FINANCIAL STATEMENTS 1.

From the following balances prepare a trading and profit and loss account and balance sheet for the year ended March 31, 2006 Carriage on goods purchased Rs. 8,000 Cash in hand Rs. 2,500 Bank overdraft Rs. 30,000 Carriage on goods sold Rs. 3,500 Motor car Rs. 60,000 Manufacturing expenses Rs. 42,000 Drawings Rs.8,000 Advertisement Rs. 7,000 Audit fees Rs. 2,700 Excise duty Rs. 6,000 Plant Rs. 1,53,900 Factory lighting Rs. 4,400 Repairs to plant Rs. 2,200 Debtors Rs. 80,000 Stock at the end Rs. 76,000 Creditors Rs. 61,000 The value of closing stock is Rs. 6000 2. From the following balances prepare trading and profit and loss account and balance sheet for the year ended March 31, 2006 Opening stock Establishment expenses 15,310 3,600 Capital Commission (Cr.) 1,200 2,50,000 Plant 42,000 Purchases 82,400 Bad debts 5,850 Drawings 48,000 Leasehold building Sales 1,50,000 256,000 Bad debts recovered Sundry debtors 57,000 2,000 Returns (Dr.) Sales tax collected Purchases less return 1,60,000 Dock and Clearing charges 5,200 Commission on purchases 2,000 Postage and Telegram Rs. Incidental trade expenses 3,200 Fire Insurance Premium Rs. Investment Rs. 30,000 Patents Rs. 12,000 Interest on investment Rs. Income tax Rs. 24,000 Capital Rs. 1,00,000 Office expenses Rs. Sales less return Rs.5,20,000 Sales tax paid 12,000 Discount allowed Rs. Discount on purchases Rs. Rs. Rs. Rs. 800 Rs. 3,600

4,500

7,200 Rs. 2,700 3,400

4,000 Sundry creditors Returns (Cr.) 2,400 Depreciation 4,200 Factory rent 18,000 Charity Custom duty 11,500 Cash balance 4,460 Coal, gas & power 6,000 Bank balance 4,000 Discount (Dr.)

12,000

500

2,000 Apprenticeship premium 4,800 Goodwill Production expenses 2,600 Patents Administrative expenses 5,000 Trademark Carriage inwards Loan (Cr.) Interest on loan Wages and salary 36,600 Bank charges 180

20,000 10,000 5,000 8,700 25,000 3,000

7,500

The value of closing stock on March 31, 2006 was Rs. 25,400 3. From the following figures extracted from the books of Shri Govind you are required to prepare a Trading and Profit and Loss account and Balance Sheet for the year ending 31st March 2010 after making necessary adjustments: Particulars Capital Drawings Plant & Machinery Freehold Property Purchases Returns Outward Salaries Office expenses Office Furniture Discount a/c (Dr.) Debtors Sales Cash at Bank Bills Payable Loan to Shri Krishna @ 10% p.a. on 1.4.04 Rs. 2,28,000 13,200 99,000 66,000 1,10,000 1,100 13,200 2,750 5,500 1,320 29,260 2,31,440 29,260 5,500 44,000 Particulars Stock 1.4.09 Wages Creditors Postage & Telegrams Insurance Gas & Fuel Bad Debts Office Rent Freight Loose Tools Factory Lighting Provision for Doubtful Debts Interest on Loan to Sh. Krishna Cash Rs. 38,500 35,200 44,000 1,540 1,760 2,970 660 2,860 9,900 2,200 1,100 880 1,100 2,640

Adjustments: a) Stock on 31st March, 2005 was valued at 72,600.

b) A new machine was installed during the year costing Rs.15,400 but was not recorded in the books as no payments was made for it. Wages of Rs. 1100 paid for its erection has been debited to wages account. c) Depreciate Plant & Machinery by 33 % 1. Furniture by 10% 2. Freehold Property 5% d) Loose tools were valued at Rs.1,760 on 31.3.2005. e) Of the Debtors Rs.660 are bad and should be written off. f) Maintain a provision of 5% on debtors for doubtful debts. g) The manager is entitled to a commission of 10% of net profit after charging such commission. 4. Following is the Trial Balance of Shri Paras as on 31st March 1991.You are required to prepare the Final Accounts. Particulars Dr. Cr. Creditors 20,500 Debtors 3,000 Capital 25,000 Building 30,000 Furniture 2,640 Scooter 4,000 Return Inward and Outward 2,300 1,600 Stock on 1st Jan. 2001 8,000 Purchases and Sales 33,800 56,040 Bad-Debts 300 Carriage inward 700 General Expenses 1,200 Bank Loan 5,000 Interest on Bank loan 300 Commission 900 Insurance and Taxes 2,000 Scooter Expenses 2,600 Salaries 4,400 Cash in hand 2,000 Total 1,03,140 1,03,140 Adjustments: a) Stock as on 31st December 2001 was valued at Rs.4,340 b) Commission includes Rs.300 being commission received in advance.. c) Salaries have been paid for 11 months d) Bank loan has been taken at 10% p.a. interest. e) Depreciate Building by 5% and Scooter by 15% f) Write off Rs.200 as further Bad-Debts. 5. The following is the Trial Balance of Raman Traders as on 31st December, 2007. Debit Rs. Credit Rs.

