St.

Joseph’s College of Commerce, Bangalore (Autonomous)

PROBLEMS ON FINAL ACCOUNTS

1. Calculate the Gross Profit from the following data for the year ended 31st March, 20X1.
Rs. Rs.
Opening Inventory 40,000 Purchases Return 12,000
Purchases 2,00,000 Sales Return 20,000
Sales 5,00,000 Carriage on purchases 8,000
Freight and Octroi 6,500 Carriage on sales 10,000
Wages 30,000 Factory Rent 12,000
Factory Lighting 10,800 Office Rent 7,500
Coal, Gas and Water 2,200 Import Duty 32,000
Closing Stock is valued at Rs. 60,000.
2. From the following information, find the Gross profit for the year ended 31st March, 20X1.
Rs. Rs.
Adjusted Purchases 24,00,000 Office Rent 18,000
Freight and Carriage inwards 20,000 Trade Expenses 10,000
Freight and carriage outwards 15,000 Sales 30,00,000
Wages 1,68,000 Closing Inventory 1,50,000
Octroi charges 2,000 Fuel and power 30,000
3. From the following information, calculate:
a) Cost of goods sold
b) Gross Profit
Rs. Rs.
Opening Inventory 40,000 Expenses on sales 15,000
Purchases 4,20,000 Wages 30,000
Expenses on purchases 8,000 Sales 6,00,000
Closing Inventory 52,000
4. From the following particulars, prepare a Statement of Profit and Loss for the year ending 31st
March, 2019:
Rs. Rs.
Opening Inventory 2,00,000 Commission paid 2,400
Purchases 19,00,000 Commission Received 6,000
Sales 25,00,000 Travelling Expenses 4,800
Purchases Return 70,000 Office Expenses 3,500
Sales Return 1,00,000 Interest on Long term loans 22,000
Wages 80,000 Dividend on Investments 2,800
Advertising 12,000 Printing and stationery 3,600
Salaries 1,78,000 Loss on sale of Machinery 35,000
Rent and Taxes 62,000 Carriage outwards 1,400
Lighting 15,000 Loss by theft 25,100
Gain on sale of building 50,000
Closing inventory was valued at Rs. 2,50,000.

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 St. Joseph’s College of Commerce, Bangalore (Autonomous)

5. From the following particulars, prepare a Statement of Profit and Loss for the year ending 31st
March, 20X1:
Debit Items Rs. Credit Items Rs.
Purchases 60,000 Capital 1,13,075
Sales Returns 1,500 Sales 1,27,000
Plant and machinery 90,000 Purchases Return 1,275
Opening Inventory 40,000 Discount Received 800
Discount allowed 350 Sundry Creditors 20,000
Bank charges 100 Bills payable 5,000
Sundry Debtors 45,000
Salaries 7,000
Wages 10,000
Freight inwards 1,000
Freight outwards 1,200
Rent, rates and taxes 2,000
Advertisements 2,000
Cash at Bank 7,000

Total 2,67,150 2,67,150

Closing inventory was valued at Rs. 35,000.

6. From the following balances of Sreeram, prepare a Balance Sheet as at 31st March, 20X1.
Particulars Debit Credit
Plant and Machinery 8,00,000
Land and Building 6,00,000
Furniture 1,50,000
Cash in hand 20,000
Bank Overdraft 1,80,000
Debtors and Creditors 3,20,000 2,40,000
Bills Receivable and Bills Payable 1,00,000 60,000
Closing Inventory 4,00,000
Investments (Short-term) 80,000
Capital 15,00,000
Drawings 1,30,000
Net Profit 6,20,000
TOTAL 26,00,000 26,00,000

7. A merchant has earned a Net Profit of Rs. 57,200 for the year ended 31 st March, 20X1. Other balances in
his ledger are as under:
Debit Balances Amount Credit Balances Amount
Cash at bank 4,800 Bills Payable 3,200
Cash in hand 1,200 Creditors 61,300
Furniture and Fixtures 7,500 Loan (Long-term) 50,000
Debtors 80,100 Capital 3,32,300
Closing Inventory 70,000
Motor Car 40,000
Building 1,50,000

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 St. Joseph’s College of Commerce, Bangalore (Autonomous)

Plant and Machinery 1,20,000

Bills Receivable 4,400
Investments 20,000
Drawings 6,000
Prepare his Balance Sheet as at 31st March, 20X1.

