Q1)

Investment A/c
In the books of A

Particulars Nominal Final

Value Cost
To Cash A/c 50,000 62,500
To Bonus Shares A/c 50,000
To Profit & Loss A/c 13,750
100,000 76,250

To Balance b/d 50,000 31,250

Note: Total Cost of 1,000 shares including bonus is Rs. 62,500.

Therefore, cost of 500 shares (carried forward) is 1/2 X 62,500 = Rs. 31,250.

Cost being lower that market price, shares will be carried forward at cost.

Q2)
In the books of Mr. Raj
Trading and Profit & Loss A/c
For the year ended 31st March 2

Particulars ₹
To Opening Stock 15,000
To Purchases 73,000
Less Loss By Fire (4,000) 69,000

To Carriage 200
To Gross Profit c/d 91,800
176,000

To Rent and Taxes 500

To Salary 1,000
To Bad Debts (1,600 + 330) 1,930
+ New provision for Bad Debts 2,845
Less Old Provision for Bad Debts (1,000) 3,775

To Depreciation
Building - 10,000
Machinery - 3,000
Furniture - 1,150 14,150
To General Expenses 500
To Insurance
Less Prepaid Insurance (200) 600

To Commission 500
To Printing and Stationery 400
To Loss by Fire 1,500

To Net Profit (Transferred To Capital A/c) 70,295

93,220

Balance Sheet
As at 31st March 2021

Liabilities ₹
Creditors 75,000
Less Adjusted Debtors (4,000)
Less Provision for Creditors (4,000) 69,580

Bills Payable 30,000

Capital 2,50,000
+ Net Profit 70,295 320,295

419,875
nvestment A/c
the books of A

Particulars Nominal Final

Value Cost
By Cash Sales A/c 50,000 45,000

By Balance c/d 50,000 31,250

100,000 76,250

00.

X 62,500 = Rs. 31,250.

ried forward at cost.

In the books of Mr. Raj

ding and Profit & Loss A/c
e year ended 31st March 2021

Particulars ₹
By Sales 101,000

By Closing Stock 75,000

176,000

By Gross Profit b/d 91,800

By Provision for Creditors 1,420

 93,220

Balance Sheet
As at 31st March 2021

Assets ₹
Cash in Hand 770

Debtors 60,000
Less Adjusted Creditors (4,000)
Less Bad Debts (1,600)
Add Dishonoured Bill 2,500
Less Provision for Bad Debts (2,845) 54,055

Closing Stock 75,000

Prepaid Insurance 200
Insurance Claim 2,500

Bills Receivable 17,000

Less Dishonoured Bill (2,500) 14,500

Machinery 60,000
Less Depreciation (3000) 57,000

Building 1,00,000
Less Depreciation (10,000) 90,000

Furniture 46,000
Less Depreciation (1,150) 44,850

Goodwill 81,000

419,875