FINAL ACCOUNT

Q. 1 From the following balances extracted from the books of Sh. Gyan on 3st December, 1993, prepare a
Trading Account, P & L A/c and a Balance Sheet.
Closing Stock valued on that date was Rs. 15,000.
Dr. Balances Rs. Rs.
Capital
Household Expenses
Sales
Return inwards
Return outwards
Purchases
Cash at Shop
Bank Overdraft
Interest on Overdraft
Creditors
Stock at the Commencement
Freight
Rent and Taxes
Debtors
Commission
Freehold Property
Sundry Expenses
Salaries and wages
Life Insurance Premium
Insurance Premium
Motor Vehicle
Typewriter
Interest
Carriage inwards

10,000

4,000

1,50,000
1,600

1,500

18,000
8,500
7,000
32,600
3,000
30,000
3,900
20,000
1,800
1,600
39,800
8,000

2,000
1,28,200

1,80,000

6,000


15,000

17,800




2,200







800

Carriage outwards
Power
Audit Fee
Lighting
800
2,200
1,700
2,000
TOTAL 3,50,000 3,50,000
Q. 2 From the following balances of the ledger of Sh. Gurdeep Singh, prepare Trading and Profit and
Loss Account and Balance Sheet :
Balances Rs. Rs.
Stock on 30-6-2007
Stock on 30-6-2008
Purchases and Sales
Returns
Commission on Purchases
Freight, octroi and carriage
Wages and Salary
Fire Insurance Premium
Business premises
Sundry Debtors
Sundry Creditors
Goodwill
Patents
Coal, Gas and Power
Printing and Stationery
Postage and Telegram
Travelling expenses
Drawings
Depreciation
General Expenses
Capital
Investments
30,000
46,200
2,30,000
12,500
1,200
26,000
10,800
820
40,000
26,100

8,000
8,400
7,600
2,100
710
4,250
7,200
1,000
8,350

8,000


3,45,800
15,200






26,700









89,760

Interest on Investments
Custom Duty on imported goods
Cash in hand
Banker's Account
Commission
Loan on Mortgage
Interest on Loan
B/P
B/R
Income Tax
Horses and Carts
Discount on Purchases

4,500
2,570

4,600

3,000

4,540
3,000
20,300
800


5,200
4,400
30,000

2,280



1,600
TOTAL 5,21,740 5,21,740
Ans. Gross Profit Rs. 38,400, Net Profit Rs. 20,370, Balance Sheet Rs. 1,64,110
Q. 3 From the following balances of Sehajta Ltd. prepare Final Accounts as on 31
st
March, 2008 :
Rs. Rs.
Stock on 01-4-2007
Purchases
Sales
Productive Expenses
Unproductive Expenses
Trade Expenses
Returns In
Returns Out
Loose Tools
Trade Marks
Discount Cr.
Salaries
Fixed Deposit with P.N.B.
23,500
46,800
1,30,000
27,000
5,800
1,200
6,600
2,800
7,200
5,000
2,100
9,600
10,000
Freight In
Freight Out
Rent (Factory 1/3, Office 2/3)
Legal Expenses
Miscellaneous Receipts
Sundry Debtors
Sundry Creditors
Donation
Bad-Debts
Bad-Debts Recovered
Sales Tax Collected
Bank Charges
Loan on Mortgage
Interest on Loan
1,100
3,000
7,500
800
500
30,000
12,200
600
4,750
4,000
3,900
2,800
20,000
2,400
Cash in Hand
Motor Vehicles
Leasehold Land
Capital
Life Insurance Premium
1,300
50,000
60,000
1,37,450
6,000
Value of Closing Stock was Rs. 36,500 on 31
st
March 2008.
Q. 4 From the following Trial Balance of Gurdeep Singh as at 31
st
December, 2007, prepare Trading and
Profit and Loss Account and Balance Sheet:
Dr. Balances Rs. Cr. Balances Rs.
Opening Stock
Land and Building
Machinery
Furniture & Fixtures
Purchases
Salaries
General Expenses
Rent
Postage and Telegrams
Stationery
Wages
Freight on Purchases
Carriage on Sales
Repairs
Sundry Debtors
Bad Debts
Cash in Hand
Cash at Bank
Sales Returns
15,500
35,000
50,000
5,000
1,06,000
11,000
2,500
3,000
1,400
1,300
26,000
2,800
4,000
4,500
30,000
600
100
6,400
5,100
Capital
Loan from Mrs. Gurdeep Singh @9%
Sundry Creditors
Purchase Returns
Sales
Discount

