COMPREHENSIVE PROBLEM

On 1st Jan. 2012, Afr. Rahul decided to open a computer tminillS <'<'nr,v rn Clurndi;rnrh. JI" 11t,rd1crN .f
a commercial comple..-.: measuring 300 sq. feet carpet area at o <'Ost of ~ :?.50.000 and decufrrl tu w,·,·::t
r 2,50,000 as a further capital in proposed business. He> apprr.x1chcd Rajosthan HonJ.• fi1,· loon u-lurli
agreed to provide 80% loan of the cost of computers. He bought 30 computer~ vt ro.,tin~ ,• 2,1,()()() ro, II.
He paid ( 1,50,000 and Rajasthan Bank financed the rcmai•1i11.g 80''0 amount of, <>.00.<KX) G_l, I()'?; Tl1<
loan was payable in 4 annual instalments along with illfcrt'sf dut'.
The transactions during the year were:
(n
Purchased Furniture ..................................................................................................... -10.(){}0
Fees received from students ....................................................................................... 5.~~0.000
Bought computer stationery ....................................................................................... 1.10.000
Sale of computer stationery ....................................................................................... 1.(,0,00U
Wages paid ..................................................................................................................... 90.000
Salaries paid ............................................................................................................... l.25.000
Electricity charges .......................................................................................................... -I i'.500
Advertisement ................................................................................................................. 22.000
Postage and Call ............................................................................................................. P.500
General Expenses ............................................................................................................. o. 000
I
~
Insurance Preniium ......................................................................................................... 4.600
Bought Printer Machine ............................................................................................... 30.000
I
He withdrew ( 12,000 p.m. as drawing and repaid the annual instalment of bonk /fl(lll c::\",..: r,•ith
interest due on 31st Dec. 2012. Assume all transactions took place through RQ.iast<m Bonk 'h'<. on•
required to:
1. Journalise these transactions after considering the followi~ infurmation:
(i) Stock of computer stationery ( 19,500.
(ii) Depreciate building by 5% and computer and fumitun.• ~1' 10<~ p.o.
(iii) Salary unpaid (9,000.
t
(iv) Advertisement includes unissued material worth ( .J..000. 't

(v) Insurance prepaid r 1,500. •

2. Post them into ledger and prepare Trial Balanct•.

~PREHENSIVE PROBLEMS 1't

t
I
I
;

:J. Prc•1><m· fi11<11u·utl Hlo /1 •1111•11/.'i /c,r !Ill' y1•or 1•11rli•d .'I Isl /)1 •1·1•111/;1•1 :20 I''
4. Mr. Ua/111/ wrn/11w lo 1,:paml hi.'I h11s1111•H.'I /itl'llwr HO /11• "l'l"'""rlll'cl /n .1.1 bC1t1lw,· /,,,. 1111111 , Wi, 0 1
1

ralws .1.1 /,ould l,1.'I lm11l.'l•r 1·011srd1•r lwj,,n• pro11,r/11111 /0011 r1111.i;1d1•ri11;: tho/ Mmilo, /um n1111s fit;t 0
as Gm/i,,; l'ro/it oll(/ 2:J% o,'I Nt•t I'm/it (
5. 7'h<' J>roje,·I Wor/,• i,'I (P/a 111111wJ
(t) lo pn•par,• m·,·01111flll/.l tf'ford of Mr. Ha/111/ (or tlu• W'C'Ollfllinl,( y1·,11· 2 / '>
(11) lo prl'par,• 7'nal JJalam·,• all(/ l11H 'l 'mdttllf and l'rn{tl & ! JOSH A I,. a11d lfol<t11n· 8h('C'/,
lo ml<-11lal1• profilabtlily ra/10.'I,
(iii)
(iu) lo /mow wh,•lht•r lw will 1,(1•/ l,a11I: /o(tt/ or 110/. Nt•,·1 ,'IHW)' data 1
i,1.1 µ11 11•11 to r1,r1111frt1• ti, 1,

JJl'Ojt'C'/ wor/t.
E~,•cution of Pnyect Work
( I) l'n•paralio11 of ,lmmu,/, J.,l'<ll,(1 r wul 'l'rl(L/ /Jal<111<·1•.
1

(2) Pn1p<11·a.lw11 of /im1111wl Hla/1•1111•11/,'I /<H' 1/w ,Yl'<tl' 1•11t!111J.! .'IJHI /)1•1·,•mlwr 2012.

