9. 10. 1 12, 3. What are contingent liabilities? Give two examples of fictitious assets. Mention two contingent liabilities. Distinguish between book keeping and accounting. Distinguish between a Trading Account and a Profit and Loss Account. LONG ANSWER QUESTIONS 1. What is a Trading Account? Explain its nature and need What is @ Profit and Loss Account? Explain its need. What is a Balance Sheet? Explain its features. Distinguish between a Balance Sheet and a Trial Balance. Distinguish between a Profit and Loss Account and a Balance Sheet. Explain the methods of marshalling of a Balance Sheet. Give a classification of assets and liabilities Collect the annual reports of at least two companies. Study the Balance Sheets given in the reports. Which order is followed for arrangement of assets and liabilities in the Balance Sheet of the two companies? Which order do you prefer and why? 1 PRACTICAL PROBLEMS [ICSE 2010) CSE 2011] Abraham is in business. The following balances were extracted from the books as on 31.12.2018, You are required to prepare a trading account and a profit and loss account for the year ended 31.12.2018 and a balance sheet as on that date, Credit ®@) Debit ®) (Cap tal] —$_ A$ $5 39.000 Drawings 4,240 Purchases less Returns 15.610, Rates and Taxes ‘388 $22 ¢§ ——— 612 Lighting and Heating 164 Electric Power 384 Del credere Commission —$$———>>414 Insurance 206 ‘Advertsing 214 Sales es Rts £534.76 Bad Debts Written off Postage, Telegrams, etc, 326 Carriage 754 Opening Stock 6,160 Wages 7.962 Land and Building 15,840 Plant and Machinery 4,034 Fumiture and Fittings 378 Sundry Debtors 6,082 ‘Sundry Crete 07 Cash at Bank 5,268 70,598 rere Cd STOGK Rs. 6760 70,598 © scwned wth KE Scanner‘When preparing the accounts itis necessary to take the following matters into consideration Closing stock on 31.12.2018 was €8,760. [Ans. Gross profit 212,066; Net profit 28,180; Balance sheet total 240,362 2. From the following balances of Mr. Kumar, prepare final accounts for the year 2018 Debit Balance Credit Balance ® © Salaries 400 © Sales 1 7.819 Advertising 2 “DCariage inwards 8 Postage and Telegrams a Capital 3.600 Bad Debis 2 Creditors 1.124 Interest 120 Loan 1.200 Discount (Or) 100 Debiors 388 + Wages 490 Fixtures and Fitings 1616 1 Opening Stock 995 Buildings 2378 “{ Purchases 6200 Machinery 1000 € Closing Stock 80 {Ans. Gross profit £1,615; Net profit%888; Balance Sheet total £6,812] 3. The following isthe trial balance of Harinath’s business, for the year ending 31 March 2019 7 Debit Credit @ @ Capital 9,790 Drawings 2,100 Debtors and Creditors ———————————————— 8.270 6470 Cash and Bank Balance 240 660 Discounts 340 210 Purchases and Sales —_—_———— 810.270 16,620 Factory Premises 5,500 Wages and Selaries 1880 Office Furiture ss o99 Stock as on 14.2019 3,120 General Expenses 210 Rates and Insurance —_—_——————— ar Retums Inwards and Outwards 1,50 00 Bad Debis 10 34,750 34,750 Prepare the trading account and the profit and loss account for the year ended 31-3-2019, together with the balance sheet as on that date Stock on 31-3-2010 valued at $5,690, [Ans. Gross proft %6,540; Net profit €5,690; Balance Sheet total €20,650] 4, Mr, Tate's nancial position on 1 December, 2018 was as follows : Stock 24,460; Debtors 2890; Creditors 22,400; Cash 2500; and Fixed assots 23,000. (@) Draw up a statement to show his assets ablties and capital on 1.122018 {b) During the month of December, 2018, the folowing transactions took place; Sold goods for cash €4,000- sold the balance goods on credit for €3,000; received £2,000 from debtors; paid £900 to creditors; withdrew 400 for personal use; allowed and accounted a direct payment of $500 by a debtor to one of te creditors. [Ans. (a) Balance sheet total on 1.12.2018 %6,850; Capital 86,450; (b) on 31.12.2018, Balance Sheet total $9,590] Cy 85 6 © scwned wth KE Scanner'5. From the following trial balance and other addtional information obtained from the books of Mr. Sunil Gavaskar, prepare his trading account and the profit and loss account for the half-year ended 30th September, 2018 and his balance sheet 6. The following is the trial balance obtained from the books of Mr. G. Vishwanath as on 30th June, 2019 ‘as.on that date Debit @ Capital Account Drawings Account 9,000 Trade Expenses 12,000 Cash in Hand 750 Cash at Bank 22,700 Freehold Premises 1,30,000 Stock as on 1.4.2018 35,000 Purchases and Sales 75,000 Retuns 2,800 Carriage Inward 1,500 Carriage Outward 3,500 ‘Sundry Debtors and Sundry Creditors 48,000 Bills Receivable and Bills Payable 22,000 Fumiture and Fixtures 1,400 Bad Debts 4,800 Wages 25,000 Salaries 19,850 Advertisement 15,000 Rent, Rates and Taxes: 3,500 442,500 (i) Stock was valued at €40,000 on 30.9.2018. [Ans. Gross profit ?1,52,700; Net Profit 297,360; Balance Sheet total 22,78 850) Debit @ Capital Drawings 4,000 Stock as on 1.7.2018 28,000 Loose Tools as on 1.7.2018 1,000 Sundry Debtors and Sundry Creditors 25,000 Purchases and Sales 90,000 Returns 750 Discounts, 250 Land and Building 88,000 Salaries and Wages 33,000 Carriage Inward 1,200 Carriage Outward 1,500 Insurance 1,000 Commission Cash in Hand 41,700 Bank Overdraft Advertisement 2,000 Bills Receivable and Bills Payable 7,500 2,81,900 Credit @ 41,85,000 2,80,000 2,000 25,000 10,500 442,500 Credit ® 50,000 16,000 41,72,000 550 300 18.550 20,000 5,500 2,81,900 © scwned wth KE ScannerYou are required to prepare Mr. Vishwanath's trading account and profit and loss account for the period ended 30 June, 1980 and a balance sheet as on that date after taking into account the following adjustments. (i). Stock valued on 30.6.2019 at £25,000. [Ans. Gross profit 77,600; Net profit ®58,700; Balance sheet total 21,48,200] 7. Mr Pati the owner of Jai Hind Engineers, submits the following trial balance to you for the year ended 31st March 2019 Dr. cr. @ @ Purchase and Sales 16,189, 75,200 Opening Stock 6.500 Drawings 4.000 Motor Cycle 12,500 cles and Carts Delivery fh 2,500 Bad Debts 200 Debtors and Creditors > 4,000 2,000 Vehicle Expenses f°/— [i 4,100 Capita 8.600 Bils Receivable and Payable > 00 1.000 Bank and Gash Balances 1,800 Betty Cash A 100 Insurance Prey 500 Salaries 900 Petty Expenses 300 Wages ss 500 ont 3.000 Godown Rent 4,800 General Expenditure 709 Bank Loan 2,000 Carriage inwards 500 Worker's Equipment fy —__________, 30,000 otums 200 280 89,080 Prepare the final accounts for him. Closing stock is valued at %5,400%—— [Ans. Gross profit 54,200; Net profit ®47,500; Balance Sheet total £57,100), 8. Mr. Sputnik, who is always in a hurry, prepares the following tral balance as at 31.12.2019. You are required to prepare the final accounts taking into consideration the trial balance for the year ended 31st December 2018 Debit creat @ ®) Capi to.180 Drawings 3.00 Opening Sock > 3200 Leasshela Promises 2.000 Purchases and Sales 20.200 4.160 Salaries and Wages 5.5.00 Carriage Outward 700 c m “ 87 @ ee © scwned wth KE Scanner9 I i Insurance 600 Returns 160 Bank of India Current Ale——=<$> 2,200 Union Bank of India Current lc BANKOD Bad Debts 300 Heavy Vehicles > 20,000 Motor Car 1,000 Vehicle and Car Expenses 2,500 Rent Eamed Commission Paid 800 Debtors and Creditors 4,000 $$ 299 Import Duty and Clearing Charges 1,800 PA CKINg EXPENSES ————— KP 2,400, Loan from Mr. Baxi (long term) Closing stock is 87,500. [Ans. Gross profit 66,420; Net profit %54,120; Balance sheet total 272,900], Debit ® Capital Drawings 1500 Cash in Hand and at 820k 1,400 Potty Cash 100 of (Ca Petmen ea ne 410,000 Credit Purchases and Sales >12,000 Retuns 2,000: Discount 400 eT Salaries 6,000 Sundry and Petty Expenses?