60,000
30,000
9,600
2,100
2,07,300
1,200
3,10,200 3,10,200

The following further information was given:
(a) Wages for December, 2007 amounting to Rs. 2,100 have not yet been paid.
(b) Included in General Expenses is Insurance Premium Rs. 600, paid for the year ending 31
st
march,
2008.
(c) A provision for doubtful debts @5% on debtors is necessary.
(d) Depreciation is to be charged as follows:
Land and Building 2%, Machinery 10% and Furniture and Fixtures 15%.
(e) The loan from Mrs. Gurdeep Singh was taken on 1
st
July, 2007. Interest has not been paid yet.
(f) The value of stock on hand on 31
st
Dec, 2007 was Rs. 14,900.
Q. 5 The following is the Trial Balance of Mr. Gyan on 30
th
June, 2007 :
Balances Rs. Rs.
Cash in Hand
Cash at bank
Purchases Account
Sales Account
Returns Inward Account
Returns Outward Account
Wages Account
Fuel & Power Account
Carriage on Sales Account
Carriage on Purchase Account
Stock Account (1
st
July, 2007)
Building Account
Freehold Land Account
Machinery Account
Patent Account
Salaries Account
General Exps. Account
Insurance Account
540
2,630
40,675

680

10,480
4,730
3,200
2,040
5,760
30,000
10,000
20,000
7,500
15,000
3,000
600



98,780

500












Drawings Account
Capital Account
Sundry Debtors Account
Sundry Creditors Account

5,245

14,500





71,000

6,300
TOTAL 1,76,580 1,76,580
Taking into account the following adjustments, Prepare Trading Account and Profit and Loss Account and the
Balance Sheet:
(a) Stock on hand on 30
th
June, 2007 is Rs. 6,800.
(b) Machinery is to be depreciated at the rate of 10% and patents at the rate of 20%.
(c) Salaries for the month of June 2007 amounting to Rs. 1,500 were unpaid.
(d) Insurance includes a premium of Rs. 170 on a policy expiring on 31
st
December 2007.
(e) Wages include a sum of Rs. 2,000 spent on the erection of a cycle shed for employees and customers.
(f) A provision for Bad and Doubtful Debts is to be created to the extent of 5 per cent on Sundry Debtors.

Q. 6 The following trial balance is extracted from the books of a merchant on 31
st
December 2007:
PARTICULARS DR.
Rs.
Cr.
Rs.
Furniture and Fittings
Motor Vehicles
Buildings
Capital Account
Bad Debts
Provision for Bad Debts
Sundry Debtors and Creditors
Stock on January 1, 2007
Purchases and Sales
Bank Overdraft
640
6,250
7,500

125

3,800
3,460
5,475




12,500

200
2,500

15,450
2,850
Sales and Purchases Returns
Advertising
Interest Account
Commission
Cash
Taxes and Insurance
General Expenses
Salaries

200
450
118

650
1,250
782
3,300




125


375




34,000 34,000

The following adjustments are to be made:
(a) Stock in Hand on 31
st
December, 2007 was Rs. 3,250.
(b) Depreciate Building @5%, Furniture and Fitting @ 10% and Motor Vehicle @ 20%.
(c) Rs. 85 is due for interest on bank Overdraft.
(d) Salaries Rs. 300 and Taxes Rs. 120 are outstanding.
(e) Insurance amounting to Rs. 100 is prepaid.
(f) One-third of the commission received is in respect of work to be done next year.
(g) Write off further Rs. 100 as Bad Debts and Provision for Bad Debts is to be made equal to 5% on
Sundry Debtors.
Prepare a Trading and Profit and Loss Account for the year ending 31
st
December, 2007 and a Balance Sheet as
on that date.





