central Procession Unit.

Ans. It is popularly known as the heart, Brain and Nervous system of the
computer. It provides central control of the operation of the whole computing
machine. The CPU is known as a part of the computer system. The CPU consists of
a memory unit, control unit and An Arithmetic and logic unit.
i. Memory unit: - A memory unit of the central processing unit is a place
where the computer program and data are stored during processing. A
memory unit is a random access storage device comprising number of
storage locations. The data which is to be stored in the memory unit for
processing are fixed by the computer program. The main or internal
memory is called as primary storage. It normally consists of the program to
be executed and the data required by the program.
ii. The Control Unit: - All the operations carried out by the computer are
directed by the control unit. A control unit is called as the nerve centre of
the computer since it controls and co – ordinates all hardware operations.
The program and data are transferred from the input device into the
memory as directed by the control unit during the execution of the program
each instruction is retrieved in turn from the memory and interpreted. A
control unit informs the Arithmetic logic unit as to how precisely the
operation to be preformed. It directs the transfer to the Arithmetic logic unit
of any item of data that is required for operation.
iii. The Arithmetic Logic Unit (ALU): - The arithmetic logic unit comprises a
number of accumulators and registers. Accumulator means a register and
associated equipment in the arithmetic unit of the computer where
arithmetic and logical operations are performed. A register is a hardware
device for holding data to be operated upon. The ALU obtains the data from
the main memory as per the direction given by the controlling unit based
on the program given to it. This data is loaded into accumulators in the ALU.
The ALU operates on the data which is available in the main memory. The ALU
after processing the data sent to output device.
8. EXPLAIN THE IMPORTANCE OF COMPUTER IN MODERN AGE.

Today computers are put to a variety of uses. They have been designed with
highly improved performances. Computers can be used to process voluminous
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H.S.C OMTEX CLASSES
6TH YEAR
data at a high speed. As regards its application in the field of accounting, a
computer should be able to deal with routine accounting. It means all normal
accounting processes such as financial transactions should be dealt with the use
of a computer. All cash and bank transactions, handling of accounts of debtors
and creditors and calculation of wages and salaries etc should be handled with the
use of computer. In addition, computers can be put to other popular uses such as
production, programming and control, flexible budgetary control, variance
analysis, sales and forward trends etc.
Following points explain the importance of computer in modern
age.
Speed: - In the modern world, the desire of a man to complete tasks within the
stipulated time limits has been, to a large extent, fulfilled by using a computer.
Computers enable us to do arithmetical computations with a high degree of speed
and ease. It has enables us to do things, which would have been almost
impossible earlier. The speed which computers functions are measured in Pico
seconds (1/1000 of Nano – second). Thus, computers are capable of making
millions of computations per second. Hence, a powerful computer is capable of
completing the tasks in less than an hour, which could have taken a year for a
group of people to compute.
Accuracy: - Computers are not only fast in completing a job at a great speed, but
it is also performed with a high degree of accuracy. Sometimes, it is common to
say that there is a “Computer error”. As a matter of fact, it is “Human error” and
not a “Computer error” since a computer carries out the instructions efficiently
given by the programmer. As such, if the instructions are faulty, the errors creep
in the computer’s output. Therefore, if the computer is provided with accurate
data and instructions, there will be no error in the output given by a computer.
Thus, a computer offers the greatest advantage of achieving high degree of
accuracy in accounting processes.
Diligence: - By doing similar job continuously, human beings get tired which
results into some mistakes. As against this, a computer is capable of doing the
same job continuously error free. A computer takes the same time to complete
the first calculation as well as the 10000th calculation. Thus, the degree of
diligence possessed by a computer is impossible in case the same job is done by
human beings.
Storage: - Another advantage offered by a computer is that of its enormous
capability to store data. A computer is capable of storing data along with the
instructions given by the programmer in the primary (main) memory. In case, the
primary memory is not sufficient it can be stored in its secondary (auxiliary)
memory. There are various devices used for storing the secondary memory. Some
of the common devices used in secondary memory are Compact Disks, Tapes,
Drums, pen Drives etc. Having large capacity to store data.
Versatility: - A computer possesses great versatility, which is capable of
performing arithmetic calculations, logic operation of comparison and moving data
within different sections of the computer and in input and output operations.
Although, a computer lacks a brain of its own, it can be put to a varied uses such
as preparation of mark – lists, financial accounting, share analysis etc. Further, a
computer can produce results almost in whatever form it is most suitable.
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H.S.C OMTEX CLASSES
6TH YEAR
Miscellaneous: - In addition to the above – mentioned advantages, a computer can
offer economies in the form of effective managerial control, saving in labour cost
because it is fully automatic.
9. EXPLAIN THE ROLE OF COMPUTER IN ACCOUNTING.

Ans. The role of computer in accounting is explained as follows.
1. For various reasons, every business organization is required to prepare and
maintain various books of account. The computer is used by many business
organizations to carry out accounting operations at a greater speed and
accuracy.
2. The computer is useful for classifying, processing, analyzing, tabulating,
recording and interpreting the accounting data for various purposes.
3. It is useful for improving the financial system of the organization.
4. With the help of the computer, accountants can easily, accurately and
speedily prepare the different source documents like voucher, invoice,
quotation, receipt, etc.
5. The computer is useful for recording accounting entries in the journal and
posting such entries in the ledger. It is also used to prepare trial balance,
final account, accounting statements like Balance sheet, etc.
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H.S.C OMTEX CLASSES
6TH YEAR
CH. 2. BILLS OF EXCHANGE [Q. 3: 12

MARKS]
Note: - In Q.3 of the Board paper, one problem on Renewal of bills of
exchange and another problem on dealing of multiple bills by a drawer (one
drawer and multiple drawees) will be asked. Students are required to attempt
any one out of these two.
BILLS OF EXCHANGE: - “A Bills of Exchange is a Negotiable (exchangeable)
Instrument, containing an unconditional order signed by the maker (drawer)
directing a certain person (drawee) to pay a certain sum of money only to the
bearer of the Instrument.”
ESSENTIAL FEATURES OF BILL OF EXCHANGE

1. A bill of exchange must be in written form.
2. It must contain an order. It should not be in the form of a request. The order
may be in the shape of a request but it must be imperative (very important or
compulsion).
3. It should be an unconditional order. There should be no condition for making
payment.
4. It must be signed by the maker. A bill of exchange without the signature of the
maker becomes invalid.
5. It must specify the definite amount to be paid.
6. It must contain an order to pay a certain sum of money only.
7. The amount must be payable to a person whose name is specified in the bill or
to his order or to the bearer.
8. A bill of exchange must be dated.
THERE ARE THREE PARTIES IN THE BILL OF EXCHANGE.

DRAWER: - The drawer is the person or the party who draws the bill. He is the
creditor and he has to receive the money from other person.
DRAWEE: - The drawee is the person or the party on whom the bill is drawn. He is a
debtor and he has to pay the amount to the drawer. Once he accepts the bill he
becomes and ‘Acceptor’.
PAYEE: - The payee is the person or the party to whom the bill is made payable. If
the bill is made payable to the drawer himself, the drawer and the payee are the
same person.
TERM OF THE BILL: -A bill of exchange is subject to certain terms and conditions.
Such terms and conditions include period of the bill, place of payment, amount of
the bill, etc.
GRACE DAYS/ DAYS OF GRACE: - While calculating the due date of any time bill, three
extra days knows as days of grace should be added to the specified period
mentioned in the bill. For example, a bill drawn on 15th January, 2007 for two
month will become due on 18th March, 2007.
DUE DATES / MATURITY DATES: - The date on which the Bill is ready for the payment is
known as due date or maturity date of that Bill.
15
H.S.C OMTEX CLASSES
6TH YEAR
If the due date falls on Sunday or any other public holiday the payment of the bill
should be made on the immediately preceding working day. If a bill falls due for
payment on 15th August, it must be paid on 14th August. If a bill falls due on 26th
January, it must be paid on 25th January. In case 25th January is Sunday the
payment must be made on 24th January.
HONOUR OF THE BILL: - When the bill is paid on the due date is known as honour of
the Bill.
DISHONOUR OF THE BILL: - When the Bill is not paid on the due date then it is known as
dishonour of the bill.
RETIREMENT OF THE BILL: - When the Bill is paid before the due date then it is known as
retirement of the Bill.
HUN DIES: - When the subject matter of the Bill is in Indian language say Tamil,
Telungu, Guajarati, Hindi etc. then it is known as hundies.
ACCEPTANCE OF THE BILL: - When the drawee puts the signature on the bill then it is
known as acceptance of the bill.
THERE ARE TWO TYPES OF ACCEPTANCE

GENERAL ACCEPTANCE: - When the bill is accepted without any terms and conditions
then it is known as general acceptance.
QUALIFIED ACCEPTANCE: - When the bill is accepted with certain terms and conditions
then it is known as qualified acceptance.
THE QUALIFIED ACCEPTANCE MAY BE DONE IN ANY ONE OF THE

FOLLOWING WAYS.
i. Qualified as to the amount:- The drawee may not agree to pay the full
amount mentioned in the bill. He may agree to pay only a part of the amount
mentioned in the bill. This type of acceptance is called qualified as to the
amount.
ii. Qualified as to the Time: - If the drawee changes the period of the bill, it is
called qualified acceptance as to the time.
iii. Qualified as to the place: - In this case, the drawee agrees to pay the
amount at a particular place and there only.
iv. Qualified as to parties: - In this case, the bill is accepted by one or more of
the drawees and not by all the drawees.
v. Conditional Acceptance: - When the drawee accepts the bill subject to the
fulfilment of a condition, it is called a conditional acceptance.
DRAFT: - Before the acceptance of the bill, it is known as draft.
ENDORSEMENT OF BILL: - When the ownership of the bill is transferred then it is known
as endorsement of Bill. There are two parties in the endorsement of Bill.
ENDORSER: - A person who transfers the ownership of the bill is known as endorser.
ENDORSEE: - A person on whom the bill has been transferred is known as endorsee.
TYPES OF BILL: - There are two types of Bill

INLAND BILL: - A bill which is drawn & made payable in the same country, it is known
as Inland bill.
16
H.S.C OMTEX CLASSES
6TH YEAR
FOREIGN BILL: - A bill which is drawn in one country & made payable in another
country then it is known as foreign bill.
NOTING CHARGES: - It is a fee charged by the Notary Public, In case of dishonour of

Inland bill. Notary Public is a government officer who is appointed to register the
dishonour bill.
PROTESTING: - It is also a fee charged by the government in case of foreign bill.
17
H.S.C OMTEX CLASSES
6TH YEAR
Pro Forma of a bill of exchange
Rs. ______________/-
STAMP Accepted
BILL OF EXCHANGE
Sd/-
________________
_______________
________________
(Drawee’s name)
(Drawer’s Name &
_______________
Address)
(Date of acceptance)
_______________
(Date of Bill drawn)
______________ after date, pay
__________________________________________________
_________________________ or his / her order, the sum of Rupees
_____________________
_______________________________________________ only for value received.
Sd /-
_______________
(Drawer’s Name)
To
___________________
(Drawee’s Name)
___________________
___________________
(Drawee’s Address)
Notes: -
1. If the question includes “Prepare a demand bill” or if the term is “On
demand”, or if the period is not given at all, the wording will be: “On
demand, pay ………”
2. If the term given in “45 days after acceptance/sight”, the wording will
be: “Forty – five days after acceptance / sight, pay ………”
3. If instead of the term, the due date itself is given the wording will be:
“On such and such a date, pay ………”
18
H.S.C OMTEX CLASSES
6TH YEAR
PREPARE A BILL OF EXCHANGE FROM THE FOLLOWING

DETAILS. [Q. 1. (F) - 5 Marks]
1. Drawer : Soundariya, Neelam Bhawan, Kalyan
Drawee : Sugandi, Dastur Nagar, Amaravati
Payee : Umesh Narigrekar, Deogad
Period : 90 days
Amount : Rs. 7,555
Date of bill : 15th March 1995
Accepted on : 20th March 1995
2. On 10th March, 1995 Rajesh Bhoyar, Gandhinagar, Nagpur draws a 2 months bill
for Rs. 3,000 on Samir Choudhary, Main Road, and Belapur. Samir Choudhary
accepted the bill on 15th March 1995
3. Drawer : Elavarasi, 35, Lakhani Apartment, Ulhasnagar

Drawee : Elavarasan, 23, Prasad Bhawan, Thane (East)
Payee : Subita Ambarnath
Period : 90 days
Amount : Rs. 9,755
Date of Bill : 15th March, 1995
Accepted on : 20th March, 1995
4. Drawer : Shri Narayandas Kela, Gandhi Chauk, Dhamangaon

Drawee : Shri Atul Khatke, Mandrup Road, Solapur
Payee : Shri Ranjeet Chavan, Ambajogi
Amount : Rs. 5,000
Period : 90 days.
Date of Bill : 15th March, 1995
Accepted on : 20th March, 1995
5. Drawee : K . Prabhakar, Nehur Road, Solapur.

Drawer : M. Sudhakaran, Shivaji Nagar, Nanded.
Period : 3 Months.
Date of Bill : 5th February,1996
Amount of the Bill : Rs. 4000/-
Accepted On : 9 February,1996
th
6. Drawer : Vilas Ptil, 44, M.G. Road, Nanded.

Drawee : Pankaj Pawar, 70, Bhavani Galli, Solapur.
Payee : Ramchandra Rampure, Rampur.
Period : 60 days.
Date of Bill : 28th January, 1995
Date of Acceptance : 29th January, 1995
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H.S.C OMTEX CLASSES
6TH YEAR
Amount of the Bill : Rs. 2,800/-
7. Drawer : Rekha, Main Road, Jalgaon.

Drawee : Basant, Sandesh, Nandura.
Payee : Uma Chandak, Khamgaon.
Amount : Rs. 2500/-
Period : 2 months.
Date of Bill : 21st January, 1995
Date of Acceptance: 25th January, 1995
8. Drawer : Shekhar Desai, Shastri Road, Mahad.

Drawee : Sharad Verma, Narayanpeth, Pune
Payee : Mukund Pande, Panel.
Amount : Rs. 3,500/-
Period : 3months.
Date of Bill : 21st June, 1995
Bill accepted : for 3,000 on 25th June, 1995.
9. Drawer : Vijay Bhat, Main Road, Nagpur.

Drawee : Ashok Kulkarni, M.G. Road, Nagpur.
Payee : Anil Jadhav, Pune.
Amount : Rs. 6,950.
Period : 80 days.
Date of Bill : 7th March, 1996.
Accepted on : 10th March, 1996. For 90 days.
10. Drawer : Namdev Tukaram, Paithan.

Drawee : Nivruti Sopan, Dehu.
Payee : Vitthal Pandurang, Pandharpur.
Amount : Rs. 5,111
Period : 3 months
Date of Bill : 17th August, 1995
Date of Acceptance : 20th August, 1995
11. Drawer : Priti Chavan, Chandika Road, Malvan.

Drawee : Snehlata Patil, Prashant Nagar, Ambajogai
Payee : Archana Ghime, Amaravati
Amount of Bill : Rs, 10,000/-
Period : 2 months.
20
H.S.C OMTEX CLASSES
6TH YEAR
12. Drawer : Shri Ravindra Patil, Housing Society, Ambajogai

Drawee : Shri Bhaurao Deshmukh, Bazar Chauk,
Dhamangaon
Payee : Shri Prasad Shendage, Malvan
Amount : Rs. 7,500/-
Period : 3 months
13. Drawer : Abhijit Patil, Vikram nagar, Patna.

Drawee : Tejas Kapare, Kothrud, Pune.
Payee : Amey Patki, Nagpur.
Amount :Rs. 7500
Period :60 days
Term :After sight
Date of Bill Drawn : 1st June 2006
Date of Acceptance : 11th June 2006
Accepted bill for Rs. : 7000 only.
14. Drawer: Yamini Gupta, Sarvapriya Vihar, Delhi
Drawee – Kamini Sharma, Raj baug, Agra.
Period – 100 days.
Term – After A\acceptance
Date of Bill – 1st January, 2007
Amount – Rs. 10,500/-
Date of Acceptance – 3rd January, 2007
15. Drawer : Vilas Patil, 20, M.G. Road, Pune.
Drawee: Vikas Pawar, 31, S.V. Road, Nashik
Payee: Viraj Potade, 41, A.B. Road, Sholapur,
Period, 3 months
Amount Rs. 7500
Date of Bill, 1st January, 2007
Date of Acceptance: - 3rd January, 2007
16. On 10th March, 1995, Rajesh Bhoyar, Gandhinagar, Nagpur draws a 2

months bill for Rs. 3,000 on Samir Chaudhary Main Road, Belapur. Samir
Chaudhary accepted the bill on 15th March, 1995.
21
H.S.C OMTEX CLASSES
6TH YEAR
TRADE BILLS {IN THE BOOKS OF DRAWER}

&
TRADE BILLS {IN THE BOOKS OF DRAWEE}
1. On 1st March, Sudhir sells goods worth Rs. 10,000 to Narendra. On the same
day, Sudhir draws a bill on Narendra for the amount at 3 months. Narendra
accepts the bill. On the date of maturity, Narendra honoured the bill. Give
journal entries in the books Sudhir.
2. On 1st July, Sham sells goods worth Rs. 20,000 to Ram. On the same day,
Sham draws a bill on Ram for the amount at 2 months. Ram accepts the bill.
Ram pays the amount of the bill on due date. Give journal entries in the books
of Sham.
3. On 1st January, 2005; Bhaskar purchased goods from Randhir on credit worth
Rs. 5,000. On the same day Bhaskar gave an acceptance to the Bill drawn by
Randhir at 3 months for Rs. 5,000. Randhir discounted the bill with his Bank at
6% p.a. on 4th January, 2005. On the maturity of the Bill, Bhaskar paid the
amount of Bill. Give journal entries in the Books of Randhir
Note: - Here the bill accepted by Randhir was discounted with the Bank.
Hence, there will be no entry on the maturity as the amount will be
received by the Bank.
4. Anand brought goods worth Rs. 4,500 from Samant on August 1, 2006. On the
same day, Anand accepted the bill for Rs. 4,500 at 3 months drawn by Samant.
Samant got the bill discounted with his bank at 6%. Before the due date,
Anand informed Samant about his inability to pay the amount of bill. He further
requested him to accept Rs. 2,500 in cash and immediately draw upon him a
new bill for the remaining amount at 2 months together with interest at 8%
p.a. Samant agreed. The second bill was duly paid on maturity. Give journal
entries in the books of Samant.
Note: - Here 1st part payment is made and then the interest is charged.
5. On 1st March, Ramchandra sold goods to Raman worth Rs. 8,000/- and Raman
accepted the Bill for Rs. 8,000/- at 3 months drawn by Ramchandra.
Ramchandra discounted the bill with his bank @ 6% p.a. On due date the bill
was dishonoured and Raman requested Ramchandra to accept Rs. 4,000/-
immediately and draw upon him a new bill for the remaining amount at 3
months together with an interest at 10% p.a. Ramchandra agreed. The second
Bill was duly honoured. Give Journal entries in the books of Ramchandra.
Note: - Here 1st part payment is made and then the interest is charged.
6. Premlal sold goods to Sunderlal worth Rs. 10,000/- and Sunderlal accepted the
bill for Rs. 10,000/- at 3 months drawn by Premlal. Premlal Discounted the bill
with his bank @ 6 % p.a. on due date the bill was dishonoured and Sunderlal
requested Premlal to accept Rs. 4,000 immediately and draw upon him a new
bill for the remaining amount at 3months together with an interest at 10% p.a.
Premlal agreed and the second bill was duly honoured. Give the Journal entries
in the books of Premlal. Note: - Here 1st part payment is made and then
the interest is charged.
22
H.S.C OMTEX CLASSES
6TH YEAR
7. Archana purchased goods from Babita on Credit for Rs. 20,000. On next day
Archana paid Rs. 10,000 to Babita and accepted a bill drawn by Babita for the
balance amount for four months. Babita discounted the bill with her bank for
Rs. 9600/- Before the due date Archana approached Babita with a request to
renew the Bill Babita agreed with the condition that Archana should pay Rs.
6000 with interest of Rs. 120 and accept a new bill for the balance. The
arrangement was duly carried out. New bill is met on the due date. Pass
journal entries in the books of Babita.
Note: - Here 1st interest is charged and then the part payment is
made.
8. Baloo owes Kaloo Rs.8000. Kaloo then draws a bill for Rs. 8000 on Baloo for a
period of three months. Baloo accepts and return it to Kaloo. Kaloo discounted
the bill with his bank at 12 % p.a. On due date, the bill was dishonoured noting
charges amount to Rs. 30. Kaloo then draws a bill for the balance plus interest
of Rs. 170. Before the due date of this bill Baloo pays the amount at a discount
of Rs. 40 to retire the bill. Pass Journal Entries in the books of Kaloo.
Note: - Here only the interest is charged and there is no part payment
occurs.
9. Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts the bill
and return to Minal. Minal discounted the bill @ 12 % p.a. with the bank. On
Maturity Usha finds herself unable to make payment of the bill and requested
Minal to renew the bill. Minal accepts the proposal on the condition that Usha
should Pay Rs. 2,000 in cash and accept a new bill at one month along with
interest at 10% p.a. These arrangements were carried through. Usha retires
the bill by paying Rs. 3015/- Pass Journal Entries in the books of Minal. Note: -
Here 1st part payment is made and then the interest is charged.
10. On 15th March, Ahmed sold goods worth Rs. 1,600 to Awasthi and draws
upon him a bill at 4 months for the amount. Awasthi returned the bill to
Ahmed with his due acceptance. On 15th April, Awasthi retired the bill
under rebate of 5% per annum. Give Journal entries in the books of
Ahmed.
MISCELLANEOUS PROBLEM
11. On 1st April 1979, Pawan draws a bill for Rs. 6,000/- on Sanjay for a period of 4 months.
The bill is duly accepted by Sanjay. On 5 th April, Pawan endorses the bill in favour of
Lalit. However on 25th July, Sanjay approaches Pawan and requests that the bill is to be
renewed for a further period of 4 months at 12% interest p.a. Pawan agrees and Pays
the necessary amount to Lalit. The new bill is duly accepted and paid by Sanjay. Pass
journal entries in the books of Pawan.
12. Rupali accepted a bill for Rs. 2,000/- drawn by Deepali at three months. Deepali got the
bill discounted with her bank for Rs. 1,900. Before the due date Rupali approached
Deepali for renewal of the bill. Deepali agreed on the condition that Rs. 1,000/- be paid
immediately together with interest on the remaining amount at 6% p.a. For balance
Rupali should accept a new bill for three months. These arrangements were carried
through but afterwards, Rupali become Insolvent and only 40 % of the amount could
be recovered from her estate. Give journal entries in the books of Deepali.
13. Chanda accepted a bill for Rs. 6,000 drawn by Nanda at three months. Nanda got the
bill discounted with his bank for Rs. 5,700. Before the due date, Chanda approached
Nanda for renewal of the Bill. Nanda agreed on the condition that Rs. 3,000 is paid
immediately together with an interest on remaining amount at 18% p.a. for four
months and for the balance Chanda should accept a new bill. But afterwards Chanda
23
H.S.C OMTEX CLASSES
6TH YEAR
become insolvent and only 25% of the amount could be recovered from her estate.
Pass journal entries in the books of Nanda.
14. Pankaj draws a bill on Anil worth Rs. 8,000 for three months which was accepted by
Anil. On the same date Pankaj discounted the bill with his bank @ 10 % p.a. On the due
date Anil dishonoured his acceptance. Anil paid Rs. 4,000/- to Pankaj and accepted a
fresh bill for two months for the balance including interest of Rs. 40. Anil became
insolvent before the maturity of the bill and 50 paise in a rupee was received at first
and final dividend from his estate. Give Journal entries in the books of Pankaj.
15. Bhagwan sold goods to Deo for Rs. 3,000. On the same date Deo accepted a bill for 2
months. Bhagwan endorsed the bill to Ishwar. On the due date of the bill, Ishwar
informed that the bill is dishonoured and the noting Charges were Rs. 20. Bhagwan
drew a new bill on Deo for the amount due including noting charges and an interest of
Rs. 130. Before the due date of the second bill Deo become bankrupt and 20 paise in a
rupee was received from his estate as first and final dividend. Pass the necessary
journal entries in the books of Bhagwan.
16. Mahendra sold goods to Ravindra worth Rs. 6000 and for that Ravindra accepted a bill
drawn by Mahendra for 3 months. After a month Mahendra discounted the bill with his
bank at 10 % p.a. On the due date Ravindra dishonoured his acceptance. Ravindra paid
Rs.3, 000 to Mahendra and accepted a fresh bill for 3 months for the balance including
interest @ 8% p.a. Before Maturity of the Bill Ravindra become insolvent and 50 paise
in a rupee was discovered from his estate as first and final dividend. Give Journal
entries in the books of Mahendra and Ravindra.
17. Prakash drew a bill for Rs. 4,000 on Anand on 1st May, 1976 for three months. This was
for the amount which Anand owed to Prakash. Anand accepts the same and return it to
Prakash who discounted at his bank for Rs. 3,900. On 1st Aug, 1976 Anand requested
Prakash to renew the bill and Prakash agreed on the condition that Rs. 1,000 is paid
immediately and Anand should accept the new bill for 3 months for the balance
payable plus interest of Rs. 45. These arrangements were carried through. However,
on 1st October, 1976, Anand retired his acceptance for Rs. 3, 035. Pass journal entries
in the books of Prakash and Anand.
18. On 1st January, 1988 Vandana drew a bill for Rs. 6,000 for 2 months periods on Lata.
Lata duly accepted the bill. On 4th January 1988 Vandana discounted the bill with her
bank for Rs. 5850. However, on the due date the bill was dishonoured. Lata agreed to
accept a new bill with an interest of Rs. 100 for a period of one month. The bill was
duly met on the due date. Give the journal entries in the books of Vandana and show
Vandana’s account in the books of Lata.
19. Mukund owes (be obligated) Prakash Rs. 4000 for which Prakash draws a bill for 2
months on 1st February, 1989. Mukund accepts it and returns it to Prakash. On 4 th
March, 1989, Mukund approaches Prakash and request him to accept Rs. 1000 in cash
and draw a fresh bill for 3 months for the balance plus interest @ 10% p.a. Prakash
accepts the request and draw a bill accordingly which is accepted by Mukund. On 1st
June 1989 Mukund retired his acceptance under discount of Rs. 30/-. Pass journal
entries in the books of Prakash and prepare Prakash account in the ledger of Mukund.
20. Abhay draws a bill on Ajay for Rs. 1,400 at 3 months. Ajay accepts the bill and returns
it to Abhay. The bill is sent to the bank for collection. On maturity – Ajay finds he
unable to make payment of the bill and request Abhay to renew it. Abhay accepts the
Proposal on the condition that Abhay should pay Rs. 700 in cash along with noting
charges of Rs. 10 and draw a renew bill for one months for the balance. These
arrangements were carried through. Afterwards Ajay retired the bill by paying Rs. 695.
Give journal entries in the books of Abhay and Ajay.
21. Krishna accepted a bill for three months drawn by Rama for Rs. 4000. Rama
discounted the bill with the bank at Rs. 3900. On the date of maturity, the bill was
dishonoured. Rama paid noting charges for Rs. 20 Krishna paid half the mount for the
24
H.S.C OMTEX CLASSES
6TH YEAR
bill and full amount of the noting charges and accepted a bill for the balance including
interest of Rs. 50. The second bill was duly honoured. Pass necessary journal entries in
the books of Rama and show Krishna’s account.
22. Jain purchased goods worth Rs. 3,000 from Sharma on 1st June 1977 and gave him
acceptance on 3rd June for a period of three months. On 15 th June Sharma discounted
the bill for Rs. 2980. On 6th September, when the bill was presented for payment. Jain
dishonoured the same. Rs. 20 was paid as noting charges. Pass journal entries in the
books of Sharma and Sharma’s account in the books of Jain.
23. Sagar owes Sindhu Rs. 8000 Sagar accepted a bill for 3 months by Sindhu for Rs. 8000.
Sindhu discounted the bill with bank at Rs. 7800. On the due date, the bill was
dishonoured. Noting charges amounted to Rs. 20. Sagar Paid half the amount of the bill
and full amount of the noting charges including interest of Rs. 100. Pass journal entries
in the books of Sindhu and show the account of Sagar.
24. On 1st January, 1982 Shri Jameersheth of Jalgaon sold goods to Shri Nanchand of
Nanded for Rs. 80,000. On the same date Shri Jameersheth drew a bill on Shri
Nanchand for the same amount for three months. Shri Nanchand accepted the bill and
returned the same to Shri Jameersheth on 4th January, 1982. Shri Jameersheth
discounted the bill with the banker at 10 % p.a. On the due date bank informed that
the bill was dishonoured and Shri Nanchand requested Shri Jameersheth to accept Rs.
40000 immediately and draw upon him the new bill for the remaining amount for two
months together and interest at 12% p.a. Shri Jameersheth agreed and the second bill
was duly honoured. Pass the necessary Journal entries in the books of Shri Jameersheth
of Jalgaon and show Shri Jameersheth’s account in the books of Shri Nanchand of Nagpur.
25
H.S.C OMTEX CLASSES
6TH YEAR
25. Ameet draws a bill for Rs. 7500 on Tushar for four months. Ameet discounts the bill
with the bank at 8%p.a. On the due date Tushar requested Ameet to accept Rs. 4,700
(including Rs. 200 for interest) and to draw a bill for the balance of three months.
Ameet agrees this proposal. Before the due date of the new bill Tushar retires the bill
for Rs. 2960. Pass the journal entries in the books of Tushar and open Tushar’s account
in the books of Ameet.
26. Akbar owed to Barbar Rs. 6,000. Akbar accepted the bill drawn by Barbar for the
amount at four months. Barbar discounted the bill with his bank for Rs. 5850. Before
the Due date, Akbar approaches Barbar with the request for renewal of the bill. Barbar
agreed on the condition that Rs. 4,000 is paid immediately in cash together with an
interest on the remaining amount at 12%p.a. for three months and for the balance
Akbar should accept a new bill at three months. These arrangements were carried
through. Barbar endorsed the new bill to Kadar. Akbar met the bill on due date. Give
the transaction in the books of Akbar and prepare Akbar’s account in the books of
Barbar.
27. Sonia draws a bill on Moni for Rs. 6,000 at 4 months. Moni accepts the bill and returns
it to Sonia who discounts the bill with the bank at a discount of 8%p.a. Before the due
date of Bill Moni requested Sonia to accept Rs. 4000 in cash and draw a bill for the
balance plus interest at 12%p.a. for two months. Sonia draws a bill as the request is
agreed. The bill is sent to bank for collection. On the due date the bill was honoured.
Pass the necessary journal entries in the books of Sonia and Moni.
28. Journalize the following transactions in the books of Kamesh:
a. Nanda informs Kamesh that Shanti’s acceptance for Rs. 4,000 endorsed to Nanda has
been dishonoured and noting charges have been Rs. 100
b. Ashok renews his acceptance to Kamesh for Rs. 2400 by paying Rs. 800 in cash and
accepting a new bill for the balance plus interest @ 12 p.a. for 3 months.
c. Deva’s acceptance to Kamesh Rs. 12,000 is retired one month before its due date at a
discount of 12% p.a.
d. The bank informs Kamesh that Sudhakar’s acceptance for Rs. 4,000 has been
dishonoured and it has paid noting charges Rs. 80.
1. Journalise the following transactions in the books of Kailash.

