6.

FINAL ACCOUNT OF NON-MANUFACTURING ENTITIES

Q. No. R1 R2 R3 Special Point
CLASS WORK
1 ICAI Illustration 2
2 ICAI Illustration 3
3 ICAI Illustration 11
4 ICAI practical Question 2
5 ICAI practical Question 4
6 RTP May 18 / RTP Nov 19
7 RTP Nov 20
ICAI Illustration 3
8
(Manufacturing Entities)
9 QP Nov 20
10 QP Nov 20
11 QP July 21
12 QP July 21
13 MTP Nov 22 Series 2
14 ICAI Exam Nov 22
 6.2

1. ICAI Illustration 2
Particulars Rs.
Opening Inventory 1,00,000
Purchases 6,72,000
Carriage Inwards 30,000
Wages 50,000
Sales 11,00,000
Returns Inward 1,00,000
Returns Outward 72,000
Closing Inventory 2,00,000
From the Above information, prepare a Trading Accounts of M/s ABC Traders for the year ended
31st March, 2022 and Pass necessary closing entries in the journal proper of M/s. ABC Traders

2. ICAI Illustration 3
Revenue, Expenses and Gross Profit Balances of M/s ABC Traders for the year ended on 31st March
2022 were as follows:
Particulars Amount(Rs.)
Gross Profit 4,20,000
Salaries 1,10,000
Discount (Cr.) 18,000
Discount (Dr.) 19,000
Bad Debts 17,000
Depreciation 65,000
Legal Charges 25,000
Consultancy Fees 32,000
Audit Fees 1,000
Electricity Charges 17,000
Telephone Postage and Telegrams 12,000
Stationery 27,000
Interest paid on Loans 70,000
Required
 6.3

Prepare Profit & Loss A/c of M/s ABC Traders for the year ended on 31 st March 2022.Show
necessary closing entries in the journal proper of M/s. ABC Traders also.

3. ICAI Illustration 11
The Balance Sheet of Mr. Popatlal, a merchant on 31st March, 2022 stood as below:
Liabilities ` Assets `
Capital 2,40,000 Fixed Assets 1,25,600
Trade payables 1,64,000 Inventories 2,06,400
Bank Overdraft 1,46,000 Trade receivables 1,88,000
Less: Provision (6,200) 1,81,800
Cash 36,200
5,50,000 5,50,000
Required
Show opening journal entry on 1st April, 2022 in the books of Mr. Popatlal.

4. ICAI Practical Question 2

Sengupta & Co. employs a team of eight workers who were paid `30,000 per month each in the
year ending 31st December, 2021. At the start of financial year 2021-2022, the company raised
salaries by 10% to `33,000 per month each.
On Oct 1, 2021 the company hired two trainees at salary of `21,000 per month each. The
work force are paid salary on the first working day of every month, one month in arrears,
so that the employees receive their salary for January on the first working day of February
etc.
You are required to calculate:
1. Amount of salaries which would be charged to the profit and loss for the year
ended 31st March 2022.
2. Amount actually paid as salaries during 2021-22
3. Outstanding Salaries as on 31st March, 2022.
 6.4

5. ICAI Practical Question 4

Mr. Kotriwal is engaged in business of selling magazines. Several of his customers pay money in
advance for subscribing his magazines. Information related to year ended 31st March 2022 has
been given below:
On 1.4.2021 he had a balance of ` 2,00,000 advance from customers of which ` 1,50,000 is
related to year 2021-22 while remaining pertains to year 2022-23. During the year 2021-22
he made cash sales of ` 5,00,000. You are required to compute:
i) Total income for the year 2021-22.
ii) Total money received during the year if the closing balance in advance from customers
account is ` 1,70,000.

6. RTP May 2018 / RTP Nov 19

The following are the balances as at 31st March, 2019 extracted from the books of Mr.XYZ.
Particulars ` Particulars `
Plant and Machinery 19,550 Bad debts recovered 450
Furniture and Fittings 10,250 Salaries 22,550
Bank Overdraft 80,000 Salaries payable 2,450
Capital Account 65,000 Prepaid rent 300
Drawings 8,000 Rent 4,300
Purchases 1,60,000 Carriage inward 1,125
Opening Stock 32,250 Carriage outward 1,350
Wages 12,165 Sales 2,15,300
Provision for doubtful debts 3,200 Advertisement Expenses 3,350
Provision for Discount on Printing and Stationery 1,250
Debtors 1,375 Cash in hand 1,450
Sundry Debtors 1,20,000 Cash at bank 3,125
 6.5

Sundry Creditors 47,500 Office Expenses 10,160

Bad debts 1,100 Interest paid on loan 3,000
Additional Information:
1. Purchases include sales return of `2,575 and sales include purchases return of ` 1,725.
2. Goods withdrawn by Mr. XYZ for own consumption ` 3,500 included in purchases.
3. Wages paid in the month of April for installation of plant and machinery amounting to `
450 were included in wages account.
4. Free samples distributed for publicity costing ` 825.
5. Create a provision for doubtful debts @ 5% and provision for discount on debtors @
2.5%.
6. Depreciation is to be provided on plant and machinery @ 15% p.a. and on furniture and
fittings @ 10% p.a.
7. Bank overdraft is secured against hypothecation of stock. Bank overdraft outstanding as
on 31.3.2019 has been considered as 80% of real value of stock (deducting 20% as margin)
and after adjusting the marginal value 80% of the same has been allowed to draw as an
overdraft.
Prepare a Trading and Profit and Loss Account for the year ended 31st March, 2019, and a
Balance Sheet as on that date. Also show the rectification entries.