Q. 7 From the following Trial Balance prepared from the books of Gurdeep on 31
st
December 2007, prepare
Trading and Profit and Loss Account for the year ending 31
st
December, 2007 and Balance Sheet as on that date
Particulars Rs. P. Particulars Rs. P.
Gurdeep's drawings
Bills Receivable
Plant and Machinery
Sundry debtors (Including Mr. Gyan for
dishonoured chequeRs. 1,000)
Wages (Manufacturing)
Returns inward
Purchases
Rent and Taxes
Stock on 1
st
Jan, 2007
Salaries
Travelling expenses
Insurance
Cash
Bank
Repairs and renewals
Interest of Loan
Interest and discount
Bad debts
Fixtures and Fittings
10,550
9,500
28,800

62,000
40,970
2,780
2,56,590
5,620
89,680
11,000
1,880
400
530
18,970
3,370
1,000
4,870
3,620
8,970

Gurdeep's Capital
Loan at 6% p.a.
Sales
Commission received
Sundry Creditors
1,19,400
20,000
3,56,430
5,640
59,630

5,61,100 5,61,100
The following adjustments are to be made:
(a) Stock-in-trade in hand on December 31, 2007 Rs. 1, 28,960.
(b) Write off half of Gyan's cheque.
(c) Create a provision of 5% on sundry debtors.
(d) Manufacturing wages include Rs. 1,200 for erection of new machinery purchased.
(e) Depreciate plant and machinery by 5% p.a. For fixtures and fittings by 10% per annum.
(f) Commission not earned but received amounts to Rs. 600.

Q. 8 On 31
st
December, 2007 the following Trail Balance was extracted from the books of Mr. Himmat Singh.

Particulars Rs. P. Particulars Rs. P.
Dr. Balances:
Drawings
Sundry Debtors
Interest on Loan
Cash in Hand
Stock on 1
st
Jan, 2007
Motor Vehicles
Cash at Bank
Land & Buildings
Bad Debts
Purchases
Sales Returns
Carriage Outward
Carriage Inward
Salaries

3,000
20,100
300
2,050
6,839
10,000
3,555
12,000
525
66,458
7,821
2,404
2,929
9,097
Rates Taxes and Insurance
Advertising
General Expenses
Bills Receivable
Cr. Balances:
Capital
Sundry Creditors
Loan on Mortgage
Bad Debts Reserve
Sales
Purchases Returns
Discounts
Bills Payable
Rent Received
2,891
3,264
3,489
6,882

28,000
10,401
9,500
710
1,10,243
1,346
540
2,614
250


Prepare Trading and Profit and Loss Account for the year ended 31
st
December, 2007 and Balance Sheet as on
that date, after making adjustments for the following matters:
1. Depreciate Land and Building at 2-1/2 % and Motor Vehicles at 20%.
2. Interest on Loan at 6% p.a. Is unpaid for six months.
3. Goods costing Rs. 500 were sent to a customer on sale or return for Rs. 600 on 30
th
December, 2007
and had been recorded in the books as actual sales.
4. Salaries amounting to Rs. 750 and rates amounting to Rs. 350 are outstanding.
5. Prepaid Insurance amounted to Rs. 150.
6. The provision for Bad Debts is to be maintained at 5% on Sundry Debtors.
7. Provide for manager's Commission at 10% on net profits after charging such commission.
8. Stock in hand on 31
st
December, 2007 was valued at Rs. 6,250.

Q. 9 From the following balances extracted from the books of Mr. Hardev Singh, prepare trading and profit and
loss account for the year ended 31.32007 and a balance sheet on that date:

Purchases
Computer at cost
(bought on 31.3.2007)
Cash at Bank
Cash in Hand
Furniture and fittings at cost
Rent
Bills receivable
Trade Charges
Sundry debtors
Drawings
Discount
Wages
Salaries
Returns Inwards
71,280

18,380
4,000
2,836
1,540
12,540
6,720
920
34,156
5,200
540
1,800
16,780
1,000
Capital account
Creditors
Bills Payable
Discount
Sales
Returns outwards
Rent due
60,000
13,000
10,220
22,000
60,720
11,432
320
1,77,692 1,77,692