8. From the following Trial Balance, you are required to prepare Statement of Profit and Loss for the year
ending 31ts March, 20X1 and a Balance Sheet as on that date:-

Rs. Rs.
Stock on 1-4-20X0 28,200 Capital 1,20,000
Debtors 88,000 Bank Overdraft 26,400
B/R 8,800 Creditors 20,200
Repairs and Stores 3,200 Staff Provident Fund 12,000
Conveyance Expenses 1,530 Provision for Bad Debts 3,600
Brokerage 800 Dividend on Investments 2,400
Investments (Market Value Rs. Royalties 10,000
15,000
20,000)
Purchase 1,54,000 Commission 6,000
Return Inwards 7,400 Commission received in advance 1,200
Octroi Duty 5,500 Sales 3,70,000
Coal, Gas and Water 800 Return onwards 8,200
Loan to Staff 11,600
Goodwill 25,000
Plant and Machinery 88,000
Live Stock 26,130
Building 50,000
Depreciation on Plant &
12,000
Machinery
Carriage 3,000
Drawings 9,600
Salaries 5,870
Bad Debts 2,200
Commission to Salesman 15,000
Bank Charges 270
Donations 5,100
Advertisement 12,000
Accrued Rent 1,000
5,80,000 5,80,000

Adjustments:-

A) Commission to salesman is paid at 5% on net sales.

B) Advertising is to be written off over 3 years.
C) Make a provision of 5% for bad debts and 2% for discount on debtors taking into consideration that Rs.
20,000 included in debtors are definitely good.
D) Interest at 10% p.a. is to be provided on Capital and Drawings. Drawings are made evenly throughout the
year on 15th of each month @ Rs. 800 per month.

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 St. Joseph’s College of Commerce, Bangalore (Autonomous)

E) During the year, a sum of Rs. 10,000 was paid as ground rent for 20X0-X1 and 20X1-X2. This sum stands
debited to Building A/c.
F) Stock at the end Rs. 24,000. In view of the constant fall in prices, it has been decided to write off stock by
20%.

9. From the following balances and information, prepare Statement of Profit and Loss for the year ended
31st December, 20X1 and a Balance Sheet as on that date:-

Rs. Rs.
Purchases 72,000 Sundry Debtors 38,000
Return Outwards 2,400 Sundry Creditors 15,600
Sales 1,80,000 Capital 1,80,000
Return Inwards 5,000 Special Rebates(Dr.) 1,200
Opening Stock 26,500 Special Rebates(Cr.) 3,400
Telephone rent 1,200 Freight 4,200
Loan to Sudhir @ 10% p.a. 25,000 Investments 15,000
Interest on above 2,375 Dividends received 450
Rent paid 2,000 Bank Overdraft 8,700
Cash in Hand 7,000 Salary 31,120
Drawings 6,000 Deposit with D.C.M 20,000
Life Insurance Premium 7,200 Interest on Deposits 2,800
Plant and Machinery 1,00,000 Petty Cash 505
Gift to Sister-in-law 5,000 Manufacturing Wages 36,800
- - Outstanding Wages 8,000

Adjustments:-

A) Rs. 5,000 due from Kapil is included in Debtors while Rs. 3,600 due to him is included in Creditors.
B) Make a provision of 5% on Sundry Debtors for Doubtful Debts.
C) Calculate interest on Loan, having regard to the fact that Rs. 10,000 was returned by Sudhir on 30 th June,
20X1.
D) Telephone rent for one year was paid on 1st May, 20X1.
E) A claim of Rs. 20,000 for Workmen’s Compensation is being disputed in the court.
F) Stock could not be taken on 31st December, 20X1 but could be taken only on 10th January 20X2. It was
then valued at Rs. 44,300. Purchases and sales between 1st January, 20X2 and 10th January, 20X2 were Rs.
2,500 and Rs. 4,000 respectively. Gross Profit included in these sales was 20% on sales.