/% Or. 1.200 Opening Stock 5,00 Bad Debts 600 Rent 4,500 MCP Cy AP 35,000, Fumiture 5,000 Debtors and Creditors 5,000 Stationary — 209 Commission Bank Loan 90,700 Prepare the complete set of final accounts for Mr. A. Harding, after incorporating the (i). Closing stock is 226,000, [Ans. Gross profit 42,500; net profit 30,500; Balance sheet total £73,500) 88 300 600 1,500 5,000 9. The following trial balance was extracted from the books of A. Harding, as on 31st March, 2019 Credit @ 20,100 20,000 5000 1,000 oO 10,000 200- 14,400 90,700 following adjustment: © scwned wth KE Scanner10. The following isthe trial balance of Mr. A. Chatterjee for the year ended 31st December, 2018. Compile the final accounts for him, after incorporating the adjustments and thereafter supply him with the required information, listed by him. Debit Credit ® ® Opening Stock 5,000 Capital 30,000 Drawings ——_______________2,000 Loan from Mr. Patel 8,000 Purchases and Sales 413,000 0,000 Rejections Retumed- > 2,000 500 Wages 5,000 Salaries 8,000 Carriage Outwar¢——$_$__> 2,000 Rent and Rates 3,000 Telephone and Trunk Calls 800 Potty Exp27s0$ 00 Plant and Machinery 35,000 Office Fixtures and Equipment 10,000 Cash in Hand 2,000 Bank Overdraft 1,000 Customers and Suppliers 8,000 6,700 196,200 —86,200 Closing stock value is €18,000. [Ans. Gross profit £40,500; Net profit €26,300; Balance sheet total 270,000), ‘14. The following isthe trial balance of MC. Nariman for the year ended 31st December, 2018. Complete the final accounts {or him, after incorporating the adjustments and thereafter complete the required details listed by him. Debit credit ® ® Capita 65,000 Drawings 4.000 Purchases and Retuns Outwar > 25.000 4,000 Cash Seles 17,000 Credit Sales 54,000 Stock (14,2018) 9.009 Salaries 10,000 Wages 3.000 Cariage inward —$=$=$=$$<$<$<$—————> 7,000 Bad Debts 500 Petty Cash 100 Cash and Bank 6,000 Rent, Rates and Taxes 4.000 Discounts 400 500 Telephones, Postage and Stationery 1,500 Bank Loan on Mortgage 14,000 Premises and Godowns 35,000 Machinery —$<—$=$_$<=_$<=_—$—$————————> 50,009 Debtors and Crediors 0,000 760,500 760,500 Stock on 31.12.2018 is £30,000 — — [Ans. Gross profit 266,000; Net profit 250,100; Balance sheet total 21,31, 100] Cy ‘ 89 fl © scwned wth KE Scanner12. Mr. PH. Mehtais in business. The following balances were extracted from the books as on 31.12.2018. Youare required to prepare the Trading Account and the Profit and Loss Account for the year ended 31.12.2018 and the Balance Sheet ‘as on that date, Debit @ Capital Drawings 10,000 Purchases and Retums Outward———————>> 18, 800 Salaries 21,650 Rate and Taxos: 950 Office Lighting and Cooling << 2,700 Import Duty. 2,200 Insurance 250 Agency COMMS 10) BO) Advertising 5,000 Retuins Inward and Sales Bad Deb t§ 809 Postage and Telegrams 800 Discount Received Carriage for Door Delivery to Customers —————— 1,400 Opening Stock 6.200 Wages 27,700 Plant and Machinery 8 2.05,000 Land and Buildings. 1,10,000, Fumiture and Fittings 3,000 ‘Sundry Debtors and Creditors 39,600 Cash at Bank 10,000 Potty Cash Balance 200 567,150 Closing stock on 31.12.2018 was €48,700. [Ans. Gross profit €2,42,800; Net profit ®2,08,500; Balance sheet total 24, 16,500] Credit @ 1,98,000 500 '3,48,500 150 20,000 5,67,150 13, The following isthe trial balance of Mr. RP. Sharma for the year ended 31st December, 2018. Compile the final accounts. for him, after attending to the adjustments and thereafter also submit the required information, listed by him, 9 Debit @ Lang 4,00,000 Freehold Premises 60,000 Bills Receivable and Payable 20,000 Wages 15,000 Rejection of Goods including Price Adjustments 2,500 Personal Accounts Resulting from Credit Sales and Purchases 31,000 Purchase and Sales Including Cash Transactions 40,500 Salaries 7,000 Insurance and Municipal Taxes 4,500 Rentals 2,000 Bad Debts, 600 Carriage 3,000 Opening Stock 5,000 Credit ® 24,000 3,600 