Exercise:

1) Journalise the following transactions:-

2006
March 4 Purchased Machinery for cash Rs. 15000

8 Sold goods for cash Rs. 4200

12 Sold Machinery for cash Rs. 7800

16 Paid Salary Rs. 1000

18 Received Commission Rs. 800

19 Paid to Raj Rs. 2000

20 Received cash from Narayan Rs. 1200

24 Purchased goods for cash Rs. 2500

2) Journalise the following transactions

2006
January2 Aravind started business with Rs. 50000

4 Opened Bank account Rs. 10000

5 Purchased Machinery Rs. 12000

6 Purchased goods from Shyam Rs. 15000

6 Purchased Furniture Rs. 4000

8 Cash withdrawn from bank Rs. 5000

9 Goods sold for cash Rs. 12000

10 Cash paid into Bank Rs. 5000

11 Paid Wages Rs. 1500

12 Cheque issued to Shyam Rs. 15000

13 Paid into Bank Rs. 1000

14 Cash sales Rs. 7500

16 Cash purchases Rs. 4300

19 Received Commission Rs. 400

20 Paid rent by cheque Rs. 1000

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3) Journalise the following transactions, Prepare ledger accounts and also prepare Trial
balance.

1. Kamal started business with cash Rs. 24000

2. Purchase goods for cash Rs. 12000

3. Sold goods for cash Rs. 16000

4. Purchased furniture Rs. 4000

5. Opened bank account Rs. 10000

6. Purchased good and paid by cheque Rs. 8000

7. Cash Sales Rs. 6000

8. Paid into Bank Rs. 4000

9. Received Commission Rs. 400

10. Paid salary by cheque Rs. 800

4) Journalise the following transactions, Prepare ledger accounts and also prepare Trial
balance.

2006
January1 Arun started business with cash Rs. 10000

3 Purchased goods for cash Rs. 2000

4 Purchased furniture Rs. 2750

5 Sold goods for cash Rs. 1230

8 Opened bank account with Rs. 3500

10 Purchased goods and paid by cheque Rs. 500

12 Sold goods to Ram Rs. 1850

15 Sold goods and received cheque Rs.2300

18 Deposited the cheque into the bank Rs. 2300

22 Purchased goods from Varun Rs. 2000

25 Paid salary by cheque Rs. 2500

28 Received commission Rs. 570

30 Paid rent Rs. 500

31 Drawing from bank for personal use Rs. 250

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 Cash Book
1) Enter the following transactions in SINGLE COLUMN CASH BOOK.

2006

April 1 Babu started business with cash Rs. 15000

2 Purchased Machinery for cash Rs. 2000

4 Purchased goods Rs. 8000

7 Cash sales Rs. 4500

8 Opened a bank account Rs. 2500

12 Sold goods for cash Rs. 4700

15 Salary paid Rs. 1100

16 Stationery purchased Rs. 250

18 Rent paid Rs. 400

20 Commission received Rs. 400

23 Paid to ram Rs. 3200

27 Received from Karim Rs. 1800

28 Received cheque for goods sold Rs. 1500

30 The cheque received paid into banks Rs. 1500

2) Enter the following transactions in SINGLE COLUMN CASH BOOK.

2006

January1 Cash balance Rs. 3000

4 Paid into bank Rs. 2100

5 Paid to arun Rs. 800

7 Cheque received from Babu Rs. 3800

9 Paid into Bank Babu’s cheque Rs. 3800

12 Paid for postage Rs. 500

13 Withdrawn from bank for office use Rs. 1800

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 15 Interest paid by cheque Rs. 1000

18 Withdraw cash for personal use Rs. 2400

19 Sachin a customer paid directly to the bank account Rs. 3000

27 Cash sales Rs. 4000

29 Draw cheque for office use Rs. 1500

30 Paid salary by cheque Rs. 1200

31 Draw cheque for personal use Rs. 500

3) From the following transactions. Prepare a DOUBLE COLUMN CASH BOOK.