10. From the following balances and information, prepare Statement of Profit and Loss for the year ended
31st December, 20X1 and a Balance Sheet as on that date:-

Rs. Rs.
Purchases 2,10,000 Sales 3,84,000
Wages and Salaries 16,200 B/P 2,500
Repairs and Renewals 2,100 Returns 2,000
Freight on Purchases 4,500 Mortgage and Interest to date 10,750
Furniture 6,000 Bad Debts recovered 1,650
Dead Stock 8,000 Interest on Govt. Bonds 500
Returns 5,200 General Reserve 6,800

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 St. Joseph’s College of Commerce, Bangalore (Autonomous)

Bank Balance 7,300 Sundry Creditors 24,000

Sundry Debtors 75,000 Outstanding Salaries 4,400
Advertisement 10,000 X’s Capital 1,20,000
Unexpired Insurance 500 Y’s Capital 80,000
Miscellaneous Expenses 14,350
Delivery van 1,98,100
Rent 8,400
10% Govt Bonds
10,000
(Purchased on 1st July 20X1)
Mortgage Interest 750
Stocks on 01.01.20X1 36,200
X’s Drawings 12,000
Y’s Drawings 12,000
6,36,600 6,36,600

Adjustments:-
A) Sales include sale of ‘Furniture’ on 30th June, 20X1 at actual sale price of Rs. 750. The book value of
Furniture sold on 1.01.20X1 was Rs. 1,000.
B) Rs. 2,500 paid to Ajay against our acceptance was debited by mistake to Ajay’s A/c and from there it was
included in the list of Sundry Debtors.
C) Depreciate furniture by 10% p.a. and Dead Stock by 20% p.a.
D) Private purchases of X amounting to Rs. 2,800 have been included in Purchase Day book.
E) Advertisement Charges include unissued material of Rs. 4,000.
F) Provide for Interest on Capital at 8% p.a.
G) X drew Rs. 1,000 at the beginning of every month and Y drew Rs. 1,000 at the end of every month.
Interest on drawings is to be charged at 10% p.a.

11.

Rs. Rs.
Opening Stock 22,000 Sales 2,75,000
Purchases 2,05,000 Bank Overdraft 12,800
Postage and Telegram 360 Account Payable 56,000
Interest on Fixed Deposits 3,200 Fixed Deposit 20,000
Buildings 1,12,000 Interest on Bank Deposit 540
Charity 2,800 A’s Capital 75,000
Repairs 2,500 B’s Capital 25,000
General Expenses 5,440
Audit Fee 800
Landlord A/c 4,800
Accounts Receivables 20,000
Indirect Expenses 1,440
Bank Deposit 6,000
Loose Tools 8,000
Salaries 14,200
Carriage 4,500
Cash in hand 7,300
Security Deposit 28,000
A’s Drawings 16,000

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 St. Joseph’s College of Commerce, Bangalore (Autonomous)

4,64,340 4,64,340

Adjustments:-
A) Closing Stock was taken on 29th December, 20X1 and was valued at Rs. 40,000. Purchases and Sales
on 30th and 31st December, 20X1 amounted to Rs. 1,500 and Rs. 1,200 respectively. These
transactions were duly passed through the books. The proportion of Gross Profit included in these
sales is to be taken as Cost plus 20%.
B) Two dishonored cheques for Rs. 1,000 and Rs. 800 respectively have not been entered in the Cash
Book. The first for Rs. 1,000 is known to be bad. In the case of second cheque it is expected that 40
paise in the rupee will be received
C) Create Provision for Doubtful Debts @ 5%.
D) Rent paid to Landlord was debited to his personal account.
E) Provide for Interest on Capital at 12% p.a. and Charge Interest on drawings at 15% p.a.
Prepare Statement of Profit and Loss for the year ended 31 st December, 20X1 and Balances Sheet as on
that date.

Home Work:

1. Calculate the Gross Profit from the following data for the year ended 31st March, 20X1.
Rs. Rs.
Opening Inventory 2,50,000 Purchases Return 22,000
Purchases 7,00,000 Sales Return 36,000
Sales 18,00,000 Custom Duty 15,000
Wages 2,06,000 Gas, Fuel and Power 60,000
Carriage Inwards 34,000 Dock Charges 8,000
Carriage outwards 20,000 Factory Lighting 96,000
Manufacturing Expenses 2,48,000 Office Lighting 5,000
Closing Inventory is valued at Rs. 6,00,000.
2. From the following information, find the Gross profit for the year ended 31st March, 20X1.
Rs. Rs.
Adjusted Purchases 15,00,000 Depreciation 36,000
Sales 21,40,000 Factory Expenses 60,000
Returns Inwards 40,000 Closing Inventory 1,20,000
Freight and Packing 15,000
Packing Expenses on sales 20,000

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