15,000 96,000 4,500 © scwned wth KE ScannerCommission Accounts 500 600 Vehicles 62,000 Machinery 85,000 Drawings and Capital Accounts 8,000 4,75,000 Loan from the SFC. 4,25,000 443,600 4,43,600 Closing stock value is 27,500. [Ans. Gross profit 241,000; Net profit %34,500; balance sheet total 23,65,500] 114. From the following trial balance of Mr. Roobex, prepare the final accounts of the year ended 31.12.2018, Debit Greait ® © 1B Freehold Land 60,000 Office and Factory Buildings —____—¥0,000 7. Purchase and Sales 4,20,000 2,05,000 Bock 30,000 77Retuns 53.500 5,500 1 Wages 9,000 Salaries 110,000 Office Expenses and Potties 4400 “F Carriage on Purchases and import Duty 2,200 {p Slationery and Printing Literature 2.750 Discounts = 83.700 1 Bad Debts 1,200 LL Capital of Mr. Roobex 4,18,000 | Loan from Miss Setalwad @ 10% 416,000 (gainfully employed through the year) P insurance——$$—__________> 1,890 Sundry Debtors and Creditors. 40,000 12,000 4 Soot Pa {7 Commission for Agency Work Gg Cash and Bank Balances 7.700 investments 20,000 ff Patty Cash 250 . Bills Receivable and Payable L 9,000 2,000 PP Bad Debs Recovered 500 3,60,300 360,300 Closing stock on 31.12.2018 was 256,000. [Ans. Gross profit €1,01,800; Net profit 288,950; Balance sheet total €2,32,050], 15, The following isthe trial balance of Miss H. Seaitle as on 31st December, 2018, Dr. @) cr. @) Salaries 5,500 Wages 33,000 Returns Accounted 10,000 8,000 Carriage Inwards 412,000 Carriage Outwards 40,000 Rent 3,900 Insurance 7,000 Stock on 1.1. 2018 15,000 Cy 1 © scwned wth KE ScannerRates and Taxes: Power and Fuel Plant and Machinery Fumiture and Fixtures Purchases Sales Investments (long-term basis) Income from investments Commission Receipts Discount to Customers and from Creditors Bad Debts Written off Cash in Bank Cash in Hand Capita Debtors’ and Creditors’ Personal Accounts Compile the final accounts for the owner, after attending to the adjustment given below, 2,700 8,000 4,00,000, 40,000 4,20,000 2,05,000 10,000 12,000 6,000 (i) Closing stock is evaluated at the lower market price €42,000 ignoring the cost price, which is higher by ®4,000. [ans. GP. 857,000; NP 250,500; B/S Total 23,09,500] 16. The following is the Trial Balance of Mr. V. yer for the year ended 31st December, 2018. Compile the final accounts al u for him, after incorporating the adjustments given. 10% Loan on Moxigage of Premises | Machinery Debtors and Creditors | Loose Toots Premises (owner but and morgage) Capital invested and Cash Drawn ~ Dr. @ 50,000 24,000 5,000 75,000, 4,000— Fp Stock (11.2018) —$—$—$—$$———————————— > 18,000 Sales Against Cash |; Sales Against Crect Salaries 410,000 ————— ec {} Carriage Outward 2,000 /p Bad Debts Writen off 500 +f Royalty (Direct Expenses) ————————————— 3,000 Cash and Bank Balances 6,000 Bre Pad Stoo Commissions $$ $ > 400 “(Purchases (Cash and Credit) and Returns 66,000 Rates and Taxes 3,000 J) Miscellaneous Expenses 6,000 9 Is 2 Closing stock is valued at €50,000. [Ans. GP 85,000; NP 758,600; BIS Total £2, 10,000] 2,81,900 cr. ® 34,000 21,400 4,00,000 L 48,000 72,000 500 6,000 2,81,900 © scwned wth KE Scanner17. The following is the trial balance of Mr. J. Jehangir as on 31st March, 2018. ® 3,000 2,55,000 200 Dr. ® Stock as on 1.4.18 25,000 Rates and Insurance 11,900 Factory Powor & Fue! ——————_____> 16,000 Machineries 100,000 Loose Tools 10,000 Commission Earnings —————————_____________ 2.009 Discounts Received and Allowed 6.000 Personal Accounts of Suppliers & Customers 48,000 Salaries $$ $< — > 25,500 Wages 13,000 Returns (of goods traded in) 5,000 Carriage Inwat —_—— 2.000 Carriage Outward 5,000 Rent 8.300 Purchases & Sales > 140,000 Bad Debis Finalsed & Recovered 2,000 Bills Receivable & Payable 6,000 Investments -—_—_—_—— 80,000 Income from Above Investments Bank Balances 20,000 Cash in Hang —— co Capital & Drawings 45,000 539,200 Compile the final accounts for the owner. ‘An inventory of the godown on 31.3.2018, reflected unsold stock valued %50,000. (Ans. GP €1,07,000; NP 60,500; B/S Total €3,14,500] 18. The following isthe trial balance of Mr. P. Crooke as on 31.03.2018. Debit @ Stock at Start 30,000 Fuel & Gas, 5,600 Capital & Drawings 8,000 Debtors 30,000 Bills Recelvable & Payable 12,000 ‘Additional Drawings (other than cash) 4,000 Carriage 9,000 Purchases & Sales 1,90,000 Bank Accounts 15,000 Creditors Retums 5,000 Office Administrative Expenses 144,000 Loans (given & borrowed) 10,000 Petty Cash & Cash Balances 2,000 Postage & Telegrams 900 3,000 5,000 10,000 2,96,000 5,39,200 Credit ® 3,50,000 8,000 '3.40,000 5,000 16,000 20,000 1,00,000, SS 7 os © scwned wth KE Scanner19, 20. Printing & Stationery 7,500 Wages 20,000 Salaries 14,000 Land 4,50,000 Factory & Office Premises 80,000 Machineries 210,000 Commission 8,47,000 Compile the final accounts for the owner, after attending to the adjustment given below. ‘Adjustment (Stock in the Godown as on 31.3.2018 is 235,000, Ans. GP %1,36,400; NP %77,000; B/S Total 85,44,000] From the following Trial Balance of Mr. Rajesh, prepare final accounts for the year ended 31.3.2019 Debit @ Opening Stock 19,000 Salaries 10,500 VV SS 8,000 Railway Freight — Purchases & Imports 2,500 General Office Expenses 13,000 Annual Insuranc¢—$_ <$_$<$_$<$_$< $< <_< _ $$$ $$$ 2,000 Plant and Machinery 50,000 Purchases and Sales 41,20,000 Rent $a $$ > 7,500, Bad Debts and its Recoveries 300 Buildings and Sheds 60,000 Bills Receivable and Payable ——=—_=_ $$$ 12,200 10% Bank of Progress Loan Travel Costs 16,000 Retums and Price Adjustments —_——<———>_ 3,000 Legal and Other Consultancy Fees 10,000, Repairs 8,600 Bank ACCOUnt nD 10,000 Capital and Drawings 4,500 Interest > 6,000 Debtors and Creditors 35,000 97,100 Closing stock is valued at 245,000 (Its market price is only 240,000) [Ans. GP 21 42,000; NP 70,100; BIS Total ¥2,07,200] 8,000 8,47,000 Credit ® 2,83,000 41,000 4,000 0,000 1,500 65,000 22,600 ‘The following is the trial balance of Mr. M. Moonlite as on 31.3.2019. The Closing Stock as on 31.3.2019 is 240,000, Debit @ Salaries 20,000 Royalty Capital Credit @ 5,000 260,000 © scwned wth KE Scannera. Freehold Land 60,000 Stock as on 14.2018 25,000 Goods Traded in 205,000 Drawings 5,000 Brokerage 4,000 Motive Power & Coke 6,000 Insurance 7,000 Cash & Bank 20,000 Administrative & Selling Expenses 55,00 Wages 15,000 Retums 10,000 Suppliers & Customers 30,000 Interest on Overdraft and Borrowings 13,000 Electricity 5,000 Goodwill 50,000 Leasehold Land 20,000 Fixed Assets (other than land) 1,50,000 Compile the final accounts for the owner. [Ans. GP 21,39,000 ; NP £90,100 ; B/S Total €3,70,000) From the following Trial Balance of Mr. PH. Planner as on 31.3.2019, propare final accounts for him Debit @ Duty, Clearing and Freight 10,000 Stock (1.4.2018) 30,000 Goodwill 30,000 Salary, Bonus and Travel Allowance ——_————>_ 25,000 Leasehold Premises A 90,000 Purchases and Sales 2,40,000/ Dediors and Crecitors 29,000 Capital and Drawings 20,000 General Expenses 16,000 Factory Equipment and Tools ———_—__—________518,000 Bank Interest-free Loan from Mr. PH. Planner for four years, Wages and 8onus—_—_$_$$ $$$ 35.000 Cash and Petty Cash 17,000 Plant and Machinery 5,000 Bill Payable and Receivable 12,000 Professional Charges ————————_____________18,000 Retums 7,000 Insurance and Office Expenses 14,000 6,52,000 Closing Stock is 245,000, [Ans. GP 21,07,000; NP £34,000; B/S Total &2,82,000] 355,000 6,000 9,900 5,000 15,000 Credit @ 30.000 / 15,000 +,60,000 5,000 80,000 SS 7 os © scwned wth KE Scanner22. Trial Balance as on 31.3.2019 of Ms. Counsel Purchases and Sales £ Wages & Eacto3) Supervisor's Remuneration sing feMachinery & Equipment pe torenionn rFrechot( Lan? A Watch