a. Sandeep informs Kailash that Vila’s acceptance for Rs. 8,000 endorsed to Sandeep has
been dishonoured. Noting Charges amounted to Rs. 200.
b. Kalpana renews her acceptance to Kailash for Rs. 7,500 by paying Rs. 3,500 in cash
and accepting a fresh bill for the balance plus interest at 10% p.a. for 3 months.
c. Uma retired her acceptance to Kailash for Rs. 3,000 by paying Rs. 2,900 in
cash.
d. Kailash sent a bill of Anita for Rs. 6,000 to bank for collection. But Bank
informed that the bill has been dishonoured by Anita.
1. Journalise the following transactions in the books of Rahul.
a. Pradeep informed Rahul that, Vijay’s acceptance for Rs. 1,000 endorsed to Pradeep has
been dishonoured. Noting charges amounted to Rs. 50.
b. Nilesh renews his acceptance to Rahul for Rs. 600 by paying Rs. 200 in cash and
accepting a fresh bill for balance plus interest at 12% p.a. for 3 months.
c. Prashant’s acceptance to Rahul for Rs. 3,000 retired one month before due date at a
discount of 12% p.a.
d. Bank informs Rahul as to the dishonour of Aviraj’s acceptance for Rs. 1,000 to Rahul,
discounted with the bank. Noting charges are Rs. 20.
1. Journalize the following transactions in the books of Maharaja.
a. Ayub informs Maharaja that Sadashiv’s acceptance for Rs. 2,000 endorsed by Ayub has
been dishonoured, noting charges amounted to Rs. 150
b. Pankaj renews his acceptance to Maharaja for Rs. 1200 by paying Rs. 400 in cash and
accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months.
26
H.S.C OMTEX CLASSES
6TH YEAR
c. Vaibhav’s acceptance to Maharaja for Rs. 6000 retired one month before the due date
at a discount of 12%p.a.
d. Bank informs Maharaja as to the dishonour of Kasam’s acceptance for Rs. 2000 to
Maharaja discounted with Bank noting charges Rs. 200.
27
H.S.C OMTEX CLASSES
6TH YEAR
1. Journalise the following transactions in the books of Mr. Ashok Agrawal.

a. The bank informed Mr. Ashok Agrawal that Kamlesh’s acceptance for Rs. 12,000
sent to bank for collection had been honoured and bank charges debited were Rs.
60.
b. Discharged Dr. Ashok Agrawal’s acceptance to Mahesh for Rs. 15,250 by endorsing
Prakash’s acceptance to Mr. Ashok Agrawal for Rs. 15,100.
c. Vishal renewed his acceptance to Mr. Ashok AGrawal for Rs. 11,200 by paying Rs.
6000 in cash and accepting a fresh bill for the balance plus interest @ 12% p.a. for
three months.
d. Dinesh who had accepted Mr. Ashok Agrawal’s bill of Rs. 14,000 was declared
bankrupt and only 45% of the amount due could be recovered from his estate.
2. Journalise the following transactions in the books of Ashwin.

a. Bank informed that Sachin’s acceptance for Rs. 5,750 sent to bank for collection
had been honoured and bank charges debited were Rs. 50.
b. Nitin renewed his acceptance for Rs. 7,200 by paying Rs. 2,200 in cash and
accepting a new bill for the balance plus interest @8% p.a. for 3 months.
c. Discharged our acceptance to Pravin for Rs. 4,250 by endorsing Bhavin’s
acceptance to us for Rs. 4,000.
d. Jatin who had accepted Ashwin’s bill of Rs. 8,500 was declared insolvent and only
40% of the amount due could be recovered from his estate.
3. Journalise the following transactions in the books of Kamalakar.

a. Nisha informs Kamalakar that Shanti’s acceptance for Rs. 14,000 endorsed to Nisha
has been dishonoured and noting charges have been paid Rs. 200.
b. Asha renews hare acceptance to Kamalakar for Rs. 12400 by paying Rs. 6000 in
cash and accepting a new bill for the balance plus interest @ 12% p.a. for 3
months.
c. Devika’s acceptance to Kamalakar for Rs. 42000 is retired one month before its due
date at a discount of 12% p.a.
d. The bank informs Kamalakar that Sindhu’s acceptance for Rs. 15000 has been
dishonoured and it has paid noting charges Rs. 100.
e. Bank informs Kamalakar that Sangita’s acceptance for Rs. 12000 which was sent to
bank for collection has been dishonoured.
4. Journalise the following transactions in the books of Ranbir.
a. Sonam informs Ranbir that Salman’s acceptance for Rs. 3200 endorsed to Sonam
has been dishonoured and the noting charges amounted to Rs. 80.
b. Ravindra renews his acceptance to Ranbir for Rs. 4,800 by paying Rs. 1800 in cash
and accepted a fresh bill for the balance, plus interest @ 12% p.a for 2 months.
c. Dilip’s acceptance to Ranbir for Rs 8000 is retired one moth before the due date at
a discount of 12% p.a.
d. The bank inform Ranbir that Shirin’s acceptance for Rs 5500 to Ranbir discounted
with the bank earlier has been dishounred and the noting charges
28
H.S.C OMTEX CLASSES
6TH YEAR
CH. 3. DEPRECIATION [Q. 2: 10 MARKS]
Note: - As per the syllabus a Standard XII (SYJC), the students are
required to study the following two methods of depreciation only,
viz.
i. Fixed Instalment Method / Original Cost Method / Straight

Lime Method / Equal Instalment method.
ii. Reducing Balance Method / Written Down Value Method /
Diminishing Balance Method.
PROBLEMS
1. A company purchased Machinery worth Rs. 2, 00,000 on 1st January, 1974.
Accounting year of the Company closes on 31st December every year. Company
provides depreciation at 10% p.a. on the original cost. On 31st December, 1976 the
machinery was sold for Rs. 1, 20,000. Give the machinery Account for three years.
[F.I.M]
2. Aurangabadkar purchased furniture worth Rs. 20,000 on 1-4-73. He charges

depreciation at the rate of 10% on the Reducing Balance method. On 1 – 7 – 75, he
sold out a part of the Furniture for Rs. 2,000, the original cost of which on 1 – 4 –
73 was Rs. 4,000. The financial year of Aurangabadkar ends on 31st March every
year. You are required to prepare his furniture account for the first four years, and
to pass journal entries for the transactions of the third year. [W.D.V.]
3. A Good – luck manufacturing Co. Ltd. Luck now purchased new machinery for Rs.
45,000 on 1st January, 1975 and immediately spent Rs. 5,000 on its fixation and
erection. In the same year on 1st July additional machinery costing Rs. 25,000 was
purchased. On 1st July 1977 the machinery purchased on 1st January, 1975 became
obsolete and was sold for Rs. 30,000. Depreciation was provided for annually on
31st December at the rate of 10% per annum on Fixed Instalment method. You are
required to prepare Machinery Account for the period from 1975 to 1977. [F.I.M]
4. A company purchased a machine worth Rs. 2,00,000 on 1st Jan. 1976. On 1st Jan
1977, the company purchased an additional machine for Rs. 40,000. On 1 st July
1978, the company sold the machine purchased on 1st Jan 1977 for Rs. 32,000.
Company writes off depreciation at the rate of 10% on the original cost and the
accounts are closed every year on 31st Dec. Show the Machinery Account and
Depreciation Account for the three years ending 31st Dec. 1976, 1977 and 1978
under Fixed Instalment Method. [F.I.M]
5. Vishal Traders, Bombay, purchased Machinery on 1-1-1970 for Rs. 68,000 and paid
installation charges Rs. 2,000 and decided to depreciate the machinery at 10% per
annum under the fixed instalment system. On 1-7-1972 machinery having an
original cost of Rs. 10,000 was sold for Rs. 5,000 and on the same date new
machinery was purchased for sr. 10,000. Give the required journal entries and also
write up the Machinery Account for 1 – 1 – 1970 to 31 – 12 – 72 assuming the
accounts of the firm are closed on every 31st December. [F.I.M]
29
H.S.C OMTEX CLASSES
6TH YEAR
6. M/s Amol Industries, Pune, purchased machinery for Rs. 19,400 on 1 st January,
1976, and spent Rs. 600 for its erection. On 1st July 1976, additional machinery
costing Rs. 10,000 was acquired. On 1st July 1978 the machinery purchased on 1st
January, 1976 was sold for Rs. 12,000 and on the same date fresh machinery was
purchased at a cost of Rs. 16,000. Depreciation was provided annually on 31st
December at the rate of 10% on the original cost. Give the machinery account and
deprecation account for 1976, 1977 and 1978. [F.I.M]
30
H.S.C OMTEX CLASSES
6TH YEAR
7. M/s. Deepali International bought furniture worth Rs. 24,000 on 1 – 4 – 1977 and
additional furniture on 1 – 10 – 1977 worth Rs. 16,000. They charged depreciation at
15% p.a. on Fixed Instalment basis. On 1 – 10 – 1979 they sold out one cupboard for
Rs. 2,200 original cost of which on 1-4-1977 was 4,000. On the same date a new
cupboard was purchased for Rs. 8,000. Show the furniture account and depreciation
account for the year 1977-78, 1978-79 and 1979-80 assuming that the financial year
closes on 31st March every year. [F.I.M]
8. Kamlesh bought the machine costing Rs. 11,000/ - on 1st January, 1977. He had to pay
Rs. 1,000/- towards its installation. He writes off depreciation @ 10% of the original
cost every year. His books are closed on 31st December every year. On 1st July, 1979 he
disposed off the machine for Rs. 6,000/- Give journal entries in the books of Kamlesh
for all these years till 31st December, 1979. [F.I.M]
9. M/s Tarachand Traders purchased machinery worth Rs. 45,000 on 1st January, 1978. On
30th June, 1978 additional machinery worth Rs. 25,000 was purchased. On 31 st
December, 1979 machinery which had cost Rs 4,000 on 1 st January, 1978 was sold for
Rs. 3,200. On 31st December, 1980 a machinery costing Rs. 10,000 on 1st January, 1978
was sold for Rs. 6,250. Prepare Machinery account and depreciation account for the
years ending 31-12-1978, 31-12-1979 and 31-12-1980 after providing depreciation @
10% p.a. on straight line method. [F.I.M]
10. M/s B. Bijapure and Co. Ltd. Of Ahmednagar purchased on 1st January, 1978 the
machinery costing Rs. 1,00,000. On 1st July, 1979 additions were made worth Rs.
20,000. On 1st March, 1980 additions were made to the amount of Rs. 12,000. On 30th
June, 1981, machinery which had original value of Rs. 16,000 on 1st January, 1978 was
sold for Rs. 10,000. Depreciation was to be charged @ 10% p.a. on original cost. Show
Machinery account in the book of M/s B. Bijapure and Co. Ltd., of Ahmednagar for the
years from 1978 to 1981. The financial years closes on 31 st December, every year.
[F.I.M]
11. M/s Joshi Bros., Jalgaon purchased on 1st January, 1967 a cost of Machinery for Rs.
17,400 and spent Rs. 600 on its erection. On 1st January, 1968, another set of
machinery was purchased at Rs. 10,000. On 1st July, 1969, the machinery purchased on
1st January, 1967, was sold at Rs. 8,000 and the same date a fresh machinery was
purchased at Rs. 15,000. Depreciation was charged at 10% p.a. under straight line
method on the original cost of asset on 31st December every year. Prepare Machinery
account for the three years, i.e. 1967, 1968 and 1969 and Depreciation account for the
same period in the books of Joshi Bros. Jalgaon. [F.I.M]
12. M/s Sharad Agency showed a debit balance of Rs. 36,000 to the Machinery account on
1-7-1978. The original cost of machinery was Rs. 60,000. On 1st January, 1979 Sharad
Agency bought an additional machinery of Rs. 48,000 and spent Rs. 2,000 for its
installation. One more machinery costing Rs. 25,000 was purchased on 30 – 6 – 1979.
On 30-6-1980 a part of machinery acquired on 1 st January, 1979 was sold for Rs. 7,250
the original cost of which was Rs. 10,000. On 31 st -12-1981 the Agency sold out the
machinery for Rs. 16,000 which was purchased on 30-06-1979. Agency charged 10%
Depreciation on fixed instalment basis and their financial year closes on 30 th June every
year. Show machinery account for the years 1978-1979, 1979-1980, 1980-1981 and
1981-1982. [F.I.M]
13. Janab Hasansab of Hyderabad made furniture for his own office on 1st October 1975.
For this he had spent Rs. 36,000 on materials and Rs. 16,000 on wages. He estimated
he life of the furniture to be 10years. He also estimated that its expected scrap value
at the end of its life would be Rs. 12,000. He closed his books of accounts on 31st March
every year. He sold the entire furniture for Rs. 40,000 on 1 st October 1978. Show the
31
H.S.C OMTEX CLASSES
6TH YEAR
furniture account and depreciation account for the year ended 31 st March, 1976, 31st
March 1977, 31st December 1978 and 31st December 1979. [F.I.M]
14. The accounting year of M/s Kothari Fine Printers ends on 31 st December every year.
They decided to depreciate their machinery at 10% p.a. on fixed instalment system.
Taking into consideration the following information, prepare machinery account and
depreciation account for the three years ending 31st December, 1982, 1983 and 1984.
➢ On 1st January, 1982 machinery worth Rs. 20,000 was purchased. On 1 st July, 1982,
another machinery costing 12,000 was purchased.
➢ Machinery the cost of which on 1st January, 1982 was Rs. 5,000 was sold for Rs.
3,000 on 1st July 1983.
➢ A few machine of the value of Rs. 8,000 was purchased on 30th June, 1984. [F.I.M]
1. M/s Mallikarjun Bros. Washim purchased on 1st January 1982 machinery for Rs.
47,000 and spent Rs. 3,000 on its erection. On 1st July, 1982 additional machinery
costing Rs. 5,000 was purchased. On 1st April, 1983 the machinery purchased on
1st July, 1982 was sold for Rs. 3,000 and on the same date new machinery was
purchased for Rs. 12,000. Depreciation is to be charged at 10% p.a. under straight
line method on 31st December, every year. Prepare machinery account for 3 years
from 1st January, 1982 and pass journal entries for the year 1983 in the books of
M/s Mallikarjun Bros. [F.I.M]
2. Goodluck Manufacturing Co. Ltd., Jalgaon purchased new machinery for Rs. 45,000
on 1st January 1981 and immediately spent Rs. 5,000 on its fixation and erection. In
the same year on 1st July additional machinery costing Rs. 25,000 was purchased.
On 1st July 1983 the machinery purchased on 1st January 1981 become absolute
and was sold for Rs. 30,000. Depreciation was provided for annually on 31st
December at the rate of 10% p.a. on Fixed Instalment Method. You are required to
prepare machinery account and depreciation account for the period from 1981 to
1983. [F.I.M]
3. On 1st January, 1981 Messrs Heera and Co. Kalyan purchased machinery for Rs.
80,000 and spent Rs. 5,000 on its installation. On 1st July in the same year they
purchased another machine for Rs. 60,000. On 31st December, 1982 the machinery
purchased on 1st January 1981 was sold for Rs. 68,000. On 1st January 1983 a new
machine was installed at a cost of Rs. 70,000. Messrs Heera and Co. Charge
depreciation @10% p.a. on the original cost. The accounts are closed on 31st
December every year. Show Machinery account and Depreciation account for the
year 1981, 1982 and 1983. [F.I.M]
4. Arun Traders, Nasik, purchased machinery on 1st July, 1984 for Rs. 14,000 and
decided to depreciate the machinery at 10% p.a. under straight line method. On 1st
January, 1985, new machinery was purchased for Rs. 20,000. On 1st July, 1986,
machinery purchased on 1st July, 1984, was sold for Rs. 10,000 and on 31st
December, 1986, new machinery was purchased for Rs. 25,000. Prepare
machinery account and deprecation account for the years 1984, 1985 and 1986
assuming that the financial year ends on 31st December every year. [F.I.M]
5. Ameet Traders, Sinnar, purchased furniture on 1-1-1984 for Rs. 15,000. In the
same year on 1st July additional furniture was purchased for Rs. 8,000. On 1-7-
1985, the furniture purchased on 1-1-1984 was sold for Rs. 10,000 and on the
same day new furniture was purchased for Rs. 12,000. The firm charged
depreciation at 10% p.a. on Reducing Balance method. Prepare – Furniture account
deprecation account for the years ending on 31st December 1984, 1985 and 1986.
[W.D.V.]
6. Deepak Washing Company, Shahpur, purchased a washing machine on 1st January

1980 for Rs. 40,000. On 1st July, 1980 another machine costing Rs. 20,000 was
purchased. On 1st July, 1982, the machine acquired on 1st January, 1980 was sold
off for Rs. 27,000 and on the same date a new machine was purchased at a cost of
32
H.S.C OMTEX CLASSES
6TH YEAR
Rs. 15,000. Depreciation was provided annually on 31st December @ 10 % p.a. on
the original cost. Show machinery account and Depreciation account for the years
1980, 1981 and 1982. [F.I.M]
7. Sangam Trading Co. purchased some machinery on 1st Jan. 1986 costing Rs.
88,000 and spent Rs. 2,000 on its erection. On 30th June, 1986, additional
machinery is purchased for Rs. 10,000. On 31st December, 1987 a part of the
machinery was sold for Rs. 2,100 which had a cost price of Rs. 4,000 on 1st
January, 1986. Prepare Machinery account for the years 1986, 87 and 88 and pass
journal entries for the year 1987 assuming that Machinery is depreciated at 10%
p.a. on Diminishing balance method on 31st December, each year. [W.D.V.]
8. M/s Joshi and company purchased one machinery on 1st January, 1983 costing Rs.
8,000. On the same date firm spent Rs. 2,000 for its erection. On 1 st July, 1983
additional Machinery was purchased for Rs. 20,000. The machine costing Rs. 10,000 on
1st January, 1983 was sold out on 30th June 1985 for Rs. 6,250. On the same date a new
machine costing Rs. 32,000 was purchased. Every year on 30th June, depreciation at
the rate of 10% on cost price of machinery was charged. Prepare Machinery account
and deprecation account for three years i.e. 1982 – 83, 1983-84 and 1984-1985 in the
books of the firm. [F.I.M]
33
H.S.C OMTEX CLASSES
6TH YEAR
9. Ram and Shyam Co. Purchased machinery on 1-1-1986 for Rs. 2,00,000 and spent Rs.
10,000 on its installation. On 1st July, 1986 they purchased another machine for Rs.
1,50,000. On 31-12-1987 the machinery purchased on 1st January, 1986 was sold for
Rs. 1,60,000. On 1-1-1988 another new machine was purchased at cost of Rs.
1,75,000. Depreciation was charged @ 10% p.a. on the original cost. The account are
closed on 31st December every year. Show Machinery account and deprecation account
for the year 1986, 1987 and 1988. [F.I.M]
10. The company purchased machinery worth Rs. 36,000 on 1-4-1987 and spent Rs. 4,000
towards installation charges. The company depreciates the machinery at the rate of
10% p.a. on original cost. On 1-10-1989 the company sold out a part machinery for Rs.
3,200. The original cost of the sold machinery on 1-4-1987 was Rs. 6,000. On 1-10-89
the company purchased machinery for Rs. 10,000. As the company closes the financial
year 31st March every year. Prepare Machinery account and the deprecation account
for the years 1987-88, 1988-89 and 1989-90. [F.I.M]
11. Seema automobiles Ltd. purchased a machine for Rs. 60,000 on 1st July, 1988. On 1st
January, 1989 Company purchased an additional machine costing Rs. 20,000. On 31st
December, 1990 the machinery purchased on 1st July 1988 become obsolete and was
sold for Rs. 40,000. Depreciation was provided annually on 31 st December at the rate
of 10% p.a. on the Reducing Balance method. Prepare Machinery account and
Depreciation Account for the period from 1988 to 1990. [W.D.V.]
12. On 1st January, 1988, Nitin and Co. Bombay purchased Machinery for Rs. 50,000. On 1st
July 1988 additional machinery purchased for Rs. 20,000. On 30 th June 1990, the
company sold a machine costing Rs. 10,000 on 1st January 1988 for Rs. 6,000.
Company closes the account on 31st December, every year decided to charge 10% p.a.
deprecation on original cost of the machinery. Prepare Machinery account and
Depreciation account for 1988, 89 and 90. [F.I.M]
13. On 1st January, 1985, Sunil Traders purchased machinery for s. 20,000. On 1st July
1985, they purchased further machinery costing Rs. 10,000. On 1st July, 1987 they sold
for Rs. 6,000 the machine purchased on 1st January, 1985, and bought another
machine for Rs. 12,000 on the same date. Depreciation was provided on machinery @
10% p.a. on the Diminishing Balance method and the financial year closes on every
31st December. Prepare the Machinery account and the Depreciation account for the
years 1985, 1986, 1987 and 1988. [W.D.V.]
14. Dhoni Manufacturing Co. purchased a Machine worth Rs. 77,600 and installs it at a cost
of Rs. 2,400 on 1st July 1986. On 1st January 1987 an additional Machine costing Rs.
40,000 was purchased. The machine purchased on 1st January, 1987 having become
obsolete was sold for Rs. 22,000 on 1st July 1989 and a new machine worth Rs 60,000
was purchased on 1st August, 1989. The deprecation is provided annually on 31 st
December, at 10% p.a. on original cost of machinery. Show machinery account for the
years 1986, 1987, 1988 and 1989. [F.I.M]
15. Shirish Enterprises purchased a machinery costing Rs. 36,000 on 1-4-1989 and was
installed on the same date. The installation expenses amounted to Rs. 4,000. The firm
decided to charge depreciation at 10% p.a. on straight line method. On 1-10-91 a part
of machinery with an original price of Rs. 6,000/- (including the installation charges)
was sold for Rs. 3,200 and a new machinery costing Rs. 10,000 was purchased on the
same date. The firm closes its books of accounts on 31st March every year. Prepare
Machinery account and Depreciation account for the year 1989-90, 1990-91 and 1991-
92 in the books of the firm. [F.I.M]
16. S. Narayan from Bombay purchased Furniture for his office costing Rs. 1,04,000 on 1st
July 1987. Estimated life of the Furniture is 10 years and scrap value Rs. 24,000. The
Furniture was sold on 31st December 1990 for Rs. 70,000. The accounts are closed on
31st December every year. From the above information prepare Furniture account and
34
H.S.C OMTEX CLASSES
6TH YEAR
Depreciation account for the years 1987, 1988, 1989 and 1990, by charging
depreciation under Fixed Instalment Method. [F.I.M]
17. On 1st January 1990 Ashok and Co. Ltd., Aurangabad, purchased Machinery for Rs.
1,00,000. On 1st July 1990 additional Machinery purchased for Rs. 40,000. On 30th June
1992, the company sold a machine (costing Rs. 20,000 on 1st January 1990) for Rs.
12,000. Company closes the accounts on 31st December every year and decided to
charge 10% p.a. depreciation on original cost of the machinery. Write Machinery
account for the year 1990, 1991 and 1992. Give journal entries for the year 1992 only.
[F.I.M]
18.Rahul Gupta Trading Co., Kalyan purchased furniture on 1.1.1992 for Rs.
25,000. In the same year on 1st July additional furniture was purchased for Rs.
10,000. On 1st July 1993 the furniture purchased on 1.1.1992 was sold for Rs.
15,000 and on the same date new furniture was purchased for Rs. 12,000. The
company charges depreciation at 8% p.a. on reducing balance method.
Prepare Furniture account and deprecation account for 3 years. Assuming that
the accounting year of the company closes on 31st December every year.
[W.D.V.]
19.On 1st July, 1992, Ajanta Traders, Pune, acquired a building for Rs. 8,00,000. On
1st April, 1993, an extension was made to the above building by spending Rs.
4,00,000. On 1st October 1994, half of the building was sold through a broker
for Rs. 5,60,000 and brokerage at 2% of the selling price was paid.
Depreciation is charged on 31st March every year at 10% p.a. under the
Diminishing Balance Method. Prepare the Building Account and the Depreciation
account for three years. [W.D.V.]
20.Mona Trading Company of Amravati purchased machinery for Rs. 65,000 on 1st
January, 1992 and immediately spent Rs. 5,000 on its fixation and erection. In
the same year on 1st July, additional machinery costing Rs. 30,000 was
purchased. On 1st July 1994 the machinery purchased on 1st January, 1992
became obsolete and was sold for Rs. 51,000. On 1-10-94 a new machine was
also purchased for Rs. 41,000. Depreciation was provided annually on 31st
December at the rate of 12% Per annum on fixed instalment method. Prepare
Machinery account and depreciation account from 1992 – 1994. [F.I.M]
21.On 1 – 1 – 1992 Vijay Traders purchased furniture for Rs. 15,000. On 1 – 7 –

1992 additional furniture was purchased for Rs. 8,000. On 30 – 6 – 1993 the
furniture purchased on 1 – 1 – 1992 was sold for Rs. 10,000 and on 1 – 7 –
1993 new furniture was purchased for Rs. 12,000. The firm charged
depreciation at 10% p.a. under the reducing balance method. Prepare furniture
account and deprecation account for the years 1992, 1993, 1994 assuming
that the accounting year of the firm is calendar year. [W.D.V.]
22.M/s Jalaram Mill, Mulund, showed a debit balance of Rs. 32,000 to the
Machinery A/c on 1st April, 2001(Original cost of the Machinery was Rs. 40,000).
On 1st October, 2001 the Mill bought additional Machinery for Rs. 15,000 and
spent Rs. 1,000 for its installation. One more machinery costing Rs. 20,000 was
purchased on 31st March, 2003. Depreciation is charged on 31st March, every
year at 10% p.a. under the Diminishing Balanced Method. On 31 st March, 2004,
the machinery which was purchased on 1st October, 2001 was sold for Rs.
12000. Prepare Machinery A/c and Depreciation A/c for the years 2001 – 2001,
2002 – 2003 and 2003 – 2004. (February, 2008) [W.D.V.]
23.On 1st April, 2004 Saikripa enterprises purchased two computers of Rs. 40,000
each. On 1st October, 2004 they purchased one more computer for Rs. 40,000.
On 1st October, 2006 they sold one computer, which was purchased on 1st April,
35
H.S.C OMTEX CLASSES
6TH YEAR
2004 for Rs. 18,780. Depreciation on computers was provided @ 10% p.a. on
diminishing balance method and the financial year closes on 31st March every
year. Prepare computer A/c depreciation A/c for years 2004 – 05, 2005 – 06
and 2006 – 07. (September. 2008) [W.D.V.]
24.M/s J.K. Company, Maroda, purchased machinery for Rs. 80,000 on 1st April
2002. Company purchased additional machinery for Rs. 36,000 on 1st October,
2003. The company charges depreciation @10% p.a. on the original cost. The
financial year of the Company ends on 31st March every year. On 30th
September, 2004 a part of the machinery, original cost of which was Rs.
30,000 on 1st April, 2002 was sold by the Company for Rs. 22,000. Prepare
Machinery account for 3 years and give journal entries for the year 2002 –
2003. [F.I.M]
36
H.S.C OMTEX CLASSES
6TH YEAR
CH. 4. JOINT VENTURE ACCOUNTS [Q. 4: 12