7. RTP NOV 20
The following is the Trial Balance of T on 31st March, 2019:
Particulars Dr. ` Cr. `
Capital - 6,00,000
Drawings 70,000 -
Fixed Assets (Opening) 1,40,000 -
Fixed Assets (Additions 01.10.2019) 2,00,000 -

Opening Stock 60,000 -

Purchases 16,00,000 -
Purchases Returns - 69,000
Sales - 22,00,000
Sales Returns 99,000 -
Debtors 2,50,000 -
 6.6

Creditors - 2,20,000
Expenses 50,000 -
Fixed Deposit with Bank 2,00,000 -
Interest on Fixed Deposit - 20,000
Cash - 8,000
Suspense A/c - 2,000
Depreciation 14,000 -
Rent (17 months upto 31.8.2019) 17,000 -
Investments 12% (01.8.2018) 2,50,000 -
Bank Balance 1,69,000 -
31,19,000 31,19,000
Stock on 31st March, 2019 was valued at ` 1,00,000. Depreciation is to be provided at 10% per
annum on fixed assets purchased during the year. A scrutiny of the books of account revealed the
following matters:

i. ` 20,000 drawn from bank was debited to Drawings account, but out of this amount
withdrawn ` 12,000 was used in the business for day-to-day expenses.
ii. Purchase of goods worth ` 16,000 was not recorded in the books of account upto 31.03.2019,
but the goods were included in stock.
iii. Purchase returns of ` 1,000 was recorded in Sales Return Journal and the amount was
correctly posted to the Party’s A/c on the correct side.
iv. Expenses include ` 6,000 in respect of the period after 31st March, 2019.
Give the necessary Journal Entries in respect of (i) to (iv) and prepare the Final Accounts for the
year ended 31st March, 2019.
 6.7

8. ICAI Illustration 3 (Manufacturing Entities)

On 31st March, 2022 the Trial Balance of Mr. White were as follows:
Trial Balance as on 31st March, 2022
Particulars Dr. ` Particulars Cr. `
Stock on 1st April 2021
Raw Materials 21,000 Sundry Creditors 15,000
Work in Progress 9,500 Bills Payable 7,500
Finished goods 15,500 Sale of Scrap 2,500
Sundry Debtors 24,000 Commission Received 450
Carriage on Purchases 1,500 Provision for doubtful debts 1,650
Bills Receivable 15,000 Capital Account 1,00,000
Wages 13,000 Sales 1,67,200
Salaries 10,000 Bank Overdraft 8,500
Telephone, Postage etc. 1,000
Repairs to Office Furniture 350
Cash at Bank 17,000
Office Furniture 10,000
Repairs to Plant 1,100
Purchases 85,000
Plant and Machinery 70,000
Rent 6,000
Lighting 1,350
General Expenses 1,500
3,02,800 3,02,800
The following additional information is available:
Stocks on 31st March, 2022 were:
Raw Materials `16,200 Finished goods `18,100 Semi-finished goods ` 7,800
Salaries and wages unpaid for March 2022 were respectively, ` 900 and ` 2,000 Machinery is to
be depreciated by 10% and office furniture by 71/2 %
Provision for doubtful debts is to be maintained @ 1% of sales Office premises occupy 1/4 of
total area.
Lighting is to be charged as to 2/3 to factory and 1/3 to office.
Prepare the Manufacturing Account Trading Account, Profit and Loss Account and the Balance
Sheet relating to 31st March 2022.
 6.8

9. QP NOV 20
Max & Co. employs a team of 9 workers who were paid ` 40,000 per month each in the year ending
31st December, 2018. At the start of 2019, the company raised salaries by 10% to ` 44,000 per
month each.
On 1st July, 2019 the company hired 2 trainees at salary of ` 21,000 per month each. The work
force are paid salary on the first working day of every month, one month in arrears, so that the
employees receive their salary for January on the first working day of February, etc.
You are required to calculate:
i. Amount of salaries which would be charged to the profit and loss for the year ended 31 st
December,2019.
ii. Amount actually paid as salaries during 2019.
iii. Outstanding salaries as on 31st December,2019.