Dogs Squad it it issued i ion —___—> 10, ig Dodt Notes & Credit Notes (issued in connection 10,000 {-) ct with goods} Lcrecitrs & Debtors Oh ‘0)-Saleries & Stat Wettare ‘Bil (drawn to guarantee payment) pp Bldng Repairs p Cash & Bank L Bonus OI ecouns ‘Watch Dogs Upkeep Costs * ‘Accounts of the owner * LL Interestfee Loan Cceneral Reserve {Ovening Stock Compile Final Accounts Debit @ 2,40,000 35,000 1,80,000, 4,75,000 2,800 1,00,000 30,100 60,000 38,000 10,000 15,000 50,000 2,500 3,200 6,600 35,000 30,000 13,29,200, Credit @) 4,48,000 41,600 15,000 “-}.Dn 45,000 7,000 L 14,600 5:95,000 17,00,000 1,30,000 13,23,200 (i) Closing Stock at the cost price is £8,000 more than the opening stock ~ but the ruling market price f6 €35,000 only, on 31.39.2019. Ans. GP #1,50,000; NP 298,100; B/S Total 29,40,100] 23. Trial Balance of Mr. J. Junior as on 31.3.2019 Factory Power Carriage Charges Salaries Sales & Purchases of Goods Machinery Discounts Received and Allowed ‘Wages (manufacturing activity) Stock Commission Insurance Loose Tools (Fixed Asse!) Retums of Goods Debtors & Creditors Carriage on Sales Oo Rent & Rates 96 Debit @ 16,000 2,500 20,400 4,40,000 1,20,000 5,000 18,000 25,000 8,000 11,000 5,000 45,000 6,000 10,800 Credit ® 2,67,000 6,000 3,800 6,000 18,000 © scwned wth KE Scanner24. 25. Bad Debts Written off & Recovered 2,000 Investments 20,000 Bank Accounts 22,000 Drawings & Capital 15,000 Bills Payable & Receivable 6,000 Income from Investments Cash Compile Final Accounts (i) An inventory of the godown on 31.3.2019 reflected stock value stated as %50,000. [Ans. GP &1,16,500; NP ¥82,500; B/.S Total 83,386,500] 4,600 10,000 2,87,000 4,000 6,800 5,60,200 From the following Trial Balance of Rinky prepare a Trading Account and a Profit & Loss Account forthe year ended 31.12.2018 and a Balance Sheet on that date. TRIAL BALANCE Dr. © Building 20,000 Gapital Account Depreciation on above 1,000 Provision for Depreciation Machinery 6,800 (on Machinery on 1.1.2018 Fumiture 2,000 Creditors Drawings 1500 Bank Loan Debtors 8.000 Sales Cash 1,600 Outstanding Carriage Inward Opening Stock 5,000 Purchase 31,000 Wages 3,000 Carriage Inwards 400 Salary 4,000 Prepaid Salary 1,000 Advertisement 300 Insurance 3,500 Packing Materials 7,900 97,000 Closing Stock €15,000. [Ans. Gross Profit 228,600; Net Profit 211,900; Balance Sheet 253,600] “The following Trial Balance was from the books of Ram as on 31st December 2018, TRIAL BALANCE Dr. ® Drawings Account 7,000 Capital Account Purchases 82,210 Purchase Return Sales Retuen 1,820 Sales Opening Stock 11,460 Bad Debt Reserve Salaries 6,280 Discount Wages 8,580 Sundry Creditors cr. @ 25,000 800 12,000 6,000 53,000 200 ‘97,000 cr. ® 90,000 4,240 1,49,240 4,240 180 a ° os © scwned wth KE Scanner9 26. I. i Leasehold Premises 25,000 Rent, Rates & Insurance 6,940 Carriage Inward 2.310 Office Expenses 9,520 Plant & Machinery 124,000 Light & Water 7,950 ls Receivable 1,240 Sundry Debtors 38,970 Cash at Bank 12,400 Cash in Hand 2210 Office Furniture 3,500 Traveling Expenses 9,870 Bad Debts 4,000 Carriage Outward 3,240 2,65,480 2,65,480 Prepare a Trading Account and a Profit & Loss Account forthe year ended 31st December 2018 and a Balance Sheet ‘as at that date. The value of Stock on 31st December 2018 was €14,920. [Ans. Gross Profi 254,690; Net Profit 218,020; Balance Shee! 21,18,000] “The following is the Trial Balance of Amrit Roy as on 31st December 2018, Credit ® 25,000 5,000 8,000 Debit ® Capital Building —___________________30,000 Fumiture 2,640 Scooter 4,000 Returns 2.300 Opening Stock 8,000 Purchases and Sales 33,800 Bad Debts ——> 400 Carriage inwards 600 General Expenses 4,200 Bad Debts Provision rg Bank Loan Interest on Bank Loan 300 Commission ay Insurance and Taxes 2,000 Scooter Expenses 2,800 Salaries $4,400 Cash in Hand 2,000 Debtors and Creditors 