Cash in hand 1,500 Sales 2,50,000 Cash at bank 3,000 Returns outward 2,000 Purchases 1,10,000 Capital 56,000 Returns inward 1,500 Sundry Creditors 30,000 Wages 20,000 Power and fuel 8,000 Carriage outwards 6,000 Carriage inwards 5,000 Opening inventory 6,000 Land 10,000 Building 80,000 Machinery 30,000 Patents 15,000 Salaries 12,000 Sundry expenses 6,000 Insurance 1,000 Drawings 8,000 Sundry Debtors 15,000 Total 3,38,000 Total 3,38,000 You are required to prepare a Trading and Profit and Loss account for the year ended 31st December, 2007 and a Balance Sheet as on that date. The adjustments to be made are given below: (i) Stock on 31st December, 2007 was Rs. 20,000 (ii) Provision for bad and doubtful debts is to be made at 5% on debtors (iii) Outstanding salary was Rs. 5,000 (iv) Prepaid sundry expenses was Rs. 500 (v) Depreciation on buildings is to be charged @ 10% p.a. and on machinery 15% p.a. 6. The following trial balance has been extracted from the books of Ms. Sharma. Prepare the final accounts for the year ended 31st March 2008 and a balance sheet as on that date: Debit Rs. Credit Rs. Drawings 35000 Buildings 60000 Debtors and creditors 50000 80000 Returns 3500 2900 Purchases and sales 300000 465000 Discount 7100 5100 Life insurance 3000 Cash 30000 Opening stock 12000 Bad debts 5000 Reserve for bad debts 17000 Carriage inwards 6200 Wages 27700 -

Machinery Furniture Salaries Bank commission Bills receivable/payable Trade expenses Capital

800000 60000 35000 2000 60000 13500

1510000 Adjustments : (i) Depreciate buildings by 5%, furniture and machinery by 10% p.a. (ii) Trade expenses Rs. 2500 and wages Rs. 3500 have not been paid yet (iii) Make a provision for doubtful debts at 5% (iv) Machinery includes Rs. 200,000 of a machine purchased on 31st December 2007. Wages include Rs. 5700 spent on the installation of machine. (v) Stock on 31st March 2008 was valued at Rs. 50,000 7. The following is the trial balance of Kanshi Ram as on 31st March 2004: Dr. Cr. Capital 800000 Drawings 60000 Opening stock 75000 Purchases 1595000 Freight on purchases 25000 Wages (11 months upto 29.2.2004) 66000 Sales 2310000 Salaries 140000 Postage, telegram and telephone 12000 Printing & stationery 18000 Miscellaneous expenses 30000 Creditors 300000 Investments 100000 Discount received 15000 Debtors 250000 Bad debts 15000 Provision for bad debts 8000 Building 300000 Machinery 500000 Furniture 40000 Commission on sales 45000 Interest on investments 12000 Insurance (year upto 31.7.2004) 24000 Bank balance 150000 3445000 3445000 Adjustments: (i) Closing stock Rs. 225,000

40000 900000 1510000

(ii)

Machinery worth Rs. 45,000 purchased on 1.10. 2003 was shown as purchases. Freight paid on the machinery was Rs. 5000, which is included in freight on purchases. (iii) Commission is payable @ 2 % on sales (iv) Investments were sold at 10% profit, but the entire sales proceeds have been taken as sales. (v) Write off bad debts of Rs. 10,000 and create a provision for doubtful debts @ 5% of debtors. (vi) Depreciate buildings by 2 % p.a. and machinery and furniture at 10% p.a. Prepare trading and profit and loss account for the year ending 31st March 2004 and a balance sheet as on that date. 8. The following is the trial balance of Mr. Mahesh as on 31.12.2004. prepare the trading and P&L a/c for the year 2001 and a balance sheet as on 31.12.2004: Dr. Cr. Purchases 180000 Opening stock 10000 Salaries 6600 PF remittance including proprietors contribution 50% 1200 Rent @ Rs. 250 p.m. 2750 Machinery 29000 Wages 3000 Furniture & fittings 5000 Electricity 550 Trade expenses 1500 Debtors 10500 Interest on loan 900 Commission 200 Building 30000 Sales 205000 10% Loan 10000 Creditors 15000 Capital 55000 Drawings 5000 Cash 1200 286200 286200

(i) On 1.1.2004 machinery worth Rs. 5000 was purchased & included in purchases a/c (ii) Wages include Rs. 1000 paid for machinery erection charges (iii)Purchases include cost of moped scooter for Rs. 5000 (iv)Proprietor has taken goods costing Rs. 1000 for which no entry has been made (v) Sundry debtors include Rs. 500 which have become bad (vi)Provide 10% reserve for bad debts (vii) Electricity outstanding Rs. 50

(viii)

Goods costing Rs. 5000 were destroyed by fire, & insurance claim receivable for Rs. 4000 (ix)Provide depreciation @5% on building. (x) Closing stock is Rs, 12000