MARKS]
Method I When Separate set of Books is maintained.
1. Dimple and Simple entered into a joint venture. They agreed to share profits
and losses in the proportion of their initial contributions to the joint venture. They
opened a joint Bank A/c. and deposited Rs. 60,000 and Rs. 40,000 respectively as
initial contributions. They made cash purchases of Rs. 70,000. They also paid Rs.
4,500 for insurance and freight and Rs. 1,750 for sundry expenses. At the end of
the venture, the sales amounted to Rs. 1, 10,000/- There was unsold stock of
goods worth Rs. 5000. Simple took over the unsold stock. The Joint Venture was
closed. You are asked to prepare Joint Venture A/c. Joint Bank A/c and Co –
ventures A/c. Also pass journal entries.
2. A and B entered in to Joint Venture to construct a building for X enterprises
limited. The contract price was Rs. 2, 50,000. They opened joint bank account and
deposited Rs. 1,20,000 and Rs. 60,000 respectively and agreed to share profits
and losses in the ratio 3 : 2. The following transactions were made from Joint Bank
A/c: Wages – Rs. 70,000 and Material purchases – Rs. 1,25,000. Apart from this A
supplied material of Rs. 12,000 and B paid the architect fees of Rs. 2,500 on
completion of construction. X enterprises Ltd. paid the full amount and unsold
stock was taken over by B at an agreed value of Rs. 15,000. Prepare Joint venture
A/c, Joint Bank A/c and Co – venturer’s A/c. Also pass journal entries.
3. Suresh and Ramesh entered into a joint venture to construct a building at a
contract price of Rs. 7,00,000. They agreed to share profits and losses in the ratio
of 2:1. Suresh deposited Rs. 5,00,000 and Ramesh Rs. 1,00,000 into joint bank.
The transactions were as follows.
1. Purchase of materials Rs. 3,50,000
2. Tools and equipment Rs. 1,00,000.
3. Wages Rs. 1,20,000
4. Architect fees Rs. 25,000
5. Besides these, Suresh supplied material worth Rs. 15,000 and Ramesh supplied
material worth Rs. 13,500. Building was ready and contract price received.
Prepare Joint venture A/c, Joint Bank A/c & Co – Venturer’s A/c. Also pass journal
entries.
1. Ashok, Kishor & Anup undertook the construction of an office building at a
contract price of Rs. 10,00,000. Receivable in cash Rs. 6,00,000 and Rs, 4,00,000
in shares. They agreed to share profits and losses equally. They opened the joint
bank a/c and contributed the following amount. Ashok – Rs. 3,00,000, Kishor - Rs.
3,00,000, and Anup – Rs.2,00,000. Ashok paid Rs. 10,000 as architect fees, Kishor
brought in the venture mixture of Rs. 25,000 and Anup brought in motor truck of
Rs. 55,000. The following transactions were made from Joint bank A/c. Purchase of
material Rs. 4, 50,000, Plant – Rs. 30,000 and freight and wages – Rs. 1, 50,000.
At the close of the venture, Ashok took away the unused material worth Rs. 8,000.
Kishor took away the mixture worth Rs. 15,000 and Anup took away the truck
worth Rs. 35,000. The scrap value realised of the plant was Rs. 6,000. The Contract
price was received in full and Kishor took over the shares for Rs. 4,10,000. Prepare
Joint Venture A/c, Joint Bank A/c & co – ventures A/c. Pass journal entries.
2. Sanjay, Ajay and Vijay entered into a Joint venture for construction of a
building for contract price of Rs. 6, 00,000. Payable in cash Rs. 4,00,000 and Rs.
2,00,000 in debentures. They decided to share profits and losses in the ratio of their
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H.S.C OMTEX CLASSES
6TH YEAR
initial contributions. They opened Joint Bank A/c. where Sanjay deposited Rs. 3,00,000
Ajay Deposited Rs. 2,00,000 and Vijay deposited Rs. 1,00,000. The following payments
are made out through Joint Bank A/c . Purchase of material Rs. 2,50,000, Plant Rs.
45,000, Wages – Rs. 77,000 and other charges Rs. 11,000. Sanjay brings truck of Rs.
40,000. Ajay brings materials of Rs. 55,000 and Vijay brings mixture of Rs. 10,000. At
the end of the venture unused materials of Rs. 55,000 and Vijay brings mixture of Rs.
10,000. At the end of the venture unused material was taken over by Sanjay for Rs.
5,000. Ajay took over mixture for Rs. 15,000 and Vijay took over Plant for Rs. 12,000.
The truck was sold in the market for Rs. 22,000. Contract price was received and
debentures were taken over by Vijay for Rs. 1,90,000. Prepare Joint Venture A/c., Joint
Bank A/c., Co – ventures A/c and also passes journal entries.
3. Harish, Iqbal and Joseph undertook to construct a building for Prabhu &
Co. at a contract price of Rs. 2, 50,000. The price was to be paid as follows: Rs.
2,00,000 in cash and balance in preference shares of the company. Profit was
agreed to be divided in the ratio of 2:2:1. The participants contributed cash as
follows. Harish Rs. 30,000 Iqbal Rs. 25,000 and Joseph Rs. 20,000. These
amount were credited to a joint bank A/c. Iqbal was to be paid a remuneration
of Rs. 1,500 for managing the business. Harish prepared the plats and paid Rs.
3,500 for them. Iqbal brought a concrete mixture for Rs. 12,000 and Joseph
brought a truck for Rs. 25,000. They brought Plant for Rs. 15,000 Material for
Rs. 1,20,000 and paid wages Rs. 1,05,000. When the contract was completed
Harish took over unused material for Rs. 10,000. Iqbal took back the concrete
mixture for Rs. 11,000 and Joseph agreed to take back the truck for Rs. 18,000.
The plant was sold as scrap for Rs. 6,000. When the contract price was
received, Harish agreed to take over preference shares at a discount of 20%.
All the accounts were closed. Prepare Joint venture A/c, Joint Bank Account and
the Co – venturer’s account also pass journal entries.
4. X and Y enter into a joint venture to build a multi – storied building. They
agree to share the profit and losses equally upto Rs. 50,000 of the profit or loss
from the venture. Thereafter, the profit and losses are to be shared in the
following proportion. X = 3/5; Y = 2/5. X contributes plant and machinery
worth Rs. 40,000 and meets registration expenses worth Rs. 10,000. Y
contributes the plot on which the building is to be built, valued at Rs. 1,00,000.
Other expenses incurred are : Fuel and electricity charges : Rs. 40,000; Raw
Materials : Rs. 1,60,000; Labour charges : Rs. 75,000; Advertisement expenses
: Rs. 5,000. All the above expenses were met from the Bank A/c. opened for
the joint venture. At the end of the venture, X agreed to take the plant and
machinery valued at Rs. 10,000. Y sold off the multi storied building for a total
of Rs. 7,20,000 and collected all dues from the buyers, except for one flat,
valued at Rs. 1,80,000 which he kept for himself in lieu of his expected share
of profit. The ventures who had agreed to maintain their venture accounts in
separate sets of books, ask you to prepare the Joint venture A/c, Joint Bank A/c
and Venturer’s Capital A/c. Also pass journal entries.
5. X, Y and Z entered into a joint venture to construct a premises and the
contract price was Rs. 4,00,000. Payable Rs. 2,00,000 in cash and Rs. 2,00,000
in shares. X,Y and Z contributed Rs. 1,00,000 each. The following payments
were made through bank: Raw materials Rs. 75,000; Transportation charges
Rs. 25,000; Machinery Rs. 50,000; Insurance Rs. 25,000. Besides this X paid
other expenses Rs. 20,000. Y paid for mixture worth Rs. 20,000 and Z brought
in materials of Rs. 20,000. After completion X and Z took over unused
materials of Rs. 5,000 each and Y took over the mixture for Rs. 10,000. The
scrap of plant was sold for Rs. 8,000. Due to a certain defect, contract price
was reduced by Rs. 10,000 and shares were taken over by X at a premium of
5%. Prepare Joint Venture A/c. Joint Bank A/c and Co – venturer’s.
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H.S.C OMTEX CLASSES
6TH YEAR
6. X,Y and Z entered into a Joint Venture to sell a certain plot of land. They
contributed Rs. 25,000 each. They purchased land of 5,000 sq. m. at Rs. 10 per
sq. m. 1/5th of the land was left over for public roads and the balance was
divided into 8 plots of equal size. A plan was got prepared for Rs. 2,000 and
other expenses were Rs. 3,500. 5 plots were sold @ Rs, 15 per sq. m. and 3
plots were sold @ Rs. 14 per sq. m. Prepare joint venture A/c Joint Bank A/c and
Co – Venturer’s A/c. Pass journal entries.
7. A, B & C entered into a joint venture sharing profits and losses in the ratio of
their initial contributions. They opened a Joint Bank A/c. wherein they
deposited Rs. 1,00,000 Rs. 1,50,000 and Rs. 2,00,000 respectively. Expenses
made through Joint Bank were as follows. Purchase of Raw material Rs. 50,000.
Paid architect fees Rs. 10,000, Plant Rs. 25,000 Besides this, A brought in
mixture of Rs. 20,000, B paid insurance charges Rs., 5,000 and C brought in
machinery worth RS. 12,000. At the end of the venture, A took back the
mixture worth Rs. 5,000, B took back the unused materials for Rs. 4,000 and C
took back the machinery for Rs. 8,000. Scrap of plat realized Rs. 2,000. On
completion they received the contract price Rs. 1,00,000 in cash and Rs.
1,00,000 in debenture which where taken over by A at a loss of Rs. 10,000.
Prepare Joint Venture A/c Joint Bank A/c and Co – venture A/c. Pass Journal
entries.
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H.S.C OMTEX CLASSES
6TH YEAR
8. Ram and Rajiv entered into a Joint venture to construct a conference hall at a
contract price of Rs. 3,00,000. Ram contributed Rs. 1,00,000 and Rajiv contributed Rs.
1,50,000. Ram brought in material worth Rs. 2,000 and Rajiv Paid transportation
charges worth Rs. 6,000 Plant was purchased for Rs. 50,000 and material worth Rs.
2,00,000 were also purchased. On completion, plant was sold for Rs. 20,000. Due to
certain defect, one bill of Rs. 20,000 was not recovered and the balance was received
in cash. Venturers share profits in the ratio of their initial contributions. Prepare Joint
Venture A/c, Joint Bank A/c and Co – venturer’s A/c and pass Journal entries.
9. X and Y entered into a Joint Venture to construct a building for Rs. 4,00,000. Rs.
1,00,000 was to be received in shares. X contributed Rs. 1,50,000 and Y contributed
Rs. 1,00,000. X brought in Plant of Rs. 30,000 and Y brought in mixture of Rs. 10,000.
Following expenses were paid from Joint Bank A/c. Insurance Rs. 5000 wages Rs
10,000 and other expenses Rs. 5,000. Materials worth Rs. 2,10,000 were purchased on
credit from Z. After contract was over X took over plant for Rs. 5,000. Y took back the
mixture for Rs. 5,000. Materials (unused stock) was sold for Rs. 10,000. Contract price
was received and Z’s A/c was settled for Rs. 2, 00,000. They shared profit in the ratio
of their initial contributions and shares were taken over by X at a profit of Rs. 5,000.
Prepare Joint Venture A/c Joint Bank A/c Co venturer’s A/c. Also pass journal entries.
10. A and B entered into a joint venture to construct a building for Rs. 1,00,000.
Both contributed Rs. 30,000 each. A brought in material of Rs. 5,000 and B brought in
plant of Rs. 10,000. Material of Rs. 40,000 were purchased on credit from C. Insurance
charges Rs. 500 and transportation cost Rs. 2,500 were paid from Joint Bank A/c. Settle
C’s A/c by accepting a bill. After contract was over plant was depreciated by 30%, half
of it was taken over by A at book value other half was sold for Rs. 2,000. Contract price
was received in full. The bill was duly honoured. Prepare Joint venture A/c Joint Bank
A/c and Co – venturer’s A/c. Also pass journal entries.
11.A and B entered into a Joint Venture. They agreed to share profits and losses in
the proportion of their initial contributions. They opened a Joint bank A/c. And
deposited Rs. 1,50,000 out of which A deposited Rs. 1,00,000. Cash purchases worth
Ts. 90,000 were made. They also paid Rs. 10,000 for other expenses. B was to be paid
a remuneration of Rs. 4,000 for managing the business. At the end of the venture the
sales amounted to Rs. 1,40,000 out of which Rs. 40,000 was sold on credit to C. B was
also to be paid a commission of 5% on Sales. C was allowed a discount of 5% while
receiving the payment from him. The unsold stock of goods amounting to Rs. 2,000
was taken over by A. the joint venture was closed. You are asked to prepare Joint
Venture A/c Joint Bank A/c Co – venturer’s A/.c. Also pass journal entries.
12.Rahul and Kunal entered in to a joint venture and both contributed Rs. 1,00,000
each. They decided to share profits and losses equally upto Rs. 20,000 and any further
profits or losses would be shared in the ratio of 3:2. Cash purchases were Rs. 1,20,000
while credit purchases from Vivek amounted to Rs. 50,000. Rahul paid Rs. 5,000 for
insurance while Kunal Paid Rs. 8,000 for transportation. All the goods were sold on
credit to Arun for Rs. 1,70,000 who accepted a bill of exchange for the same. The bill
was discounted with the bank at a discount of 5%. Kunal was to be given a commission
of 2% on sales. Vivek’s A/c was settled for Rs. 48,000. The Joint venture was closed.
Prepare Joint Venture A/c; Joint bank A/c; Co – venturer’s A/c. Also pass journal entries.
13.A and B entered into a Joint venture. They contributed Rs. 75,000 each and
purchases a plot of 6,000 sq. m. @ Rs. 20 per sq. m. Besides this A got the plat
prepared for Rs. 2,000 and B paid the stamp duty of Rs. 3,000. Fencing expenses were
Rs. 5,000 and other expenses amounting to Rs. 3,000 were paid from Joint Bank A/c
Later on , 1/6th of the land was left over for roads and the balance was divided into 10
equal plots. 5 plots were sold for Rs. 30 per sq. m. and 4 plots were sold for Rs. 40 per
sq. m. Remaining one plot was taken over by A for Rs. 10,000. Prepare Joint Venture
A/c. Joint Bank A/c and Co – Venturer’s A/c. Also pass the necessary Journal Entries.
14.Anik and Sridhar entered into a joint venture to deal in a certain plot of
land. Both contributed Rs. 1,00,000 each towards the Joint Bank A/c. The plot
40
H.S.C OMTEX CLASSES
6TH YEAR
which measured 12,000 sq. m. was purchased for Rs. 1,50,000. The various
expenses amounted to Rs. 15,000. According to the plan, 3,000 sq. m. was
used for roads and the remaining area was divided into 3 plots of 2,000 sq. m.
each and 3 plots of 1,000 sq. m. each. The bigger plots were sold @ Rs. 18 per
sq. m. each and the smaller plots @ Rs. 22 per sq. m. Anik was to get a
commission of 3% on sale of big plots and Sridhar 5% on sale of the smaller
plots. Their profit sharing ratio was equal. Prepare Joint Venture A/c Joint Bank
A/c. and Co – venturer’s A/c Also pass journal entries.
HOME WORK
15.Pramod and Amit jointly undertook to construct a factory building for a limited
company. The contract price was Rs. 5, 00,000 and was received after work has been
completed. They contributed_ Pramod Rs. 80,000 & Amit Rs. 40,000 and deposited in
Joint Bank Account. They agreed to share profit or Loss in the capital ratio. Pramod got
plans ready and paid Rs. 5, 000 for that Amit brought into the venture Plant and
Machinery valued at Rs. 20, 000 and a motor truck at Rs. 16, 000. For the purpose of
erection of factory building, materials of the value of Rs. 3, 50, 000 were purchased
and wages paid Rs. 60, 000. They also paid other sundry expenses amounting to Rs.
25, 000. The contract was completed and the company settled their account fully.
Uninsured Material valued at Rs. 4, 000 was taken over by Pramod. The plant and
Machinery was sold as scrap for Rs. 3, 000 and Amit took back the motor truck at an
agreed value of RS. 5000. You are required to show Joint venture A/c, Joint Bank A/c in
the books of the Joint venture.
16.Raj and Dev entered into a Joint venture to prepare film for the Government
which agrees to pay Rs. 2, 00, 000. A Bank account was opened in their joint names.
Raj contributing Rs. 20, 000 and Dev Rs. 30, 000. They are to share the profits and
losses in proportion of 2/5th and 3/5th respectively. Payments made out of Joint Banking
Accounts were_
Purchase of Equipments Rs. 12, 000
Hire charges of Equipments Rs. 10, 000
Wages Rs. 90, 000
Materials Rs. 20, 000
Office Expenses Rs. 10, 000
Raj Paid Rs. 4, 000 for other expenses. The film was completed and the Government paid
the amount by cheque. The joint venture was closed, Dev taking up equipment at a
valuation of Rs. 6, 000. Show Joint venture A/c & Joint Bank A/c after the final distribution.
17.Raghu and Ramesh entered into a joint venture to produce an advertisement
film for Bharati Traders, at a contract price of 40,000. Raghu contributed Rs. 10, 000
and Ramesh Rs. 20,000 and opened a joint account in the bank with these
contributions. Raghu purchases from his own funds raw film for Rs. 8, 000 and a
Camera for Rs. 7,000 for joint venture. They Paid from the Joint Bank Account: Artist’s
fees Rs. 18, 000, Hire of sets Rs. 2,000 and technician Charges RS. 10,000. The firm
was completed but due to certain defects in the firm, the contract Price was reduced
by 10% the amount being received by cheque from Bharati Traders. At the end of
venture, the camera was sold for Rs. 5,000 and Ramesh took over the unused film for
Rs. 400. Raghu and Ramesh shared profit and losses in the proportion of 1:2 and
settled account of the venture. Prepare the Joint venture Account the Joint Bank
account and the accounts of the Co – ventures.
18.Suratwala and Bodochwala entered into a joint venture to construct a bridge of
Koyna river at a contract price of Rs. 7, 00, 000. Suratwala and Bodochwala introduced
Rs. 1,50,000 and Rs. 1, 00, 000 and opened a joint account in the bank. Suratwala
supplied material worth Rs. 60, 000 and Bodochwala brought a Motor Truck costing Rs.
50, 000. Total Material used amounted to Rs. 2,50,000; payment for wages Rs.
3,00,000 and other expenses amounted to Rs. 40,000. Suratwala took over unused
material at Rs. 5, 000. Motor truck was sold as a scrap of Rs. 4,000 contract prices was
received in full on completion of contract. Prepare Joint Venture A/c, Co- venture’s
accounts and Joint Bank Account.
19.Shri Nandkarni of Nanded and Shri Kulkarni of Kolhapur undertook in January
1983 the construction of “Ajanta Market Hall” for Rs. 5, 00, 000 to be completed within
41
H.S.C OMTEX CLASSES
6TH YEAR
one year. On the same date Nandkarni brought in Rs. 5, 000 and Kulkarni brought Rs.
10,000. These amounts were deposited in a Joint Bank account which was newly
opened by them for the purpose. Both agreed to share profits and losses equally. The
work was completed in time and the following expenses were incurred and paid from
Bank accounts, Material Rs. 2,30,000; Wages, Rs. 1,90,000 and Plant Rs. 40,000. The
payments were received in instalments but due to certain defects a bill of Rs. 15,000
was not paid. When the work was over, as half of plant was taken over by Nandkarni @
20% below while the other half could be sold for Rs. 15,000.
Prepare: Joint venture A/c, Joint Bank A/c, Accounts of Co- ventures.
20. Doshi and Soman entered into a joint venture and agreed to share profits and losses
in proportion of their initial contribution to the joint venture. They opened a joint bank
account and deposited Rs. 60,000 and 40,000 respectively as initial contribution. They
made cash purchases of Rs. 70,000 and paid Rs. 4,500 for Insurance and freight and
Rs. 1750 for sundry expenses. At the end of the venture the sales amounted to Rs. 1,
10,000. The unsold stock of goods worth Rs. 5,000 was taken over by Soman. Prepare
Joint venture A/c, and Joint Bank A/c assuming that Joint venture is closed and final
settlement was made by the Co – ventures.
21.Latha and Kalai, entered into a joint venture. They agreed to share profits and
losses in the proportion of their initial contribution to the joint venture. They opened a
joint Bank account and deposited Rs. 60, 000 and 40,000 respectively as initial
contribution. They made cash purchases of Rs. 70,000. They also paid Rs. 4,500 for
insurance and freight and Rs. 1,750 for sundry expenses. At the end of the venture, the
sales amounted to Rs. 1, 10,000. There was unsold stock of goods worth Rs. 5,000.
Kalai took over the unsold stock. Prepare Joint Venture A/c, Joint Bank A/c and Co –
Ventures A/c.
22.Manoj and Ambalal enter into a joint venture to prepare a building for the
government, who agrees to pay Rs. 2,00,000. A Bank Account is opened in their joint
names; Manoj contributing Rs. 25,000 and Ambalal Rs. 25,000 and it is agreed that
they will share the profit and losses in the proportion of 2/5th and 3/5th respectively.
Payment made out of the Joint Bank accounts were:
Purchases of Equipments : Rs. 14,000
Hire Purchases of Equipments : Rs. 13,000
Wages : Rs. 85,000
Purchases of Materials : Rs. 18,000
Office expenses : Rs. 8,000
Manoj and Ambalal then paid Rs. 5, 000 and Rs. 3,000 respectively for other expenses.
The building was completed the government paid the amount by cheque and the joint
venture was closed. Ambalal taking up the equipments at Rs. 4,000 and Manoj taking
up the unused material at Rs. 2, 000. Prepare Joint Venture A/c, Joint Bank A/c and Co-
Venture’s A/c.
23. Anand and Vijay entered into a joint venture and agreed to share profits and losses
in the ratio 3:4 respectively. Anand contributed Rs. 10,000 and Vijay Rs. 8,000 which
they deposited into a joint bank account. Goods worth Rs. 16,000 were purchased
expenses of the venture amounted to Rs. 800. Goods were sold for Rs. 21,700. The
account between the parties was duly settled. Pass journal entries and open the
necessary ledger accounts.
24. Ram and Shyam entered into a Joint venture and under took a building construction
contract of M/s Anand Traders Limited, Mumbai for Rs. 1,00,000. Ram brought in Rs.
25,000 and Shyam Rs. 15,000. They agreed to share profit and losses equally. They
also agreed to accept contract amount Rs. 80,000 cash and 20,000 in the form of
company’s fully paid up shares. After the completion of work they received the amount
other details are as under. Wages Rs. 40,000, Material Rs. 60,000. Ram supplied
material for Rs. 5,500 and paid legal charges Rs. 1,500. Shyam paid labour charges for
Rs. 4,000. Ram agreed to take all shares for Rs. 16,000 and Shyam took over material
for Rs. 3,000 Draw Journal entries and write ledger A/c
42
H.S.C OMTEX CLASSES
6TH YEAR
25. Rajiv and Ashok enter into a joint venture as dealers in land and opened a joint
Bank Account with Rs. 60, 000 forwards which Rajiv contributed Rs. 40, 000 and Ashok
Rs. 20,000. They agree to share profits and losses in proportion to their cash
contribution. They purchased a plot of Land measuring 5,000 sq. yards for Rs. 50,000.
It was decided to sell the Land in smaller plots and a plan was got prepared at the cost
of Rs. 1,200. In the said plan 1/5th of the total area of the land was left over for public
roads and the remaining land was divided into 8 plots of equal size. Out of 8 plots 3
plots were sold @ Rs. 15 per square yard and the remaining 5 plots were sold @ Rs. 14
per square yard. Expenses incurred in connection with the plots were registration
expenses Rs. 4,000 stamp duty, Rs. 400. and other expenses Rs. 1,000. Allow 2% on
the sale proceeds as commission to Rajiv.
26. Suresh Somani and Bhagwan Jambe of Gangapur entered into a joint venture to
sell computers and share profits or loss in proportion of 1: 2 Suresh Somani contributes
Rs. 5,00,000 and Bhagwan Jambe contributes Rs. 10,00,000. The amount was
deposited in a joint Bank A/c. Suresh Somani bought 40 computers at Rs. 30,000 each
and paid for them for the Joint Bank A/c. Freight and Insurance premium of Rs. 4,000
and Rs. 12,000 respectively were paid by Bhagwan form his private cash. 35
computers were sold at a price of Rs. 40,000 each 5 computers, which were damaged
in transit, were repaired by Bhagwan Jambe at a cost of Rs. 5,000 from his private
cash. They were finally sold by Bhagwan Jambe at Rs. 35,000 each and the proceeds
were deposited in the Joint Bank A/c. Pass the Journal entries assuming that the joint
venture is closed.
43
H.S.C OMTEX CLASSES
6TH YEAR
27. Abuja and Saluja entered in a Joint Venture to purchase and sell plots. Abuja
Contributed Rs. 4, 00, 000 and Saluja Rs. 2, 00, 000 and the amount was deposited
into a joint Bank Account. The transactions of the venture were as follows.
a. Purchased Land Rs. 2, 00, 000/-
b. Incurred development expenses Rs. 80, 000/-
c. Saluja paid registration fees Rs. 10, 000/-
d. ¾th of land was sold at Rs. 3,05,000/-
b. The remaining land was taken over by Abuja at Rs. 80, 000/-
c. The accounts between co – ventures were settled at the end of the joint venture.
Pass Journal entries to record the above transactions.
1. Sanjay, Ajay & Vijay undertook the construction of a building at a contract price of
Rs. 10,00,000 payable in cash Rs. 7,50,000 and in 15%debentures Rs. 2,50,000/-
a. They decided to share the profits and losses in the proportion to their initial
contribution. They opened a joint Bank account where they have deposited the
following initial amounts. Sanjay Rs. 4, 00,000, Ajay Rs. 3, 00,000, Vijay Rs. 2,
00,000.
The following payments are made out through the Joint Bank Account.
Purchase of Materials Rs. 2, 50,000
Purchase of Plant Rs. 45,000
Payment of Wages Rs. 77,000
Payment towards other charges Rs. 11,000
Sanjay brings in material of Rs. 40,000
Ajay brings in material of Rs. 55,000
Vijay brings mixer worth Rs. 10,000
At the close of venture, Sanjay took the unused material for Rs. 5,000. Ajay took over
the mixer and plant for Rs. 27, 000/- The truck was sold in the market for Rs. 22,000.
The contract price was received as per the agreement and Vijay agreed to take over
the Debentures for Rs, 1,90,000. Prepare Joint venture A/c, Joint Bank A/c and Co –
Venture’s A/c.
1. Girish, Manisha and Rajnish undertake the construction of an office building at a
contract price of Rs. 8, 00,000. The contract price is to be received Rs. 6,00,000 in cash
and Rs. 4,00,000 in fully paid shares of that company. They decide to share profits and
losses equally. They opened a joint bank account and contributed the following
amounts: Girish Rs. 2,00,000 Manish Rs. 2,00,000 Rajnish Rs. 1,00,000.
Girish pays Rs. 10,000 as the fees of the Architect. Manish Brings into the
venture Mixer worth Rs. 25,000. Rajnish brings into the venture the motor truck worth
Rs. 55,000. The following expenses were made from the Joint Bank Accounts. Purchase
of Materials Rs. 3, 50, 000,Purchase of Plant Rs. 30, 000, Freight and Wages Rs. 1,
50, 000. At the close of the venture, Girish took over the unused material worth Rs.
8,000; Manish took back mixer worth Rs. 15000 and Rajnish took back the truck worth
Rs. 35,000. The scrap value of the plant was realised at Rs. 6,000. The contract price
was received in full and Manish took over the shares at the value of Rs. 4, 10,000
Prepare the Joint venture A/c, Co – Venture’s A/c and Joint Bank A/c.
2. Sagar and Pankaj entered into a joint venture and undertook building construction
of Patel and company Ltd., Bombay for Rs. 5, 00,000. They agreed to accept Rs.
1,00,000 in the form of shares of the company and balance to be received in cash.
Sagar contributed Rs. 1,25,000 Pankaj contributed Rs. 75,000 and deposited the same
in the joint bank account. Sagar supplied materials of Rs. 35,000 and Pankaj paid Rs.
20,000 for Architect’s fees. They paid from joint bank account for materials Rs.
2,80,000 and for wages Rs. 1,20,000. On completion of work, they received contract
price as per the agreement. Sagar took ass the shares for Rs. 80,000 and Pankaj took
over the unused material for Rs. 15,000 prepare joint venture, joint bank and co –
venture’s accounts in the books of the Joint venture.
3. Ram, Bharat & Laxman undertook the construction of a Bridge at a contract price
of Rs. 5,00,000 payable in cash Rs. 4,00,000 and in debentures Rs. 1,00,000. They
decided to share the profits and losses in the proportion of their initial contribution.
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H.S.C OMTEX CLASSES
6TH YEAR
They opened a joint Bank account wherein they deposited they deposited the following
amounts Ram; Rs. 2,00,000, Bharat; Rs. 2,00,000 & Laxman Rs. 1,00,000.The following
payments are made through the Joint Bank Accounts, Purchases of cement Rs.
2,00,000. Purchases of Steel Rs. 50,000. Payment of wages Rs. 75,000. and other
charges of Rs. 15,000 Ram brings truck of Rs. 60,000. Bharat brings materials of Rs.
80,000 and Laxman bring over the mixer worth Rs. 20,000.At the close of the venture,
the unused materials were taken over by Ram for Rs. 10,000; Bharat took over the
mixer and steel for Rs. 35,000. The truck was sold in the market for Rs. 40,000. The
contract price was received as per the agreement and Laxman agreed to take over the
debentures for Rs. 1,10,000.
4. Harban Singh and Jogendra Singh entered into a Joint venture agreement to
construct a modern building for Mehta trading co, Amaravati at a price of Rs. 2,00,000.
This price was to be paid in cash Rs. 1,50,000 and Rs. 50,000 by the issue of
preference shares of his renowned company. They opened a joint account with Punjab
National Bank in which Harban Singh deposited Rs. 1, 00,000 and Jogendra Singh Rs.
75,000. They agreed to share profit and losses equally. Harban Singh paid Rs. 10,000
as architect’s fees for preparing plan of building. Jogendra Singh brought concrete
mixer of Rs. 25,000. They paid Rs. 20,000 for Plant; Rs.50,000 for purchase of
materials; Rs. 25,000 for wages and Rs. 20,000 for freight insurance and other
charges. After the completion of contract, Harban Singh took over the unused material
of Rs. 5,000 Jogendra Singh took back the concrete mixer at a valuation of Rs. 7,000.
Harban Singh agreed to take over the preference share at S. 45,000. Prepare joint
venture A/c, Joint Bank A/c and Coventurers A/c
5. Anand, Balaji & Maganlal jointly signed a contract to construct a bridge for ABC OIL
Co., Ltd. The contract price was Rs. 7,00,000; Payable in cash Rs. 4,00,000 and Rs,
3,00,000 in debentures of the company at par. Anand, Balaji and Maganlal
deposited Rs. 1,00,000 Rs. 50,000 and Rs. 50,000 respectively in the Joint Bank
Account as their contributions. They are to distribute profit in the proportion of their
contribution. Anand paid Rs. 5,000 for the blue prints of the Bridge. Balaji acquired the
plant and equipment’s for Rs. 60,000 and paid for the same. Maganlal brought in
vehicle worth Rs. 22,000. The construction material was purchased for Rs. 4,20,000.
The salaries and wages paid amounted to Rs. 30,000. The miscellaneous expenses
paid were Rs. 2,000. On completion of the construction of the bridge, the company
settled the accounts as per the contract. At the end, the unused construction material
was taken over by Anand for Rs. 5,000. The plant and equipment were deposited of for
Rs. 40,000. The vehicle was taken over by Maganlal for Rs. 12,000. The debentures
were taken over by Balaji at a discount of 10% . You are required to prepare: Joint
Venture Account, Joint Bank account and Co – Venture Account and debentures
Account.
6. Sudhir and Narendra Signed a contract jointly to construct an office building for
Abhay Enterprises Ltd. The contract price was Rs. 2,50,000. They opened a Joint Bank
Account and deposited Rs. 1, 20,000 and Rs. 60,000 respectively. They agreed to
share the profits and losses in the ration of 3/5 th and 2/5th respectively. The following
transaction was made from the Joint Bank Account. Wages Rs. 70,000 Materials
purchased Rs. 1,25,000 Apart from the above transactions, Sudhir supplied material of
Rs. 12,000 and Narendra paid the architect’s fees Rs. 2500. On completion of the
construction, Abhay Enterprises Ltd. paid full amount. There was unused stock of
materials which was taken over by Narendra at Rs. 15000.
Prepare Joint Venture Account, Joint Bank Account and Co – venture’s Account.
45
H.S.C OMTEX CLASSES
6TH YEAR
Method II: When no Separate set of Books is