2006

March 1 Opening Balance

Cash in hand Rs. 500

Cash at bank Rs. 6500

4 Purchased goods for cash Rs. 6000

4 Sold goods for cash Rs. 8200

5 Cash deposited into bank Rs. 1000

8 Paid to Sam by cheque Rs. 1200

12 Stationery charges paid Rs. 500

15 Insurance premium paid by cheque Rs. 1200

17 Withdraw cash for domestic purposes Rs. 600

18 Received cheque from Anil Rs. 3000

19 Withdraw cash from bank for office use Rs. 1000

24 Personal drawings from bank Rs. 500

27 The cheque from Anil sent to bank for collection Rs. 3000

30 Salaries paid by cheque Rs. 1800

31 Cash sales Rs. 3500

31 Interest on deposit credited by bank Rs. 200

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4) From the following transactions. Prepare a THREE COLUMN CASH BOOK.
2006
January 1 Opening balance of cash Rs. 5500

1 Bank overdraft Rs. 2700

3 Purchased furniture Rs. 3000

5 Cash deposited into bank Rs. 1500

7 Cash sales Rs. 7000

8 Purchased goods for cash Rs. 4200

13 Received a cheque from Riny Rs. 7800

Allowed him a discount Rs. 200

16 Deposited the cheque to bank from Riny Rs. 7800

19 Paid to Salim Rs. 2000

For full settlement of Rs. 2150

21 Withdrew from bank Rs. 700

23 Paid interest on loan by cheque Rs. 500

27 Cash received from Sathesh Rs. 4700

For full settlement of Rs.5000

29 Issued a cheque to Kumar Rs. 1400

Discount earned Rs. 100

31 Paid salaries Rs. 1500

PETTY CASH BOOK

1) Record the following transactions in the PETTY CASH BOOK.

A petty cashier is paid Rs. 1000 as imprest money on 1st January 2006. During the month his
expenses were as under:-

January2 Postage Rs. 85

3 Printing Rs. 110

5 Stationery Rs. 65

8 Refreshment Rs. 25
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 11 Carriage Rs. 95

15 Travelling expenses Rs. 135

19 Repairs Rs. 165

21 Telegrams Rs. 30

24 Bus fare Rs. 20

26 Taxi charges Rs. 80

29 Wages to casual workers Rs. 60

2) Enter the following transaction in PETTY CASH BOOK for the month of March 2006.

March 1 Cash received from chief cashier Rs. 2000

3 Repairs Rs. 120

5 Postage Rs. 40

7 Carriage Rs. 85

10 Cleaning charges Rs. 65

11 Travelling expenses Rs. 160

13 Taxi charges Rs. 225

14 Stationer purchase Rs. 95

18 Refreshment to customers Rs. 115

21 Telegrams Rs. 60

23 Bus fare Rs. 80

24 Wages paid to labourers Rs. 145

27 Electricity charges paid Rs. 265

30 Loading charge paid Rs. 140

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Final accounts
Format of Trading Account

Trading a/c
For the year ended xx/xx/xxxx
Particular Adjustment Amount Particular Adjustment Amount
To opening stock Xxx By sales Xxx
Purchase Xxx Less: sales return Xx xxx
Less: purchase return Xx Closing stock Xxx
Direct expenses Xxx
Gross profit c/d (if
Xxx
any)
Xxxx Xxxx

Format of Profit & Loss account

Profit & loss a/c

For the year ended xx/xx/xxxx
Particular Adjustment Amount Particular Adjustment Amount
To Gross loss b/d(if By gross profit b/d (if
xxx xxx
any) any)
Salaries Xxx Commission received Xxx
Rent, rates & taxes Xxx Discount received Xxx
Printing & stationery Xxx Rent received Xxx
Postage Xxx Interest on dividend Xxx
Advertisement Xxx Net loss (if any) Xxx
Insurance xxx Transferred to capital a/c
Audit fee Xxx
Bank charges Xxx
Telephone charges Xxx
Legal charges xxx
Carriage outward xxx
Commission Xxx
Repairs &
Xxx
maintenance
Bad debts Xxx
Discount allowed Xxx
Depreciation Xxx
Interest on loan xxx
Net profit (if any) Xxx
Transferred to capital
Xxx
a/c

xxxx xxxx

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Format of balance sheet

Balance sheet
For the year ended xx/xx/xxxx
Liabilities Adjustment Amount Assets Adjustment Amount
Capital xxxx Goodwill xxxx
Add: net profit xxx Land & building xxx
xxxx Plant & machinery xxxx
Add: interest on Furniture
xx xxx
capital
xxxx Investment xxxx
Less: drawings xxx xxxx Prepaid expenses xxxx
Sundry creditors xxx Closing stock xxxx
Bills payable xxxx Sundry debtors xxx
Bank overdraft xxx Bills receivable xxxx
Outstanding expenses xxxx Cash in hand xxx
Loans xxxx Cash at bank xxxx
xxxxxx xxxxxx

Q1. The following is the trial balance of Gupta stores 31/3/2006. Prepare trading & profit & loss
a/c and balance sheet for the year ended 31/3/2006.