of µroH1; pm{tl l'(//1(), '"'' /Jl'IJ/il mlio, (Ill(/ OJW(lflll/.f l'(lf/(1 lo (IS/W,'IH pro/itai>1lttv
(,'J) ('ompuluftoll
(4) C'ompul<tltcm o(.i;hort l1•r111 011<1 lo111( tam Holul'IH'Y mlw, to /wow w/1/'tlwr loo11 be /.[tl'l'II by htt11I,·
or not.
Solution:
J. In the Book of Mr. lwhul
Journal Entrlos
.
0.1 ((' P.utlwl,1n L.I. Dr(~ Cr(~
--
201 2
),111, I Building Ale 1)1 , l,',0,000
B,111k A/1· Dr. J_,r,o,ooo
Io C.1pi1,1I Ale h,00,000
(I or , ,1p11,1I i11V1•st t>d in Uusirwss)

B,111k A/, Dr (i,00,000

IO B,t11k I Odil (,,00,000
(I or lo,m f,1ken from l<,1jMh,lfl B,mkJ

Compu1ni; Ale Dr . 7,'i0,000

lo B,1nk N, 7,'i0,000
(for JO co,np. pur< h,1.,,.cf @ :l!i,000 1•,11 h ,11111 ,11 l,,111k provid«•d
80% lo.in)

r:urniluu• Ale Dr. '10,000

lo B,mk A/,· 110,000
(I or furnilurc• pun h,1w.d)

B,mk A/1 Dr. 'i,'J0,000

1o I 1•1•s from Slude111s Ne 5,90,000
(I or f<•t• rt•< PiVl'd from , ornpull'r , la<,sps durinl{ yt-..r)

Pun hascs Al< l)r, I, 10,000

To IJ,lnk Ne 1, 10,000
(f·or ,,,ariorwry r>un h,1s1•d for , 0111p11h•r)
-------- -------- -------- ---- -- ----- ----
12 PHOJI CI WOHK IN ACCOUNlANCY~X
 Date Particulars L.F. Dr ((} Cr((}
- ,,
Bank Ne Or. 1,60,000
To Sales Ne 1,60,000
(For computer stationery sold)

Wages Ne Dr. 90,000

Salaries Ne Dr. 1,25,000
Electricity Charges Ne
Advertisement Ne
Dr. 47,500 '1
Dr. 22,000 I
Postage and Call Ne Dr. 9,500 I
General Expenses Ne Dr. 6,000
I
I
Insurance Premium Ne Or. 4,600
To Bank Ne 3,04,600
(For expenses paid)

Printer Machine Ne Or. 30,000

To Bank Ne
(For printer purchased)
30,000
1
Drawings Ne Dr. 1,44,000
To Bank Ne 1,44,000
(For drawings made during the year)

Interest on Bank Loan Ne 60,000

To Bank Loan Ne 60,000
(For interest due on bank loan)

Bank Loan Ne Or. 2, 10,000

To Bank Ne 2, 10,000
(For first instalment on loan paid along with interest @ 10%
on loan)

2012 Depreciation Ne Dr. 96,500

Dec. 31 To Building Ne 17,500
To Computer Ne 75,000
To Furniture Ne 4,000
(For depreciation provided)

Salaries Ne Dr. 9,000

To Salaries Outstanding Ne 9,000
(For salary due but not paid)

Stock for Advertisement Ne Dr. 4,000

To Advertisement Ne

,
4,000
(For stock of advertisement material)

Prepaid Insurance Ne
To Insurance Ne
Dr. 1,500 ·,
1,500
(For insurance prepaid)

Stock of Goods Ne Dr. 19,500

To Purchases Ne
19,500
- (For stock of stationery purchased for computers left)

COMPREHENSIVE PROBLEMS
----- -- -- --- ---- 13
 LEDGER ACCOUNTS
1
2.
Or Building Ale Cr

r PJrtitu/Jn I .I . •
Oat~ Particulars L.f. Datr

By D<>prec.1,1t1on Nl
- \

17 5()()
2012 To (dpital Ale. 3,50,000 101'.l
8)' B,11,mc t' def l, l.!,liOO

J ,50,000 ,___.:1, 'iO, llOO

2013 To Balance bid 3, t2,500

Or. Bank Ale c,

r P,,rtic ul.u:~ L.I. r
2012
Date Particulars

1 o Clp1tal Ale
L.F.

