1.

M/sRaghuram&Associates
TradingAccountfortheyearended31stMarch2018
Particulars Details Amount Particulars Details Amount
` `
ToOpeningStock 3,20,000 BySales 15,00,000
ToPurchases 12,00,000 Less:SalesReturns (24,000) 14,76,000
Less:Purchase (18,000) 11,82,000 ByClosingStock 4,10,000
Returns
ToFreight 62,000
ToGrossProfitc/d 3,22,000
18,86,000 18,86,000

M/sRaghuram&Associates
ProfitandLossAccountfortheyearended31stMarch2018
Particulars Details Amount Particulars Details Amount
` `
ToSalaries 72,000 ByGrossprofitb/d 3,22,000

ToRentforGodown 55,000
Add:Outstanding 5,000 60,000 ByDiscount
ToProvisionforDoubtfulDebts(W.N.4) received 12,000
16,200
ToRentandTaxes 24,000
ToDiscountAllowed 7,500
ToCarriageoutwards 8,500
ToPrintingandstationery 6,000
ToElectricitycharges 14,000
ToInsurancepremium(W.N.1) 4,800
ToDepreciation(W.N.2) 80,000
ToGeneralexpenses 11,000
ToBankCharges 3,800
ToInterestonloan 4,400
Add:Outstanding(W.N.3) 100 4,500
To Motor car 13,000
expenses(Repairs)
ToNetProfittransferredtoCapitalA/c
8,700
3,34,000 3,34,000

1
 BalanceSheetofM/sRaghuram&Associatesasat31stMarch2018

Liabilities Details Amount Assets Details Amount

` `
Capital 14,11,400 Land&Building 5,00,00
0 4,75,00
Add:NetProfit 8,700 Less:Depreciation (25,000 0
)
Less:Drawings (20,000) MotorVehicles 1,00,00
0
Less:proprietor’sInsurancePremiu Less:Depreciation (20,000 80,000
m (42,000) 13,58,10 )
0
LoanfromRajan 60,000 Officeequipment 2,00,00
0
Add:OutstandingInterest 10 60,100 Less:Depreciation (30,000 1,70,000
0 )
SundryCreditors 62,000 Furniture&Fixture 50,000
Outstandingrent 5,000 Less:Depreciation (5,000) 45,000
StockinTrade 4,10,000
SundryDebtors 2,80,00
0
Less:Provisionfordoubtfuldebt (14,000 2,66,000
s )
Cashathand 22,000
Cashinbank 16,000
Prepaidinsurance(W.N.1)
1,20
0
14,85,20 14,85,20
0 0
WorkingNotes:
(1) Insurancepremium `
Insurancepremiumasgivenintrialbalance 48,000

Less:Personalpremium (42,000)

Less:Prepaidfor3 months

 6000 
 15  3  (1200)
 


TransfertoProfitandLossA/c 4,800
(2) Depreciation
Building@5%on5,00,000 25,000
MotorVehicles@20%on1,00,000 20,000

2
 Furniture&Fittings@10%on50,000 5,000
OfficeEquipment@15%on2,00,000 30,000
Total 80,000

(3) InterestonLoan
InterestonLoan`60,000X10%X9/12 = 4,500
Less:interestasperTrialBalance = (4,400)
Amount(Outstanding) 100
(4) ProvisionforbaddebtsA/c
Particulars Amount Particulars Amount
(`) (`)
To bad debts 12,200 Bybalanceb/dByP 10,000
a/cTobalancec/d 14,000 &LA/c 16,200
(5%of2,80,000)
26,200 26,200

2. TradingandProfitandLossAccountofMr.Mananfortheyearended31stMarch,2020
Particulars ` Amount` Amount` `
ToOpeningstock 93,600 BySales 7,79,200
ToPurchases 6,43,400 Less:Returns 17,200 7,62,000
Add:Omittedinvoice 800 ByClosingstock 1,57,200
6,44,200
Less:Returns 11,600
6,32,600
Less:Drawings 1,200 6,31,400
ToCarriage 39,200
ToGrossprofitc/d 1,55,000
9,19,200 9,19,200
ToRentandtaxes 9,400 ByGrossprofitb/d 1,55,000
ToSalariesandwages 18,600 ByDiscount 8,880
ToBankinterest 2,200
Add:Due 3,400 5,600
ToPrintingandstationary 28,800
Less:Prepaid(1/4) 7,200 21,600
ToDiscountallowed 3,600
ToGeneralexpenses 22,900
ToInsurance 2,600
ToPostage&telegramexpenses 4,660

ToTravellingexpenses 1,740
ToProvisionforbaddebts[W.N.(2)] 2,300

3
ToProvisionfordiscountondebtors[W.N.(2)] 874

ToDepreciationonfurniture&fittings 1,000

ToNetprofit 69,006 ______

1,63,880 1,63,880

BalanceSheetofMananasat31stMarch,2020

Liabilities ` ` Assets ` `
Capital 1,53,380 Furniture&fittings 10,000
Add:Netprofit 69,006 Less:Depreciation 1000 9,000
2,22,386 Sundrydebtors(W.N.1) 46,000
Less:Drawings: Less:Provisionforbad
Cash60,000 &doubtfuldebts(W.N.2) 2,300
Goods1,200 61,200 1,61186 43,700
Bankloan 40,000 Less:Provisionfor
Bankinterestdue 3,400 discount(W.N.2) 874 42,826
Sundrycreditors(W.N.3) 28,400 Stock 1,57,200
Prepaidexpenses:
Printing&stationary 7,200
Bankbalance 16,000
_______ Cashbalance 760
2,32,986 2,32,986

WorkingNotes:
(1) Sundrydebtors
Balanceaspertrialbalance 48,000
Less:DuetoRahul 2,000
46,000
(2) Provisionforbad&doubtfuldebts:
@5%on`46,000 2,300
Provisionfordiscount:
2%on`43,700(46,000-2,300) 874
(3) Sundrycreditors
Balanceaspertrialbalance 29,600
Less:SetoffinrespectofRahul 2,000
27,600
Add:Purchaseinvoiceomitted 800
28,400

RectificationEntries
Particulars Dr. Cr.
Amou Amou
nt nt
` `
(i) Returnsinwardaccount Dr. 2,575

4
 Salesaccount Dr. 1,725
ToPurchasesaccount 2,575
ToReturnsoutwardaccount 1,725
(Being sales return and purchases
returnwronglyincludedinpurchasesandsalesrespectively,nowrectified)