Particular Debit credit

Capital 20000
Opening stock 4800
Purchase 30500
Wages 2000
Salaries 3000
Sales 42500
Rent and rates 2500
Drawings 1500
Advertisement 500
Interest received 1500
Discount received 300
Cash in hand 3300
Cash at bank 7000
Sundry debtors 8500
furniture 7500
Creditors 6800
71100 71100

Stock on 31/3/2006 was 6000.

Ans: - GP-11200, NP-7000, balance sheet-32300.

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Final accounts with adjustment
1) Outstanding expenses: add in trading & profit & loss a/c (TPL), add in liabilities.

2) Prepaid expenses: less in TPL, add in assets.

3) Income earned but not received (accrued income): add in TPL, add in assets.

4) Income received in advance: less in TPL, add in liabilities.

5) Depreciation: add in TPL, less in assets.

6) Bad debts: add in TPL, less in assets (debtors).

7) Provision for bad debts: add in TPL, less in assets (debtors).

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Q2. Prepare trading & profit & loss a/c and balance sheet for the year ended 31/3/2006.

Particular Debit Credit

Opening stock 5000
Sundry debtors 1500
Sundry creditors 7000
Land & building 10000
Cash in hand 1000
Cash at bank 4000
Interest received 500
Bills payable 3000
Sales 18000
Wages 3000
Bills receivable 2000
Interest 200
Bad debts 600
Repairs 200
Furniture & fixtures 1500
Depreciation 1000
Advertisement 500
Salaries 2000
Drawings 2000
Office expenses 2500
Purchase 10000
Plant & machinery 5700
Capital 25000
Rent & rates 800
53500 53500

Adjustment:

1] Stock in the end is valued at 10000.

2] Wages outstanding 500.

3] Salary outstanding 250.

Ans: GP-9500, NP-1950, balance sheet-35700.

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Q3. Prepare trading & profit & loss a/c and balance sheet for the year ended 31/3/2006.

Particular Debit Credit

Capital 50000
Stock at the beginning 22000
Salaries 26000
General expenses 2200
Purchase 120000
Wages 22000
Sundry expenses 1400
Rent 2600
Debtors 34000
Insurance 800
Cash in hand 3000
Machinery 30000
Purchase return 2000
Sales return 2000
Sales 207000
Drawings 7000
Creditors 14000
273000 273000

Adjustments:

1] Closing stock as on 3331/3/06 42000.

2] Salary outstanding 3000.

3] Insurance prepaid 100.

4] Rent prepaid 400.

Ans: GP-85000, NP-49500, balance sheet-109500.

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Q4. From the following trial balance of Rajgopal as on 31/12/2005. Prepare trading & profit &
loss a/c and balance sheet.

Particular Debit Credit

Purchase 55000
Drawings 2000
Opening stock 14000
Bills payable 5200
Furniture & fixtures 2800
Capital 32000
Premises 13000
Debtors 5000
Creditors 8100
Insurance 1000
Commission received 1200
Rent 2500
Carriage outwards 2700
Cash in hand 5800
Cash at bank 5000
Sales 81000
Salaries and allowances 11000
Repairs & maintenance 6000
General expenses 3200
Travelling expenses 2800
Office expenses 700
130000 130000

Adjustments:

1] Stock as on 31/12/2005 18000.

2] Rent receivable amounted to 600.

3] Commission accrued but not received amounted to 300.

4] Salary outstanding 700.

5] Insurance paid in advance 150.

Ans: GP- 30000, NP-6500, balance sheet- 50650.