maintained.
I.e. Individual Books of Accounts are maintained.
1. Abhay Kumar and Jaywant entered into a joint venture to share profits and
losses in equal proportion. The following transactions were made:
a. Abhay Kumar brought goods for Rs. 60,000/-
b. Abhay Kumar paid for expenses incurred on the above purchases Rs. 3,500/-
c. Jaywant supplied goods of Rs. 24,000 from the stock.
d. Jaywant had to pay Rs. 600/- and Rs. 700/- for loading and freight respectively
on supply of goods.
e. Abhay Kumar paid Rs. 350/- and Rs. 250/- for warehousing charges and other
expenses respectively.
f. Abhay Kumar sold goods for Rs. 1,20,000/-
g. Jaywant sold goods for Rs. 10,000/-
h. The unsold stock of goods was taken over by Jaywant for Rs. 5,000/-
You are asked to prepare Joint Venture account and Co – venturers A/c in the
books of both the parties. Also pass journal entries.
2. A and B entered into a joint venture to sell carpets. A purchased 200 carpets
at Rs. 20 each and B purchased 100 at Rs. 25 each. A paid transportation
expenses Rs. 500 and also paid freight Rs. 200. B Paid advertising expenses
Rs. 100. Later on A sold 150 carpets for Rs. 35 each and B sold 125 carpets for
Rs. 30 each. Remaining 25 carpets were taken over by B for Rs. 500.
Venturer’s settle their accounts. Pass journal entries and ledger accounts in
both the books.
3. Humayun and Phiroz entered into a joint venture. They agreed to share the
profits and losses equally. Following transactions were made by them.
i. Humayun bought goods Rs. 90,000
ii.Phiroz paid for freight Rs. 7000
iii.Phiroz sold goods Rs. 75,000
iv.Phiroz paid commission on sales Rs. 2500
v.Humayun paid for warehousing charges Rs. 3500
vi.Humayun sold rest of the goods Rs. 45,000
vii.Humayun paid commission on sales Rs. 3500
You are asked to show as to how the above transactions will be entered in the books
of Humayun and Phiroz and prepare journal entries.
4. Ramrao and Shamrao decided to undertake a business venture jointly. They
agreed to share the profits and losses in the proportion of 2/3 and 1/3 respectively.
Ramrao supplied goods for the joint venture worth Rs. 15,000 and paid Rs. 650 for
carriage and freight. Shamrao supplied goods worth Rs. 12,000 and spent Rs. 500
for sundry expenses. Shamrao sold goods for Rs. 35,000. Shamrao is entitled to
get a commission of 10% on sales as per agreement. Shamrao settled the account
of Ramrao by remitting the amount due by bank draft. Open the necessary ledger
account in the books of Ramrao and Shamrao and prepare journal entries.
5. East and West entered into a joint venture to share profits and losses in the
ratio 2:1 to sell rice. East purchased 100 bags of rice at Rs. 200 each. He also paid
packing charges Rs. 2000 and freight Rs. 300. West paid warehousing charges Rs.
1000 and sold all the bags for Rs. 300 each. He was entitled to a commission of 5%
on sales. They settled their account by a draft. Prepare necessary ledger accounts
and pass Journal entries also.
6. Kapil and Rohan entered into a joint venture to deal in computers. They agreed
to share profits and losses in the ratio 3:2. Kapil purchased 20 computers @ Rs.
25,000 each and supplied 5 computers @ Rs. 20,000 each from his own shop while
Rohan purchased 15 computers @ Rs. 24,000 each and got 5 computers from his
46
H.S.C OMTEX CLASSES
6TH YEAR
godown @ Rs. 20,000 each. Kapil paid for the transportation charges amounting to
Rs. 30,000 while Rohan paid for insurance and other charges totally amounting to
Rs. 40,000. Finally all the computer were sold except 4 computers out of which
both took back 2 computer each @ Rs. 17,000 each. Kapil sold 16 computers and
Rohan sold the remaining computers. The selling price of each computer was Rs.
32,000 each. Both the venturer’s were to get 4% commission on the sales made by
them. The venturers settle their accounts by a draft. You are required to prepare
Joint venture A/c and Co Venturer’s account in the books of both the parties. Also
pass journal entries in both books.
7. Jaganlal of Mumbai purchases cotton goods and supplied them to Babanlal of Delhi
for sale on joint venture basis. They have agreed to share the profits and losses equal
proportion. Jaganlal bought goods worth Rs. 35,000/- and sent them to Babanlal in
Delhi. Jaganlal paid Rs. 2500 towards the freight charges. Jaganlal’s bill of exchange for
Rs. 20000 payable after 3 months drawn on Babanlal was accepted by Babanlal.
Jaganlal discounted the same bill with bank for Rs. 18200. Babanlal informed Jaganlal
that he had incurred Rs. 4500 expenses and the entire goods were sold for Rs. 50,000.
Babanlal remitted the required amount to Jaganlal. You are required to prepare Joint
venture A/c and Coventurers’ account in the books of both the parties. Also pass
journal entries.
8. Satish and Ramesh enter into a joint venture to deal in TV. Sets. Satish is to
purchase TV sets in Mumbai and sent it to Ramesh in Pune. They agreed to share
profits and losses in the ratio of 3:1. Satish purchased 50 TV sets in Mumbai costing Rs.
7000 each and paid Rs. 10,000 as transportation cost. Ramesh received the
consignment and sold all the TV sets at a lump sum price of Rs. 4, 45,000. Ramesh
sent a draft of Rs. 75,000 to Satish as an advance. The expenses incurred by Ramesh
were Rs. 6000 to sell the TC sets. Venturer’s settle their accounts. You are requested
to open necessary ledger accounts in the books of both the parities. Also pass journal
entries.
9. Mahesh and Kalpesh enter into a joint venture to share profits and losses in the
proportion of 3:2. Mahesh paid Rs. 25,000 for purchases of goods and supplied goods
of Rs. 3500 from his stock. Kalpesh made purchases of R. 78000 for the joint venture in
addition to goods supplied from his godown worth Rs. 14000. Mahesh accepted a bill
drawn by Kalpesh of Rs. 25000 which was discounted by Kalpesh for Rs. 24000 and the
discount to be treated as an expense of the joint venture. Kalpesh also received Rs.
5000 cash as an advance from Mahesh. The expenses of the joint venture amounted to
Rs. 10000 which were paid by Mahesh and Kalpesh equally. Mahesh sold goods
amounting to Rs. 3000 and Kalpesh could sell goods worth Rs. 70000. The unsold
goods were taken away by Mahesh for Rs. 4000. The Coventurers’ are entitled for a
commission of 10% of sales made by them. Venturer’s settled their accounts by
cheque. Prepare Joint venture account and coventurers’ account in the books of both
the parties and also pass journal entries.
10. Usha and Sulbha decided to undertake a venture jointly. They agreed to share
profits and losses in the ratio of ¾ and ¼ respectively. Usha supplied from her own
stock goods worth Rs. 90,000 and paid Rs. 3,600 for freight. Sulbha supplied goods
worth Rs. 72,000 and spent Rs. 3,000 for sundry expenses. Usha drew a 4 months bill
on Sulbha for Rs. 12,000 as an advance. The same was discounted by her at 15% p.a.
and discount was charged to Joint Venture A/c. Sulbha sold all the goods for Rs.
2,10,000. At the end of the venture, the accounts were settled. Give journal entries in
the books of Usha.
11. Narayani and Indrayani entered into a joint venture to buy and sell second – hand
motor cars and agreed to share profits & losses equally. Narayani purchased two cars
for Rs. 75,000 and Rs. 78,000 respectively, paid Rs. 4,000 for repairing these cars and
sold them for Rs. 1,30,000 and Rs. 1,40,000 respectively. Indrayani purchased three
cars for RS. 2,70,000 in all, incurred an expense of Rs. 4,000 for reconditioning these
cars, sold two cars at a total price of Rs. 2,40,000 and took over the third car at an
agreed price of Rs. 90,000. Prepare the Joint Venture A/c and the Co – Venture’s
A/c in the books of each party assuming that the accounts between the co –
ventures were settled by cheque.
47
H.S.C OMTEX CLASSES
6TH YEAR
12.Pritam of Sindhudurg and Prasad of Ratnagiri entered into a joint venture to
consign 100 computers to Priti of Mumbai to sell at their joint risk which is in
proportion of 2/3 and 1/3 respectively. Pritam supplied 55 computers at Rs. 25,000
each paying freight of Rs. 7,500 and other charges Rs. 1,500. Prasad suppled 45
computers at Rs. 24,000 each paying insurance Rs. 750, freight Rs. 350 and other
charges Rs. 1,800. Pritam advanced to Prasad Rs. 25,000 on account of venture.
All the computers were sold by Priti for Rs. 28,00,000 out of which she deducted
2% for her expenses and 2% for her commission on total sales. Priti remitted Rs.
13,00,000 to Pritam by bank draft and balance to Prasad by accepting a bil drawn
by Prasad for one month. Pass Journal Entries in the books of Pritam assuming that
all accounts have been finally settled.
13. Ramsingh of Rampur and Narsingh of Nagpur entered into Joint Venture. They
decided to send 500 TV sets to Harsingh of Hyderabad on their joint risk. They
share profits and losses in the ratio of 3/5 and 2/5 respectively. Ramsingh sent 300
sets at Rs. 2,500/- each and paid Rs. 17,000/- for the expenditure of sending the
goods. Narsingh sent 200 TV sets at Rs, 2,000/- each and paid Rs. 13,000 for the
expenditure of sending the goods. Ramsingh advanced to Narsingh Rs. 50,000/- on
account of Joint Venture. All the TV sets were sold by Harsingh for Rs. 14,00,000/-
from which he deducted 3% for his expenses and 2% commission on total sales
and he remitted Rs. 10,00,000 to Ramsingh and the balance amount to Narsingh.
The co – venturers closed their venture and settled their accounts. Prepare: Joint
Venture A/c, Narsingh A/c, Harsingh A/c in the books of Ramsingh.
14. Anil and Sunil entered in to a joint venture to consign 500 bales of cotton to
Mukesh to be sold on their joint risk. Anil sends 150 bales at Rs. 300 each and pays
Rs. 2000 for freight and insurance. Sunil purchases 350 bales at Rs. 250 each
paying for insurance and other charges Rs. 4000. Anil advances a cheque of
12,000 to Sunil and also accepts a bill for the same amount drawn by Sunil which
was discounted by Sunil@ 90% of its value. Mukesh sold all the bales @ Rs. 400
each. The expenses incurred by Mukesh are Rs. 5000 and his commission was 10%
of the sales value. Mukesh remits Rs. 100000 to Sunil and the balance to Anil by a
cheque. Venturers settle their accounts by a draft. Prepare joint ventures account
and coventurers’ account in the books of both the parties and pass journal entries.
15. Nagpurkar of Warud and Warudkar of Akola entered into joint venture to sent
oranges to M/s Modern Fruit Co., Amrutsar on their Joint risks for sale. They
decided to share profits and losses equally. Nagpurkar purchased oranges of Rs.
2,40,000and paid for transportation, packing and insurance Rs. 70,000. Warudkar
purchased oranges of Rs. 3,70,000 and paid for transportation, packing and
insurance Rs. 1,00,000. All the oranges were sold by M/s Modern Fruit Co. For Rs.
10,00,000 from which company deducted Rs. 25,000 for expenses and 5%
commission on sale proceeds and remitted Rs. 5,00,000 to Warudkar and
remaining amount to Nagpurkar. The co – ventures closed their venture and
settled their accounts. Prepare Joint venture account, Warudkar account, M/s
Modern Fruit co. Account in the books of Nagpurkar.
16. Arun of Solapur and Dhanaji of Sangli entered into Joint venture to send 100
bales of cotton to Shivaji of Mumbai to be sold at their equal joint risks. Arun sends
60 bales at Rs. 12,000 each and pays Rs. 18000 for freight and other charges.
Dhanaji sends 40 bales at Rs. 11,000 each and pays Rs. 10,000 for freight and
other charges. Shivaji sold all the bales of cotton at Rs. 15,00,000. He charges Rs.
10,000 as his commission and other expenses and remits the balance due fully to
Dhanaji. Dhanaji settled account of Arun by remitting to him the balance due. You
are required to prepare Joint venture account, Dhanaji account, Shivaji account in
the books of Arun.
17. Akash, Sameer and Sidharth entered into a joint venture to buy and sell leather
goods sharing profits and losses equally. Akash purchased and sent to Sidharth for
selling 200 belts @ Rs. 90 each and 150 wallets @ Rs. 75 each. He spent Rs. 750
on transport. Sameer purchased 200 pouches @ Rs. 120 each, paid Rs. 1,000 for
packing and transport and sent them to Sidharth. Sidharth sold al the leather
48
H.S.C OMTEX CLASSES
6TH YEAR
goods at the total amount of Rs. 60,000. His selling expenses amounted to Rs.
1,100. Prepare Joint Venture Account, Sameer Account and Sidharth Account in the
books of Akash presuming that Sidharth paid the amount due to both Sameer and
Akash.
18. Methe and Mane decided to undertake the business jointly. They agreed to share
the profits and losses in the ratio of ¾ and ¼ respectively. Methe supplied goods
from his own stock for joint venture worth Rs. 4,50,000 and paid Rs. 15,000 for
carriage and freight. Mane supplied goods worth Rs. 3,60,000 and spent Rs.
15,000 for sundry expenses. Methe drew a bill on Mane for Rs. 60,000 as an
advance. Mane sold goods for Rs. 10,50,000. AT the end of venture the accounts
were settled. Give Journal enries in the books of Methe.
19. Vithal of Bombay and Kailash of assai entered into Joint Venture to purchase and
sell cycles. They decided to share profits and losses equally. Vitthal purchased 200
cycles at Rs. 500 each and spent Rs. 2000 for carriage, Rs. 4000 for insurance and
draws a bill for Rs. 20000 on Kailash, which is duly accepted by Kailash. Kailash
purchased 140 cycles at Rs. 600 each and spent Rs. 10 per cycles for carriage and
Rs. 2000 for selling expenses. Vitthal sold 180 cycles at Rs. 750 each. All the
remaining cycles of venture were sold by Kailash at Rs. 550 each. Joint venture
was completed and both the parties settled their accounts. You are required to
pass journal entries in the books of Vitthal.
20. Yashpal of Udgir and Balu of Latur entered into Joint Venture to consign 300
machines to Amol of Amravati to be sold on their joint risk which is in the
proportion of 2:3 respectively. Yashpal sent 180 machines at Rs. 300 each and
paid freight Rs. 700 and sundry expenses Rs. 300. Balu sent 120 machines at Rs.
250 each and paid for insurance Rs. 500 and carriage Rs. 500. Amold sold all the
machines at Rs. 400 each. He spent Rs. 4,000 for advertisement and Rs. 1,000 for
godown charges. Amol deducted 5% commission on sales and sent Rs. 80,000 to
Yashpal and balance to Balu by bank draft. Prepare: Joint venture A/c, Balu’s A/c,
Amol’s A/c in the ledger of Yashpal.
49
H.S.C OMTEX CLASSES
6TH YEAR
CH. 5. SINGLE ENTRY SYSTEM [Q. 5: 10

Proprietary concerns
1. Rao commenced business on 1st April,06 with cash of Rs. 20,000. On 1st April
Oct, 06; he introduced a further capital of Rs.5,000 .During the year he with
drew Rs.400 p.m. for personal use. On 31st march, 07 his asset and liabilities
were:
Stock in 20,0
trade 00
Debtor 15,0
00
Furniture
4,00
Cash at bank
0
Unpaid
3,00
expense
0
Sundry
1,00
creditors
0
8,00
0
Prepare closing statement of affairs and profit earned by Mr.Rao for the
year ended 31/3/07.
2. The following info. Is available from Rajendra’s records:
Particular 1.4.0 31.3.
6 07
Creditor 5,00 8,000

0
Bank overdraft 15,00
- 0
Bank balance
10,0 -
Plant and
00
machinery 20,00
10,0 0
Furniture
00
4,000
Debtors
4,00
52,00
Stock 0
0
30,0
28,00
00
50
H.S.C OMTEX CLASSES
6TH YEAR
34,0 0
00
Ram had withdrawn Rs.5000 for personal expenses and Rs. 4000 for son’s
marriage. Out of business funds, he had also purchased a residential building
costing Rs.20000; which is not shown in the above balance. Additions to
Machinery were made on 1/04/06. Dep at 10 %p.a. should be provided on plant
and machinery. Find out Ram’s net profit for the year ended 31st march 07.
3. On 01/04/06; Mr. Bannerjee commenced business with a capital of

Rs.25,000.
During the year 2006-07, he with drew for his personal use goods worth
Rs.2, 000 and cash Rs.3,000. He also gave a donation of Rs. 500 to shri
Ramakrishna mission. He paid Life Insurance premium of Rs.1000.During
the year, he received a gift of Rs.5000 from his father by cheque which was
deposited in the bank account of the business. On 31/3/07; his position was
as under:
Particulars RS
Machinery 20,0
00
Furniture
2,00
Stock
0
Debtors
5,00
Balance at bank 0
Prepaid insurance 8,00

0
Payable to
creditors 1,50
0
Liabilities for
expenses 200
3,00
0
700
Find out the profit earned by him after providing for depreciation at %10 on
plant and Machinery and furniture and Rs.400 as reserve for Doubtful Debt.
Also prepare statement of affair as on 31.03.07
4. Ash keeps her books on single entry & following information is disclosed.
Particulars 31.3. 31.3.
51
H.S.C OMTEX CLASSES
6TH YEAR
06 07
Cash 18,00 27,00

0 0
Stock
15,00 18,75
Debtors 0 0
Furniture 30,00 45,00
Sundry 0 0
creditors 7,500 7,500
Bills payable 26,25 31,50
Loan from ‘y’ 0 0
Investments - 9,000
- 3,000
- 15,00
0
Miss Ash transferred Rs150 each month during first half year and Rs.100 each
month for the remaining period from her business to her private banking account
by way of drawing, and took away Rs.350 worth of goods for private use. She sold
her private car for Rs.3, 500 and proceeds were utilised for business. Furniture to
be depreciated by 10% and Reserve for Doubtful debts to be maintained at 5% on
debtors.Prepare opening and closing statement of affairs and also profit and loss
statement for the year ending 31/03/07.
5. Mr.Mukesh maintains single entry books of accounts. From the following details,
determine profit for the year and statement of affairs at the end of year:
Rs.1000 (cost) furniture was sold for Rs.5,000 on 1 st April,06 ; 10% depreciation is
to be charged on furniture . Mr.Mukesh has drawn Rs.1000 per month and
Rs.2,000 was invested in 2006.
Particulars 1.04. 31.3.07
06
Stock 40,00 60,000

0
Debtors 40,000
30,00
Cash 0 1,000
Bank 2,000 5,000( O.

D)
Creditors 10,00
0 25,000
Outstanding
expenses 15,00 8,000
Furniture(cost) 0 2,000
5,000
52
H.S.C OMTEX CLASSES
6TH YEAR
3,000
Bank balance on 1st April 06 is as per cash book, but the bank overdraft on
31.03.07 is as per bank statement. Rs2,000 cheques drawn in March 07 have not
been en cashed with in the year. Provide interest on Drawing @ 10%p.a.
6. Mr. Ganesh keeps his books by single entry method. His financial position on
1.01.03 and 1.1.04 was as under.
04 04
Cash 10,0 16,000

00
Bank 36,000
20,0
Stock 00 24,000
Debtors 16,0 30,000
Creditors 00 18,000
Plant and 24,0 90,000

machinery 00
18,000
Furniture and 15,0
fitting 00
60,0
00
18,0
00
During the year Mr.Ganesh withdrew Rs.8,000 for his private purpose and he had
used 2,000 worth of stock also for his private purpose. On 1.10.03 he sold some of
his house hold furniture for Rs.2,000 and paid this amount into his Bank A/c of
business.
Prepare a statement of profit & loss for the year ended 31.12.04 and a statement
of affairs after taking into consideration the following:
1. Provide interest on capital @ 5% p.a on opening balance and Interest on
drawing ( only on cash drawings) @10% p.a. (on an average of 6 months)
2. Depreciate plant and machinery @10 %(assuming addition were made on 1.10.04) and
furniture at 5%
3. stock on 31.12.04 was overvalued by Rs.2,000
4. Write off bad debts Rs.2,000 and provide Reserve for Doubtful debts at 7.5%
on debtors
7. Mohan keeps his books under single entry system. Prepare: Statement of affair as
an 31.12.00 &
31.12.01. Statement of profit/loss for the year ending 31.12.01. He gives the
following information:
01 00
Bank balance 4,500 1,000
53
H.S.C OMTEX CLASSES
6TH YEAR
Stock Cr. Dr
Debtors 12,000 15,000
Creditors 9,600 9,600
Loose tool 10,900 14,300
Outstanding 2,700 2,700

salary
1,000 1,500
Prepaid
insurance 300 200
Add information: 1.He has withdrawn from business Rs 2,500 of which he spent
Rs2,000
For investing in securities in the name of the business.
2. Provide depreciation at 20% on loose tools and 7% on
furniture.
8. Premjeet a trader keeps his books by the single entry Method. His financial
position on 1st April 06
and 31.3.07 were as follows:
Particulars 1.04.06 31.03.0
7
Cash in hand 1,500 1,600
Bank balance 1,200(D 1,800(C

r.) r.)
Stock in trade
4,000 4,650
Debtors
3,400 3,800
Creditors
2,400 3,600
Plant and
machinery 6,000 8,000
During the year, Sri Premjeet had withdrawn Rs.75 per month for his household
use.
From the above information ascertain his profit or loss for the year ended and also
give his statement of affairs as on 31.03.07 after taking into account the following
further information:
1. Depreciate plant and machinery by 15% and furniture by 121/2% p.a(assume the
addition on 30th September,2006)
2. Of the debtors Rs100 are bad and to be written off.
3. Create a reserve for Discount on Debtors at 2% and a reserve for Doubtful
debts at 5%.
4. Allow interest on capital at 5% and charge interest on Drawing at 6%p.a
54
H.S.C OMTEX CLASSES
6TH YEAR
9. Mr.Gopal maintained his books on single entry. The following statement of affairs had
been Prepared as on
31.03.06
Liabilities Amt Asset Amt
Capital 28,0 Leasehold land 2,07

account 00 5
Plant and
Sundry 3,17 Machinery 4,94
creditors 0 0
Stock in trade
Bill payable 2,15 9,67
0 Book debts 3
Cash in hand 15,5
50
1,08
2
33,3 33,3
20 20
On 31.03.07 it was learnt that he had introduced further capital of Rs1,000 on 1 st july,06
and he drawn Rs1,580 on various dates during the year. It was also ascertained that the
proprietor had taken Rs.75 worth of goods for his own use. Statement prepared on the
same date disclosed that book debts were Rs.14,640,
Creditors were Rs.2,309 and Bills payable were Rs.1,775. The stock was valued at
Rs.11,417 and cash in hand amounted Rs.917 on the same date.
Prepare: 1. Statement of profit for the year 06-07
2. Statement of affairs as on 31.03.07 taking in to consideration the
following:
• 5% Reserve to be created on Book debts.
• 5% Depreciation to be written off on plant and machinery.
• Rs.125 to be written off the lease.
• Interest at 5% p.a to be provide on the capital.
Partner ship firm

10. Rose and Jack is partner in a firm sharing profit and losses in the proportion of 3:2.
They keep their books on the single entry system. On 31/03/06 the following statement of
affairs was extracted from their books:
Liabilities Amt Assets Amt
Capital Plant and 30,0

Account: machinery 00
25,0
Rose 00 Stock 20,0
00
Jack 20,0 Sundry
00 debtors 35,0
Loan – jack 00
25,0 Cash at bank
Sundry 00 15,0
creditors 00
30,0
55
H.S.C OMTEX CLASSES
6TH YEAR
00
On 31/03/07 their asset and liabilities were :

Debtors Rs.40,000 , Creditors Rs.25,000 , plant and machinery Rs 50,000 (Addition to
plant and machinery was on 01/07/07) stock Rs 30,000 , Bills receivable Rs.5,000 , cash at
bank Rs.25,000 , Loan –jack Rs. 25,000.
Prepare a profit and loss statement for the year ended 31 st march07 and a statement as at
that date after taking into consideration the following:
1. Plant and machinery is to be depreciated by 10% p.a
2. Stock is to be reduced to Rs.25, 000
3. A provision for Bad Debts to be raised at 5% on sundry debtors.
4. Interest on loan is to be allowed at 6% p.a
5. During the period Rose and Jack draw Rs 5,000 and Rs3,00 respectively.
11. X and Y are carrying on business in partnership sharing profit and losses equally.
They were unable to maintain full and complete records. From the following available
information, compute the profit of the firm and prepare a balance sheet:
Particulars 1.04. 31.03
06 .07
Land and Building 50,00 50,00

(cost) 0 0
Machinery (cost) 60,00 75,00

0 0
Furniture(cost)
20,00 25,00
Stock 0 0
Debtors 12,00 30,00
Bank 0 0
Cash 17,00 22,00

0 0
Prepaid insurance
Premium 4,900 5,000
Bills Receivable 1,100 5,000
Creditors 5,000 -
Bills payable - 8,000
60,00 50,00
0 0
10,00 -
0
At the beginning of the year, the capitals of the partner were equal. During the year, X
brought in Rs.15, 000 and Y has withdrawn Rs.5, 000. An insurance policy matured during
the year for Rs10, 000. A sum of Rs4, 000 has become bad out of debtors. Provision has to
be made for depreciation @ 10% on land & building, Machinery and furniture.
56
H.S.C OMTEX CLASSES
6TH YEAR
12. Naresh, Ramesh and Dinesh are partners in a firm sharing profit and losses in the
ratio 5 :3 : 2 respectively. They kept their books on the single entry system. .
On 31st march 06; the following statement of affair are extracted from their books:
Creditors 20,00 Plant 45,00

0 0
Ramesh – Land and
loan A/c 10,00 building 30,00
0 0
Capital: Stock
20,00
Naresh Debtors 0
50,00
Ramesh 0 Cash 15,00
0
40,00 Capital –
0 Dinesh 8,000
2,000
1,20, 1,20,
000 000
On 31/03/07 the asset and liabilities were as follows.

Plant Rs50,000 ; land and building Rs30,000 ; Stock Rs30,000 , Debtors Rs25,000 ,
Creditors Rs25,000 ,Cash Rs15,000.
Prepare a profit and loss statement for the year ended 31st march 07 and a statement of
affairs as at date after taking into consideration the following additional information:
a) plant is to depreciated by 10% p.a(addition was as on 31/09/07)
b) A Reserve for bad debts is to raised at 2.5%
c) Interest on partners capital is to be allowed at % p.a
d) During 06-07, Naresh and Ramesh withdrew from the business Rs7,500 and
Rs5,000 respectively .
13. Ajay and Babita are in partnership sharing profit and losses in 2/3 and1/3
respectively.
The books are kept on the single entry system and their statement of affairs dated
31st March 06 showed their position to be as follows:
Statement of affairs of Ajay and Babita as at 31st march 06
Liabiliti Amt Asset Amt
es
Capital Freehold 6,00

building 0
Ajay 10,0
00 Plant and 2,00
Babita machinery 0
4,00
Creditors 0 Office furniture 500
Loan 5,00 Stock 4,00
Bill 0 0
Debtors
payable 1,00 6,00
0
57
H.S.C OMTEX CLASSES
6TH YEAR
500 Bills receivable 0
Cash 1,50
0
500
20,5 20,5
00 00
On 31st March 07 the books disclosed the following facts:

Debtors Rs8, 000. Creditors on open account Rs 8,500. Creditors for loan Rs 1,600
and cash Rs 800. The stock was valued at Rs4, 200 and bills receivable amounted
Rs 1,400. An examination of the cash book showed that during the year, Ajay had
drawn on account of profit Rs 1,500 and Babita Rs600. Ajay had ,in addition
withdrawn Rs2,000 from his capital account on 30th June 07.
The partners agree to reduce the existing valuation of the plant and machinery by
5% and the office furniture by 10% by way of depreciation. Charge 5% by way of
interest of interest on capital and 2% interest on drawing
Kindly draw:
1. A statement of profit ,dividing the balance between Ajay and babita
2. A statement of affairs, showing the position as at 31st march 07.
14. The following is the balance sheet of M/s A, B, and C as on 31st march 06:
Sundry 12,600 Cash in hand 1,200

creditors
8,4000 Cash at bank 11,400
Bills payable
Sundry debtors 25,200
Capital A/c
Stock 20,100
A
45,000 Furniture 6,000
B 90,000 Plant and 48,000

30,000 machinery
1,560
C Current A/c - C
15,000
2,460
Current A/c
A
1,440
B
1,020
1,13,4 1,13,4
60 60
58
H.S.C OMTEX CLASSES
6TH YEAR
A, B and C share profit and losses in the ration of 3:2:1 after charging interest on
capital at 5%p.a. During 07, the monthly drawing on the partners were: A-1,200 ,
B-900,C-750.
On 31st march 07, the asset and liabilities of the firm were :
Cash in hand Rs.900; stock Rs 30,600; Plant and machinery Rs 75,000; Bill
payable Rs7,200; sundry debtors Rs 28,800 , Furniture Rs5,400 , sundry creditors
Rs 10,200 and Bank overdraft Rs 18,000.
You are asked to: 1. Ascertain the profit or loss made by the firm as on
31/03/07
2. Show the Balance sheet of the firm 31.03.07
15. The books of P and S are kept on the single entry system and the profit and
losses are shared as to 2/3 and 1/3 respectively. Their capital were also in profit
sharing proportion on 31stmarch 07.
The position of affair on 31st march 07 was as a follows:
Creditors Rs 6,250, loan Rs 1,500 , Bills payable Rs 750 ,Building Rs7,000,
Machinery and plant Rs 1,500, Furniture Rs 500 , stock Rs 3,500, sundry Debtors
Rs7,000, Bills receivable Rs 550 , cash Rs 450.
At 31st march 08 the following figures were extracted :
Debtors Rs 6,500, Creditors Rs.5,000 , cash Rs 650 , Stock Rs4,350 , Bills
Receivable Rs.400, Mortgage Rs2,600 , Drawing on account of profit : P- Rs600 , S-
Rs200. P also withdraws Rs 1,000 Capital on 31stoct 07.Allow 10% per annum
depreciation both on machinery and furniture and 5% p.a interest on capital .
Each partner is entitled to salary of 500 p.a. Show the statement of affairs on 31 st
march 07 and on31st march 08 and statement of profit earned during the year .
16. Priya and Supriya are equal partners, who maintain their books under single
entry.
Their position as on 1st April 02 are as follows:
Capitals : Plant 1,60,0

00
Priya 2,00,0 Furniture
00 10,000
Supriya Stock
1,20,0 67,600
Creditors 00 Debtors
97,300
Bills 40,000 Bills
payable receivable 9,200
12,400
Cash 540
Bank 27,760
3,72,4 3,72,4
00 00
On 31st march 03 their statement of affairs was as follows :

Cash Rs.800 , Bank Rs 31,600 , Creditors Rs 42,400 , Stock Rs 73,400 , Debtors Rs
1,32,600, Bills payable Rs 1,200, Bills receivable Rs 17,600 .
Plant and Furniture are to be depreciated by 10%
From the debtors Rs 4,600 are considered irrecoverable and R.D.D at 5% is to be created.
An amount of Rs1,600 is to be set aside from bills receivable.
59
H.S.C OMTEX CLASSES
6TH YEAR
Priya and supriya have withdrawn Rs20,000 and Rs 16,000 for their personal use.
Interest at 5% on the opening balances of partners capital is to be.
Prepare : statement of affairs as on 31st March 02 and statement of profit and loss for the
year ending 31.03.03
17. A and B are partners in a firm sharing profits and losses as A 60% and B
40%.
The statement of affairs as at 31st March 06 was given below :
Creditors 20,000 Plant 40,000
A’s loan 20,000 Land and 20,000

account building
30,000
Capital : Stock
20,000
A Debtors
50,000 80,000 10,000
Cash
B
30,000
1,20,0 1,20,0
00 00
The partners keep their books by single Entry system.