(ii Drawingsaccount Dr. 3,500

)
ToPurchasesaccount 3,500
(Beinggoodswithdrawnforownconsumptionincludedinpurchases,nowre
ctified)

(iii Plantandmachineryaccount Dr. 450

)
ToWagesaccount 450
(Being wages paid for installation of plantand machinery wrongly
debited to wages,nowrectified)

(iv) Advertisementexpensesaccount Dr. 825

ToPurchasesaccount 825
(Beingfreesamplesdistributedforpublicityoutofpurchases,nowrectified)

3. TradingandProfitandLossAccountofMr.XYZfortheyearended31stMarch,2017
Dr. Cr.
Amount Amount
` ` ` `
To Openingstock 32,250 By Sales 2,13,57
5
To Purchases 1,53,100 Less:Salesreturn 2,11,000
2,575
Less: Purchasesreturn 1,725 1,51,375 By Closingstock

ToToTo CarriageinwardWages 1,125  100100 1,25,000

Grossprofitc/d 11,715 `80,000  
 80 80
1,39,535

3,36,000 3,36,000

To Salaries 22,550 By Grossprofitb/d 1,39,535

To Rent 4,300 By Bad debts 450
recovered
To Advertisementexpenses 4,175
To Printingand stationery 1,250

To Baddebts 1,100
To Carriageoutward 1,350

5
 To Provisionfordoubtfuldebts
5%of`1,20,000 6,000
Less:Existingprovision3,200 2,800
To Provision for discount on
debtors
2.5%of`1,14,000 2,850
Less:Existingprovision1,375 1,475
To Depreciation:
Plantandmachinery 3,000
Furnitureandfittings 1,025 4,025
To Officeexpenses 10,160
To Interestonloan 3,000
To Netprofit
(Transferredtocapitalaccount)
83,800 _______
1,39,985 1,39,985

BalanceSheetof Mr.XYZ ason 31stMarch,2017

Amount Amount
Liabilities ` ` Assets ` `
Capitalaccount 65,000 Plantandmachinery 20,000

Add:Netprofit 83,800 Less:Depreciation 3,000 17,000

1,48,800 Furnitureandfittings 10,250
Less:Drawings 11,500 1,37,300 Less:Depreciation 1,025 9,225

Bankoverdraft 80,000 Closingstock 1,25,000

Sundrycreditors 47,500 Sundrydebtors 1,20,000

Payablesalaries 2,450 Less: Provision 6,000

fordoubtfuldebts
Provision for baddebts
2,850 1,11,150
Prepaidrent 300
Cashinhand 1,450
_______ Cashatbank 3,125
2,67,250 2,67,250

JournalEntries
Particulars Dr.(`) Cr.(`)
(i) ExpensesA/c Dr. 12,000
ToDrawings 12,000
(Entryfortheamountwronglydebitedtothelatter
A/c,nowcorrected)
(ii) PurchaseA/c Dr. 16,000
ToCreditors 16,000
(Entryforpurchasesnotrecorded)
(iii) SuspenseA/c Dr. 2,000

6
 ToPurchaseReturns 1,000
ToSalesReturns 1,000
(RectificationentryforamountwronglyenteredinSalesJournal)

(iv) PrepaidExpensesA/c Dr. 6,000

ToExpenses 6,000
(Prepaidexpensesadjusted)
4. Trading,ProfitandLossAccountofTfortheyearending31stMarch,2019
Dr. Cr.
` `
ToOpeningStock 60,000 BySales 22,00,000
ToPurchases 16,00,000 Less:SalesReturn

Add:Amountnotrecorded 16,000 (99,000–1,000) 98,000 21,02,000

16,16,000 ByClosingStock 1,00,000
Less:PurchasesReturns
(69,000+1,000) 70,000 15,46,000
ToGrossProfitc/f 5,96,000
22,02,000 22,02,000
ToExpenses(50,000– 56,000 ByGrossProfit 5,96,000
6,000+12,000)
ToRent(17,000–5,000) 12,000 ByInterestonFixedDeposit 20,000
ToDepreciation 14,000 ByInterestonInvestments 20,000
Add:FurtherDepreciation 10,000 24,000 


ToNetProfit 5,44,000
6,36,000 6,36,000

BalanceSheetason31stMarch,2019
Liabilities ` Assets `
Capital 6,00,000 FixedAssets 1,40,000
Add:Profit 5,44,000 Additions 2,00,000
Less:Drawings 3,40,000
(70,000–12,000) 58,000 10,86,000 Less:Depreciation 10,000 3,30,000
Creditors 2,20,000 Stock 1,00,000
Add: Debtors 2,50,000
Purchasesnotrecor 16,000 2,36,000 Investments 2,50,000
ded
Overdraft 8,000 Interestaccrued 20,000
Bankfixeddeposit 2,00,000
PrepaidExpenses(6000+5000) 11,000

Bank 1,69,000

7
13,30,000 13,30,000

8
5.
(a) InthebooksofM/sDesignerwear
TradingandProfit&LossAccount(fortheyearending31.3.2021)
` `
To Purchases 17,00,000 By Sales 20,00,000
To Grossprofit 8,50,000 By Closingstock 5,50,000
25,50,000 25,50,000
To Interest(9,000+8,550+8,100+7,650) 33,300 By Grossprofit 8,50,000
To Telephonecharges 50,000
To Travellingexpenses 45,000
To Maintenanceexpenses 25,000
To Entertainmentexpenses 5,000
To Electricityexp 40,000
Add:outstanding 20,000 60,000
To Carriageoutward 60,000
To Depreciation
Building5% 30,000
Furniture10% 1,000 31,000
To Misc.exp 15,000
To Netprofit 5,25,700
8,50,000 8,50,000

BalanceSheetason31stMarch,2021
LIABILITIES ` ` ASSETS ` `
Capital 3,00,000 Building 6,00,000
FurtherCapital 2,00,000 Less:dep 30,000 5,70,000
Less:Drawings (60,000) Furniture 10,000
Add:Netprofit 5,25,700 9,65,700 Less:dep 1,000 9,000
Securitydeposit- 7,000
Telephone
Bank Loan 3,00,000
Less:repayment 60,000 2,40,000 Bank 89,700
outstandingelectricityexp 20,000 Closingstock 5,50,000