10. QP NOV 20
Following are the Manufacturing A/c, Creditors A/c and Raw Material A/c provided by M/s. Shivam
related to financial year 2019-20. There are certain figures missing from these accounts.
Raw Material A/c.
Particulars Amount ( ` ) Particulars Amount ( ` )
To Opening stock A/c 1,27,000 By Raw Material Consumed -
To Creditors A/c - By Closing Stock -
Creditors A/c.
Particulars Amount ( ` ) Particulars Amount ( ` )
To Bank A/c 23,50,000 By balance b/d 15,70,000
To Balance c/d 6,60,000
Manufacturing A/c.
 6.9

Particulars Amount ( ` ) Particulars Amount ( ` )

To Raw Material A/c. - By Trading A/c 17,44,000
To Wages 3,65,000
To Depreciation 2,15,000
To Direct Expenses 2,49,000
Additional Information:
i. Purchase of Machinery worth ` 12,00,000 on 1st April, 2019 has been omitted. Machinery are
chargeable at a depreciation rate of 15%
ii. Wages include the following:
Paid to factory workers - ` 3,15,000
Paid to Labour at office - ` 50,000
iii. Direct expenses including following:
Electricity charges - ` 80,000 of which 25% pertained to office
Fuel charges - ` 25,000
Freight inwards - ` 32,000
Delivery charges to customers - ` 22,000
You are required to prepare revised Manufacturing A/c and raw Material A/c.

11. QP July 21
Karuna decided to start business of fashion garments under the name of M/s. Designer Wear on
1st April, 2020. She had a saving of about ` 10,00,000. She invested ` 3,00,000 out of her savings
and borrowed equal amount from bank. She purchased a commercial space for ` 5,00,000 and
further spent ` 1,00,000 on its renovation to make it ready for business.
Loan and interest repaid by her in the first year are as follows:
30th June, 2020 - ` 15,000 principal+ ` 9,000 interest
30th September, 2020 - ` 15,000 principal+ ` 8,550 interest
31st December, 2020 - ` 15,000 principal+ ` 8,100 interest
31st March, 2021 - ` 15,000 principal+ ` 7,650 interest.
In view of further capital requirement, she transferred ` 2,00,000 from her saving bank account
to the bank account of the business. She paid security deposit of ` 7,000 for telephone connection.
 6.10

Furniture of ` 10,000 was purchased, All payments were made by cheque and all receipts in cash
were deposited in the bank.
At the end of the year, her business showed the following results:
Particulars Amount Particulars Amount
Total Sales 20,00,000 Total Purchases 17,00,000
Electricity Expenses paid 40,000 Telephone Charges 50,000
Cartage Outwards 60,000 Travelling Expenses 45,000
Entertainment Expenses 5,000 Maintenance Expenses 25,000
Misc. Expenses 15,000 Electricity Expenses Payable 20,000
Other Information:
i. She withdrew ` 5,000 by cheque each month for her personal expenses.
ii. Depreciation on building @ 5% p.a. and oil furniture @ 10% p.a.
iii. Closing stock in hand as on 31st March, 2021: ` 5,50,000
Prepare trading account, profit and loss account for the year ended 31-3-2021 and Balance Sheet
as on that date.

12. QP July 21
PQR Limited's Profit and Loss account for the year ended 31st March, 2021 includes the following
information:
(1) Liability for Income Tax ` 40,000
(2) Retained Profit ` 2,00,000
(3) Proposed Dividend ` 20,000
(4) Increase in Provision for Doubtful Debts ` 25,000
(5) Bad Debts written off ` 20,000
State which one of the items above is - (a) transfer to provisions; (b) transfer to reserves; and
(c) neither related to provisions nor reserves.
 6.11

13. MTP Nov 22 Series 2

Ms. Veena is engaged in business of selling magazines. Several of his customers pay money in advance
for subscribing his magazines. Information related to year ended 31st March, 2022 has been given below:
On 1.4.2021 he had a balance of ` 3,00,000 advance from customers of which ` 2,25,000 is related to year
2021-22 while remaining pertains to year 2022-23. During the year 2021-22 he made cash sales of `
7,50,000. You are required to compute:
i. Total income for the year 2021-22.
ii. Total money received during the year if the closing balance in Advance from customers Account is `
2,55,000.

14. ICAI Exam Nov 22

The balance sheet of on 1st April, 2022 was as follows
Particular Amount Particular Amount
Trade payable 6,50,000 Furniture and Fixtures 6,50,000
Expenses payable 75,000 Vehicle 2,75,000
Capital 22,00,000 Trade receivable 11,00,000
Cash at bank 4,75,000
Inventories 4,25,000
29,25,000 29,25,000
During 2021-22, his profit and loss Account revealed a net profit of ₹ 6, 70,000. This was after
allowing for the following.
i. Commission paid to selling agent ₹ 65,000
ii. Discount received from creditors ₹ 75,000
iii. Purchased a vehicle of ₹ 50,000 on 31st March, 2022.
iv. Depreciations on Furniture and Fixtures @ 10% and on Vehicle @ 20%.
 6.12

v. A provision for doubtful debts @ 3% of the trade receivables as at 31st March, 2022.
But while preparing the profit and Loss Account he had forgotten to provide for
1. Prepaid expenses ₹ 15,000 and
2. Outstanding commission ₹ 35,000.
His current assets and liabilities on 31st March, 2022 were. Inventories ₹ 6, 50,000. Trade
Receivable 13, 00,000 (before provision for doubtful debts), cash at bank 5,50,000 and Trade
Payable ₹ 1,46,000.
During the year he introduced further capital of ₹ 3, 00,000 into the business.
You are required to prepare the balance sheet as at March 31, 2022.