On 31st March 2007 ; the position of the business was as follows :
Plant Rs 50,000 , Land and Building Rs 20,000 , Stock Rs 40,000 ,Debtors Rs
25,000;
Creditors Rs 25,000 ; cash Rs 20,000.
You are required to ascertain the amount of the firm’s Profit or loss for the year
ended 31st March 07 and a statement of affairs as on that date after taking into
consideration the following
1. Depreciate plant @ 10% p.a including additions.
2. On 1st January,2007 ; A increased his loan by Rs 10,000 in order to pay for additional
machinery which was installed on the same day.
3. Interest on loan is to be allowed @6% p.a.
4. During the year A and B drew Rs 12,000 and Rs 9,000 respectively.
5. Provide interest on capital @ 5% p.a and interest on Drawing @10% p.a(on an average
for 6M)
18. A, B, and C were in partnership and towards the end of 2004 most of their
books and records were destroyed in a fire. The balance sheet as on 31 st March
2003 was as follows:
Creditors 5,50 Cash 2,40

0 0
Capital Debtors
3,60
A Stock 0
4,50
B 0 Machinery 6,50
3,00 Fixtures and 0
60
H.S.C OMTEX CLASSES
6TH YEAR
C 0 Fittings 1,44
0
Current 1,50 Advance
account 0 payment 600
A Current 35
Account
B 145
C
100 170
14,7 14,7
45 45
The partners drawing in 2004 have been proved at A Rs.1,400, B Rs.1,000 and C
Rs650.
On 31st March, 2004, cash Rs 3,200 , Debtors Rs 4,025 ; Stock Rs 5,900 Advance
payment Rs 25, and creditors Rs 6,040 . Machinery is to be depreciated by 10 %
per annum and Fixtures and fittings at 7% 5% interest is to be allowed on capitals.
The partners share profits in proportions of ½, 1/3 and 1/6 respectively. Prepare a
statement showing net profit for the year 2004 and the division of the same
between the partners, together with the balance sheet as on 31st march 2004
61
H.S.C OMTEX CLASSES
6TH YEAR
CH. 6. FINAL ACCOUNTS OF NPO

[NOT FOR PROFIT ORGANISATION]
[Q. 6: 16 MARKS]
1. From the following Receipts and payments account of Western Gymkhana for
the year ended 31st March, 2007 and other information, prepare Income and
Expenditure account for the year ended on and a Balance Sheet as at that
date.
Receipts Amou Payments Amou
nt nt
To Balance B/F 1,040 By salaries 1300
T Subscriptions for: By Entertainment 645

Expenses
2006 85 234
By Electric charges
2007 4000 350
By General Expenses
2008 103 120
By Rates and Taxes
To Donations 1200 3000
By Investments
To Entertainment 876 241
Receipts By Stationery and
81 600
Printing
To Interest
1000 1000
By Expenses of 2006
To Entrance Fees
895
By Fixed Deposit
8385 8385
By Balance c/f
The Gymkhana has 450 members paying an annual subscription of Rs. 10/- each. Rs. 20/-
is still in arrears towards subscription for the year 2006 carry forward Rs. 20/- or rates
paid in advance. Provide Rs. 200/- for salaries outstanding. The Gymkhana owns Land and
Building standing in the books of Rs. 15,000/- and Furniture standing at Rs. 1,150, on
which depreciation at 5% and 15% respectively is to be written off. Interest for 3 months
at 12% p.a. is accrued on Investments. The Capital Fund as on 1st April, 2006 was Rs.
16,695/- 50% of the Entrance Fees is to be capitalised. Donations are capitalised.
2. From the following Receipts and Payments Account of a charitable Institution and other
additional information supplied to you, prepare an Income and Expenditure account for the
year ended 31st March, 2007.
Receipts and Payments A/c For the year ended 31st March , 2007
nt nt
62
H.S.C OMTEX CLASSES
6TH YEAR
To Balance b/d By Charities 8500
Cash in hand 150 By Salaries 2500
Cash in deposit A/c 2500 By Rent and Taxes 1300
Cash in Current A/c 1200 By Printing & Stationery 400
To Donations 4000 By Postage 150
To Subscriptions 2000 By Advertisements 350
To Endowment Fund 16000 By Purchase of Furniture 850

Receipts
By Investments 16000
To Legacies
8000 By Advance against contract for 2500
To Interest on extension of premises
8000
Investments
By Balance c/d
To Interest on
Cash in hand
Deposits 200 1050
Cash in Deposit A/c
To Sale of Old 50 6000
Furniture Cash in Current A/c
2500
42100 42100
Adjustments:
1. Treat 50% of donations and legacies received as income.
2. Outstanding rent for the year Rs. 300.
3. Salaries unpaid fro the year amounted to Rs. 500.
4. Interest on investments due but not received Rs. 500.
1. The following is the Receipts and Payments Account of Pensioners’ Association
for the year ending 31st March, 2007.
Receipts & Payments A/c For the year ending 31st March, 2007.
nt nt
To Balance: 1.4.2006 1500 By Travelling 2000

Expenses
To Entrance Fees 375 1500
By Stationery
To Subscriptions: 3700
By salaries
2005 – 06 200 8000
By wages
2006 – 07 1500 1250
0 By repairs
470
63
H.S.C OMTEX CLASSES
6TH YEAR
2007 – 08 700 By interest 4105
To special subscription for 3250 By Balance

Chairman’s Party 31.3.2007
2102 21025
5
Stationery expenses include Rs. 300 for the year 2006 – 07. Similarly, salary for
the month of March 2007 Rs. 700 is yet not paid. Subscription unpaid for the
current year is Rs. 300. Special subscription for the Chairman’s party Rs. 100 is
yet outstanding.
From the above information, you are requested to make out an Income and
Expenditure Account of the Association for the year ending 31st March, 2007.
2. Receipts & Payments A/c for the year ended 31st March, 2007.
Receipts Amount Payments Amount
To Subscriptions 1100 By Salaries 1000
To Bar Receipts 600 By Printing & 100

Stationery
To Interest on Securities 150 150
By Telephone
To Cricket Fees 250 120
By Gardening
To Tennis Fees 300 200
By Cricket
To Billiard Fees 250 100
By Insurance
To Life Members’ Fees 2000 300
By Tennis
To Donations 24800 400
By Billiards
By Bar Expenses
To Tournament Fund 1000 5000
Bu Investments
20000
By Land and
1000
Building
1200
By Tournament
Expenses 1000
By Furniture 1000
By sports Material 680
33450 By Current A/c 33450

Balance
64
H.S.C OMTEX CLASSES
6TH YEAR
By Cash in hand
Additional Information
1. Subscriptions outstanding for the year Rs. 550
2. Subscriptions of Rs. 100 were received in advance.
3. Salaries unpaid fro 2007 amounted to Rs. 200
4. Insurance prepaid Rs. 50
5. Half of the entrance fees received was to be capitalised.
6. Donations and Life members’ fees were to be capitalised.
7. Interest due but not received Rs. 100.
8. Sports Materials were valued at Rs. 800
9. Depreciate furniture by 5% and land and building by 2 ½ %.
10. From the above information, prepare an Income and Expenditure account for the year
ended 31st March, 2007.
1. From the following information, prepare Income and Expenditure account for
the year ended 31st March, 2008 and a Balance Sheet as on that date.
Receipts Amou Payments Amount

nt
To Cash in hand 1750 By Bank Overdraft 2500

(1.4.2007)
By Salaries 5300
To Subscriptions
150 By Furniture 2000
2006 – 07
1410 By Investments in 4000
2007 – 08 0 Securities
800
2008 – 09 75 By Printing and
1500
Stationery
To proceeds from 2500
1300
Drama By Cost of Staging
800
drama 2500
To Entrance Fees
500
By Sundry Expenses 175
To Interest on
200
Securities By Cash at Bank
2007 20075
To sale of Old Furniture By Cash in Hand
5
1. The society has 1500 members, each paying an annual subscription of Rs.
12.
2. Subscriptions of Rs. 100 pertaining to the year 2006 – 07 are still in
arrears.
3. Value of Stationery at hand on 31st March, 2007 was Rs. 200 and on 31st March,
2008 was Rs. 150.
4. Entrance fees are to be treated as Capital receipts.
5. Salary of Rs. 700 for the current year is unpaid.
65
H.S.C OMTEX CLASSES
6TH YEAR
6. Balances as on 31st March, 2007: Investment Rs. 4500, Building Rs. 25000,
Furniture Rs. 200.
7. Depreciate building by 2 ½ % and furniture by 5%.
1. Dr. Narendra commenced practice in the month of April 2007. He prepared

the following Receipts & Payments Account for the year ended 31st March,
2008.
Receipts and Payments A/c For the year ended 31st March, 2008
nt nt
To Cash 1000 By 1500

0 Furniture
To Visits 2500
7000 By
To Sundry 2000
Equipment
Receipts 400
1000
By Drugs
500
By Salaries
700
By Rent
100
By
conveyance 125
By 100
Stationery
4375
By Lighting
4500
By
1740 periodicals 17400
0
By
Drawings
By Balance
c/d
1. Rs 200 were to be received on account of visits.

2. Unpaid Salaries Rs. 200
3. 60% of conveyance is for private purposes.
4. Value of drugs on hand was estimated at Rs. 1,000.
5. Depreciate furniture and equipment by 10%
6. Prepare Income and Expenditure account and balance sheet.
66
H.S.C OMTEX CLASSES
6TH YEAR
the year ended 31st march, 2008 and a Balance Sheet as on that date.
nt nt
To Balance b/d 3500 By Salaries
To donations 1500 2007 – 08 250
To Subscriptions: 2008 – 09 2250
2006 – 07 250 By Rent 4300
2007 – 08 3500 By Postage 300
2008 – 09 750 By Printing & 3000

Stationery
By Balance c/d
To Interest on 2000
Investments
1250 12500
0
1. Salaries unpaid Rs. 250. Printing unpaid includes Rs. 600.

2. Printing paid includes Rs. 500 pertaining to the previous year.
3. Subscriptions outstanding Rs. 650
4. Balance on 1st April, 2007: Furniture – Rs. 6000, Investments – Rs. 50,000,
Buildings – Rs. 20,000.
1. The following is the Receipts and payments account of the Smart club in
respect of the year ending 31st March, 2007:
Receipts and Payments account for the year ended 31st March, 2007
nt nt
To opening 2050 By Salaries 4160

Balance
By Printing & Stationery 800
To Subscriptions:
80 By Rates and Taxes 1200
2005 – 06
4220 By Telephone 200
2006 – 07
160 By Purchase of 4% Govt. Securities at 2500
2007 – 08 par on 31st march 2007.
3100
67
H.S.C OMTEX CLASSES
6TH YEAR
To Sports Meeting By sundry Expenses 1850
Surplus
2000 By Balance at close 900
To Interest on
Investments
1161 11610
0
In addition to the information contained in the above account, the

following additional facts are ascertained.
1. There are 450 members each paying an annual subscription of Rs. 10, Rs. 90
being in arrears for 2006 at the beginning of 2007.
2. Stock of stationery at 31st March, 2006, was Rs. 100/- and at 31st March, 2007
Rs. 180.
3. At 31st March, 2007 the rates were prepaid up to the following 30th June, the
yearly charge being Rs. 1,200/- A quarter’s charge for telephone Rs. 70/- is
outstanding. Sundry expenses outstanding on 31st March, 2006 were Rs. 140/-
4. On 31st March, 2006; the Building stood in the books at Rs. 20,000 and it is
required to write of depreciation at 5% per annum. Investments at 31st March
were Rs. 40,000.
You are required to prepare an Income and Expenditure account for the year
ended 31st March, 2007 and Balance sheet as at that date.
68
H.S.C OMTEX CLASSES
6TH YEAR
1. From the following information relating to Thane Cricket Association, prepare

the income & Expenditure account for the year ended 31st March, 2008 and the
Balance sheet at that date. The following is the abstract from the Cash book of
the year.
nt nt
To Members’ subscriptions 1000 By Tournaments Expenses 1800
To Members’ admission Fees 300 By Maintenance charges of 1500

ground
To Miscellaneous Receipts 400 600
By Rates and Insurance
To Hire of Ground 1000 150
By Telephone Charges
To subscription Fee for 3000 300
Tournaments By printing and Stationery
6000 500
To Cash drawn from Bank By General charges
1000 1300
To Donations for instituting a 0 By Honorarium to Secretary
6000
prize.
By Fixed Deposit in Bank
9550
By Investment
2000
By Sports equipment
7000
By payment into Bank
3070 30700
0
Assets on 1st April, 2007 were: Sports and Equipments Rs. 3000; Cash at
bank Rs. 6000; Prepaid Insurance Rs. 200; Subscription due to the
association Rs. 600;
Liabilities on 1s April, 2007 were
Printing and Stationery Rs. 100; Honorarium to Secretary Rs. 100;
You are furnished the following further information.
Donations of Rs. 10,000 should be kept in a separate account. Subscription
received for the year 2008 – 09 are Rs. 1,000/- while subscriptions outstanding on
31st March, 2008 was Rs. 400/-
Investments are of the face value of Rs. 10, 000/ - and were purchased on 1st
October. 2007. Interest thereon at 12% per annum has accrued due. Write off 50%
of Sports Equipment, Prepaid Insurance amounts to Rs. 250/- and the Secretary is
to be given a bonus of Rs. 500/-.
69
H.S.C OMTEX CLASSES
6TH YEAR
2. From the following Receipts and payments account of a Credit Club and the
subjoined information, prepare Income and Expenditure Account for the year ended
31st March, 2007. Receipts and payments A/c
nt nt
To Balance – Cash 352 By Crockery 265

Purchases
To Current A/c With Bank 2738 682
By Maintenance
To Foxed Deposit at 6% 3000 1324
By Match Expenses
To Membership Subscription 4000 1100
(Including Rs. 600 for 2006) By Salaries
82
To Entrance Fees By conveyance
275 424
To Donation By Upkeep of Lawn
501 105
To Interest on Fixed Deposit By Postage Stamps
90 972
To Tournament Fund By Purchase of
2000
Cricket Goods
To Sale of Crockery (Book value Rs.
200 200
120) By Sundries
570
By investments
1880
By Tournaments
Expenses
By Balance :
Cash in Hand 220

Current A/c 2332
By Fixed Deposit 3000
1315 13156
6
Additional Information:
1. Monthly Salary is Rs. 100.
2. The value of unused postage stamps is as follows: 31st March, 2006 Rs. 75; 31st March,
2007 Rs. 90.
3. Stock of Cricket Equipment are as follows:31st March, 2006 Rs. 321; 31st March,
2007Rs. 280.
4. Arrears of Membership Subscriptions: 31st March, 2006 Rs. 660; 31st March, 2007 Rs.
800.
70
H.S.C OMTEX CLASSES
6TH YEAR
1. The following is the Receipts and payments Account of Madras Junior Club for
the year ended 31st March, 2007.
nt nt
To Balance at bank of 1.4.2006 1020 By Salaries 4160
To Entrance Fees 1000 By Rent 1860
To subscriptions: By Electricity 1280
2006 250 By Postage and 330

Stationery
2007 3050 180
By Insurance Premium
2008 350 460
By General Expenses
To Sale of Investments 7500 4500
By Part Payment on
To Loan Taken from 2000
account of new
Krishnaswamy on 1.10.2006 at
furniture. 2400
10% interest p.a.
1517 By Balance at Bank. 15170
0
The following information is also available

Particulars 31.3.20 31.3.20
06 07
Rent Due Rs. 180 Rs. 360
Electricity Rs.640 Rs. 200
Subscriptions due Rs.250 Rs. 400
Insurance paid in Rs.50 Rs. 70

advance
The cost of the investments sold was Rs. 5000. The surplus is to be treated as
income. Furniture was valued at Rs. 3000 on 31st March, 2006. On 30th September,
2006; he club purchased additional new furniture at a cost of Rs. 5,200.
Depreciation at the rate of 10% is to be provided on all furniture. The entrance
fees are not be capitalised. Prepare an Income and Expenditure account for the
year ended 31st March, 2007.
nt nt

71
H.S.C OMTEX CLASSES
6TH YEAR
(1.4.2007)
To Subscriptions 150 By Salaries 5500
2006 – 07 1410 By Furniture 2000

0
2007 – 08 By Investments in 4000
75 Securities
2008 – 09 1000
2500 By Printing and
Stationery
Drama 800
1300
By Cost of Staging
To Entrance Fees 500
drama 2500
To Interest on 200
Securities
2010 By Cash at Bank 20100
To sale of Old
0
Furniture By Cash in Hand
1. The society has 1800 members, each paying an annual subscription of Rs. 10.
2. Subscriptions of Rs. 200 pertaining to the year 2006 – 07 are still in arrears.
2008 was Rs. 150.
4. 50% of Entrance Fees are to be treated as Capital receipts.
Furniture Rs. 200.
7. Depreciate building by 10 % and furniture by 5%.
nt nt

(1.4.2007)
By Salaries 6000
To Subscriptions
2006 – 07
1000
1200
Stationery
1300
600
drama
72
H.S.C OMTEX CLASSES
6TH YEAR
To Entrance Fees 500 By Sundry Expenses 2500
To Interest on 100 By Cash at Bank 200

Securities
2000 By Cash in Hand 20000
To sale of Old 0
Furniture
10.
3. Value of Stationery at hand on 31st March, 2007 was Rs. 500 and on 31st
March, 2008 was Rs. 350.
Furniture Rs. 200.
nt nt

(1.4.2007)
By Salaries 5000
To Subscriptions
2006 – 07
1000
200
Stationery
1300
600
drama 2500
To Entrance Fees
500
To Interest on
100
Securities By Cash at Bank
1600 16000
To sale of Old By Cash in Hand
0
Furniture
12.
73
H.S.C OMTEX CLASSES
6TH YEAR
Furniture Rs. 500.
7. Depreciate building by 7 ½ % and furniture by 10%.
nt nt

(1.4.2007)
By Salaries 1000
To Subscriptions
2006 – 07
2007 – 08 Securities
75 1000
2008 – 09 By Printing and
2475 1200
Stationery
To proceeds from
600 300
500 drama 500
To Entrance Fees
100 By Sundry Expenses 200
To Interest on
Securities 1000 By Cash at Bank 10000
0
Furniture
15.
6. Balances as on 31st March, 2007: Investment Rs. 15000, Building Rs.
125000, Furniture Rs. 600.
74
H.S.C OMTEX CLASSES
6TH YEAR
nt nt

(1.4.2007)
By Salaries 1000
To Subscriptions
2006 – 07
2007 – 08 Securities
100 1000
2008 – 09 By Printing and
2300 1200
Stationery
To proceeds from
680 300
570 drama 500
To Entrance Fees
105 By Sundry Expenses 200
To Interest on
Securities 1000 By Cash at Bank 10000
0
Furniture
1. The society has 290 members, each paying an annual subscription of Rs. 15.5.
2008 was Rs. 350.
Furniture Rs. 600.
75
H.S.C OMTEX CLASSES
6TH YEAR
1. The following is he Receipts and payments account of Charitable Hospital for

the year ending 31st March, 2007.
Receipts Amount Payments Amount Rs.
Rs.
Opening Balance: Furniture 50
Cash 625 Salaries 11500
Bank 3625 Surgical Instruments 250
Govt. Securities 90000 Diet Expenses 1175
Receipts: Surgical & Dispensary 1750
Subscription 12500 Rent & Rates 500
Interest 4500 Insurance 350
Donations 5750 Office Expenses 600
Sundry Receipts 325 Travelling Expenses 750

paid to
Doctors
300
Sundry Expenses
750
Medicines
Closing Balance:
725
Cash
8625
Bank
90000
Govt. Securities
117325 117325
You are asked to prepare the Income & Expenditure Account for the year ended
on 31st March, 2007 and the Balance Sheet as on that date after taking into
account the following information.
1. The assets on 1st April, 2006 were as follows:
Furniture Rs. 1,000; Land Rs. 25,000; Building Rs. 75,000; Surgical instruments Rs.
1,750.
2. Write off depreciation at 2 ½ % on Building; 6% on Furniture and 20% on
surgical instruments. The Govt. Securities were of the face value of Rs.
1,00,000 and represents the investments of the Endowment fund.
3. The subscription received included Rs. 5,000 for the previous years,
whereas the outstanding subscriptions for the current year amounted to Rs.
76
H.S.C OMTEX CLASSES
6TH YEAR
3,500. Salaries of staff include Rs. 500 for the last year and salaries Rs. 750
is outstanding for the current year.
4. Interest received included Rs. 1,000 for the year 2005 and Rs. 1,150 are
outstanding for the current year.
18.From the following balance Sheet and Receipts and Payments account of
Nanavati Hospital, Bombay, prepare Income and Expenditure account for the
year ending on 31st March, 2007 and the Balance sheet as on that date.
Balance Sheet as on 1st April, 2006
Liabilities Amoun Assets Amount
t
Salaries Unpaid 2000 Cash 11000
Medicines Bill Unpaid 1500 Securities 150000
Capital Fund 383000 Furniture 4000
Land and 200000

Buildings
15000
Equipments
5000
Subscription Due
1500
Interest Accrued
386500 386500
Receipts and Payment Account

nt nt
Cash 1100 Furniture purchased on 1-4- 1900

0 2006
To subscription 2300
3000 Salaries including Rs. 2000/- of
Interest (Rs. 1500/- 7500
0 last year.
last year)
4700
5000 Equipment purchased on 1-4-06
Donations(Revenue)
5500
4300 Dispensary expenses
Life Membership Fee
500
1000 Medicines
0 17200
Taxes
6030 60300
Cash
0
Adjustments.
77
H.S.C OMTEX CLASSES
6TH YEAR
1. Capitalise the amount of life membership fees.
2. Interest earned but not received Rs. 1,000/-
3. Subscription include Rs.1000/- for 2008 and outstanding subscription for 31st
march, 2007 is 4,200
4. Unpaid salary for the year 2007 is Rs. 2500/-
5. Provide for depreciation on furniture 10%, Land and Building 5%, Equipments
20%.
6. Prepaid taxes Rs. 100/-
18.The Balance Sheet as at 1st April, 2006 and the Receipts and Payments account
for the year ended 31st March, 2007 of the Young Sports Club, Dadar are as
under.
Young Sports Club – Balance Sheet as on 1st April, 2006
nt nt
Capital Fund 3000 Building 9500

0
Outstanding Expenses: Furniture 5000
Salaries Entrance Fee receivable 200

400
Subscriptions Fee 800
Printing 700 receivable
28000
300
2330 Sports Material &
4200
Income and Expenditure 0 Equipments
A/c 6300
Cash in Hand
5400 54000
Cash at Bank
0
Young Sports Club, Dadar, Receipts and Payments A/c for the year
ending 31st March, 2007
nt nt
To Opening Balance 4200 By Cricket Tournament 16460

Expenditure
Cash in Hand 6300 1050 860
0 By Printing & Stationery
To Subscriptions 1600
1800 By Salaries & Honorarium
To Receipts from Cricket 500
0
Tournament By Repairs to Building
470
4000
To Interest on Bank A/c By Newspapers and
300
1452 Periodicals
0
78
H.S.C OMTEX CLASSES
6TH YEAR
300 By Advertising Expenses 400
By Insurance 15000
By Investments
By Closing Balance
Cash in Hand 11730

5280
4732 47320
0 Cash in Bank
6450
You are also given the following additional information.

1. Subscriptions of the amount of Rs. 800 were receivable as on 31st March,
2007
2. Subscriptions Rs. 200 and Entrance Fees Rs. 300 were received in advance.
3. Outstanding Expenses were: Salaries and Honorarium Rs. 100; Insurance
Rs. 50; Cricket Tournament Expenses Rs. 250.
You are required to prepare Income & Expenditure account for the year ending
31st March, 2007 and a Balance Sheet as on that date.
18.OMTEX sports club, Presented their Receipts and payments account for the
year ended 31st March, 2006 are as follows.
Receipts and Payments account for the year ended 31st March, 2006
nt nt
To cash opening Balance as on 1- 5000 By Bank Overdraft as 5000

4-2005 on 1-4-2005.
To Subscriptions: By Prize Distribution

400 2000
Exp.
2004– 05
31000 7000
By Investments
2005– 06
1900 10160
By Furniture (on 1-4-
2006– 07
1000 2005) 6200
To Locker Rent
1400 By Salaries 540
To Entrance Fees
1000 By Fax Charges 400
To Interest on Investments
5000 By Printing 1200
To Donations for Prize
200 By postage 700
Distribution.
3100 By Stationery 700
79
H.S.C OMTEX CLASSES
6TH YEAR
To Sale of Furniture (Cost Price By Telephone Charges 600
Rs. 160 on 1-4-2005)
By Municipal Taxes 25800
To Legacies.
By Rent 2000
By Expenses on Annual
get together
By balance C/d
300
Cash in hand
10400
Cash at bank
50000 50000
In addition to the information contained in the above account, the following

additional facts are ascertained.
1. The stock of stationery on 31-3-2005 and 31-3-2006 amounted to Rs. 100 and
Rs. 200 respectively.
2. Outstanding Salaries on 31-3-2006 were Rs. 800.
3. Half of entrance Fees and full amount of Legacies are to be capitalized.
4. The Club had 320 members paying an annual subscription of Rs. 100 per
member.
5. On 31-3-2005, the assets and liabilities were as follows.
Premises Rs. 50,000
Investments Rs. 12,000
Furniture Rs. 6,000
Prize Distribution Fund Rs. 8,500
Capital Fund Rs. 60,000
6. Depreciation of Premises is to be provided @ 10% p.a. and on Furniture @ 5%
p.a. Prepare Income and Expenditure account for the year ended 31 – 3 – 2006
and a balance sheet as on that date.
80
H.S.C OMTEX CLASSES
6TH YEAR
18. From the showing Receipts & Payments account for the year ended 31-3-
2006. You are required to prepare an Income and Expenditure account for the
year ended 31st March, 2006 & Balance sheet as on that date.
(16 marks)
Receipts and payments Account for the year ended 31st March, 2006
nt nt
To Balance b/d 4160 By Salaries 5500
To Subscriptions By Entertainment 2500

Expenses
2005 – 06 1600 1080
0 By Lighting
2006 – 07 1536
412 By General Expenses
To Donation 500
5000 By Taxes
To Receipts From 12000
Entertainment 3644 By Investments
2400
To Interest 324 By Expenses of 2004
944
– 06
4000
By Printing &
Stationery 3580
3404 By Fixed Deposit 34040

0
By Balance C/d
Adjustments
1. There are 450 members paying an annual subscription of Rs. 40 each.
2. The salaries outstanding on 31 – 3 – 2006 was Rs. 1000
3. Land and Building stood in the book at Rs. 60,000 and Furniture at Rs. 4,600
on 1st April 2005 write off depreciation at 2% on land and building and at 10%
on furniture. Capital fund as on 1st April 2005 was Rs. 66,360.
4. Interest on Investments @ 5% p.a. has accrued for 3 months.
5. 50% of the entrance fees is to be capitalized.
18. The following is the Receipts and Payments Account of Youngsters Club for the
year ending 31st December, 2001. (16
marks)
nt nt
81
H.S.C OMTEX CLASSES
6TH YEAR
To Bal. b/d – Cash 2150 By Salaries 4160
To Subscriptions By Printing & Stationery 800
2000 80 By Rates & Taxes 1200
2001 4220 By Television Charges 200
2002 160 4460 By Investment in Govt. 2500

Securities.
To Sport meeting 3250 1850
surplus By Sundry Expenses
2000 1150
To interest on By Balance C/d – Cash.
1186 11860
investments
0
Adjustments
1. There are 450 members paying an annual subscription of Rs. 10 each. Rs. 90 being in
arrears for the year 2000, at the beginning of the year 2001.
2. Stock of stationery on 31 – 12 – 2000 was Rs. 100 and that of 31 – 12 – 2001 is Rs. 180.
3. On 31 – 12 – 2001 – prepaid rates & taxes are Rs. 300 upto 31 – 3 – 2002. Yearly
charges Rs. 1,200. Outstanding television charges are Rs. 70.
4. On 31 – 12 – 2000 – outstanding sundry expenses are Rs. 140.
5. On 31 – 12 – 2000 book value of building was Rs. 20,000 & it is to be depreciated @
5% p.a. & Investments were valued at Rs. 40,000 on the above date.
6. Prepare (1) Balance sheet as on 31 – 12 – 2000. (2) Balance sheet as on 31 – 12 –
2001. (3) Income and Expenditure account for the year ending 31 – 12 – 2001.
18. From the following information prepare Income and Expenditure account for the year
ended 31st March, 2008 of Youth Association and a balance sheet as on that date. (16
marks)
Receipts Amo Payments Amou

unt nt
To Bal. b/d – 3500 By Salaries
To Subscriptions 2007 250
2006 - 07250 2008 2250 2500
2007 - 083500 By Rent 4300
2008 - 09750 4500 By Postage 300
To Entrance Fees 1600 By Printing and Stationary 3000
To interest on investments 2900 By Balance C/d 2400
1250 12500
0
Adjustments
82
H.S.C OMTEX CLASSES
6TH YEAR
1. Salaries unpaid Rs. 250, printing unpaid includes Rs. 600 for the year.
2. Printing paid includes Rs. 500 pertaining to the previous year.
3. Subscriptions outstanding Rs. 650 for the year.
4. Balances on 1st April 2007, Furniture – Rs. 6000, Investment – Rs. 50,000, Building - Rs.
2000
5. Provide 5% depreciation on furniture and building.
18. From the following receipts and payments account for the year ended 31st March, 2006
and additional information of Mumbai Sports Club, Mumbai prepare Income and
Expenditure account for the year ended 31st March, 2006 and a Balance sheet as on
that date. (16 marks)
Receipts Amount Payments Amou

nt
To Opening Cash 8600 By Sports Materials 10000

Balance Purchased
12000 3000
To Donations By Wages
15600 500
To Subscriptions By insurance
1550 800
To Locker Rent By Stationery
1300 Expenses 2900
To Entrance Fees
To Interest on
Investments 200 By Rent 5000
To sale of Old 4000 By Investments 800