12,25,700 12,25,700

9
Workingnote:
BankAccount
PARTICULARS RS. PARTICULARS RS.
To Capital 3,00,000 By Building 6,00,000
To Furthercapital 2,00,000 By Furniture 10,000
To Bankloan 3,00,000 By Bankloanrepaid 60,000
To Sales 20,00,000 By Interest 33,300
By Securitydeposit 7,000
By Drawings 60,000
By Purchase 17,00,000
By Telephonecharges 50,000
By Travellingexpenses 45,000
By Maintenanceexpenses 25,000

By Entertainmentexpenses 5,000

By Electricity 40,000
By Carriageoutward 60,000
By Misc.expenses 15,000
By Balancec/d 89,700
28,00, 28,00,000
000

6. Sol (b)
InthebooksofMr.Shyamal
st
ManufacturingAccountfortheYearended31 March,2019

Dr. Cr.
Particulars Units Amount Particulars Units Amount
To Opening work-in- 9000 26000 ByClosingwork-in-progress 14000 48000
progressTo Raw Material By Trading A/c (Cost of 5,00,000 16,73,600
Consumed :Opening inventory 2,60,000 7,60,000 Finishedgoodstransferred)
Add:Purchases 8,20,000 (B/F)
10,80,000
Less: Closinginventory 3,20,000
To Direct Wages (W.N. 4,05,600
(1))ToDirectexpenses 3,50,000
Hire charges on
Machinery(5,00,000×0.70)
To Indirect 1,80,000
expensesRepairs&
maintenance 17,21,600 17,21,600

10
W.N.
(1) Directwages:
5,00,000units×0.80 = 4,00,000
Add:14000units×0.40 = 5600
4,05,600

7.

Sol.(c)Dr. Profit&LossAccount(Revised)Fortheyearending31stDec.2018
Cr.
Particulars Amount Particulars Amount
ToOutstandingexpensesA/c 1,85,000 ByBalanceb/d 15,10,000
ToCapital(NetProfit) (B/F) 13,50,000 ByPrepaidInsurance 25,000
15,35,000 15,35,000

BalancesheetofMittalAson31stDecember,2018
Liabilities Amount Assets Amount
Capital 51,00,000 61,36,000 CashatBank 5,20,000
Add:NetProfit 13,50,000 Tradereceivables 21,00,000 19,95,000
64,50,000 Less: Provisionfor
Less:Drawings 6,20,000 doubtfuldebts
58,30,000 1,05,000Pla
Add:InterestonCapital 3,06,000 nt&Machinery 27,90,000
OutstandingExpenses 1,85,000 31,00,000L
TradePayables 13,84,000 ess:Depreciation 3,80,000
3,10,000Fu
rniture&fixtures 19,95,000
4,00,000Le 25,000
77,05,000 ss:Depreciation 77,05,000
20,000Inve
ntories
PrepaidInsurance

8.

(a) ManufacturingA/c
Particulars ` Particulars `
ToRawMaterialConsumed(BalancingFigure) 9,15,000 ByTradingA/c(W.N.4) 18,32,000

ToWages(W.N.2) 3,15,000
ToDepreciation(W.N.1) 3,95,000

11
 ToDirectExpenses(W.N.3) 2,07,000

18,32,000 18,32,000

RawMaterialA/c
Particulars ` Particulars `
ToOpeningStockA/c 1,27,000 ByRawMaterialConsumed(fromManufacturingA/cabove)
9,15,000
ToCreditorsA/c(W.N.5) 14,40,000 ByClosingStockA/c(BalancingFigure) 6,52,000

15,67,000 15,67,000
WorkingNotes:

(1) SincepurchaseofMachineryworth`12,00,000hasbeenomitted.So,depreciationomittedfro
mbeingcharged=12,00,000X15%
=`1,80,000
Correcttotaldepreciationexpense =`(2,15,000+1,80,000)
=3,95,000
(2) Wagesworth
`50,000willbeexcludedfrommanufacturingaccountastheypertaintoofficeandhencewillbechargedP&LA/c.Sot
herevisedwagesamounting
`3,15,000willbeshowninmanufacturingaccount.
(3) Expensestobeexcludedfromdirectexpenses:
OfficeElectricityCharges(80,000X25%) 20,000
DeliveryChargestoCustomers 22,000
TotalexpensesnotpartofDirectExpenses 42,000
=>RevisedDirectExpenses =`(2,49,000-42,000)
=`2,07,000
Fuelchargesarerelatedtofactoryexpensesandalsofreightinwardsareincurredforbringinggoodstofactory/go
downsotheyarepartofdirectexpenses.
(4) RevisedBalancetobetransferredtoTradingA/c:
Particulars `
CurrentBalancetransferred 17,44,000
Add:Depreciationchargesnotrecordedearlier 1,80,000
Less:WagesrelatedtoOffice (50,000)
Less:OfficeExpenses (42,000)
Revisedbalancetobetransferred 18,32,000

(5) CreditorsA/c
Particulars ` Particulars `
ToBankA/c 23,50,000 ByBalanceb/d 15,70,000

12
ToBalancec/d ByRawMaterialsA/c(Bal.figure)
6,60,000 14,40,000
30,10,000 30,10,000

13
9.
InthebooksofGanguli

TradingandProfit&LossAccountfortheyearended31stMarch,2020
` ` ` `
ToOpeningstock 2,34,000 BySales 14,48,000
ToPurchases 12,15,500 Less:Returns (58,000) 13,90,000
Less:TransfertofurnitureA/c (10,000) ByClosingstock 3,93,000
12,05,500
Less:Returns (29,000) 11,76,500
ToCarriageinwards 93,000
ToGrossprofitc/d 2,79,500
17,83,000 17,83,000
ToSalaries 46,500 ByGrossprofitb/d 2,79,500
ToRent 28,500 ByInterest 17,250
ToAdvertisement 56,000 ByDiscountreceived 14,950
ToPrinting&stationery 17,000
ToInterest 7,500
ToDiscountallowed 37,700
ToGeneralexpenses 19,600
ToTravellingexpenses 11,650
ToFireinsurancepremium 3,000
ToPostage&telegrams 4,350
ToProvisionfordoubtfuldebts(W.N.I) 4,750

ToDepreciationonfurniture 1,150
ToAuditfees 3,500
ToCapitalA/c(Netprofittransferred) 70,500