3,000 97,240 You are required to prepare the final accounts for the year ending 31st December 2018. Closing Stock on 31.12.2018 was valued at 24,340. <— [Ans. Gross Profit 217.280; Net Profit7,280; Balance Sheet 245,280] 97,240 © scwned wth KE Scanner27. The following balances were extracted from the books of Sri 8. Kumar on 31st December 2018 Dr. cr. @ ® Capital 24,500 Drawings 2,000 General Expenses 2,500 Building 1,000 Machinery 9,340 Opening Stock 16,200 Power 2.240 Taxes & Insurance 1.315 Wages 7.200 Sundry Debtors 6,280 Sundry Creditors 2,500 Charity 105 Bad Debts 550 Bank Overdraft 11,180 Sales 65,360 Purchases 47,000 Scooter 2,000 Bad Debt Provision 900 Commission 1,320 Trade Expenses 1,780 Bills Payable 3,850 Cash 100 Stock on 31st December 2018 was valued at £23,500, Prepare Final Accounts for the year ended 31st December 2018, [Ans. Gross Profit {16,220; Net Profit 11,290; Balance Sheet €51,320} 28. On 31st December, 2018 the following Trial Balance, was extracted from the books of Mohan. = oa ®) ®) Carriage Outward 2.500 Cy 99 6 © scwned wth KE Scanner29. 30. Carriage Inward Salaries Rent and Insurance Advertsing Discount General Expenses BIR and BIP Rent Received 3,000 9,000 3,000 3,500 3.400 6,000 1,64,500 500 2,000 300 1,64,500 Propare a Trading Account and a Profit and Loss Account for the year ended 31st December, 2018 and a Balance Sheet as on that date after taking into account the following, Stock on 31st December, 2018 was valued at 27,000. [Ans. GP 34,700; NP ¥13,300; B/S 259,800] From the following trial balance of Mr. A prepare a Trading Account and a Profit and Loss A/c for the year ending 31st Dec,, 2018 and a Balance Sheet as on that date TRIAL BALANCE Debit Balance @ Cash 10,000 Stock 40,800 Wages 22,525 Purchases 1,30,295, Retums inward 2,400 Repairs 1675 Bad Debts 2310 Interast on Loan 600 Salaries 8,000 Sales Tax 800 Octrot 500 Insurance 1,000 Charity 125 Rent 2,000 Machinery 16,000 Debtors 30,000 Stock on 31st Dec., 2018 was 740,925. [Ans. GP 225,600; NP 29,120, B/S 296,925}. Credit Balance Sales Retums Loan Cregitors Discount Capital 2) 1,80,500, 195 20,000 30,305 530 37,500 Prepare a Trading, Profit and Loss AVc. and Balance Sheet of Mis. Sultan Enterprises for the year ended 31st March, 2010 from the following Trial Balance ‘Trial Balance as on 31.03.2010 Heads of Accounts Opening Stock Salary Purchase & Sales Dr. @ 15,000 2.400 80,000 cr. ) 4,20,000, © scwned wth KE ScannerMachinery 40,000 Retums 4,000 Commission Received Investments 10,000 Interest on Investment Carriage on Purchase 3,000 Rent & Rates 4,000 Debtors & Creditors 22,800 Bills Receivable & Bills Payable 3.400 Cash-in-hand 6.400 Wages 18,600 Discount Allowed 5,200 Royalty Paid 12,000 Discount Received Drawings and Capital Closing Stock was ®15,250. [Ans. Gross Profit €19,650; Net Profit %9,250; Balance Sheet 97,850] 5,000 6,000 1,200 16,700 4,100 [ics 2011] 31. Prepare Trading, Profit and Loss AV and Balance Sheet of M/s Banerjee Enterprises for the Year ended 31st March, 2010 from the following Trial Balance. Heads of Accounts (Or) ® Opening Stock T 25,000 Purchases and Sales 7” 75,000 Discounts 3,600 fk Debiors on art Bad debts P 400 Cash-in-Hand fb 3,000 Machinery 0.099 Selaries 8,000 Carriage Inwards7— 2,000 Wages < 6.000 Allavestments 8S 20,090 {pland and Building 90,300 {Bank Overdraft = Comissens( 1350 pp lnterest on Investments — Electricity 2,000 Ren 500 plnsurance 1800 {Capital - 322,950 Closing stock was €10,260. [Ans. Gross Profit 100,360; Net Profit 94,220, B/S %2,05,660] (cr) ® 200,000 6,000 15,000 © scwned wth KE Scanner32. From the following rial balance of Shri Rai Bahadur, prepare Trading, Profit and Loss Account for the year ending 31st 33. March, 2018 and a Balance Sheet as on that date TRIAL BALANCE Debit Balance @ Drawings 4.240 Purchase less returns 15610 Rates and Taxes. 