Newspapers 1700
By Newspapers and
To Hire of Ground Periodicals 700
By playground 3200
Expenses
450
By Interest
480
By Salaries
820
By Postage
850
By Printings
1000
By Repairs of Sports
Material 10650
By Expenses on 43,85
43,850 Matches 0
By Sundry Expenses
By closing Cash
balance
83
H.S.C OMTEX CLASSES
6TH YEAR
Adjustments
1. The assets and liabilities on 1-4-2005 were as follows.
a. Land and buildings Rs. 300000
b. Furniture Rs. 10000
c. Playground Rs. 25000
d. Sports Material Rs. 22000
e. Investments Rs. 8000
f. Capital fund Rs. 373900
1. Subscriptions received include Rs. 300 for 2004 – 05, Rs. 800 for 2006 – 07 whereas
subscription s of Rs. 2500 are outstanding for 2005 – 06.
2. Half of the donations and full amount of entrance fees are to be capitalised.
3. Outstanding salaries amounted to Rs. 650
4. Depreciate Land and Building @ 2.5%, Furniture @ 7.5% and Sports material @
12.5% on the opening balance.
18. The following is the Receipts and payments Account of Modern Sports Club, Satara, for
the year ended on 31st March, 2007.
Receipts and Payments Account for the year ended on 31st March, 2007.
unt nt
To Balance b/d 1490 By Upkeep of 9500

Garden
To Subscription 1360 2360
0 By wages
520 By Salary
To Interest on 210
Investments 840 By Ground rent
930
To Proceeds from 5180 By Printing
Matches 190
5000 By Postage
To Life member 5000
fees By Bank
balance 1440
2663 26630
By Balance c/d
0
Adjustments:
1. Ledge balances of the club as on 31.3.2006 were
Capital fund Rs. 66,430, Club house and ground Rs. 40,000, Investments Rs.
48,640, furniture Rs. 6,400, Outstanding subscription Rs. 600.
2. Printing includes Rs. 200, Upkeep of garden includes Rs. 500 and Subscription includes
Rs. 400 for the previous year.
3. Entrance fees are to be capitalized.
4. The Rotary club of Satara owed Rs. 210 for the use of club hall.
5. Provide 10% depreciation on furniture.
6. Subscriptions outstanding for the current year were Rs. 1,000.
Prepare _
Income and Expenditure account for the year ended 31st March, 2007 and Balance Sheet
as on that date.
HOME WORK
84
H.S.C OMTEX CLASSES
6TH YEAR
18. Dr. Subhash Raje started practice as a medical practitioner on 1st April, 2007. He gives
you the Receipts & Payments Accounts for the year 2007 – 08 and the adjustments to
be made. Prepare his Income and Expenditure Account and Balance sheet for 2007
-08.
Receipts and payments account for the year ended 31st March, 2008.
unt nt
To Cash Introduced 10750 By 50000

0 Furniture
To Visits 40000
84000 By
To Receipts From Equipment 35000
Dispensary 64000
By Drugs 24000
To Sundry Receipts 12000
By Salary 6000
By Rent 18000
By 5600
Conveyanc 10000
es
1200
By
Stationery 37700
By Lighting 40000
26750 By Journals 26750

0 0
By
Drawings
By Balance
c/f
Adjustments:
1. Receipts in arrears are: Visits Rs. 11,500 and Dispensary Rs. 9,000.
2. The outstanding salaries are Rs. 1,800 and the outstanding expenses on drugs are also
Rs. 3,000.
3. 40% of the amount spent on conveyance was for domestic use.
4. Stock of drugs in hand at the close of the year was worth Rs. 4,200.
5. Depreciate furniture at 5% p.a. and equipments at 10% p.a.
6. Furniture and equipment purchased on 1st April 2007.
85
H.S.C OMTEX CLASSES
6TH YEAR
18. The following is the Receipts and Payments A/c of the Saraswati Vidya Mandir, Latur.
Receipts and Payments Account for 2007 – 08.
nt nt
To Cash Balance 32,00 By Furniture (31-12-2007) 80000

b/f 0
By Salaries 12400
To Admission 68,00 0
Fees 0 By Office Expenses
42000
To Tuition Fees 46,00 By Sports Material
0 By Printing & Stationery 18000
To Donations
90,00 By Fixed Deposit(@10% on 17000
To Govt. Grant 0 1.10.2008) 10000
To Life 1,00. By Cash Balance c/f 0
Members’ Fees 000 41000
To Term Fees 62,00
To Examination 0
Fees 24,00
0
30,00
0
4520 45200
00 0
1. The assets of the society on 1st April, 2007 were:
Building Rs. 50,000 Furniture Rs. 47,000 Library Rs. 40,000 Laboratory Rs.
48,000
2. The tuition fees receivable from students for 2007 – 08 is Rs. 12,000.
3. Furniture and Building are to be depreciated at 10% p.a. each.
4. The 50% of donations and entire amount of Life Members’ Fees are to be
capitalized.
5. Sports material is valued at Rs. 42,000 on 31-03-08.
6. The capital fund on 1st April, 2007 was Rs. 2,17,000.
Prepare Income and Expenditure Account for the year ended 31st March, 2004 and a
Balance sheet as on that date.
18. From the following Receipts and Payments Account of Ajanta Club, Ratnagiri and
additional information, prepare an Income and Expenditure Account for the year ended
31st March, 2008 and Balance Sheet as on that date.
Receipts and Payments A/c for the year ended 31st March, 08
unt nt
86
H.S.C OMTEX CLASSES
6TH YEAR
To Balance b/d By Balance b/d
Cash 3000 Bank 25000

0
To Receipts from By Stationery A/c 11500
entertainment programme 8400
0 By Furniture A/c 40000
To Entrance Fees
By Investments A/c 60000
To Interest on Investments
2600 By Salaries A/c 45000
To Charity 0 By Expenses of entertainment 50000
To Subscriptions 3600 programme
2006 – 07 0 By Balance c/d
2007 – 08 1200 Cash Balance

0 8500
2008 – 09 Bank Balance
12000
1210
0
4030
0
1160
0
2520 25200
00 0
Additional Information.
1. Capitalize 50% of the entrance fees.

2. Outstanding salary is Rs. 8,700 while outstanding interest on investment is Rs.
1500.
3. There are 500 members of the club, each of them is paying an annual subscription
of Rs. 100.
4. Opening stock of stationery was Rs. 1,800 and closing stock of stationery is Rs.
1900.
5. The assets of the Ajanta club on 1st April 2007 were Building: Rs. 1,50,000.
Furniture Rs. 50,000 and Equipment Rs. 30,000. The capital Fund as on 1st April
2007 was Rs. 2,48,900. New Furniture was purchased on 1st October, 2007.
6. Provide depreciation on Building and Furniture @10% and 5% respectively.
Equipment valued at Rs. 26,000 at the end of the accounting year 2007 – 08.
Note: In the absence of any information to the contrary, entrance fees should
be treated as revenue receipt. If any specific instruction is given in the problem,
entrance fes should be treaed accordingly.
87
H.S.C OMTEX CLASSES
6TH YEAR
18. Girgaon Library showed the following position on 1st April, 2007.
Balance Sheet as on 1st April, 2007
Liabilities Amo Assets Amou
unt nt
Rs. Rs.
Capital Fund 2676 Furniture 82500

50
Outstanding Liability for Books 12000
Expenses 2350 0
Investme
nts 45000
Cash at 22500
Bank
2700 27000
00 0
Receipts and Payments Account for the year ended 31st March, 2008
unt nt
To Opening Balance 2250 By Electric 2360

0 Charges
To Entrance Fes 1250
4150 By Postage &
To subscriptions 0 Stationery 6250
To Sale Proceeds of 5000 By Telephone 33000

old papers 0 Charges 2350
To Hire of Lecture Hall 1275 By Purchase of 14400
To interest on Books
2100 42000
investments 0 By Expenses of
2006 – 07 23300
3400
By Rent 14765
1396 By Investments 13967

75 5
By closing Balance
You are asked to prepare an Income and Expenditure A/c of the Library for the year ended
31st March, 2008 and a Balance Sheet as on that date after making the following
adjustments.
1. Subscriptions include Rs. 12500 received in advance and subscriptions of Rs. 27500
in respect of current year are still receivable.
2. Outstanding Liabilities on 31st March, 2008 were Rent Rs. 4,000 and Salaries Rs.
3,000.
3. Books, excluding any additions during the year, are to be depreciated at 10% p.a.
4. 50% of the Entrance Fees are to be capitalized.
88
H.S.C OMTEX CLASSES
6TH YEAR
18. From the following Balance Sheet and Receipts and Payments Account of Ashwini
Hospital, Mumbai, prepare an Income and Expenditure Account for 2007 – 08 and a
Balance Sheet as on 31-03-2008.
Balance Sheet as on 1-04-2007
Liabilities Amo Assets Amou

unt nt
Salaries unpaid 1200 Cash 41000

0
Medicines bill Securities 15000
unpaid 1150 0
0 Furniture
Capital fund 24000
4460 Land and
00 buildings 20000
0
Equipment
45000
Subscriptions
due 5000
Interest 4500
accrued
4695 46950
00 0
Receipts and payments A/c for the year ended 31st March, 08

unt nt
To Cash Balance b/f 4100 By Furniture 11900

0
To Subscriptions (Purchased on 1-4-07)
6000
To interest 0 By Salaries 48000
(including Rs. 4500 of 1500 (Including Rs. 12000 of

last year) 0 last year) 7500
To Donations By Equipment
(Revenue) 1430 (purchased on 1-4-07) 24700

To Life Membership 0 By Dispensary Expenses
Fees 45500
By Medicines
4500
4000 By Taxes
0 28200
By Cash Balance c/f
1703 17030
00 0
89
H.S.C OMTEX CLASSES
6TH YEAR
Adjustments:
Capitalize the entire amount of life membership fees. Interest earned but not
received is Rs. 2,000. Subscriptions for 2007 – 08 are Rs. 4,200. Unpaid salary for
the year 2007 – 08 is Rs. 12,500. Provide for depreciation on furniture at 10%, on
land and buildings at 5% and on equipment at20%. Prepaid taxes are Rs. 400.
19. The following is the Receipts and Payments Account of the Shree Sports Club,
Ahmednagar.
Receipts and payments account for the year ended 31st March, 2008.
unt nt
To balance b/d By Salaries 8500
Cash 7000 By Badminton court 22000

(1.4.07)
To subscriptions 2000 3000
0 By Insurance
To interest on 17000
investments 3000 By Furniture (1.4.07)
6000
To Rent 6000 By Sundry Expenses
8000
To Badminton 1200 By Tournament
Fees 0 Expenses 1500
To Tournament 1900 By Printing Charges 600

Fees 0 50000
By Newspapers &
To Admission Fees 2200 Magazines
0
To Donations. By 12% Investments 17400
4500
0 By Balance c/d
1340 Cash 13400

00 0
On 31st March, 2007, the club owned a building worth Rs. 1,50,000. The capital fund on
the same date was Rs. 1,57,000.
Prepare and Income and Expenditure account for the year ended 31st March, 2008 and
a Balance sheet as on that date after considering the following additional information.
1. Subscriptions received for 2008-09 Rs. 1500; subscriptions still due for 2007 – 08:
Rs 4,000.
2. Outstanding salaries on 31st March, 2008: Rs. 3000 and Insurance premium is paid
for one year ending 30th June, 2008.
3. Depreciation on building, badminton court and furniture @10%, p.a. each.
4. Capitalize 70% of the admission fees.
5. Donations are received for endowment fund.
6. Investments purchased on 1st July 2007.
18. From the following Receipts and payments Account of South Indian Cultural Society,
Matunga, Mumbai, prepare Income and Expenditure Account for the year ended 31st
March 2008 and a Balance Sheet as on that date:
90
H.S.C OMTEX CLASSES
6TH YEAR
nt nt
To Opening Cash 7420 By Opening Bank 92700

in Hand Overdraft
53000
To Subscriptions By Investments in
7300 Securities 41450
2006 – 07
1855 By Purchase of 36200
2007 – 08 00 Furniture
1890
2008 - 09 5000 By Salaries
21710
To Proceeds from 70000 By Printing &
Dramas 14420
30000 Stationery
To Entrance Fees
4200 By Cost of Staging
To Interest on Dramas 55550
Securities 7500
By Sundry Expenses
3,16, 3,16,9
To Miscellaneous
920 By Closing Balances 20
Income
Cash in hand
1. The society has 1000 members each paying an annual subscription of Rs. 200.
Subscriptions of Rs. 9,000 are still in arrears in respect of 2006 – 07. Capital fund as
on 1st April, 2007 was 1,22,950.
2. Stock of stationery amounted to Rs. 1,125 on 31-3-2007 and Rs. 2,087 on 31-3-
2008.
3. Half the entrance fees are to be capitalized.
4. Salary for the year 2007 – 08 Rs. 1550 is outstanding.
5. Outstanding Sundry Expenses on 31-3-2007 had amounted to Rs. 1320.
6. Sundry expenses paid in 2006-07 included telephone charges Rs. 1125 relating to
2007-08.
7. On 31-3-2007, the society owned premises worth Rs. 124500. Billiard Table worth
Rs. 40,000 and investments worth Rs. 26,500.
8. Both the premises and the Billiards Table at the end of the year are to be
depreciated at 10% on the opening balances.
91
H.S.C OMTEX CLASSES
6TH YEAR
CH. 6. FINAL ACCOUNTS OF

PARTNERSHIP FIRM
1. From the following Trial Balance of M/s Sonia and Sufi, you are required to prepare
Trading Profit and Loss Account for the year ended 31st December, 2004 and the
Trial Balance as on 31.12.2004
Particulars Debit Credit
(Rs.) (Rs.)
Sonia’s Capital 1, 80,

000
Sufi’s capital
1, 50,
Sonia’s Drawing 14, 450
000
Sufi’s Drawing 10, 000
Stock on 1 – 1 – 2004 2, 00,

000
Bills Receivable
25, 000
Purchases
2, 75,
Sales
000
Bills Payable
4, 00,
Return In ward 000
Return Outward 60, 000

5, 000
Plant and Machinery
Loose Tools 4, 500

1, 00,
Patents 000
Sundry Debtors 25, 000
Sundry Creditors 25, 000
Cash at Bank 1, 25,

000
Wages 1, 40,
000
Salaries
77, 550
92
H.S.C OMTEX CLASSES
6TH YEAR
Rent and Taxes 19, 000
Insurance 17, 500
Printing and Stationery 7, 500
Power and Fuel 3, 000
2, 000
3, 500
9, 34, 9, 34,
500 500
Adjustments:
1. Stock as on 31st December, 1978 Rs. 1, 30,000 and its market value were Rs.
1, 40,000.
2. Write off Rs. 1000 for bad & Provide for Bad and Doubtful debts at 5% on
Sundry Debtors.
3. Goods worth Rs. 1000 were distributed as free samples.
4. Prepaid Insurance Rs. 750.
5. Depreciate Plant and Machinery by 10% p.a. and Patent by 15% p.a.
6. Outstanding expenses
 Salaries Rs. 2,500
 Wages Rs. 1,000
 Printing and Stationery Rs. 500.
1. Uninsured goods worth Rs 1200 were lost by fire.
93
H.S.C OMTEX CLASSES
6TH YEAR
2. Misha and Latha are partners sharing profits and losses in the ratio of 2 : 1.
From the following Trial Balance prepare Trading and Profit and loss account
for the year ending 31st December, 2004.
(Rs.) (Rs.)
Stock (1st January) 10, 000
Bills payable 10, 101
Purchases 40, 000
Wages 8, 500
Returns Outward 2, 500
Salaries 2, 700
Office Expenses 2, 446
Insurance 1, 300
Plant & Machinery 30, 000
Sundry Creditors 21, 500
Rent 1, 800
Sales 60, 000
Reserve for Doubtful 400

Debts
1, 400
Travelling Expenses
3, 500
Returns Inward
44, 800
Land and Building
3, 400
Bills Receivable
6, 655
Bank
60, 000
Misha’s capital
30, 000
Latha’s capital
1, 84, 1, 84,
94
H.S.C OMTEX CLASSES
6TH YEAR
501 501
Adjustments:
1. Closing stock was valued at Rs. 26,500.

2. Provide 10% Depreciation on Plant and Machinery.
4. Prepaid Insurance Rs. 300.
5. Maintain Reserve for Doubtful debts at 1% of Sundry debtors.
6. Outstanding rent for the current year Rs. 200.
7. Goods worth Rs. 100 were taken over by Latha for her personal use, but no
entry is made in the books.
95
H.S.C OMTEX CLASSES
6TH YEAR
2. Surya and Abhijeet are in a Partnership firm. The trial Balance of the firm on
31st December, 2004 was as follows.
Trial Balance as on 31st December, 2004
(Rs.) (Rs.)
Capitals:
Surya 15, 000
Abhijeet 10, 000
Drawings:
Surya 500
Abhijeet 200
Buildings 20, 000
Plant and Machinery 6, 000
Cash at bank 600
Purchases and Sales 47, 500 75, 500
Returns 1, 500 1, 000
Carriage 350
Opening stock 11, 000
Wages 6, 000
Debtors & Creditors 17, 600 12, 600
Salaries 2, 500
Rent and Insurances 400
Postage and Telegrams 200
Bad Debts 250
Discounts 100 50
Reserve for Bad Debts 750
Outstanding Salaries 100
96
H.S.C OMTEX CLASSES
6TH YEAR
Trade Expenses 300
1, 15, 000 1, 15,

000
Adjustments:
1. Partners share Profits and Losses in the ratio of their capitals.
2. Write off Rs. 450 for Bad debts & Reserve for Bad and Doubtful Debts is to be
maintained at 5% on the Debtors.
3. Depreciate Building @ 5% and Machinery @ 10% p.a.
4. Goods worth Rs. 1, 000 were destroyed by fire and the insurance company
admitted a claim for Rs. 800.
5. Stock as on 31st December, 2004 was valued at Rs. 8, 000.
7. Wages outstanding Rs. 1000.
Prepare Trading and Profit & Loss account for the year ended 31st December,
2004 and a Balance sheet as on that date.
97
H.S.C OMTEX CLASSES
6TH YEAR
2. Agarkar and Dravid are in partnership sharing profit and losses in the
ratio of 2: 1 from the following information of Trial balance and
adjustments you are required to prepare profit and loss account, trading
account and Balance sheet as on 31st march 2003.
3.

(Rs.) (Rs.)
Prepaid Insurance 400
Insurance 1, 000
R.B.D.D 500
Discount 400
Postage and Telephones 1, 600
Salaries 28, 000
Debtors 33, 000
Creditors 34, 000
Wages 12, 000
Opening Stock 24, 000
Carriage 500
Return Inward 2,800
Purchase and sales 96, 600 1, 50,

800
Bank Overdraft
60, 400
Land and Building 88, 000
Drawings:-
Agarkar 4,000
Dravid 2,000
98
H.S.C OMTEX CLASSES
6TH YEAR
Capitals:-
Agarkar 30, 000
Dravid 26, 000
3, 06, 300 3, 06,

300
Adjustments:
1. Write off Rs. 1,000 for bad debts and provide for R.B.D.D @ 5% on
debtors.
2. Goods worth Rs. 2,000 were distributed as free samples.
3. Closing Stock 31 – 12- 2003 was valued at cost Rs. 28, 000 while its
market value is Rs. 30,000/-.
4. Salaries were outstanding Rs. 1,000.
5. Depreciate Land and Building @ 5% p.a. and Plant and Machinery @
10% p.a.
6. Goods worth Rs. 3,000 were destroyed by fire, but insurance company
admitted the claim for Rs. 400 only.
7. Dravid had taken goods worth Rs. 1000 for his own use, but no entry is
made in the books.
99
H.S.C OMTEX CLASSES
6TH YEAR
5. From the following Trial Balance and adjustments you are required to
prepare the Trading account, Profit and loss account and Balance sheet
as on 31st December, 2004.
(Rs.) (Rs.)
Aishwarya’s Capital 2, 00,

000
Revathi’s Capital
1, 30,
Aishwarya’s Drawing 14, 000
000
Revathi’s Drawing 10, 000
Stock on 1 – 1 – 2004 2, 00, 000
Bills Receivable 15, 000
Purchases 2, 85, 000
Sales
Bills Payable
3, 90,
Return In ward 15, 000 000
Plant and Machinery 1, 00, 000
Loose Tools 25, 500 4, 000
Patents 15, 000
Sundry Debtors 1, 25, 000
Sundry Creditors
Cash at Bank 78,00 0
Wages 19, 000 1, 40,

800
Salaries 17, 500
Insurance 3, 000
100
H.S.C OMTEX CLASSES
6TH YEAR
9, 34, 800 9, 34,

800
Adjustments
1. Stock on 31st December, 2004 is valued at Rs. 50,000 but is market

value is Rs. 45,000.
2. Depreciate plant and machinery @ 5% p.a. Patents by 10%.
3. Write off Rs. 1,000 for bad debts and provide for R.B.D.D @ 5% on
debtors.
4. Insurance were prepaid for Rs. 200.
5. Salaries outstanding amounted to Rs. 800.
6. Goods worth Rs. 5000 were destroyed by fire.
101
H.S.C OMTEX CLASSES
6TH YEAR
5. From the following Trial Balance and Adjustments of Kumbhar and

Maroti you are required to prepare Trading and Profit and Loss Account
for the year ended on 31st March, 2005 and Balance Sheet as on that
date.
Trial Balance as on 31st March, 2005
Debit Balance Rs. Credit Balance Rs.
Stock (1.4.2004) 35000 Sales 330000
Salary and Wages 4200 Discount 4000
Cash 10000 Creditors 20000
Purchases 225200 Bank Overdraft 10000
Sundry expenses 13600 Interest on Investment 8000
Wages 12000 Capitals:
Bills Receivable 6000 Kumbhar 60000
Travelling Expenses 2000 Maroti 40000
Bad Debts 3000
Factory Expenses 8000
Commission 4000
Investments 20000
Debtors 40000
Tools and Equipments 6000
Furniture 12000
Goodwill 21000
Building 50000
472000 472000
Adjustments
1. Partners share Profits and Losses in the ratio of their capitals.
102
H.S.C OMTEX CLASSES
6TH YEAR
2. Closing stock is valued at Cost Price Rs. 40,000 and at Market Price Rs.
45,000.
3. Kumbhar has withdrawn goods worth Rs. 1,200 for his own use, but no
entry is made in the books.
4. Uninsured goods worth Rs. 12,000 were lost by fire.
5. Rs. 450 is to be written off as bad debts.
6. Unpaid expenses:
Salary and Wages Rs. 800
Rent Rs. 1,200
7. Depreciate building @ 7 ½ % p.a.
103
H.S.C OMTEX CLASSES
6TH YEAR
7. From the following information you are required to prepare the Trading
account, profit and loss account and Balance sheet as on 31st March, 2005.
(Rs.) (Rs.)
Sachin’s Capital 1, 00,

000
Ganguly’s capital
2, 30,
Sachin’s Drawing 4, 000
000
Ganguly’s Drawing 1, 000
Stock on 1 – 1 – 2004 2, 20, 000
Purchases 2, 95, 000
Sales
Bills Payable
2, 00,
Return In ward 5, 000 000
Return Outward 1, 60,

000
Plant and Machinery 1, 00, 000
Loose Tools 24, 000

4, 500
Patents 25, 000
Sundry Debtors 1, 25, 000
Sundry Creditors
Cash at Bank 77, 550
Wages 19, 000

2, 40,
Salaries 17, 500 000
Insurance 3, 000
104
H.S.C OMTEX CLASSES
6TH YEAR
9, 34, 500 9, 34,

500
Adjustment
1. Stock on 31st March, 2004 is valued at Rs. 30,000 but is market value is
Rs. 35,000.
2. Depreciate plant and machinery @ 5% p.a. Patents by 20%.
3. Insurance were prepaid for Rs. 200.
4. Salaries outstanding amounted to Rs. 800.
5. Maintain Reserve for Doubtful debts at 10% of Sundry debtors.
6. Goods worth Rs. 5000 were destroyed by fire and the insurance
company admitted a claim for Rs. 3000 only.
7. Sachin has withdrawn goods worth Rs. 500 for his own use, but no entry
is passed in the books.
105
H.S.C OMTEX CLASSES
6TH YEAR
8. Abhijit, Pawan and Vikram are partners. The following balanced were
extracted from the books of a partnership firm as on 31st March, 1999.
Trial Balance As On 31st March, 1999
Purchases 1650 Capital Accounts:

00
Debtors Abhijit 2400
6000 0
Stock (1st April, 1998) Vikram
2500 1200
Wages Pawan
0 0
Salaries Current Accounts:
2000 3000
Furniture 0 Vikram 0
Building 8000 Pawan
Insurance 8000 Sales 2000
Loan at 5% to Vijay (1st 4520 Reserved for Doubtful 3000

Dec. 98) 0 Debts
2500
Rent and Taxes 3500 Interest on Investment 00
Investment 4000 Creditors 7800
Cash in Hand 2000 Bills Payable 720
Bills Receivable 1000 Return Outwards 2500

0 0
Current Account :
Abhijit 8820 1400
0
1000
0 3000
2000
3715 3715
106
H.S.C OMTEX CLASSES
6TH YEAR
20 20
Adjustment
1. Closing stock Rs. 13,000.
2. Partners are allowed a salary at Rs. 3000 p.a.
3. Rs. 1200 paid during the year as building repairs wrongly debited to
building account.
4. Depreciate furniture at 12% p.a. and Building at 10% p.a.
5. Rs. 1000 due from customer is not recoverable and create R.D.D. at 5%
on debtors.
6. Goods of Rs. 12,000 were destroyed by fire. The insurance company
admitted a claim for Rs. 7,410.
7. Prepare Final Accounts for the year ending 31st March, 1999.
107
H.S.C OMTEX CLASSES
6TH YEAR
1. Mr. Kale and Mr. Gore were partners sharing profits and losses equally.
The Trial Balance of their firm was as under: Prepare Trading and Profit
and Loss Account for the year ended on 31st March, 2004 and Balance
Sheet as on that date:
Trial Balance as on 31st March, 2004.
Opening Stock 3000 Capitals:

0
Wages Mr. Kale 3000
9500 0
Purchases Mr. Gore
5250 6000
Investments Current Accounts:
0 0
Postage Mr. Kale
1000
Printing & Stationery 0 Mr. Gore
2100
Carriage Outwards 1000 Bills Payable
1400
Insurance 2500 10% Bank Loan(Taken on
7500
1.10.2003)
Debtors 1300
1000
Bank Overdraft
Furniture 3200 0
Creditors
Bad Debts 3500 6500
0 Sales
Carriage Inwards 2500
5500 R.D.D. 0
Cash in Hand
1200 Returns Outward 7050
Machinery (Purchased on 0
1.7.03) 1800
3000
Salaries (For 10 months) 5400
500
Sundry Expenses 3200
0
Bills receivable
1500
0
2100
8500
108
H.S.C OMTEX CLASSES
6TH YEAR
2165 2165
00 00
Adjustment
2. Printing and Stationery included Rs. 500 paid for purchase of postal
stamps.
3. Depreciate Furniture and Machinery at 10% p.a.
4. 5% interest is to be allowed on capital.
5. Of the debtors Rs. 500 were bad and should be written off, and R.D.D.
should be maintained at 5%.
6. Goods of Rs. 7,500 were purchased on 30th March, 2004 and included in
the closing stock but those purchases were not recorded in the books of
accounts.
7. Bills receivable include a dishonoured bill of Rs. 500.
109
H.S.C OMTEX CLASSES
6TH YEAR
1. From the following Trial Balance of Ramesh and Reshma and given
adjustments, prepare final accounts for the year ending 31st March,
2007. Ramesh and Reshma share profits and losses in the ratio of 2:1.
Land & Buildings 2500 Capital A/c.