3,11,700 3,11,700

14
 BalanceSheetason31stMarch,2020
Liabilities ` ` Assets ` `
Capitalaccount: Furniture 9,000
Balanceon1stApril,2019 5,40,500 Additionsduringtheyear 10,000
Add:Netprofit 70,500 19,000
6,11,000 Less:Depreciation (1,150) 17,850
Less:Drawings (50,000) 5,61,000 Investments 25,000
LoanfromDenaBankLtd. 1,00,000 Deposits 1,50,000
Insuranceaccruedonbankloan(W.N.2) 3,000 Interest accrued oninvestment10,000 & depos
(W.N.3)

Sundrycreditors 64,000 Stockintrade 3,93,000

Sundrydebtors 95,000
Less:Provision (4,750) 90,250
CashwithTradersBankLtd. 40,000
Cashinhand 1,900
7,28,000 7,28,000
WorkingNotes:
1. Calculationofprovisionfordoubtfuldebts: `
Sundrydebtorsaspertrialbalance 1,20,000
Less:Salesreturnsnotrecorded (15,000)
1,05,000
Less:Cancellationagainstsundrycreditors (10,000)
Adjustedbalanceofsundrydebtors 95,000
Provisionfordoubtfuldebts@5% 4,750
2. Accruedinterestonbankloan:
Annualinterest@12% 6,000
Less:InterestpaidtoDenabank (3,000)
Accruedinterest 3,000
3. Interestaccruedoninvestmentsanddeposits:
Annualinterestoninvestments@5% 1,250
Annualinterestondeposits@10% 15,000
16,250
Less:Interestreceivedoninvestmentsanddeposits (6,250)
Accruedinterest 10,000

15
10.
`
(i) Salariestobechargedtoprofitandlossaccountfortheyear
ended31stMarch,2020:
Salariesof8employeesforfullyear@`33,000permontheach 31,68,000
Salariesof2traineesfor6months@`21,000p.m. 2,52,000
34,20,000
(ii) Salariesactuallypaidin2019-20
March,2019salariespaidinApril,2019(8x30,000) 2,40,000
Salariesof8employeesforApril2019toMarch,2020paidin
May2019toMarch2020@`33,000for11months 29,04,000
Salariesof2traineesforOctober2019toFebruary2020paidin
November2019toMarch2020@`21,000for5months 2,10,000
33,54,000
(iii) Outstandingsalariesasat31stMarch,2020
8employees@`33,000eachfor1month 2,64,000
2trainees@`21,000eachfor1month 42,000
3,06,000
11.
TradingandProfitandLossAccountfortheyearending31stMarch,2020
Particulars ` Particulars `
ToOpeningInventory 5,00,000 BySales 17,00,000
ToPurchases 12,50,000 ByClosingInventory 10,00,000
ToWages 3,00,000
ToGrossProfit 6,50,000
27,00,000 27,00,000
ToBadDebts 50,000 ByGrossProfit 6,50,000
ToDepreciation 1,50,000
ToSalaries 2,20,000
ToNetProfittransferred.toCapitalA/c 2,30,000
6,50,000 6,50,000
BalanceSheetasat31stMarch,2020
Liabilities ` ` Assets ` `
Tradepayables 9,00,000 CashinHand 5,60,000
Capital: Tradereceivables 3,50,000
PreviousBalance 25,00,000 ClosingInventory 10,00,000 19,10,000
Add:NetProfit 2,30,000 27,30,000
Furniture&Fixtures 1,50,000
Plant&Machinery 15,70,000 17,20,000
36,30,000 36,30,000

16
12.
(i) ComputationofIncomefortheyear2019-20:
`
Moneyreceivedduringtheyearrelatedto2019-20 5,00,000
Add:Moneyreceivedinadvanceduringpreviousyears 1,50,000
Totalincomeoftheyear2019-20 6,50,000

(ii) AdvancefromCustomersA/c
Date Particulars ` Date Particulars `
ToSalesA/c 1,50,00 1.4.201 ByBalanceb/d 2,00,00
0 9 0
(Advancerelatedtocurrentyeartransferredtos By Bank 1,20,00
31.3.2 ales) A/c(BalancingFi 0
0 gure)
ToBalancec/d 1,70,00
0
3,20,00 3,20,00
0 0
So,totalmoneyreceivedduringtheyearis:
`
CashSalesduringtheyear 5,00,000
Add:Advancereceivedduringtheyear 1,20,000
Totalmoneyreceivedduringtheyear 6,20,000

13.
A) ComputationofNetProfit:
CommissionManager=RateofCommissionXNetProfitbeforechargingsuchcommis
sionSo,Commissiontomanager=10/100XNetProfitbeforechargingsuchcomm
ission
=>`2,00,000=10/100XNetProfitbeforechargingsuchcommission
=>NetProfitbeforechargingsuchcommission=`20,00,000
=>NetProfit(A)=`(20,00,000-2,00,000)=`18,00,000
B) ComputationofSellingExpenses:
TotalincomeappearinginP&LA/c =`60,00,000
Totalexpensesotherthansellingexpenses
=`(26,00,000+13,00
,000+2,00,000)=`41,00,000So,SellingExpenses+RemainingExpenses+NetProfit
=TotalIncome
=>SellingExpenses=`60,00,000-`41,00,000-`18,00,000
=>SellingExpenses=`1,00,000
C) ComputationofSales:

17
 Wehavebeengivensellingexpensesamountto1%ofSales
Selling Expenses 1,00,000
So, Sales =  100   100  100,00,000
1 1

D) ComputationofGrossProfit:
InTradingA/c
Particulars ` Particulars `
ToCOGS 45,00,000 BySales(fromCabove) 100,00,000
ToGrossProfit(BalancingFigure) 55,00,000
Total(F) 100,00,000 Total(F) 100,00,000
So,GrossProfit(D) =`55,00,000
E) MiscellaneousIncome =TotalIncomeinP&L-GrossProfit
=`(60,00,000-55,00,000)=`5,00,000
F) =`100,00,000(AscomputedinDabove)
G) =`60,00,000(TotalofbothsidesofP&Lisequalafterbalancinghasbeendone)

14.
IntheBooksofMr.Pankaj
ManufacturingAccountfortheyearendedonMarch31,2020
Particulars Amount Particulars Amount
` ` `
ToOpeningW.I.P. 3,90,000 ByClosingW-I-P 5,07,000
ToRawMaterialConsumed: Bybyproducts 20,000
Openinginventory 3,02,000 ByTradingA/c- 17,81,000
Purchases 12,10,000 Costoffinished
15,12,000 goodstransferred
Less:Return (18,000)
14,94,000
Less:Closinginventory (3,10,000) 11,84,000
ToDirectWages 2,10,000
ToDirectexpenses:
Royalty 1,30,000
ToManufacturingOverhead:
IndirectMaterial 16,000
IndirectWages 48,000
Repairs&Maintenance 2,30,000
Depreciationon

18
 FactoryShed 40,000
DepreciationonPlant&
Machinery 60,000 3,94,000
23,08,000 23,08,000

15.