388 Salaries 1612 Lighting and Heating 164 Electric Power 384 Commission 414 Insurance 206, ‘Advertsing: 214 Bad Debts 62 Postage, Telegrams, etc. 826 Carriage $754 Opening Stock 6,160 Wages 7,962 Land and Building 15,840 Plant and Machinery 4,034 Fumiture and Fittings _________78 Sundry Debtors 6.082 Cash at Bank 5.268 70,598 ‘The closing stock on 31st March was valued at £8,760. [Ans. GP 11,902; NP 8,160, B/S 740,362} Credit Balance ® Capital 32,000 Sales less Retuns ——__——=34,176 “The following is the Trial Balance of ABC Industries as on 31st December 2015. TRIAL BALANCE of ABC Industries as on 31.12.2015 Particulars ‘Amount (Or) Solaries 4,000.00 Cash Batance 2,000.00 Bank Balance 3,000.00 Wages, 500.00 Insurance 500.00 Trade Expenses 7,000.00 Discount Allowed —=—=—_—_—_—_————— > 750.00 Opening Stock (1.1.2015) 5,000.00 Buildings 40,000.00 Furniture > 15,000.00 Sales Returns 250.00 Drawings 1,000.00, Debtors 5 000.00 Purchases 30,000.00, Legal Charges 1,000.00 ‘Advertisenent Expenses 2,000.00 4,48,000.00 Sundry Creditors 4,422 70,598 Particulars ‘Amount (Cr.) Sales 83,000.00 Rent Received 2,000.00 Purchases Retumig——————==-> 1,000.00 Creditors 7,000.00 Capital Account 25,000.00 4,18,000.00 © scwned wth KE Scanner“The closing stock was valued at 29,000. ‘You are required to prepare a Trading Account and a Profit and Loss Account for the year ending 31st December 2015, and a Balance Sheet as on 31st December, 2016. [ICSE 2019] [Ans. GP 256,250; NP %43,000, B/S €74,000] 2 QUESTION EEN i Wish ena ea ‘Ans. Liquid assets are cash and investments that can be converted into cash quickly and easily Q.2. Distinguish between Book Keeping and Accounting. ‘Ans. (i) Book Keeping means making original entries of business transactions in the books whereas accounting means analysing and interpreting these entries. (il) Book Keeping is the fist stage of accounting cycle wtile accounting is the second stage, Q3. What are fictitious assets? ‘Ans. The assets which represent no property and no market value are called fictitious assets. Preliminary expenses, discount on issue of shares and debentures are examples of fictitious assets. These are written off in the profit and loss account over a period of more than one accounting year. Q4, What are contingent liabilities? ‘Ans. Contingent liablities are those liabilities which may or may not become payable depending (contingent) upon certain events, For example, the liability on bills discounted with a bank would become payable only when the debtors on whom the ils are drawn do not honour the bills on their due dates, Q5. Discuss the need of Profit and Loss Account? ‘Ans. Profit and Loss Account is required for the following reasons. () Knowledge of Net Profit or Net Loss: Profit and Loss Account provides information about the net profit eared or net loss suffered by the business during a given accounting period (ii) Comparison with Profit of Previous Year : The net profit calculated from the Profit and Loss Account for 2 particular accounting year can be compared with the net profit of the previous year. Such comparison is helpful in judging whether the efficiency of the business is increasing or decreasing. Control over Expenses : An analysis of the various expenses included in the Profit and Loss Account and their comparison with the expenses of the previous year is helpful in exercising effective control over the expenses. Q6. Give two points of distinction between balance sheet and trial balance. ‘Ans. Difference between: Its purpose is to show the financial [Its purpose is to establish the 1. Purpose position of the business. arithmetical accuracy of the books of account. —— It is prepared generally at the end of | it may be prepared every month or the accounting year. even shorter period. Cy 103 @ fl © scwned wth KE Scanner TaN