20

Problems Accounting

Problem # 1: Following data extracted from the books of ABC Company

NAME: ALI IRFAN SHAH

ABC Company
Enrollment: 01-111192-006
Corrected Trial Balance

31-Dec-16

Description Debit Description Credit

Purchases 720 Sales 5,000

Carriage inward 930 Owner Equity 9,500
Wages 1,560 Note Payable 700
Salaries 1,220 Sundry Creditor 240
General Expenses 300 Salaries Payable 740
Cash at Bank 1,600
Petty Cash 30
Premises 6,500
Furniture 1,500
Stock 550
Drawing 70
Account Receivable 1,200

Total Rs. 16,180 Total Rs. 16,180

Adjustments
st
a) Stock at 31 , December was valued at Rs. 320

b) General Expenses of Rs. 300 paid for two years, first year had expired

c) A Debt of Rs. 100 is to be written off as bad by direct method

d) Unpaid Salaries during the 2008 was Rs. 140

Requirements
1. Pass Adjusted Entries

2. Pass Closing Entries

3. Prepare Work Sheet

1 Closing & Worksheet

 20
Problems Accounting

General Journal

Amount (Rs.)
Date Account Title and Explanations Ref Debit Credit

2016

Dec 31 Stock A/C 320

Puchases A/C 320

31 Pre-paid Expenses A/C 2000

Expenses A/C 2000

Bad Debt A/C 100

31
Accounts Receivable 100

140
Salaries A/C
31 140
Salaries Payable

Consulting Fee earned 5000

(i)
Income Summary A/C 5000

(Revenue Closed)
(ii)
Income Summary A/C 4500

Carriage inward A/C 930

Purchases A/C 400

Wages A/C 1560

Salaries A/C 1360

General Expense A/C 150

Bad debt A/C 100

( Expenses are closed )

Income Summary A/C
500
(iii)
Owner’s Equity
500

Owner’s Equity 70
(iv)
Drawing A/C 70

( Drawing Closed with Owner equity account)

Total Rs. 12,630 Rs. 12,630

2 Closing & Worksheet

Problem Accounting
20

ABC Company
Work Sheet
st
For the Period ended December 31 , 2016
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Trial Balance Adjustments Adj. Trial Balance Income Statement Statement of O.E Balance Sheet
A# Chart of Accounts
Dr Cr Dr Cr Dr Cr Expenses Revenues Dr Cr Assets Equities
1 Purchases 720 320 400 400
2 Carriage inward 930 930 930
3 Wages 1560 1560 1560
4 Salaries 1220 140 1360 1360
5 General Expenses 300 150 150 150
6 Cash at Bank 1600 1600 1600
7 Petty Cash 30 30 30
8 Premises 6500 6500 6500
9 Furniture 1500 1500 1500
10 Stock 550 320 870 870
11 Drawing 70 70 70
12 Account Receivable 1200 100 1100 1100
13 Prepaid General Exp. 150 150 150
14 Bad Debts 100 100 100
15 Sales 5000 5000 5000
16 Owner Equity 9500 9500 9500
17 Note Payable 700 700 700
18 Sundry Creditor 240 240 240
19 Salaries Payable 740 140 880 880
20 Net Profit c/f to O.E 500 500
21 Bal c/f to B/S 9930 9930

Total 16,180 16,180 710 710 16,320 16,320 5,000 5,000 10,000 10,000 11,750 11,750

3 Closing & Worksheet

 20
Problems Accounting

Problem #
Following Data is extracted from books of Elixier & Co

Elixier & Co
Corrected Trial Balance

31-Dec-15

Description Debit Description Credit

Sundry Debtors 145,000 Sundry Creditors 63,000

Drawings 52,450 Opening Capital 710,000
Insurance Exp. 6,000 Sales 982,000
General Expenses 30,000 Commission 3,200
Salaries 150,000
Patents 75,000
Machinery 200,000
Leasehold Land 100,000
Building 300,000
Opening Inventory 58,600

Carriage on Purchases 20,400

Carriage on Sales 32,000

Fuel and Power 47,300

Wages 104,800
Cash at Bank 29,500
Cash in Hand 5,400
Net Purchases 401,750

Total Rs. 1,758,200 Total Rs. 1,758,200

Adjustments
st
a) Inventory on 31 , December 2015 was valued at Rs. 68,000.
b) Depreciation Machinery by 10 % and Amortization of Patents by 20 %.
c) Unexpired Insurance at the end financial year was Rs. 2,000.
d) Advance Wages paid to of Rs. 7,000.

Requirements
1. Pass Adjusted Entries
2. Pass Closing Entries
3. Prepare Work Sheet

4
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Problems Accounting

General Journal
Amount (Rs.)
Date Account Title and Explanations Ref Debit Credit
2015 Inventory A/C 68000
Dec 31
Purchases A/C 6800

Depreciated Expense - Machinery 20000

31 Amortization Expense - Patents 15000
Acc. Depreciated - Machinery 20000
Acc. Depreciated - Patents 15000

Unexpired Insurance A/C 2000

31
Insurance Expense A/C 2000

Pre-paid wages A/C 7000

31
Wages A/C 7000

(i) Sales A/C 982000

Commission A/C 3200
985200
Income Summary A/C
(Revenue closed )

(ii) Income Summary A/C 750250

Insurance Expense A/C 4000

General Expense A/C 30000
Salaries A/C 150000
Carriages on purchases A/C 20400
Carriage on sales 32000
Fuel and power A/C 47300
Wages A/C 97800
Purchases A/C 333750
Depreciated Expense-Machinery 20000
Amortized Exp.- Patents 15000
(Expenses are closed )
iii Income summary A/C 234950
Owner’s equity 234950
(Income summary is closed with Owner equity )

Owner equity 52450

52450
(iv) Drawing A/c

(Drawing closed with Owner Equity)

5 Closing & Worksheet

Problems Accounting
20

Work Sheet
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Trial Balance Adjustments Adj. Trial Balance Income Statement Statement of O.E Balance Sheet
A# Chart of Accounts
Dr Cr Dr Cr Dr Cr Expenses Revenues Dr Cr Assets Equities
Sundry Debtors 145000 145000 14500
Drawings 52450 52450 52450
Insurance Expense 6000 2000 4000 4000
General Expense 30000 30000 30000
Salaries 150000 150000 150000
Patents 75000 75000 75000
Machinery 200000 200000 200000
Leasehold Land 100000 100000 100000
Building 300000 300000 300000
Inventory 58600 68000 126600 126600
Carriage on purchase 20400 20400 20400
Carriage on Sales 32000 32000 32000
Fuel and Power 47300 47300 47300
Wages 104800 7000 97800 97800
Cash at Bank 29500 29500 29500
Cash in HAND 5400 5400 5400
Purchases 401750 68000 333750 333750
Sundry Creditors 6300 63000 63000
Opening Capital 710000 710000 710000
Sales 982000 982000 982000
Commission 3200 3200 3200
Dep. Exp Machinery 20000 20000 20000
Amortized. Exp Patents 15000 15000 15000
Acc Dep. Machinery 20000 20000 20000
Acc Amortized-Patents 15000 15000 15000
Unexpired Insurance 2000 2000 2000
Prepaid Wages 7000 7000 7000
Net profit c/f to O.E 234950 234950
Bal c/f to B/S 892500
TOTAL 1,758,200 1,758,200 112,000 112,000 1,793,200 1,793,200 985,200 985,200 944,950 944,950 990,500 990,500

6 Closing & Worksheet