00
Plant & Ramesh 2700
Machinery 1500 00
Reshma
00
Salaries 2000
Current A/c
4500 00
Productive
0 Ramesh
Wages
3500 Reshma
Delivery Van 1300
0
Sales 0
Office Expenses
8000
1700
Purchases 0 Returns
0
Returns 2600 Reserve For Bad
2900
0 debts
Bad debts 00
1250 Sundry Creditors
Sundry Debtors 4000
00
Bills Payable
Rent (for 10 6000
2500
Bank Overdraft
months)
6400
1000 10% p.a.
12% 0
2400 (Taken on 1 Jan
st
Investments
4000
0 07)
Stock 0
1200 Interest on
Insurance 2000
0 Investments
0
Unproductive 1800
Wages 0
Advertising 1700
2600
0
Furniture &
Fixtures 3600
1000
110
H.S.C OMTEX CLASSES
6TH YEAR
Printing & 4000
Stationery
3800
Power & fuel 0
Patent 4600
Cash at Bank 1000

0
Cash in Hand
1500
0
1800
0
2700
0
9257 9257
00 00
Adjustment
1. The stock of goods on 31st March, 2007 was valued at Rs. 66,000 at cost
while its market price was Rs. 70,000.
2. Write off Rs. 2,000 as further bad debts and maintain 5% R.D.D. on
debtors and maintain 3% Reserve for discount on debtors and 2%
Reserve for discount on Creditors.
3. Depreciate Plant and Machinery by 10%; Delivery Van by 15%; Patent by
20%. Furniture costing Rs. 8,000 sold for Rs. 5000 was wrongly included
in sales and remaining furniture & fixtures are valued at Rs. 22,000.
[less Rs. 8,000 from furniture, less Rs. 5,000 from sales and record loss on
sale of furniture worth Rs. 3,000 in P&L A/c Dr. Side & Depreciation on
furniture is Rs. 8,000]
4. Outstanding expenses: Productive Wages Rs. 5400; Salaries Rs. 4500;
Insurance premium is paid for the year ended 31st December, 2007.
5. Goods worth Rs. 6,500 were distributed as free samples for which no
record has been made.
6. Bills Payable includes a dishonoured bill of Rs. 12,000.
7. Sale of goods of Rs. 10,000 was wrongly considered as sale of
machinery.
1. Following is the Trial Balance of Kalavati and Lilavati as on 31st March,

2005 who share Profits and Loses to the ratio of 3:2. Interest on capital
was allowed at 5% p.a.
111
H.S.C OMTEX CLASSES
6TH YEAR
Opening Stock 100 Return Outward 125

00 0
Sundry Debtors Sundry Creditors
141 158
Purchases Sales
00 00
Wages R.B.D.D. A/c.
200 350
Salaries 00 Capital A/c. 00
Office expenses 425 Kalavati 200

0
Discount Lilavati
135
Rent, Rates & 350
0 Loan at 9%
Taxes 00
122 (Taken on
Plant & 100
3 1.10.2004)
Machinery 00
650
Return Inward 200
900 0
Land & Building
150
Cash at Bank 00
Current A/c : 175
0
Kalavati
200
Lilavati
00
732
7
210
0
600
992 992
50 50
Additional Information
2. Unpaid wages Rs. 750.
3. Outstanding salary Rs. 657.
112
H.S.C OMTEX CLASSES
6TH YEAR
4. Provide depreciation on Plant & Machinery at 10% p.a. and on
land & building at 5% p.a.
5. Write of Rs. 100 as bad debts and provide R.B.D.D. at 5% on
debtors.
6. Rent, Rates and Taxes prepaid Rs. 100.
7. Prepare Trading A/c and Profit & Loss A/c for the year ending
31st March, 2005 and a balance sheet as on that date.
113
H.S.C OMTEX CLASSES
6TH YEAR
1. Given below is the Trial Balance of M/s Radha and Krishna on 31st March,
2004. Partners share profit & losses in the ratio of 3:2 respectively. From
the following trial balance and additional information, prepare a Trading
& Profit & Loss account for the year ended 31st March, 2004 and a
Particulars(Debit) Amou Particulars(Credit) Amou
nt nt
Partner's Current Partners Capital

A/c Account
Radha 16000 Radha 80000
Partner's Drawings Krishna 50000
Radha 15000 Partners Current

Account
Krishna 10000 Krishna 10000
Purchases 12000 Sales 36500

0 0
Returns 2500 Returns 3500
Debtors 65000 Creditors 10000
Furniture 50000 RDD 2000
Premises 16000 Provident fund 65000

0
Bad debts 7500 Interest on P.F. 6000

Investment
Discount 5000 Outstanding Salaries & 6500

Wages
Provident Fund 15000 General Reserve 45003

Contribution
Provident Fund 60000

Investment
Salaries & Wages 15003
Opening Stock 80000
Cash in hand 18000
114
H.S.C OMTEX CLASSES
6TH YEAR
Royalties 4000
64300 64300
3 3
Adjustments:
1. The closing stock was valued at marked price Rs. 90,000 which is 20%
above cost.
2. Write off bad debts Rs. 1500 and make a provision for doubtful debts
@5% on debtors.
3. Provide 2% Reserve for discount on debtors and creditors.
4. Depreciate Furniture @ 15% and Premises @ 20%.
5. Interest on capital is allowed @ 105 p.a. and interest on drawings be
charged @ 15% p.a.
6. Radha is entitled to receive rent for her premises at Rs. 300 p.m. where
business is carried out and Krishna is to be given 5% commission on
‘Gross Profit’.
115
H.S.C OMTEX CLASSES
6TH YEAR
1. X, Y & Z are partners in a firm of following terms.

a. Y and Z to get salaries of Rs. 10,000 and Rs. 5,000 respectively for
the year.
b. Interest on Capital and on drawings is to be calculated at 10% p.a.
c. They share profits and losses as X – 50%, Y – 30%, Z – 20%.
The Trial Balance of the firm as on 31st March 1996 was as follows.
Furniture 22,000 Capital A/c
Premises 60,000 X 80,000

Y
Plant & Machinery 70,000 50,000
Z
Purchases 2,80,00 30,000
Current A/c
0
Opening Stock
X
42,000
Works Manager’s Y 6,000
Salary 64,000 Z
12,000
Office Expenses 45,200 Sales
18,000
Rent & Insurance 10,500 Creditors
4,65,00
Legal Fees 3,500 0
Debtors 20,600 37,500
Balance at bank 43,700
Drawings:
X 17,000
Y 11,000
Z 9,000
6,98,50 6,98,50
0 0
Your are informed that:
1. Stock on 31st march, 1996 is valued at Rs. 36,000

2. Outstanding expenses are Works Manager’s salary Rs. 6,000, Rent Rs.
1,000
116
H.S.C OMTEX CLASSES
6TH YEAR
3. Prepaid insurance Rs. 500
4. Machinery of Rs. 2,000 is included in Purchases.
5. Depreciate all fixed assets at 10%
6. Provide for commission receivable Rs. 2,000
7. On 31st March 1996 goods worth Rs. 5,000 were destroyed by fire and
insurance co. Admitted claim for Rs. 2,000.
8. Goods distributed as free samples Rs. 1,000 were not recorded.
117
H.S.C OMTEX CLASSES
6TH YEAR
1. Following is the Trial Balance of Vinod and Vikas sharing profits and losses
equally. Prepare a Trading and Profit & Loss account for the year ending 31 st
March, 1996 and a Balance Sheet as on that date after considering the
adjustment given below.
Amou Particulars(C Amou

Particulars(Debit) nt redit) nt
Stock (1-4-1995) 44000 Capital A/c
Purchases 17000 Vinod 80000

0
Returns Inwards Vikas 80000
10000
Carriage Sales 32000
4000 0
Motive Power Creditors
6000 40000
Wages Commission
56000 4000
Trade Expenses Bank Loan
4000 32000
Sundry Debtors
72000
Salaries
38000
Insurance
2400
Postage
3600
Commission
5000
Plant & Machinery
60000
Furniture
16000
Advertising
8000
Office Rent (10
months) 10000
Drawings
Vinod 14000
Vikas 6000
Building 24000
118
H.S.C OMTEX CLASSES
6TH YEAR
Cash in Hand 3000
55600 55600
0 0
Adjustments
1. Stock on 31.3.1996 was valued at cost price Rs. 80,000 and market price Rs.
72,000.
2. Depreciate Plant & Machinery and Building at 20% and 10% respectively.
3. Insurance has been paid for one year ending 31.6.1996.
4. Goods withdrawn by Vinod amounting to Rs. 10,000 during the year were not
recorded in the books.
5. Bad debts were Rs. 2000 and an R.D.D. is to be created at 5% on debtors.
6. Goods of Rs. 6000 were purchased on 30.3.1996 and also included in the
closing stock, but the purchase was not recorded in the books of account.
119
H.S.C OMTEX CLASSES
6TH YEAR
1. From the following Trial Balance of Somnath and Ambadas being equal
partners, you are required to prepare Trading and Profit & Loss A/c for the year
ended 31st March, 1996 and Balance Sheet as on that date after taking into
consideration the additional information.
Amou Particulars(Credit) Amou
Particulars(Debit) nt nt
Opening Stock 60000 Capital A/c
Drawings: Somnath 22000
Somnath 1000 Ambadas 18000
Ambadas 1500 Reserve Fund 21600
Insurance 600 Sales 13000

0
Salaries and Wages 4500 Bills Payable
1000
Carriage 2500 Creditors
16000
Purchase 65000 Reserve for Bad and
Doubtful Debts 800
Bills Receivable 600
Returns 500
Rent 3500
Debtors 18000
Returns 1000
Machinery 12000
Travelling Expenses 3000
Cash at Bank 1000
Building 30000
Office Expenses 2700
Advertisement (for 3 3000

years)
20990 20990
0 0
120
H.S.C OMTEX CLASSES
6TH YEAR
Adjustments:
1. Closing stock: cost Rs. 25,000 and market price Rs. 30,000.
2. Allow interest on capital at 10% p.a.
3. Prepaid insurance Rs. 50.
4. Provide for R.B.D.D. at 5% on debtors.
5. Uninsured goods costing Rs. 3000 were destroyed by fire.
6. Outstanding expenses: Salaries Rs. 1000; Rent Rs. 500.
7. Provide depreciation on Machinery at 20%; Building 2 ½ %.
121
H.S.C OMTEX CLASSES
6TH YEAR
1. Pradeep and Prashant are partners sharing profits and losses in equal ratio.
From the following Trial Balance you are required to prepare Trading and Profit
& Loss account for the year ended 31st March, 1998 and Balance Sheet as on
that date after taking into consideration the additional information.
Particulars(Debit) Amou Particulars(Credit) Amou

nt nt
Land and Building 44500 Capitals
Plant(Addition on 1st Jan. 98, 9750 Pradeep 60000

Rs. 3,000)
Prashant 40000
Drawings
3000 Sales 57000
Pradeep
2000 Sundry Creditors 9500
Prashant
26000 Reserve for Doubtful 500
Opening Stock Debts
5000 500
Wages Outstanding
34500
Expenses
Purchases
700
Carriage
2270
Office Expenses
1750
Rent, Rates and Taxes
480
Insurance
20000
Motor van
1750
Salaries
950
Bad debts
14600
Debtors
250
Cash at Bank
16750 16750
0 0
122
H.S.C OMTEX CLASSES
6TH YEAR
1. Closing stock on 31st March, 1998 was at cost Rs. 40,000 and Market price
Rs. 50,000.
2. Provide 10% p.a. interest on Capital.
3. Charge interest on drawings: Pradeep Rs. 100 and Prashant Rs. 150.
4. Depreciate plant at 10% p.a.
5. Prashant’s withdrawal of goods worth Rs. 1,000 for personal use but not
recorded in the books.
123
H.S.C OMTEX CLASSES
6TH YEAR
1. Given below is the Trial Balance of Sagar and Sindhu who are partners sharing
profits and losses in equal ratio. You are required to prepare a Trading and
Profits and Losses in equal ratio. You are required to prepare a Trading and
Profit & Loss A/c for the year ended 31st March, 2006 and a balance sheet as on
that date after taking into account the given adjustments.
Particulars(Debit) Amou Particulars(Credit Amou
nt ) nt
Purchases 98000 Capitals
Patent Rights 4000 Sagar 30000
Buildings 10000 Sindhu 40000

0
Opening sock Provident Fund 17000
15000
Printing & Stationery Creditors 45000
1750
Sundry Debtors Bank Loan 42000
35000
Wages & Salaries Sales 16325
11000 0
Partner’s Drawings Reserve for Doubtful
Debts 6250
Sagar
4500 Purchases Returns
Sindhu
6500 General Reserve 3500
Audit Fees
700 Commission 10000
Sundry Expenses
3500 Bills Payable 9000
Furniture & Fixtures
8000 10000
10% Investments (Purchased on 1st
Oct. 2005) 10000
Conveyance Expenses
Cash 2000
Provident Fund contribution 4000
Carriage Inwards 800
Trade Expenses 1300
Goodwill 2700
124
H.S.C OMTEX CLASSES
6TH YEAR
Machinery 20000
Shop Fittings 20000
Bad Debts 18000
Bills Receivable 250
9000
37600 37600
0 0
Adjustments
1. The closing stock at the end of the year was valued at market price Rs.
1,44,000 which is 205 above cost.
2. Commission includes Rs. 1,400 received in advance.
3. Goods worth Rs. 15,000 were sold on 30th March 2006, but not yet recorded in
the books of accounts.
4. 1/6th shop fittings and 20% of goodwill were to be written of. The provision for
Bad debts was to be maintained @ 5% on debtors.
5. Provide interest on Partners’ capital @ 10% p.a. and charge interest on
drawings @ 12% p.a.
6. Sagar is allowed a commission @ 2% on Gross profit.
7. Machinery and Buildings were to be depreciated at 15% and 205 respectively.
Patent Rights and Furniture and Fixtures were valued at Rs. 2,000 and Rs.
5,000 respectively.
8. Bills Receivable include a dishonoured bill for Rs. 2500. An amount of Rs. 2,000
spent on repairs on machinery was wrongly included in machinery account.
125
H.S.C OMTEX CLASSES
6TH YEAR
1. Asha and Nir0sha are the partners sharing profits and losses equally. You are
required to prepare the Trading and profit and loss account for the year ended
31st December, 1997 and a Balance sheet as at that date after making the
necessary adjustments.
Debit Balance Amount Credit Balance Amount
Buildings 70,000 Asha’s Capital 80,000
Plant and Machinery 60,000 Nirosha’s Capital 1,00,00

0
Furniture 16,000 Discount Received
1,800
Sundry Debtors 28,800 Loan From Vijay
30,500
Return Inwards 6,000 Sales
1,20,00
Discount 2,600 Sundry Creditors
0
Printing and 1,500 Reserve for Bad Debts
30,000
Stationery
1,600 Return Outward
2,000
Insurance Charges
1,400
3,700
Bad debts
19,300
Salaries
98,000
Purchases
25,800
Cash at Bank
20,000
Stock ( on 1.1.97)
2,500
Carriage Inwards
500
Legal Charges
8,000
Asha’s Drawings
6,000
Nirosha’s Drawings
3,68,00 3,68,00
0 0
Adjustments:
1. The stock on 31.12.97 was of the value of Rs. 44,000 which is less than its
market value by 2,000.
126
H.S.C OMTEX CLASSES
6TH YEAR
2. On 24th December, 1997 stock of the value of Rs. 6,000 was stolen Insurance
company admitted the claim for Rs. 4,000 only and paid the amount on 7th Jan
1998.
3. Goods worth Rs. 4,000 were received on 31st December, 1997 and were
included in the closing stock, but purchase invoice was omitted to be entered
in the books.
4. The partnership firm distributed goods worth Rs. 1,500 as free samples and
Asha withdrew goods worth Rs. 3,000 for personal use, but no record was
made of the same in the books.
5. Of the sundry Debtors Rs. 800 were bad debts and should be written off.
6. Make reserve for discount at 5% on debtors and creditors.
7. Depreciation Plant and Machinery by 10% and Furniture by 5%.
127
H.S.C OMTEX CLASSES
6TH YEAR
1. Following is the Trial balance of a firm as on 31st December, 1997

Trial Balance as at 31st December, 1997
Bank 2,000 A’s Capital 25,000
Bills Receivable 8,000 B’s Capital 15,000
Sundry Debtors 23,000 Bills Payable 7,500
Stock on 31.12.96 31,000 Sundry Creditors 33,300
Purchases(net) 1,80,00 Reserve for bad debts 600

0
Petty cash A/c Sales 2,90,00
4,000 0
Wages
38,300
Salaries
20,800
Rent (for 10 months)
1,000
Electricity Charges
2,180
Drawings – A
6,000
Drawings – B
4,000
Buildings
34,000
Furniture
4,000
Carriage Inwards
2,000
Donations
1,000
Carriage Outwards
3,500
Miscellaneous
Expenses 1,500
Printing and 2,300

Stationery
1,430
Postage and Telegram
1,390
Fuel and power
3,71,40 3,71,40
0 0
128
H.S.C OMTEX CLASSES
6TH YEAR
Adjustments:
1. Wages include Rs. 3,300 paid for the construction of a part of the building.
2. Provide for outstanding rent
3. Depreciation is to be provided on furniture@ 10% and Building @ 5%
4. Bills Receivable and Bills Payable include dishonoured bills for Rs. 2,000 and
Rs. 1,500 respectively.
5. Bad debts to be written off Rs. 500. Provide reserve for doubtful debts @ 5%
on debtors.
6. Petty cash A/c shows the amounts transferred from cash book. Actual petty
cash expenses are Rs. 3,100.
You are required to prepare Trading and profit and loss account for the year ended
31st December 1997 and a balance sheet as on that date.
129
H.S.C OMTEX CLASSES
6TH YEAR
1. From the following Trial Balance of M/s Kale and Gore your are required to
prepare Trading and Profit and Loss account for the year ended 31st December,
1997 and the Balance sheet as on that date after taking into account the
necessary adjustments. Trial Balance as on 31st December, 1997
Particulars Debit Credit (Rs.)
(Rs.)
Kale’s Capital 1, 80, 000
Gore’s capital 1, 50, 000
Kale’s Drawing 14, 450
Gore’s Drawing 10, 000
Stock on 1 – 1 – 2004 2, 00,

000
Bills Receivable
25, 000
Purchases
2, 75,
Sales 4, 00, 000
000
Bills Payable 60, 000
Return In ward

5, 000
Plant and Machinery
Loose Tools
1, 00,
Patents 000
Sundry Creditors 25, 000 40, 000
Cash at Bank 55, 000
Wages
Salaries 47, 550
Insurance 17, 500
7, 500
130
H.S.C OMTEX CLASSES
6TH YEAR
3, 500
8, 34, 8, 34, 500

500
Adjustments:
1. Depreciate Plant and Machinery by 5% and Patents by 15%.
2. Provide for Bad and Doubtful debts @ 5% on Sundry debtors.
3. Prepaid Insurance Rs. 750
4. Outstanding expenses
a. Salaries Rs. 2,500
b. Wages Rs. 1,000
c. Printing and Stationery Rs. 500.
5. Stock as at 31st December 1997 Rs. 1,30,000.
6. Kale and Gore have taken goods worth Rs. 2,000 and Rs. 3,000 respectively for
their personal use. No entry has been passed in the books.
7. Sales include Rs. 5,000 for goods sent on sale or return basis at 25% profit on
cost.
131
H.S.C OMTEX CLASSES
6TH YEAR
1. Keshav & Devidas are partners and the Trial Balance and the necessary
adjustments of their firm are given below. Trial Balance as at 31st March 1998
Debit Balance Amou Credit Balance Amou
nt nt
Purchases 1,25,2 Capital

25
Sales return Keshav 27,000
4,250
Debtors Devidas 35,000
50,200
Opening Stock Sales 2,05,0
28,788 00
Wages Purchase Returns
20,167 3,230
Salaries Commission
13,677 245
Furniture( Balance as on Creditors
1.4.98) 21,073
Dividend in
Investments 825
Rs. 6750
Reserve for Doubtful 500
Add: Purchases debts
7,450 10,000
On 31.2.98 Rs. Devidas Loan
7,500
700
315
Machines
3000
Bad Debts
9,500
Advt. (for 3years w.e.f. 1stOct.
97) 320
Investments
Insurance 3,000
Drawings 1,500
Keshav 27,981
Devidas 3,02,8 3,02,8
73 73
Cash and Bank Balances
Adjustments:
132
H.S.C OMTEX CLASSES
6TH YEAR
1. Closing Stock Rs. 15,000
2. Depreciation on Machines @ 5% and on furniture @ 10% p.a.
3. Deduct Rs. 200 for bad debts and provide 2% R.D.D
4. Interest on capital (Opening Balance) at 5% p.a. but on drawings at 10% p.a.
5. Keshav is to get 1% commission on Gross profit and Devidas is to be paid at
Rs. 2,000 p.a. as a salary.
6. Goods of Rs. 3,000 sold on sale or return basis. Goods are sold at 25% profit on
sale. Customer has not yet taken any decision.
7. After considering the adjustment, prepare the Trading, Profit and Loss A/c for
the year ending 31st March 1998 and a Balance sheet on that date.
133
H.S.C OMTEX CLASSES
6TH YEAR
1. Pankaj and Bindas are partners sharing profits in the ratio of their capital. Their
Trial Balance as on 31.03.1997 is as under.
Trial Balance as on 31.3.1997 is as under
Land and Building 1,00,00 Pankaj’s Capital 30,000

0
Plant and Machinery Bindas’s Capital 50,000
30,000
Purchases Bills Payable 6,000
1,20,00
Wages Creditors 12,000
0
Opening Stock Outstanding 500
3,500
commission
Carriage Outward 10,000
10,000
10% Loan (taken on
Sundry Debtors 2,00,00
400 1.7.96)
0
Interest on Loan
25,000 Sales
1,100
Prepaid taxes
250 Discount
4,000
Salary
200 Commission
3,000
Commission
4,500 Reserve for bad debts
1,000
Loss by fire
700 General Reserve
Travelling Expenses
2,000
Electricity
3.400
Pankaj’s Drawings
650
Bindas’s Drawings
2,000
Cash on hand
3,000
Sales Returns
10,000
2,000
3,17,60 3,17,60
0 0
Prepare Trading and Profit and loss A/c for the year ended 31st March 1997 and
the Balance sheet as on that date after taking into account the following
adjustments.
134
H.S.C OMTEX CLASSES
6TH YEAR
1. Closing stock cost price Rs. 20,000 and Market price is less than the cost price
by 5000.
2. Goods distributed as free samples Rs. 1,000.
3. Purchase returns of Rs. 2,000 on 30th March, 1997 have not been recorded in
the books.
4. Wages included Rs. 1,000 paid for installation of Plant and Machinery.
5. Bills payable include a dishonoured bill of Rs. 1,000
6. Depreciate Machinery by 10% and Land & Building by 5%
7. Reserve for Bad debts is to be maintained at 5% on Debtors.
8. Sales include, sale of Rs. 6,000 on approval basis. The cost of such goods is Rs.
5,000
135
H.S.C OMTEX CLASSES
6TH YEAR
1. Dalal & Raja are partners sharing profit and losses equally. From the following
Trial Balance of the firm, prepare Trading a/c Profit and Loss A/c and Balance
sheet for the year ending 31.12.1997.
Debit Rs. Credit Rs.
Stock 20,000 Capital Accounts:
Purchases 1,30,20 Dalal 15,000

0
Sales Return Raja 15,000
500
Debtors Current Accounts
20,000
Wages Dalal 2,000
6,000
Royalties Raja 2,000
1,000
Furniture Sales 1,70,50
5,000 0
Machinery Purchase Return
30,000 3,200
Advertisement for 4 Commission
years 4,000 300
Provident Fund
Salary 3,000 2,000
Interest on Provident
Provident fund 500 fund investments. 200
contribution
2,000 Reserve for Doubtful
Provident fund debts
500 500
investment
Creditors
3,000 20,000
Insurance
Drawings :
Cash
Dalal
3,500
Raja
1,500
2,30,70 2,30,70
0 0
Adjustments.
1. Closing stock: Cost price Rs. 25,000. Market Price Rs. 30,000/-
2. Dalal has taken goods worth Rs. 500 for his personal use.
3. Goods amounting Rs. 3,000 were sold and dispatched on 27.12.1997 but no
entry was made in the sales book.
136
H.S.C OMTEX CLASSES
6TH YEAR
4. Prepaid insurance Rs. 100.
5. Depreciation Furniture by 15%, Machinery by 20%
6. Write off bad debts Rs. 400/- and provide for reserve for doubtful debts at 3%
on debtors.
137
H.S.C OMTEX CLASSES
6TH YEAR
1. Hira and Manik are partners in a firm sharing profits and losses in the ratio of
their opening capitals. Below given is their Trial Balance as on 31st March 1998.
Trial Balance as at 31st March 1998
Plant and Machinery 50,000 Sales 2,40,00

0
Opening Stock 30,000 Discount
2,000
Purchases 80,000 Sundry Creditors
20,000
Freehold Land & 85,000 Bills Payable
Building 10,750
1,700 Hira’s Loan A/c
Carriage inwards 50,000
2,500 Capital A/c
Carriage outwards
16,000 Hira
Wages 50,000
50,000 Manik
Sundry Debtors 25,000
12,000
Salaries
18,000
Furniture
6,000
Trade Expenses
950
Return Inwards
12,500
Advt. Suspense A/c
900
Discount
Partner’s Drawings:
3,000
Hira
2,000
Manik
20,000
Bills Receivable
1,200
Insurance
1,000
Bad debts
5,000
Cash at Bank
3,97,75 3,97,7
0 50
138
H.S.C OMTEX CLASSES
6TH YEAR
You are required to prepare the Trading and Profit and Loss account of the firm for
the year ended 31st March 1998 and the Balance sheet as at that date after taking
into consideration the following adjustments.
1. Closing stock Rs. 45,000
2. Depreciate Plant @10% p.a. and Furniture @20%p.a.
3. Appreciate Freehold Land & Building to Rs. 90,000
4. Bad debts reserve to be written off against 2 ½ % on sundry debtors.
5. Advertisement Suspense A/c is to be written off against revenue over five
years.
6. Partner’s Drawings are to bear interest @10% p.a. amounts were withdrawn
evenly throughout the year.
7. Annual charge for insurance is Rs. 1,000 the balance represents amount paid
in advance
8. Hira gave loan @ 10% to the firm on 30th September, 1997.
9. Manik was to be allowed a partnership salary of Rs. 250/- p.m.
139
H.S.C OMTEX CLASSES
6TH YEAR
1. Sridevi & Jayaprada were partners sharing profits and losses in ratio 3/5 & 2/5.
Interest on Capital was allowed @ 5% p.a. but interests on drawings were
ignored. The following balances of accounts were given on 30.9.1997.
Opening Stock 20,000 Return Outward 2,500
Sundry Debtors 28,200 Sundry Creditors 31,600
Purchases 40,000 Sales 70,000
Wages 8,500 Reserve for Bad Debts 400
Salaries 2,700 Capital Account:
Office Expenses 2,446 Sridevi 70,000
Conveyance 1,300 Jayaprada 20,000
Insurance 1,800 Loan @ 10% p.a. 4,000

(Taken on 1.4.97)
Plant & Machinery 30,000
Return Inward 3,500
Land & Building 40,000
Cash at Bank 2,654
Bills Receivable 12,000
Drawings :
Sridevi 4,200
Jayaprada 1,200
1,98,50 1,98,50
0 0
You are given the following additional information.

1. Closing stock was valued at Rs. 52,000/-
2. Wages unpaid was Rs. 2,000/- & outstanding salaries were Rs. 1,600/-
3. Bills Receivable includes a dishonoured bill of Rs. 2,000
4. Write off Rs. 200/- as further bad debts and provide 6% reserve for bad debts
on Sundry debtors.
5. Depreciation Plant & Machinery @ 10% and Land & Building @ 5%
6. Goods distributed as free samples amounted to Rs. 2,000 were not recorded.
140
H.S.C OMTEX CLASSES
6TH YEAR
7. Sridevi was entitled to a salary @ Rs. 500 p.m. and Jayaprada was entitled to a
commission of 5% on Gross profit.
8. Carriage inward included Rs. 1, 000 paid for transport charges and octroi on
new machinery purchases on 1- 10 – 1996.
141
H.S.C OMTEX CLASSES
6TH YEAR
1. Prepare Trading and Profit & Loss account for the year ended 31st December,
1996 and Balance sheet as on that date from the following Trial Balance of
Kaveri and Narmada
Kaveri’s Drawings 4,000 Kaveri Capital 12,000
Narmada’s Drawings 4,000 Narmada’s Capital 20,000
Land & Building 21,000 Bills Payable 6,790
Plant & Machinery 12,600 Creditors 14,600
Stock(1.1.1996) 8,000 Purchase Returns 500
Purchases 12,000 Sales 43,000
Wages 5,000
Carriage Outward 500
Carriage Inward 400
Coal 1,260
Salary 7,500
Rent, Rates & Taxes 560
Discount Allowed 300
Cash & Bank Balance 5,080
Sundry Debtors 9,000
Printing & Stationery 460
Bad Debts 240
Advertisement 1,750
Sales Return 400
Furniture 1,240
Bills Receivable 1,600
96,890 96,890
Adjustments:
142
H.S.C OMTEX CLASSES
6TH YEAR
1. Closing Stock is valued at Rs. 10,000/- at cost whose market value was Rs.
15,000/-
2. Depreciation Land & Building and Plant & Machinery by 10% & Furniture by
5%.
3. Provision for doubtful debts should be maintained at 5% on sundry debtors.
4. Kaveri has withdrawn goods for his personal use Rs. 500 for which no entry is
passed.
5. Fire occurred in the Godown and goods worth Rs. 5, 000 were destroyed, but
Insurance Company admitted Claim for Rs. 3, 500.
6. Salary outstanding Rs. 1,500.
7. Wages outstanding Rs. 1,000 and
8. Rates prepaid Rs. 60.
143
H.S.C OMTEX CLASSES
6TH YEAR
1. Umesh and Mani are partners sharing profits and losses in equal ratio. From
the following Trial Balance you are required to prepare Trading and profit and
Loss Account for the year ended 31st December, 2005 and Balance sheet as on
that date after taking into consideration the additional information.
Land and Building 44, 500 Capitals
Plant (addition on 1st Umesh 60, 000

October, 2005 Rs.
9, 750 Mani 40, 000
3,000)
Sales 57, 000
Drawings:
3, 000 Sundry Creditors 9, 500
Umesh
2, 000 Reserve for Doubtful 500
Mani
Debts
26, 000 500
Opening Stock
Outstanding Expenses
5, 000
Wages
34, 500
Purchases
700
Carriage inwards
2, 270
Office expenses
1, 750
Rent, Rates and Takes
480
Insurance
Motor Van ( addition on

1st June Rs. 10, 000) 20, 000
Salaries 1, 750
Bad debts 950
Debtors 14, 600
Cash at Bank 250
1, 67, 1, 67,
500 500
1. Closing stock on 31st December, 2005 was at cist Rs, 40, 000/- and Market
price Rs. 50,000/-
144
H.S.C OMTEX CLASSES
6TH YEAR
2. Depreciate Plant at 10% p.a. and Land and Building @ 20% p.a.
3. Mani withdrawal of goods worth Rs. 1, 000 for personal use but not recorded in
the books.
4. Depreciate Motor van by 10% p.a.
5. The goods for Rs. 5, 600 purchases and received on 25th December, 2002 were
not recorded in the purchase book.
6. Goods worth Rs. 3, 000 were destroyed by fire but insurance company
admitted claim for the full amount.
7. Insurance is paid for the year ended 31st March 2005.
145
H.S.C OMTEX CLASSES
6TH YEAR
1. From the following Trial Balance by Kuruvi Traders, you are required to
Prepare Trading and profit and Loss Account for the year ended 31st March,
2005 and the Balance sheet as on that date.
Trial Balance as on 31st March 2005
Machinery 12, 000 Discount 400
Wages 4, 000 Sales 60, 000
Purchases 41, 000 Unpaid Salaries 200
Stock ( 1- 4 - 2004 ) 7, 000 Capital: Maridas 30, 000
Carriage inwards 400 Perinbaraj 15, 000
Office Expenses 2, 600 Creditors 6, 900
Leasehold property 10, 000 Bills Payable 4, 300
Furniture 2, 000 Return Outwards 500
Insurance 2, 000
Bad debts 250
Discount 350
Rent ( 10 month) 1, 000
Drawing: Maridas 4, 000
Perinbaraj 6, 000
Packing expenses 200
Cash at Bank 5, 700
Salaries 4, 000
Bills receivable 6, 000
Sundry debtors 5, 300
Cash in hand 3, 500
1, 17, 1, 17,
300 300
Adjustments:
1. Maridas and Perinbaraj share profits and losses in the ratio 3: 2.
146
H.S.C OMTEX CLASSES
6TH YEAR
2. On 31st March 2005 Stock was valued at Rs. 11, 000/-
3. Rent is payable for two months.
4. On 29th March, 2005 goods were sold to a customer on credit for Rs. 2, 000 no
entry has been passed in the books for sale.
5. Machinery to be depreciated at 10% p.a.
6. R.D.D is to be created at 5% on sundry debtors.
147
H.S.C OMTEX CLASSES
6TH YEAR
1. From the following Trial Balance of Shyam and Sundar, You are required to
prepare a Trading and Profit and Loss account for the year ended 31st
December, 2002 and Balance sheet as on that date after taking into
consideration the additional information. They share profits and losses in their
capital ratio.
Particulars Amount Particulars Amounts
s
Drawings: Capital Accounts:
Shyam 2, 000 Shyam 40, 000
Sundar 1, 000 Sundar 60, 000
Opening Stock 12, 000 Creditors 30, 000
Purchases 80, 000 Sales 1, 40,