InthebooksofMr.Pandit
ManufacturingAccountfortheyearended31stMarch,2020
Particulars ` Particulars `
ToOpeningStockofRawMaterials 1,50,0 ByCostofManufacturedgoodstransferr 8,08,
00 edtoTradingA/c 000
ToPurchase 5,00,
000
Less:PurchaseReturn 5,000 4,95,0
00
ToCarriageInwards 15,00
0
ToDirectWages 80,00
0
ToPower 30,00
0
ToCoalandfuel 15,00
0
ToFactoryRentandRatesToDepreci 20,
ationonMachinery 000
3,
00
0
8,08,0 8,08,
00 000
TradingAccountfortheyearended31stMarch,2020
Particulars ` Particulars `
ToOpeningStockoffinishedgoods 75,000 BySales 8,50,000
ToCostofgoodstransferredfromManufacturingA/c 8,08,000 Less:SalesReturn 10,000 8,40,000
ByClosingStock 1,00,000
ToGrossProfitc/d 57,000
9,40,000 9,40,000

ProfitandLossAccountfortheyearended31stMarch2020
Particulars ` Particulars `
ToCarriageOutward 7,000 ByGrossProfitb/d 57,000
ToDiscountAllowed 3,000 ByAccruedCommission 12,500
ToCommissionPaid 9,000 ByAccruedInterest 15,000
ToGeneralExpenses 4,000
ToAdvertisement 5,000

19
ToSalaries
20,000
Add:Outstanding 2,000 22,000
ToInterestPaid 7,000
Less:Prepaid 1,500 5,500
ToProvisionforBad&DoubtfulDebts 2,000
Add:BadDebts 4,000
Less:OldProvisionforDoubtfulDebts 2,000 4,000
ToDepreciationonBuilding 1,000
ToNetProfitc/d 24,000
84,500 84,500

20
 BalanceSheetason31stMarch,2020

CapitalandLiabilities ` Assets `
Capital 1,00,000 Plant&Machinery 30,000
Add:NetProfit 24,000 Less:Depreciation 3,000 27,000
1,24,000 Land&Building 1,00,000
Less:Drawings 20,000 1,04,000 Less:Depreciation 1,000 99,000
BillsPayable 24,000 Furniture&Fixtures 15,000
SundryCreditors 50,000 Investments 25,000
SalaryOutstanding 2,000 ClosingStock 1,00,000
Long-TermLoans 2,00,000 LooseTools 30,000
BankOverdraft 23,000 SundryDebtors 40,000
Less: Provision 2,000 38,000
forBad&Doubtful
Debts
BillsReceivable 15,000
AccruedCommission 12,500
AccruedInterest 15,000
PrepaidInterest 1,500
CashinHand 20,000
CashatBank 5,000
4,03,000 4,03,000

16. InthiscaseManufacturingCostcomprisesof–

RawMaterialconsumed (1,00,000×`10) `10,00,000

DirectWages (1,00,000×`5) `5,00,000
DirectExpenses (1,00,000×`3) `3,00,000
`18,00,000

21
17. Answer:
Trading and Profit and Loss Account of Mr. K for the year ended 31 st March, 2000

Particulars Amount ? Particulars Amount ?

To Opening Stock 75,000 By Sales 23,10,000

To Purchases 15,95,000
Less: Sales of

45,000 15,50,000 Investment 1,10,000 22,00,000

Less: Transfer

To Freight 25,000 By Closing Stock 2,25,000

Less: Transfer to Machi-

neryAIc 5,000 20,000

To Wages 66,000

Add: Outstanding 6,000 72,000

To Gross Profit c/d 7,08,000

24,25,000 24,25,000

To Salaries 1,40,000 By Gross Profit b/d 7,08,000

To Miscellaneous Expenses, 30,000 By Interest on investments 12,000

To Printing and Stationary 18,000 By Discounts 15,000

To Postage, Telegrams, telephones 12,000 By Profit of sales of invest. 10,000

To Commission on Sales 45,000

Add: Outstanding 10,000 55,000

To Insurance 24,000

8,000 16,000
Less: Prepaid

To Provisions for D/D (New 15,000

provision) Bad Debts

Add: Written off 10,000

Add: Prov. 12,000

37,000

8,000 29,000
Less: Old Prov.

To Depreciation: 7,500

Building Machinery 52,500

Furniture 4,000 64,000

To Net Profit 3,81,000

7,45,000 7,45,000

22
 st
Balance Sheet of Mr. K as at 31 March 2000

Liabilities Amount Assets Amount

(₹) (₹)

Capital 8,00,000 Building 3,00,000 2,92,500

Add: Profit 3,81,000 750
Less: Depreciation

11,81,000 11,21,000 Machinery 5,00,000

Less: Drawings 60,000 Add: New 50,000

Creditors 3,00,000 5,50,000 4,97,500

Outstanding Expenses Less: Depreciation 52,500

Wages Outstanding 6,000 Furniture 40,000 36,000

Commission Outstanding 10,000 4,000
Less: Depreciation

Debtors 2,50,000
10,000
Less: Bad Debts

2,40,000 2,28,000
Less: Provision for D/D 12,000

Prepaid Insurance Stock 8,000

Cash ad Bank 2.25.000
1.50.000

14,37,000 14,37,000

18.