Adjustments:
(a) Stock at the end at cost Rs. 25,600 (market-value Rs. 26,200).
(b) Rs. 6,000 paid to Mrs. Red against Bills payable were debited by mistake to Mr. Green's account and
included in the list of sundry debtors.
(c) Travelling expenses paid to sales representatives Rs. 5,000 for the month of March 2007 were debited
to his personal account and included in the list of sundry debtors.
(d) Depreciation on furniture and fittings shall be provided at 10% p.a.
(e) Provide for doubtful debts at 5% on sundry debtors.
(f) Goods costing Rs. 1,500 were used by the proprietor.
(g) Salaries included Rs. 12,000 paid to sales representative who is further entitled to a commission of 5%
on net sales.
(h) Stationery charges Rs. 1,200 due on 31.3.2007.
(i) Purchases included opening stock valued at cost Rs. 7,000.
(j) Sales representative further entitled to an extra commission of 5% on net profit after charging his extra
commission.
Q. 10 Define accounting and explain the steps in the accounting process.
Mrs. Gurdeep Singh , shopkeeper had prepared the following trial balance from his ledger as on 31
st
March,
2007 :
Particulars Dr. Cr.
Rs. Rs.
Purchases and sales 6,20,000 8,30,000
Cash in hand 4,200
Cash at Bank 24,000
Stock of goods on 01-04-2006 1,00,000
Capital A/c 5,77,200
Drawings 8,000
Salaries 64,000
Postage and telephones 23,000
Salesmens commission 70,000
Insurance 18,000
Advertising 34,000
Furniture 44,000
Printing and Stationery 6,000
Motor Car 96,000
Bad debts 4,000
Cash discount 8,000
General expenses 60,000
Carriage inwards 20,000
Carriage outwards 40,000
Wages 40,000
Debtors and creditors 2, 00,000 80,000
14,87,200 14,87,200
You are required to prepare Trading and Profit & Loss Account for the year ended 31
st
March, 2007 and
Balance Sheet on that date. You are also given the following information:

1. Stock on 31-3-2007 was Rs. 1,45,000.
2. Mr. Gurdeep Singh had withdrawn goods worth Rs. 5,000 during the year.
3. Purchases include purchase of furniture worth Rs. 10,000.
4. Debtors are bad to the extent of Rs. 5,000.
5. Creditors include a balance of Rs. 4,000 to the credit of Mr. Mandeep in respect of which it has been
decided and settled with the party to pay only Rs. 1,000.
6. Sales include goods worth Rs. 15,000 sent to Gyan & Co. on approval and remaining unsold as on 31-
3-2007. The cost of the goods was Rs. 10,000.
7. Provision for Bad Debts is to be created at 5% on Sundry Debtors.
8. Depreciate Furniture by 15% and Motor Car by 20%.
9. The salesmen are entitled to a commission of 10% on total sales.
Q11) From the following information prepare Trading and Profit & Loss Account/ Income Statement for the
year ended 31 December 2005 and prepare the Balance Sheet at the end and also take into Account the
adjustments.
Dr. Rs. Cr. Rs.
Opening Stock 10,000 Capital 15,000
Drawings 11,000 Sales
85,000
Purchases 75,000 Purchases Returns
1,300
Sales returns 2,700 Sundry Creditors
30,000
Trade Expenses 3.675 Bank Overdraft
10,000
Wages 3,500
Salaries 5,600
Travelling Expenses 110
Advertising 420

Taxes & Insurance 2,800

Discount 300

Bank interest 215
Bad debts 400
Premises 6,000
Machinery 10,000

Furniture 2,450

Sundry debtors. 6,100
Cash in hand 1.030
Total 141,300 141,300

Adjustments:
i) Stock on 31st December, 2005 was valued Rs. 45,000
ii) Salary Rs. 200 is outstanding.
iii) Depreciate Machinery at 10%
iv) Insurance Rs. 50 is prepaid.
Answer: Gross Profit Rs. 40,100, Net Profit Rs. 25, 430, Balance Sheet Rs. 69,630