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Q5. From the following trial balance prepare trading & profit & loss a/c and balance sheet as on
31/3/2006.
Particular Debit Credit
Capital 35000
Purchase 43000
Wages 2200
Factory expenses 1700
Salaries 2500
Commission received 1000
Rent received 2500
Sales 73300
Cash in hand 2800
Cash with bank 3600
Return inward and outward 1300 2100
Repairs 1400
Building 22000
Bills receivable 1700
Bills payable 1300
Land 27000
Debtors 8500
Creditors 6900
Postage and telegram 1200
Opening stock 2500
Carriage inwards 400
Carriage outwards 300
122100 122100
Adjustments:
1] Salary prepaid 500.
2] Wages outstanding 200.

3] Rent received in advance 400.

4] Commission received in advance 200.

5] Closing stock 2000.

Ans: GP-26100, NP-24100, balance sheet-68100.

Q6. From the following trial balance of M/S Balaji as on 31/12/2005.

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 Particular Debit Credit
Capital 105000
Sundry debtors 34000
Sundry creditors 17000
Opening stock 15000
Purchase 85000
Sales 135000
Plant & machinery 25000
Land & building 40000
Furniture 18000
Discount paid 2000
Discount received 1300
Purchase return 1800
Sales return 2300
Rent 8500
Factory expenses 2400
Electricity and water 2200
Office expenses 3000
Carriage outward 2700
Bills receivable 12000
Bills payable 8000
Cash in hand 3600
Cash at bank 4700
Postage and telegram 3200
Sales expenses 4800
Advertisement charges 7200
Travelling expenses 4000
Salaries 1700
Wages 3800
276600 276600

You are required to prepare trading & profit & loss a/c and balance sheet as on 31/12/2005
after considering the following adjustments.
1] Closing stock valued at 35000.
2] Wages outstanding amounted to 600.
3] Rent accrued but not received amounted to 400.

4] ¼ of the advertisement is paid for the next year.

5] Salary outstanding 300.

6] Depreciation: a) plant & machinery @10%. b) Land & building @ 5%. c) Furniture & fixtures
@20%.

Ans: GP-60500, NP-35500, balance sheet-166400.

Q7. From the following trial balance of Prakash as on 31/3/2006. Prepare trading & profit & loss
a/c and balance sheet.
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 Particular Debit Credit
A’s capital 69700
Drawings 1875
Purchase 137480
Sales 248775
Machinery 15500
Land & building 32000
Travelling expenses 1235
Cash 850
Insurance 1455
Wages 32685
Interest on investment 2440
Salaries 6400
Return inward 2250
Interest on loan 750
Bank loan 15000
Investment 12000
Commission received 2470
Discount allowed 2645
Furniture 15600
Bills receivable 5650
Bills payable 4750
Sundry debtors 35000
Sundry creditors 32000
Opening stock 43750
Coal, coke and power 3650
Advertisement charges 18460
Postage and telegrams 4600
Bad debts 1300
375135 375135

Adjustments:
1] Stock on shop 65050.
2] Depreciate machinery @10%, furniture @15%, land and building @ 5%.

3] Outstanding salary 1500.

4] Write off bad debts 3200.

5] Interest accrued on investment amount to 475.

6] Provide interest on bank loan @12% for half year.

Ans: GP-94010, NP-51460, balance sheet- 173435.

Q8. The following is the trial balance of Mr. Krishnan 31/3/2006. Prepare trading & profit & loss
a/c and balance sheet for the year ended 31/3/2006.

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 Particular Debit Particular credit
Opening stock 32000 Purchase return 2500
Purchase 50500 Sundry creditors 17000
Sales return 3000 Bank overdraft 3500
Debtors 23000 Discount received 3200
Bad debts 800 Sales 87500
Cash in hand 2200 capital 60000
Lease hold premises 22000
Goodwill 16000
Discount paid 500
Salaries 4800
Wages 1600
Printing & stationery 1800
General expenses 500
Furniture 15000
173700 173700

Adjustments:

1] Depreciate lease hold premises @15%, furniture @ 20%.

2] Salary outstanding 800.

3] Wages outstanding 200.

4] Closing stock as on 31/3/2006 35000.

5] Provision required for bad debts @5%.

6] Closing stock of stationery is valued at 250.

Ans: GP-37700, NP-24500, balance sheet-106000.

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