2,50,000
0df('

2012 By Cornpuh.>rs All

- 7, 'i0,(l()(l

Jan. 1 To Bank Loan Ale (1,00,000 j,JJI. 1 By I urniturt• Ale •lll,lll)ll

Jan. I To fees from Students Alt 5,CJQ,()()O By PurChdS~ Ale I, 111,ll(l(l

fan . 1 1 o Sctles Ale 1,uo,000 By Wdger; Ne 1111, llllll

By 5,,l,111P<; Ale 1,2 'i,(11)()

By r.1t-c1ric11y (..ndrgt><; Ale ,17, 'illll
By Advertisement Ale 2.l,llllO
By PoslJgl• & C.111 Ale 'l,'iOll
By General f:xp Ale ,,,01111
By lm,ur,1nu• Ne •l, 1,1111
By Prnlll'I Mc1dunr J'k m,01111
By Dr.i" ing, Ale I ,•\.1,0IJO
2012 By Bc1nk I o.m Ale 2, l O,llOIJ
()pc, 31 B)• B,11,rnu.• cld I 1,41111

lG,00,000 1'1,00,000

2013
Jan. 1 To Balance bid 11,400

Dr. Capital Ale Cr

D•te l'•rticulMs L.F. r Date Particulars l.l . ~

2012 2012
Dec. 31 To Balance dd 6,00,000 Jan. 1 By Building Al< l , t;0,000
By Bank Ak 2,50,000
6,00,000 h,00,0UO
2013
jan. 1 By B.ilJnce bid b,00,000

,.. PROJECT WORK IN A.CCOUNTAN V >=

 Or. Bank Loan Ale Cr.

Date Particulars L.F. ~ Particul.1rs L.F t

-
Date

2012 2012
- -
Jan. 1 To Bank Ne 2,10,000 Jan. 1 Br B,mk ~./c h 00,000
Dec. 31 To Balance dd 4,50,000 Jan. 1 Bv lntere,t ~...tc t,O, l)l){)

6,60,000 6 60,t)Oll
2013
Jan 1 Bv Balance b.'d 4,t;O,t)OO

Or. Computers Ale Cr

Date Particulars L.F. ~ Date Particulars L.F. ..

\

2012 2012
Jan. 1 To Bank Ne 7,50,000 Dec. 31 B) Depreciation .\ (' -s.ooo
Dec. 31 B) Balance dd 6,,5,000

:-',50,000 i,50,000
2013
Jan. 1 To Balance bid 6,75,000

Dr. Furniture Ale Cr

Date Particulars L.F. ~ Date Particulars L.F. r

2012 2012
Jan. 1 To Bank Ne 40,000 Dec. 31 8) Depreciation Ac 4,000
Dec. 31 By Balance c'd 36000
40,000 40,00()
2013
Jan. 1 To Balance bid 36,000 t
1
Dr. Fees from Students Ale

Date Particulars L.F. (' Date Particulars L.F. •

\

2012 2012
Dec. 31 To Trading Ne 7,50,000 Jan. 1
Jan. 1
By Bani-. Ve
By Banl .\/c
5,90 000
1,60 000 ,
-
l
i
7,50,000 7,50,000

COMPREHENSIVE PROBLEMS 15
 0, PurchA&Od Ale
t
,,,,,,. l',11 tit 11/,tr 1 r l>rtlf• l't1rtu 11l.u~

'111 I '1
lo B,1111-. N, 1, 10,000 1)1'(. 11 Hy <,1(X k of <,oo<ls Air
l)Pr 11 By l r.irhng Nr

1, 10,000

Dt Wages Ale
C,
---,
2012
t>.atf' Particulars L.f. r Date Particulars
-r -
Lf r ---
2012
Ian. 1 1o B.mk N< 90,000 2012 By Trading Ne 90,(T.(J
~

Dr. Salaries Ale Cr

Dc1tf' Particulars Lf. r Date Particulars L.f. r -
2012 -
2012
lc1n. 1 To Bank Ne 1,25,000 Dec. 31 By P&L Ne 1,34,000
Dl'C. 31 To Sal.iry 9,000

1,34,000 1,34,000

Dr. Electricity Charges Ale Cr.

Date Particulars L.f. r Date Particulars L.F. r
2012 2012
Jan. 1 To Bank Ne 47,500 Dec 31 By P&L Ne 4-.500

Dr Advertisement Ale ~ Cr
Date Particulars L.F. r Date Particulars L.F. r
2012 201 2
jdn. 1 To Bank Ne 22,000 Dec. 31 By Stock of Adv. Ne 4,000
Dec. 31 By P&L Ne 18,000
22,000 22,000

Dr. Postage and Call Ale Cr.