000
Office Salaries 6, 000 R.D.D
1, 000
Royalties 2, 000 Return Outwards
2, 400
Trade Expenses 1, 400 Bills Payable
6, 000
Advertisement 5, 200 Reserve Fund
4, 000
Wages and Salaries 10, 400
Cash in Hand 8, 000
Debtors 50, 000
Bad Debts 400
Investments 16, 000
Motor Van 30, 000
Furniture 10, 000
Office Rent 3, 400
Freehold Property 16, 000
Discount 1, 600
148
H.S.C OMTEX CLASSES
6TH YEAR
2, 83, 2, 83,
400 400
Adjustments:
1. Closing stock was valued at Rs. 17, 600
2. Audit Fee for the year was outstanding Rs. 2, 400
3. Create R.D.D at 5% on Debtors.
4. The goods for Rs. 5, 600 purchased and received on 25th December, 2002 were
not recorded in the purchase book.
5. Depreciate freehold property at 10% and Motor Van at 25%
149
H.S.C OMTEX CLASSES
6TH YEAR
1. Ram and Sham are partners sharing Profits & Losses in the ratio of 2:3. Their
trial balance as on 31st March, 2005 is given below. You are required to prepare
Trading A/c and Profit & Loss A/c For the year ending 31st March, 2005 and a
Balance sheet as on that date after taking into account the given adjustments.
Particulars Amount Particulars Amounts
s
Purchases 98, 000 Capitals:
Patent rights 4, 000 Ram 30000
Buildings 1, 00, Sham 40000

000
Stock(1-4-2004) Provident Fund 7000
15, 000
Printing & Stationery Creditors 45000
1, 750
Sundry Debtors Bank Loan 12000
35, 000
Wages & Salaries Sales 158000
11, 000
Audit Fees Reserve for doubtful 250
700 debts
Sundry Expenses 3500
3, 500 Purchase Returns.
Furniture
8, 000
10% investment
(purchased on 1-10-
2004)
10, 000
Cash
4, 000
Provident fund
800
contribution
1, 300
Carriage inward
2, 700
General expenses
295750 295750
Adjustments
1. Closing stock is valued at cost Rs. 15, 000 while its market price Rs. 18, 000.
2. On 31st December 2004 the stock of stationery was Rs. 500.
150
H.S.C OMTEX CLASSES
6TH YEAR
3. Reserve for bad and doubtful debts at 5% on debtors.
4. Depreciate building at 5% and Patents at 10%
5. Interest on capital is to be allowed @5%.
6. Goods worth Rs. 10, 000 were destroyed by fire. The insurance company
admitted a claim for Rs. 8, 000/-.
151
H.S.C OMTEX CLASSES
6TH YEAR
CH. 7. OBJECTIVES [Q. 1: 20 MARKS]

SET I
Q1. Answer Any four of the following. (20 marks)
A. Answer the following. (5)
1. What is Balance Sheet?
2. Who is co – venture?
3. What is Super Profit?
4. What is Endorsement of Bill?
5. What is Good will of the firm.
B. Write word/term/phrase which can substitute each of the followings: (5)
1. Reputation of a firm expressed in terms of money.
2. Payment of expenses before they have become due.
3. Payment of bill of exchange before its due date at rebate.
4. The person on whom the bill of exchange is drawn.
5. The account that is credited when depreciation is charged.
C. Match the pairs. (5)
A B
1 Depreciation 1 Temporary Partners

. .
Dishonour of bill Intangible Asset
2 2
. Joint Venture . Wear and tear
3 Goodwill 3 Notary public

. Co – Venturers . Temporary partnership
4 4 Tangible Asset
. .
5 5
. .
6
.
D. Select the most appropriate alternative from those given below: (5)
1. Debit Balance in Profit and Loss Account shows _______________
a. Net profit
b. Gross profit
c. Net loss
d. Gross loss
2. A bill of exchange must be accepted by _______________
a. A drawer
b. A payee
c. An endorsee
d. A drawee
3. At the end of the financial year balance of Depreciation account is transferred to
_______
152
H.S.C OMTEX CLASSES
6TH YEAR
a. Depreciation account
b. Asset account
c. Trading account
d. Profit and loss account.
4. In the absence of partnership deed the partners share the profit and loss of the firm
____
a. In the ratio of capital
b. Equally
c. As per rights in management
d. On the basis of experience.
5. ____________ has to ultimately bear the noting charges.
a. Drawer
b. Drawee
c. Endorser
d. Bank
E. State True / False with reasons. (Any Two) (5)
1. Under fixed capital method for each partner two accounts are maintained.
2. Under fixed instalment method depreciation is charged on the diminishing value of
the asset.
3. Interest on partner’s drawings is debited to Profit and loss appropriation account.
F. Prepare a bill of exchange from the following information:
Drawer: Vilas Patil, 21. M.G. Road, Pune
Drawee: Vikas Pawar, 31. S.V. Road, Nasik.
Payee: Viraj Potade, 41, A.B. Road, Sholapur,
Period: 2 months
Amount: Rs. 7,500/-
Date of Bill: 1st January, 2007.
Date of acceptance: 3rd January, 2007.
SET II
Q1. Answer any four of the following. (20 marks)
1. Under single entry system if the assets is undervalued, how it is treated in the
statement of profit / loss?
2. What is the minimum, and maximum number of partners allowed by the Indian
Partnership Act, 1932?
3. What is meant by dishonouring of a bill?
4. What do you mean by revenue receipts?
5. Which Account is credited when depreciation is charged?
B. Write word/term/phrase which can substitute each of the followings: (5)
1. A bill before acceptance.
2. Amount by which book value of fixed assets exceeds its selling price.
3. Expenses due but not paid.
4. Partners of joint venture business.
5. Normal Rate of Return x Capital employed.
C. Match the pairs. (5)
A B
1 Interest on partners loan 1 Deficit

. .
Excess of income over expenditure Before adding three grace days
2 2
. Legal due date . Not Exceeding 6%
153
H.S.C OMTEX CLASSES
6TH YEAR
3 Printing and Stationery 3 After adding three grace days.
. .
Goods sold by consignee Surplus
4 4
. . Trading Account
5 5 Debited to Consignee’s Account.

. . Profit / loss account.
6
.
7
.
8
.
D. Select the most appropriate alternative from those given below: (5)
1. The Indian Partnership Act came into force in ____________________.
a. 1942
b. 1932
c. 1953
d. 1956
2. Excess of assets over liabilities is termed as ___________________.
a. Endowment Fund
b. Capital Fund
c. Special Fund
d. None of these
3. Fixed Instalment method of depreciation is also called as _______________
a. Straight Line Method.
b. Reducing Balance Method.
c. Written down value method.
d. Depreciation Fund Method.
4. Drawing a fresh bill in cancellation of old bill is called as _________________.
a. Retirement of Bill.
b. Discounting of bill.
c. Endorsement of Bill.
d. Renewal of bill.
5. When the co – ventures incur the joint venture expenses from his pocket _________
A/c is credited.
a. Joint Venture A/c
b. Joint Bank A/c
c. Co – venture’s A/c
d. Consignees A/c
E. State True / False with reasons. (Any Two) (5)
1. The liability of a partner is limited to his capital contribution.
2. In the Absence of partnership deed partners share the profit and loss equally.
3. A bill of exchange is discounted on due date.
F. Prepare a bill of exchange from the following information:
Drawer: Vilas Patil, 44, M.G. Road, Nanded.
Drawee: Pankaj Pawar, 70 Bhavani Galli Solapur.
Payee: Paresh Patkar, Rampur.
154
H.S.C OMTEX CLASSES
6TH YEAR
Period: 40 days.
Amount: Rs. 2,800/-
Date of Acceptance: 28th March, 2002.
Accepted: 29th March, 2002.
SET III
Q1. Answer Any four of the following. (20 marks)
1. Which types of expenses are debited to Trading Account?
2. What are ‘Not for Profit’ Concerns?
3. How are drawings treated in preparing statement of Profit or Loss?
4. Who is an endorsee?
5. What is depreciation?
B. Write the word/term/phrase which can substitute each of the following
statements?
1. Expenses paid in advance for the period which has not expired.
2. Fees paid to the Notary Public for noting of a bill.
3. Fees received for the entire life in lump sum on one occasion only from the
members.
4. The relationship between persons who have agreed to share profit or loss in Joint
Venture business.
5. A statement prepared to find out the closing capital at the end of the year.
C. Match the following pairs.
A Group B Group
1. Not for profit concerns. a. Capital account of partner
b. Current account of partner

2. Fixed Capital method.
c. Joint venture
3. Unexpired expenses.
d. Asset
4. Temporary partnership
e. Liability
5. Pure single entry system.
f. Only Personal account
g. Profit and Loss account.
h. Income and expenditure account.
D. Select the correct choice and complete the statement.

1. The Indian Partnership Act is in force since ____________
a. 1932 b. 1942 c. 1952 d. 2002
2. Normally, Receipts and payments account shows ____________ balance.
a. Debit b. Credit c. Nil d. Overdraft
3. Excess of opening capital over the closing capital is considered as
a. Income b. Profit c. Gain d. Loss
4. Making payment of the bill before the due date is known as ____________ of a bill.
a. Retirement b. Honouring c. Dishonouring d. Renewal
5. If two or more persons come together to carry on a business activity for a short
period, it is known as ____________
a. Joint venture b. Consignment c. Partnership firm. d. Co – operative
society.
E. State True or False with reasons.
1. The Receipts and payments account record receipts and payments of revenue
nature only.
155
H.S.C OMTEX CLASSES
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2. Scrap value of asset reduces the amount of annual depreciation.
F. Prepare bill of exchange from the following details.
1. Drawer : Vilas Patil, 44, M.G. Road, Nanded.
2. Drawee : Pankaj Pawar, 70, Bhavani Galli, Solapur.
3. Payee : Ramachandra Rampure, Rampur.
4. Period : 60 days.
5. Date of Bill : 28th January, 2005
6. Date of Acce. : 29th January, 2005
7. Amt. of Bill : Rs. 2,800.
SET IV
Q1. Attempt any four of the following.
A. Answer in one sentence each.
1. What is dishonour of bill?
2. What is the fixed instalment method of depreciation?
3. What does a credit balance on the Joint Venture Account show?
4. What is an average profit?
5. What do you mean by statement of Affairs?
B. Write the word/term/phrase which can substitute each of the following
statement:
1. A partnership for specific purpose and for temporary period.
2. List of debit and credit balances of the ledger accounts.
3. A person who accepts the bill.
4. Written agreement among the partners.
5. The balance which cannot be recovered from the debtors.
C. Match the following pairs.
Group A Group B
1. Co - Venturer a. Limited liability
2. Rebate b. Surplus
3. Credit balance of Income & c. Temporary partner

Expenditure Account
d. Retirement of a bill
4. Dormant Partner
e. Deficit
5. Trading Account
f. Does not take active part in the
business
g. Account showing the net profit / net

loss
h. Power and Fuel / Gross profit.
A. Select the most appropriate alternative from hose given below each
statement.
1. The interest on capital of a partner is _______ to profit & loss account.
a. Credited
b. Added
c. Debited
d. Divided
2. If fixed capital method is adopted, Net profit is transferred to _______ account of
the partner.
a. Current
b. Capital
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H.S.C OMTEX CLASSES
6TH YEAR
c. Balance sheet
d. Trading
3. Not for profit organisation prepares _________ to find out its financial position.
a. Balance sheet
b. Receipts & payments accounts.
c. Trading account
d. Income & Expenditure account.
4. Wages paid for Installation of Machinery should be debited to the ____________
account.
a. Installation
b. Wages
c. Salaries
d. Machinery.
5. There are ___________Parties to a bill of exchange.
a. Four
b. Three
c. Two
d. One.
B. State with reason whether the following statements are true of false.
1. Partnership is a non – trading concern.
2. A bill of exchange is a negotiable instruments.
C. On 10-Feb-1999, Thomas Kuruvilla, Mira Road, Draws a 3 months bill for Rs. 9000
on Poonam Ghadi, B.M.C. Road, Mahim. Poonam Ghadi, accepts the bill on 15th
March, 1999. Draft a bill of exchange.
SET V
Q1. Attempt any four of the following. (20 marks)
A. Answer in one sentence each. (5 marks)
1. What is depreciation?
2. What do you mean by qualified acceptance?
3. Why is Joint Venture Account opened?
4. What do you mean by capital fund?
5. What is carriage inward?
Ans. 1. Gradual continuous and permanent reduction in the value of fixed assets on
account of usage, wear and tear or passage of time is called as depreciation. 2. Qualified
acceptance means acceptance of a bill of exchange by the drawee with addition of certain
phrases that change the effect of the bill as to time, place, amount. 3. Joint venture
Account is opened to record the joint venture transactions so as to find out joint venture
profit / loss. 4. The excess of assets over liabilities of a non profit organisation is called as
capital fund. 5. Carriage Inward is expenditure incurred on purchase of goods that is
debited to Trading Account.
A. Write the word/term/phrase which can substitute each of the following
statement: (5 marks)
1. The account that serves the purpose of P&L A/c for non trading organisation.
2. The system of book keeping under which only one aspect of the transactions
is recorded.
3. The person on whom the bill of exchange is drawn.
4. The account that is credited when depreciation is charged.
5. The present value of tangible trading assets less all the liabilities, which is
required for valuation of goodwill.
A. Match the following pairs. (5 marks)
Group A Group B
1. RAM a. Intangible Asset
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H.S.C OMTEX CLASSES
6TH YEAR
2. Co – Ventures
3. Goodwill b. Records all cash transactions
4. Receipts & Payment A/c c. Trading A/c can’t be prepared
5. Single Entry System of Book – d. Current asset

Keeping.
e. Temporary memory
f. Uniformity maintaining accounts.
g. Temporary partners
h. Nominal A/c
statement. (5 marks)
1. Persons entering into a joint venture are called _______________
a. Partners
b. Co – partners
c. Co – venturers
d. Consignees
1. The _________ has to ultimately bear the noting charges.
a. Drawer
b. Endorser
c. Bank
d. drawee
1. The component of CPU that controls the various input output devices is
___________
a. Memory unit,
b. Control unit,
c. arithmetic logical unit
d. Key board
1. Loss on sale of asset is debited to _______________
a. Assets A/c
b. P&L A/c
c. Depreciation A/c
d. Trading A/c
1. In the absence of partnership deed the partners share profit & loss of the firm
___________
a. In the ratio of capital
b. Equally
c. As per rights in management
d. On the basis of experience
A. State with reason whether the following statements are true of false.
(5 marks)
1. Income & Expenditure account does not have any opening balance.
Ans. True: - Income & Expenditure A/c of Non – Trading Organisation is a nominal account
prepared from Receipts and payment A/c and additional information. It is like a profit &
loss A/c. where there can be closing balance but there is no opening balance.
2. Under fixed Capital method for each partner two accounts are
maintained.
Ans. True: Under fixed capital method, the amount of partners capital in the trial balance &
that in the balance sheet is same and fixed. The appropriations as per the partnership
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H.S.C OMTEX CLASSES
6TH YEAR
deed are accounted through the current account of the partners. Thus there are two
accounts i.e. Capital account and Current account.
3. Under fixed instalment method depreciation is charges on the
diminishing value of the asset.
Ans. False: Under fixed instalment method, a fixed percentage of the original cost of the
asset is charged as depreciation for each year during the life of the asset. Diminishing
value of the asset is considered under diminishing balance method of depreciation.
A. Drawer: Abhijit Patil, Vikram nagar, Patna. (5 marks)
Drawee – Tejas Kapare, Kothrud, Pune.
Payee – Amey Patki, Nagpur.
Amount - Rs. 7500
Period, 60 days
Term – After sight
Date of Bill Drawn – 1st June 2006
Date of Acceptance – 11th June 2006
Accepted bill for Rs. 7000 only.
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H.S.C OMTEX CLASSES
6TH YEAR
SET VI

1. What do you mean by scrap value?
2. What are noting charges?
3. What is the relationship between coventurers?
4. What is partnership deed?
5. State the formula for calculating Normal Profit?
Ans. 1.Market value of the asset after its use or when it becomes obsolete is known as
scrap value. 2. The fees charged by the notary public for noting and protesting the
dishonoured bill are termed as noting charges. 3. The relation between coventurers is
that of partners. 4. Partnership deed is a written document in which terms of
agreement are given in writing. 5. Formula for calculating normal profit = Capital
employed x Normal rate of return.
1. Goods returned to the supplier.
2. It is a stick or lever used to change the position of the cursor on a screen.
3. A bill in which the period of the bill is counted from the date of the bill accepted.
4. The receipts that are an unusual nature not arising through named activities of the
business.
5. A fixed asset which is not essential for conduct of business.
Group A Group B
1. Partner’s Salary a. Balance sheet asset side.
2. Subscription received in advance b. Current asset.

for the current year.
c. Deducted from gross profit.
3. Dishonour of bill.
d. Credited to joint venture account.
4. Cash in hand.
e. Credited to coventurers A/c
5. Unsold goods taken over by co –
ventures f. Noting Charges.
g. Closing balance sheet liability side.
h. Fixed assets.
1. Partner’s drawings are transferred to his __________ a/c under fixed capital
method.
a. Capital A/c
b. Current A/c
c. Trading A/c
d. Profit and loss A/c
1. Sale of old materials must be shown on credit side of ____________
a. Cash book
b. Income and expenditure account
c. Balance sheet
d. Receipt and Payments account
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H.S.C OMTEX CLASSES
6TH YEAR
1. Cost of asset = _____________
a. Purchase price + scrap value
b. Purchase price + depreciation
c. Purchase price + incidental cost
d. None of the above
1. A person in whose favour the bill is endorsed is called ___________
a. Endorsee
b. Endorser
c. Drawer
d. None of the above
1. Expenses incurred by coventurers is debited to ___________
a. None of the below
b. Consignee’s account
c. Co venturers account
d. Joint venture account.
(5 marks)
1. Balance sheet is a statement and not an account.
Ans. True: - Balance sheet takes into consideration balance of real and personal accounts
which are to be carried forward. Nominal accounts are closed by transferring their
balances either to trading account or profit & loss account. So balance sheet is a
statement prepared on the last date of accounting year and not an account. It is prepared
to know the financial position of the concern.
2. Partnership firm enjoys business continuity.
Ans. False: - Partnership firm is a personal organisation. Hence it stands dissolved in case
of insolvency, insanity or death of any partner. Hence partnership firm does not enjoy
business continuity.
3. When the bill is sent to bank for collection, bank A/c is credited.
Ans. False: - When bill is sent to bank for collection, bills receivable account is credited.
Bills receivable account being a real account the rule applicable is credit what goes out.
Hence when bill is sent to bank for collection, bank account is not credited.
F. Drawer: Shekhar Desai, Spastic Road, Mahad. (5
marks)
Drawee – Sharad Verma, Narayan Peth, Pune.
Payee – Mukund Pande, Panvel.
Amount - Rs. 5775/-
Period - 50 days
Date of Bill Drawn – 15th March, 1995
Date of Acceptance – 19th March, 1995 (Accepted for only Rs. 5700)
SET VII
1. Why Partnership Deed in necessary?
2. What is Capital Receipt?
3. What is Single Entry System of Book – Keeping?
4. Who is drawer?
5. What is qualified acceptance?
1. Debit balance of trading account.
2. Written terms of agreement between the partners.
3. Summary of actual cash receipts and cash payments.
4. A system in which accounts are prepared from incomplete records.
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H.S.C OMTEX CLASSES
6TH YEAR
5. An account opened by coventure in the bank for recording cash transactions.
Group A Group B
1. Goodwill a. Book Debts
2. Discount to customers b. Sundry Creditors
3. Statement of Affairs c. Tangible Asset
4. Income and Expenditure d. Intangible Asset

account
e. Single Entry System
5. Fixed Instalment Method.
f. Double Entry System
g. Original Cost
h. Not for Profit concerns
1. Reserve for discount on ______________ has a debit balance.
a. Debtors
b. Creditors
c. Bills Receivable
d. Loan advanced.
1. Income and Expenditure Account is a _______________
a. Personal account
b. Real account
c. Nominal account
d. Asset account
1. Under ____________ single entry system, no records are kept separately for
impersonal accounts.
a. Quasi
b. Pure
c. Simple
d. Modern
1. There are ___________ parties to a bill of exchange.
a. Two
b. Three
c. Four
d. Five
1. Persons who enter into Joint Venture are called ___________
a. Co – ventures
b. Partners
c. Shareholders
d. Loan holders
(5 marks)
1. Goodwill is a tangible asset of the business.
2. Under fixed capital method, current accounts of partners must be opened.
F. Drawer: Vikas Jagtap, Guruwar Peth,
Satara. (5 marks)
Drawee – Dadasaheb Kavthekar, Ramnagar, Chapal.
Amount - Rs. 5555/-
Period - 60 days
Date of Bill Drawn – 1st February, 2008
Date of Acceptance – 3rd February, 2008
SET VIII
162
H.S.C OMTEX CLASSES
6TH YEAR
1. Which types of expenses are debited to trading account?
2. What is Reserve Fund?
3. Who is an endorser?
4. What is non – profit organisation?
5. Why is Joint Bank Account opened?
1. A statement showing financial position of the business.
2. Making the payment of bill before its due date.
3. Summary of actual cash receipts and cash payments.
4. The relationship between persons who have agreed to share profit or loss in
Joint Venture Business.
5. A Partner who only lends his name to the firm.
Group A Group B
1. Not for profit concerns a. Capital A/c. of partner.
2. Fixed capital method. b. Current A./c of Partner.
3. Unexpired expenses c. Joint venture
4. Temporary Partnership d. Asset
5. Pure Single Entry System e. Liability
f. Only personal A/cs.
g. Profit & Loss A/c.
h. Income and Expenditure A/c.
1. Reserve for discount on ______________ has a debit balance.
a. Debtors
b. Creditors
c. Bills Receivable
d. Loan advanced.
1. Income Statements and Balance Sheet are prepared in a systematic and
scientific manner under ________________
a. Double Entry System.
b. Single Entry System
c. Partial Entry System.
d. Indian System.
1. Before accepting a bill, it is called a _________
a. Note
b. Draft
c. Hundi
d. Request.
1. Valuation of goodwill depends upon ________ capacity of business.
a. Normal
b. Repaying
c. Earning
d. Capital
1. If two or more persons come together to carry on a business activity for a
short period, it is known as ___________
a. Joint venture
b. Consignment
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H.S.C OMTEX CLASSES
6TH YEAR
c. Partnership
d. Stock exchange
(5 marks)
1. Scrap value of asset reduces the amount of annual depreciation.
2. When the amount of the bill is paid on the due date, it is said to be retired.
A. Prepare bill of exchange from the following details.
Drawer - Shekhar Desai, Shastri Road, Mahad. (5 marks)
Drawee – Sharad Verma, Narayan Peth, Pune.
Amount - Rs. 3500/-
Period - 3 months.
Payee - Mukund Pande, Panvel
Date of Bill Drawn – 21st June, 2007
SET IX
Q1. Attempt any four of the following.
(20 marks)

1. What is Balance Sheet?
2. What is Single Entry System?
3. What do you mean by Fixed Instalment Method?
4. What is Good will?
5. When Joint Bank A/c is opened?
1. A Partner who lends only his name to the firm.
2. Concerns established for providing services.
3. Profit earned over and above normal profit.
4. A temporary partnership without firm name.
5. A person who endorses the bill.
Group A Group B
1. Unpaid expenses a. Electronic device
2. Single Entry System b. Partnership firm
3. Computer c. Drawee
4. Co – Venturer d. Asset side
5. Maker of a bill e. Unscientific
f. Liability side
g. Drawer
h. Joint venture
1. Subscription received in advance during the accounting year is ____________
a. an income
b. an expense
c. an asset
d. a liability
1. Depreciation is charged only on the ____________
a. Current asset
b. Intangible assets
c. Immovable assets
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H.S.C OMTEX CLASSES
6TH YEAR
d. Fixed assets
2. Brain of computer is _____________
a. Micro processor (march 2008)
b. RAM
c. DRAM
d. DOS
3. Unsold stock of Joint Venture taken over by Co – venturer is credited to ___________
a. Co – venturers’ A/c
b. Joint Venture A/c
c. Joint Bank A/c
d. Stock A/c
4. A one month’s bill drawn on 31st January, 2007 will be matured on ___________
a. 3rd March, 2007
b. 28th February, 2007
c. 29th February, 2007
d. 2nd March, 2007
(5 marks)
1. Receipts and Payments A/c is a Nominal A/c
2. Drawee has no right to discount the bill with Bank.

Shri Amar Patil, Guruwar Peth, Karad, draws a Two months’ bill on Mehul Maniyar, Mul,
payable to Yogesh Ghatkar, CIDCO, Aurangabad, on 31st December, 2007 for Rs. 9,500.
Shri Mehul Maniyar accepted it on 2nd January, 2008.
SET X
(March 2009 Paper)
Q1. Attempt any four of the following. (20
marks)
A. Answer in one sentence each. (5
marks)
1. What is Statement of Profit or Loss?
2. What is Reducing Balance method?
3. What is the Method of Valuation of Goodwill?
4. What do you mean by Debit balance of Joint venture account?
1. The balance which cannot be recovered from the debtors.
2. An accounting system where rules of debit and credit are not followed.
3. Money value of business reputation.
4. A person entered into a joint venture.
5. The Gifts received from legal representative as per the will of a deceased
person.
Group A Group B
1. Opening Stock a. Amount of depreciation remains

constant.
2. Fixed instalment method
b. Trading account
3. Software
c. Revenue income
4. Joint Bank Account
d. Capital income
5. Subscription
e. Balance sheet
165
H.S.C OMTEX CLASSES
6TH YEAR
f. Converting symbolic language
g. Separate set of books
h. Utility programme
1. Interest on the capital of partner is debited to _______________
a. Trading account
b. Profit and loss account
c. Partner’s capital account
d. Partner’s current account
2. Computer is a / an ______________
a. Mechanical device
b. Automation device
c. Electronic device
d. Electric device
3. Joint venture is a ________________

a. Trading concern
b. Non – trading concern
c. Religious concern
d. Public concern
4. A donation received for a specific purpose is a _______________

a. Capital receipt
b. Revenue receipt
c. Liability
d. Asset
5. A bill drawn and accepted on 12th June 2007 for two months will be due for
payment on ___________
a. 12th August, 2007
b. 15th August, 2007
c. 16th August, 2007
d. 14th August, 2007
(5 marks)
1. Non – commercial concerns with ‘no profit’ base prepare income and expenditure
account in place of profit and loss account.
2. Noting charges are bone by Drawer.

(5 marks)
1. Drawer : Mrs. Archana Patil, Vikram Nagar, Patan.

2. Drawee : Mrs. Nalini Maniyar, Jalaram Krupa, Mulund.
3. Payee : Mrs. Sugandhi Ghatkar, Mangal Yog, CIDCO,
Aurangabad.
4. Amount : Rs. 17,575.
5. Period : 60 days.
166
H.S.C OMTEX CLASSES
6TH YEAR
6. Date of Bill : 28th December, 2007.
7. Accepted on : 2nd January, 2008.
8. Accepted for : 90 days.
OMTEX WISHING YOU ALL THE VERY SUCCESS IN YOUR FORTH COMING BOARD
EXAMINATON BISMILLAH
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H.S.

CH. 1. VALUATION OF GOODWILL [Q. 2

We can define goodwill as under:

2nd Year, Rs, 60,000(Profit)

4th Year, Rs, 50,000(Profit)

5th Year, Rs, 30,000 (Loss)

6th Year, Rs, 80,000(Profit)

[Ans. Rs. 95,000]

3rd Year Rs, 4,000(Loss)

4th Year Rs, 18,000(Profit)

1992 Rs, 45,000

1993 Rs, 55,000

1994 Rs, 53,000

2nd Year 7,200(L)

3rd Year 10,000(L)

4th Year 3,000(P)

5th Year 5,000(L)

2nd Year 7,400

3rd Year 20,000

4th Year 3,500

5th Year 7,300

[Ans. Rs. 26,400]

31-12- 5,35,80 7.5%

2nd Rs, 44,000

3rd Rs, 61,000

4th Rs, 58,000

19.The following balance sheet of Kantilal, Chandrakant.

Capital Machinery 50,000

Kantilal 90,000 Building 41,000

Chandraka 70,000 Investments 30,000

Creditors Bank 30,000

Less: Cost of (30000) (50000) (50000)

Calculate the value of good will at 2 years purchase of the average

Less: Cost of (10000) (50000) (50000)

HOME WORK SECTION

Capital Plant and 1,78,0

1. Following is the Balance Sheet of Mr. Atul as on 31st March, 1993:

Capital 77,500 Fixed Assets 85,000

General 22,500 Current Assets 50,000

CH. 2. COMPUTER AWARENESS [Q. 2 (B): 5

2. Explain about the components of computer hardware?

3. Write a short note on – second generation computers.

4. Write short notes on ‘Third Generation Computers’ (1965 – 71)

5. Write short note on “Fourth Generation of Computers” (1971 – 85)

6. Write a short notes on – First generation Computers.

7. Write short notes on Central Procession Unit.

8. EXPLAIN THE IMPORTANCE OF COMPUTER IN MODERN AGE.

9. EXPLAIN THE ROLE OF COMPUTER IN ACCOUNTING.

CH. 2. BILLS OF EXCHANGE [Q. 3: 12

ESSENTIAL FEATURES OF BILL OF EXCHANGE

THERE ARE THREE PARTIES IN THE BILL OF EXCHANGE.

THERE ARE TWO TYPES OF ACCEPTANCE

THE QUALIFIED ACCEPTANCE MAY BE DONE IN ANY ONE OF THE

DRAFT: - Before the acceptance of the bill, it is known as draft.

TYPES OF BILL: - There are two types of Bill

NOTING CHARGES: - It is a fee charged by the Notary Public, In case of dishonour of

PROTESTING: - It is also a fee charged by the government in case of foreign bill.

Pro Forma of a bill of exchange

PREPARE A BILL OF EXCHANGE FROM THE FOLLOWING

3. Drawer : Elavarasi, 35, Lakhani Apartment, Ulhasnagar

4. Drawer : Shri Narayandas Kela, Gandhi Chauk, Dhamangaon

5. Drawee : K . Prabhakar, Nehur Road, Solapur.