(a) ManufacturingA/c
Particulars ` Particulars `
ToRawMaterialConsumed(B 9,15,000 ByTradingA/c(W.N.4) 18,32,000
alancingFigure)
ToWages(W.N.2) 3,15,000
ToDepreciation(W.N.1) 3,95,000
ToDirectExpenses(W.N.3) 2,07,000

18,32,000 18,32,000
RawMaterialA/c
Particulars ` Particulars `
ToOpeningStockA/c 1,27,000 ByRawMaterialConsumed(fromMan
ufacturingA/cabove) 9,15,000
ToCreditorsA/c(W.N.5) 14,40,000 ByClosingStockA/c(BalancingFi 6,52,000
gure)
15,67,000 15,67,000

23
WorkingNotes:
(1) SincepurchaseofMachineryworth`12,00,000hasbeenomitted.So,depreciation
omittedfrombeingcharged=12,00,000X15%
=`1,80,000
Correcttotaldepreciationexpense =`(2,15,000+1,80,000)
=3,95,000
(2) Wagesworth `
50,000willbeexcludedfrommanufacturingaccountastheypertaintoofficeandhencewillbechargedP
&LA/c.Sotherevisedwagesamounting
`3,15,000willbeshowninmanufacturingaccount.
(3) Expensestobeexcludedfromdirectexpenses:
OfficeElectricityCharges(80,000X25%) 20,000
DeliveryChargestoCustomers 22,000
TotalexpensesnotpartofDirectExpenses 42,000
=>RevisedDirectExpenses =`(2,49,000-42,000)
=`2,07,000
Fuelchargesarerelatedtofactoryexpensesandalsofreightinwardsareincurredforbringinggoodst
ofactory/godownsotheyarepartofdirectexpenses.
(4) RevisedBalancetobetransferredtoTradingA/c:
Particulars `
CurrentBalancetransferred 17,44,000
Add:Depreciationchargesnotrecordedearlier 1,80,000
Less:WagesrelatedtoOffice (50,000)
Less:OfficeExpenses (42,000)
Revisedbalancetobetransferred 18,32,000

(5) CreditorsA/c
Particulars ` Particulars `
ToBankA/c 23,50,000 ByBalanceb/d 15,70,000
ToBalancec/d ByRawMaterialsA/c(B
6,60,000 al.figure) 14,40,000
30,10,000 30,10,000

24
 st
19. Trading and Profit and Loss Account of Mr. R for the year ended 31 March, 1997
Particulars Amount Particulars Amount

To Opening Stock 1,20,000 By Sales 32,20,000 31,00,000

To Purchases 25,00,000 24,00,000 Less: Return 1,20,000 2,30,000
Less: Returns 1,00,000 8,10,000
By Closing Stock (1)
By Gross Profit b/d
To Gross Profit c/d
To Rent
To Establishment expenses 33,30,000 33,30,000
To Electricity charges
60,000 8,10,000
To Telephone Charges
1,80,000
To Commission on sales
15.000
To Insurance Premium
10.000
To Bad debts
30.000
To Provision for doubtful debts
10.000 20,000
25,000

To Interest on loan 45,000

To Depreciation (2) 85,000

To Manager’s Commission (3) 30,000

To Net profit transferred to Capital

Account 3,00,000

8,10,000 8.10,000

Balance Sheet of Mr. R

st
(as at 31 March,1997)

Liabilities Amount Assets Amount

Capital Account: Building 5,00,000 4,75,000

Opening Balance 5,20,000 Less: Dep. 25,000

Add: Profit 3,00,000 8,20,000 Machineries 2,00,000

18% Mortgage Loan 3,00,000 50,000 1,50,000

Less: Dep.

Interest accrued on Loan Sundry 45,000 Furniture 1,00,000 90,000

Creditors 4,00,000 Less: Dep. 10,000

Commission due to Manager 30,000 Closing Stock Sundry 5,00,000 2.30.000

Debtors 25,000 4.75.000
Less: Prov. for D/D

Bills Receivable Cash 75.000

at Bank Cash in Hand 90.000
10.000

15,95,000 15,95,000

Working Notes: ?

25
1. Value of closing Stock
th
Stock (As on 7 April 1997) 1,80,000

Add: Cost of sales

Sales (1.4.1997 to 7.4.1997) 2,50,000

50.000 2.00.000
Less: Gross Profit @20% on sales

3,80,000

1.50.000
Less: Purchases

Closing Stock 2.30.000

2. Depreciation

On Building (5% of 5,00,000) 25,000

On Machineries (25% of 2,00,000) 50,000

On Furniture (10% of 1,00,000) 10.000

85.000

3. Manager’s Commission
Profit before charging commission 3,30,000
Commission (3,30,000 x 10/110) 30,000
20. Trading and Profit and Loss Account (For the year ended 31 st March, 1998)

Particulars Amount Particulars Amount

To Opening Stock 7,400 By Sales 49,800

To Purchases 25,000
Less: Sales on Approval

300 24,700 Basis 1,200 48,600

Less: Returns

To Wages 5,400 By Closing Stock 6,000

To Gross Profit c/d 18,100 Add: Stock with 1,000 7,000

Customer

55,600 55,600

To Repairs to Plant 520 By Gross Profit b/d 18,100

To Salaries 2,100 By Discount on Purchases 708

To Rent 240 By Provision for Bad Debts (W.N. 2) 752

To Bad Debts (200+600) 800

26
To Depreciation on:

Plant & Machinery 400

Building 500 900

To Commission to Work Manager 1,800

(W.N. 3)

To Commission to General Manager 1,200

(W.N. 4)

To Net Profit 12,000

19,560 19,560

st
Balance Sheet of Mr. X as on 31 March, 1998

Liabilities Amount Assets Amount

Capital Account 10,000 Land and Building 14,900

100 Plant and Machinery 3,600

Less: Income Tax

9,900

Add: Net Profit 12,000 21,900 Stock in Hand 6,000

Bank Overdraft 760 Add: Stock with Customers 1.000 7,000

Bills Payable 1,600 Debtors (W.N. 1) 4,960

Sundry Creditors 6,252 248 4,712

Less: Provision for Bad Debts

Salaries Outstanding 400

Outstanding Commission: Bill Receivable 3,000

Works Manager 1,800 Accrued Income 300

General Manager 1,200 3,000 Cash in hand and at Bank 400

33,912 33,912

27
Working Notes:

(1) Debtors as per Trial Balance 7,000

1,200
Less: Debtors on account of goods sold on approval basis

Landlord account wrongly taken as debtor 240 1,440

5,560

Less: Bad Debts Written off 600

4.960

(2) Provision for Bad Debts Required (Closing Balance): 5% on Debtors 74,960 = 7248
(3) Calculation of Commission of Works Manager:
12% of ₹15,000 = ₹1,800
(4) Calculation of Commission of General Manager:
-10/110 x ₹(15,000- 1,800)
10/110 x ₹13,200 = ₹1,200