Date Particulars L.F. r Date Particulars L.F. r
2012
2012
Jan. 1 To Bank Ne 9,500 Dec. 31 By P&L Ne 9,500
-

16
 o,. Gener al E,cpenaes
- o,,t" Pi!rticulars
Ale
Cr
- - -
201..?
l..f. r {),1f('
P.,r," ul.us Lf. ,
),Ill 1 To B.inl,; Ne :rn11
. <,,ooo D1"( i1 By P&l Ne 6,000

or Insura nce Ale

- Date Particu lars C r.
-2012 L.F. r Date Particular( LF. r
To Bank. Ne 2012
)Jn 1
4,600 Dec. 31 Bv Pre. lnc,urance Ale 1,500
Dec. 31 Bv
. P&L Ale
~ 3 100
4,600
4 ,600
Or
Printe r Machi ne Ale
Cr.
Date Particu lars L.F. r ~te ParticulMS LF.1 r
2013
2012
Jan. 1 To Bank Ne
30,000 Dec. 31 By Balance' dd 30,000

Dr. Drawin gs Ale

Cr
Date Particu lars L.F. i' Date Particulars LF. t'
2012 2012
Jan. 1 To Bank Ne 1,44,00 0 Dec. 31 By Balance dd ..... 1.~ .000
1,44,0 00 1,44,00 0

Dr. Intere st on Bank Loan Ale

Date Particu lars L.F. r Date Particulars L.F. ~

2012 2012
Jan. 1 To Bank Loan Ne 60,000 Dec. 31 By P&L Ne 60000

Dr, Depreciation Ale Cr

I
Date Particu lars L.F. r Date Particulars LF. r
2012 2013
Dec. 31 To Buildin g Ne 17,500 Dec. 31 By P&.L AL 96,500
Dec. 31 To Compu ters Ne 75,000
Dec. 31 To Furnitu re Ne 4,000

- 96,500 96,500

~EHE NSIV E PROBL EMS 17

,,I
I
 Outstanding Salaries Ale Cr.
Dr.

Dc1te Particul.irs L.F. r

- D,1te Particulars L.F. (

201 2 2012
9,000 Dec. 31 By Sd lari,•s Ale 9,000
Dec. 31 To Balancc> d d
2013
Jan. I By Balance b/d 9,000

Stock of Advertisement Ale Cr.

Dr.
Particulars L.F. (
Date Particulars L.F. ( Date

2012 2012
4,000 Dec. 31 By Balance dd 4,000
Dec. 31 To Advertisement Ne

2013
Jan. 1 To Balance b/d 4,000

Dr. Prepaid Insurance Ale Cr.

(
Date Particulars L.F. r Date Particulars L.F.

2012 2012
Dec. 31 To Insurance Ne 1,500 Dec. 31 By Balance dd 1,500

2013
Jan. 1 To Balance b/d 1,500

Or. Stock of Goods Ale Cr.

Date Particulars L.F. r Date Particulars L.F. ~

2012 2012
Dec. 31 To Purchase Ne 19,500 Dec. 31 By Balance dd 19,500

Trial Balance
as on December 31, 2013

Building Ne
Name of Ledger Accounts Dr. (<")

3,32,500
Cr. (<")
j
Bank Ne 11,400
Capital Ne 6,00,000
Bank Loan Ne 4,50,000
Computers Ne 6,75,000
Furniture Ne 36,000
Fees from Students Ne 7,50,000
Purchases Ne 90,500
Wages Ne 90,000
Salaries Ne 1,34,000
- -----------------------------L------- II

18 PROJECT WORK IN ACCOUNTANCY-XII

--- - - - - - - - - - - -
 Name af Led
------====1=~~ ~]=~ "1
----Elect ~ ;C
ricity n~
Cnar ~N
ges
A£f'tertisement Ne
postage and Call Ne
Ne c~-----=~ -
g":_:
' _:A::o~Cl.l~J~un~k~ Cr,
1
~

.!J,3//,
iP..f/ h
'; Y/J
0-,
--

General Expenses Ne ~/// )

insurance Ne ~,,f'JJ
Printer vtachine Ne :-'>//:,{j
orawings Ne ••~ /J'h
Interest on Bank loan Ne ':J)f fh
oepredation Ne %.,Y /j
outstanding Salaries Ne
Stock of Advertisement Ne
Prepaid Insurance Ne
Stock of Goods 131-3-20131
-aff iffJJ

3. ANANCfAL ACCOUNTS
Trading and Prof it and Loss Ale
for the year ending Dec. 31, 2012

~ Partirolan I r
Particulars f

I
7,:h_,f/jf]
90,500 Bv fees from Studems -~- c
To Purchase Ale
90,000
To Wages Ne
5,69,500
To Gross Profit dd
7,50,000 ~ i,5f!,00.C
'
5,69 ,500
1,34, 000 By Gross Proiit bl'd
To Salaries Ne
47,5 00
To Electricity Charges Ale
18,000
To Advertising Ale
9,500 -
To Postage and Call Ale
6,00 0
To General Expenses Ale 3,100
To Insurance Ale
60,000
To Interest on Bank Loan Ale
To Depreciation Ale:
17,5 00
Building
75,0 00
Computers 96,50 0
4,00 0
Furniture 1,94,900
To Net Profit I
I
.i 69 500
5,69,500
\

19

COMPREHENSIVE PROBLEMS
 Balance Sheet
2
for the year end ed on J 1st Dec., 201
Assets r
Liabilities r
11,400
9,000 Bank
Salary Outstanding Ne 1,500
4,50,000 Prepaid Insurance
Bank loan 19,500
6,00,000 Stock of Goods
Capital 4,00 0
Stock of Advertisement
+ Net Profit 1,94,900 3,32,500
7,94,900 Building less Depreciation
6,75,000
6,50,900 Computers less Depreciation
- Drawings (1,44,000) 36,000
Furniture less Depreciation
30,000
Printer Machine
11 ,09, 900
11,09,900

n:
low ing rat ios bef ore pro vid ing loa
4. Ba nk er sho uld con sid er the fol
Pro fita bil ity Ratios:
Gross Profit x 100
(i) Gross Pro fit Ratio =
Sales
51691500
= ~5~ 000 X 100 = 75 .93n~t.
Ne t Profit x 100
(ii ) Gross Profit Ratio = Sales
94 9
= l, , 00 X 100 = 25.98%
7,50,000
Op era ting Exp.) x 100
Operating Ratio = (Cost of Sales +
(iii) Sales
where
(a) Cost of Sales = Sales - Gross Profit
= 7,50,000 - 5,69,600 = t 1,80,500 e
Exp ens es = Sal arie s + Ele ctri city Charges + Adverti sem ent + Pos tag
(b) Operating st + Depreciation
+ General Exp . + Ins ura nce + Int ere
= 1,34,000 + 47,500 + 18,000 + 9,50
0 + 6,000 + 3,000 + 60,000 + 96,500
= ~ 3,74,600
00] x 100
Operating Ratio = [1,80,500 + 3,74,6
7,50,000
5,55 ,lOO X 100 = 74.01%
=
7,50,000
Co mm ent s: quite good.
io of Mr . Rah ul is 75.93% aga ins t ind ust ry sta nda rd of 58% which is
(i) Gross Pro fit Rat
also good.
Pro fit Rat io of firm is 25.98% aga ins t ind ust ry sta nda rd of 23%. It is
(ii) The Ne t

XII
PROJECT WORK IN ACCOUNTANCY-
20
 So len cy Ra tio :
(i) Sh or t Te rm So
lv en cy Ra tio s
Cu rre nt AHsctR :rn,-100
(a ) Cu rre nt Rn tio = r;.9 00 ( = 0 23 )
Cu rre nt LiabiJiticR = J ,,>. • )
wh er e,
of St ati on er y
(i) Cu rre nt As se ts = Ba nk + Pr ep aid In su ra nc e + St oc k
nt
+ St oc k of Ad ve rti se me
,50 0 + 4,0 00
= 11 ,40 0 + 1,5 00 + 19
= ~ 36 ,40 0 id ne xt ye ar )
lar ies + In sta lm en t of Ba nk lo an (to be pa
(ii ) Cu rr en t Li ab ili
tie s = O/ s Sa
= 9,0 00 + 1,50,000 = ~ 1,59,000
Lo ng te rm Lo an
(b ) De bt Eq ui ty Ra tio = Ca pi tal
= Ba nk Lo an (A fte r
1 ye ar re pa ym en t)
Ca pi tal
3,0 0,0 00
= --- = 0.4 6:1
00
6,5 0,9
bt
Comment: rd ly 0.2 3:1 ag ai ns t st an ~d ra tio of 2:1. De
tio is ha
ve ry po or as cu rre nt ra nd ar d, ra tio of 2:1 . So
lo an
Sh or t te rm so lv en cy is ng is on ly 0.4 6:1 ag ai ns t sta
th at lo ng te rm bo rro wi ry po or.
Eq ui ty ra tio in di ca te s sh ou ld im pr ov e its cu rre nt ra tio as it is ve
nk bu t fir m
ca n be gr an te d by ba
□□□