28
21. Statement showing computation of net profit of Mr. James for the year ended 31.3.2001
Gross profit on normal sales {?6,20,000x 20/100} 1,24,000

- 7,000
Less: Loss on sale of damaged goods (712,000 75,000)

1,17,000

Less: Overhead expenses

Administration expenses 18,000

Selling expenses 33,000

Financial charges 6,000 57,000

Net profit 60,000

Working Notes:
Calculation of normal sales

Actual sales 6,25,000

5.000
Less: Abnormal sales (sale of damaged goods)

Normal sales 6.20.000

st
Trading and Profit and Loss Account of Mr. James for the year ended 31 March, 2001

₹ ₹

To Opening Stock 1,50,500 By Sales 6,25,000

To Purchases 4,37,000 By Closing stock 1,64,500

To Manufacturing 85,000 (balancing

expenses 1,17,000 figure)

To Gross Profit c/d

(71,24,000-77,000)

7,89,500 7,89,500

To Administration 18,000 By Gross Profit b/d 1,17,000

Expenses 33,000

To Selling expenses 6,000

To Financial Charges 60,000

To Net profit 1,17,000 1,17,000

29
 st
22. Trading and Profit & Loss Account (For the year ended 31 March, 2004)
Particulars Amount Particulars Amount
(₹) (₹)

To Opening Stock 5,00,000 By Sales 41,50,000

To Purchases 31,00,000 Less: Returns 55,000

45,000 40,95,000
Less: Returns

30,55,000 Less: Goods sent

on

1,00,000 approval 1,50,000 39,45,000

Less: Furniture

29,55,000 By Closing Stock 1,45,000

50,000 29,05,000 Add: Cost of goods

Less: Drawings

To Carnage Inward 10,000 sent on approval 1.00.000 2,45,000

To Wages 50,000

To Gross Profit c/d 7,25,000

41,90,000 41,90,000

To Salaries 95,000 By Gross Prolit b/d 7,25,000

To Rates & Taxes 50,000 By Discount received 75,000

To Postage & Telegram 1,05,000 By Net Loss transferred to Capital A/c 5,02,300

To Insurance 90,000

To Printing & Stationery 95,500

To Advertisement 1,70,000

To Discount allowed 50,000

To General Expenses 65,700

To Carriage Outward 22,000

To Bad debts 50,000

To Provision for Doubtful Debts 40,000

To Salesman Commission 78,000

Add: Outstanding 3,16,500 3,94,500

To Depreciation on:

Furniture 65,000

Motor Car 9,600 74,600

• 13,02,300 13,02.300

30
 Balance Sheet of Mr. Neel (As on 31 st March,2004)

Liabilities Amount Assets Amount

(₹) (₹)

Capital 22,59,200 Furniture 5,50,000

Less: Drawings 45,000 Add: Purchased 1.00.000

Less: Goods Witli-drawn 50,000 6,50.000

Less: Dep. 65.000 5,85,000

Motor Car 48,000

21,64,200 Less: Dep. 9.600 38,400

Less: Net Loss 5.02.300 16,61,900 Stock in hand 1,45,000

Sundry Creditors 4,00,000 Goods sent on Approval 1,00,000

Outstanding Salesman's Commission 3,16,500 Sundry Debtors 10,00,000

Less: Goods sent on

Approval 1.50.000

8,50,000

Less: Bad Debts 50.000

8,00,000

Less: Provision for Doubtful

Debts 40.000 7,60,000

Cash in Hand 2,50,000

Cash at Bank 5.00.000

23.78.400 23.78.400

31
 81
23. In the books of Shri Shivam Trading and Profit and Loss Acccount for the year ended 31 March, 2005
Dr. Cr.
To Opening stock 40,000 By Sales 2,64,000

To Purchases 1,70,000 Less: Goods sent for approval 1,200 2,62,800

Less: Free samples 2.000 1,68,000 By Closing stock 30,000

To Carriage inward 400 Add: Stock with customer (at co st) 1,000 31,000

To Wages 30,000

1.000 29,000
Less: Installation
charges

To Gross profit c/d 56,400

2,93,800 2,93,800

To Rent, rales and taxes 7,200 By Gross profit b/d 56,400

To Salaries 14,800 By Discount received 1,200

TO Postage and fax 3,000

To Sundry expenses 600

To Travelling expenses 1,000

To Interest on loan 300

AcW/'Accrued interest 300 600

To Advertising 2,000

To Insurance 1,600

To Loss of machinery by 2,000

fire

To Bad debts 800

Add: Written off 200

1,000

Add: Provision for doubtful debts 950 1,950

To Provision for discount on debtors 361

To Depreciation:

Plant and machinery 12,400

Furniture and fixtures 800

Patents 4,000 17,200

To Net profit transferred to capital account 5,289

57,600 57,600

32
 st
Balance Sheet as on 31 March, 2005

Liabilities Assets

Capital account: Land 28,350

Opening balance 1,60,000 Plant and machinery 60,000

Add: Net profit 5.289 Add: Purchased 3.000

1,65,289 63,000

24.000 1,41,289 Add: Installation charges i.odo

Less: Drawings

64,000

Loans from Shyam @ 6% 20,000 2.000

Less: Loss by fire

Add: Accrued interest 300 20,300 62,000

Sundry creditors 24,000 12.400 49,600

Less: Depreciation @ 20%

Creditor tor machinery 3,000 Patents 40,000

Bank overdraft 15,000 Less. Depreciation @ 10% 4.000 36,000

Furniture & Fixtures 8,000

800 7,200
Less: Depreciation @ 10%

Closing stock 30,000

Add: Stock with customers 1.000 31,000

Debtors 20,400

1.200
Less: Goods sent on approval
basis

19,200

200
Less: Bad debts written off

19,000

5% 950
Less: Provision for doubtful debts
@

18,050

361 17,689
Less: Provision for discount @
2%

Cash at bank 20,500

Cash in hand 13,250

2,03,589 2,03,589

33
 QUESTIONS FOR SELF PRACTICE

1.
In the books of Mr. Sandeep Trading Account for the year ended 31.12.18

Particulars Amount (₹) Particulars Amount(₹)

To Opening Stock 1,400 By Sales 9,000

To Purchases 12,000 8,000

Less: Sales Return 1.000

10,000 By Closing Stock 4,500

Less: Purchase Return 2.000

To Gross Profit 1,100

12,500 12,500

Profit and Loss Account for the year ended 31.12.18

Particulars Particulars

To Salaries 2,500 By Gross Profit 1,100

Add: O/s 100 2,600 By Commission 500

To Taxes & Ins. 500 100 400

Less: Received in adv.

Add: O/s Tax 200

50 650 By Interest on investments 210

Less: Ins. Prepaid

To Reserve for bad debts 1,000

Add: Bad-debts 500 By Net loss (b/f) 2,500

1,500

1.000 500
Less: Old Provision

To Int on Overdraft 300

To Dep on furniture 160

4,210 4,210

34
 Balance Sheet as on 31.12.18

Liabilities Assets

Capital 16,000 Furniture - Dep. 1,600 1,440

2.000 160
Less: Drawings

14,000 11,500 Investments Accrued interest on 4,000

Less: Net loss 2.500 210

Bank overdraft 2,000 investments Debtors - 5.000 4,000

Int. on overdraft unpaid 300 Res. for B/D 1.000

Creditors 2,000 Stock 4,500

Bills payable 2,500 Bills receivable 3,000

Salary outstanding 100 Prepaid Insurance 50

Taxes outstanding 200 Cash in hand 1,500

Commission reed, in 100

advance

18,700 18,700

2.
Trading A/c
Opening Stock 50,000 Sales 321000 311000
Purchase 150000 139000 (-) SR 10000
(-) PR 5000
(-) Drawing 6000 Closing Stock 60000
Wages 20000
Gross Profit 162000

P & L A/c
Salary 30000 Gross Profit 162000
Add: O/s 3000 Interest earned 4000
Less: Advance (2000) 31000
PFPP 60000
Rent 15000
Bed Debts (Written off) 7000
Printing & Stationery 8000
Interest 12000 10000
(-) Pre. (2000)
Depreciation 2000
PFDD 10000
Office Expenses 12000 20000
Add: Outstanding 8000
69000

35
3. RedraftedTrialBalanceofMr.Bansalason31stMarch,2021

Particulars Dr. Cr.

` `
Capital - 16,000
Openingstock 17,500 -
Drawings 3,305 -
Returnsinward 550 -
Carriageinward 1,240 -
DepositwithX 1,400 -
Returnsoutward - 840

Carriageoutward 725 -
Rentpaid 800 -
Rentoutstanding - 150
Purchases 13,000 -
Sundrydebtors 5,000 -
Sundrycreditors - 2,200
Furniture 1,500 -
Sales - 29,000
Wages 850 -
Cash 1,370 -
Advertisement ___950 ___-__
48,190 48,190

36
 TradingandProfitandLossAccountofMr.Bansalfortheyearended31stMarch,2021
Dr. Cr.
Particulars ` ` Particulars ` `
ToOpeningstock 17,500 BySales 29,000
ToPurchases 13,000 Less:Returnsinward (550) 28,450

Less:Returnsoutward (840) 12,160 By Stock 2,000

destroyedbyfire
ToWages 850 ByClosingstock 18,790
ToCarriageinward 1,240
ToGrossprofit 17,490 ______
49,240 49,240
ToCarriageoutward 725 ByGrossprofit 17,490
ToRent 800
ToAdvertisement 950
ToBaddebts 600
To Provision 220
fordoubtfuldebts(5%of
`4,400)
ToLossofstockbyfire 500
ToDepreciationonfurniture(10%of`1,500) 150

ToNetprofit 13,545
17,490 17,490

BalanceSheetofMr.Bansalasat31stMarch,2021
Liabilities ` Assets `
Capital 16,000
Add:Netprofit 13,545 Furniture 1,500
29,545 Less:Depreciation 150 1,350
Less:Drawings 3,305 26,240 DepositwithX 1,400
Sundrycreditors 2,200 ClosingStock 18,790
Outstandingrent 150 Sundrydebtors 5,000
Less:Baddebts 600
4,400
Less:ProvisionforDoubtfulDebts 220 4,180

Insuranceclaimreceivable 1,500
______ Cash 1,370
28,590 28,590

37
24. RedraftedTrialBalanceofMr.Bansalason31stMarch,2021
Particulars Dr. Cr.
` `
Capital - 16,000
Openingstock 17,500 -
Drawings 3,305 -
Returnsinward 550 -
Carriageinward 1,240 -
DepositwithX 1,400 -
Returnsoutward - 840

Carriageoutward 725 -
Rentpaid 800 -
Rentoutstanding - 150
Purchases 13,000 -
Sundrydebtors 5,000 -
Sundrycreditors - 2,200
Furniture 1,500 -
Sales - 29,000
Wages 850 -
Cash 1,370 -
Advertisement ___950 ___-__
48,190 48,190

38
 TradingandProfitandLossAccountofMr.Bansalfortheyearended31stMarch,2021
Dr. Cr.
Particulars ` ` Particulars ` `
ToOpeningstock 17,500 BySales 29,000
ToPurchases 13,000 Less:Returnsinward (550) 28,450

Less:Returnsoutward (840) 12,160 By Stock 2,000

destroyedbyfire
ToWages 850 ByClosingstock 18,790
ToCarriageinward 1,240
ToGrossprofit 17,490 ______
49,240 49,240
ToCarriageoutward 725 ByGrossprofit 17,490
ToRent 800
ToAdvertisement 950
ToBaddebts 600
To Provision 220
fordoubtfuldebts(5%of
`4,400)
ToLossofstockbyfire 500
ToDepreciationonfurniture(10%of`1,500) 150

ToNetprofit 13,545
17,490 17,490

BalanceSheetofMr.Bansalasat31stMarch,2021
Liabilities ` Assets `
Capital 16,000
Add:Netprofit 13,545 Furniture 1,500
29,545 Less:Depreciation 150 1,350
Less:Drawings 3,305 26,240 DepositwithX 1,400
Sundrycreditors 2,200 ClosingStock 18,790
Outstandingrent 150 Sundrydebtors 5,000
Less:Baddebts 600
4,400
Less:ProvisionforDoubtfulDebts 220 4,180

Insuranceclaimreceivable 1,500
______ Cash 1,370
28,590 28,590

39