1 Building A Nominal Account 2 Interest Paid B Real Account 3 Goodwill C Nominal Account 4 Commision received D Real Account 5 Outstanding Salaries account E Personal Account
Activity 4: List of examples of accounts and the category of accounts:
Examples Category of accounts Capital Land Patents Creditors Drawings Cash Sales Purchases Machinery Discount allowed Investments Interest paid Outstanding expenses Prepaid Rent Outstanding income Carriage Inward Carriage Outward Interest received in advance
Activity 5: write the golden rules of accounting Personal account: Real account: Nominal account:
Activity 6 Debit and Credit concepts
Identification of accounts: Identify the account(s) to be debited and credited for the following transactions:
Transaction Debit Credit 1 Paid creditors 2 Paid insurance premium 3 Bought office supplies on credit 4 Paid rent 5 Paid rent for proprietors home 6 Bought equipment on part payment 7 Collected cash from customers for services provided
1. Journalize the following transactions in the books of Tmt.Amutha as on Jaunary 2012 Jan 1 Tmt.Amutha commenced business with cash50000 Jan 2 Purchased goods for cash 10000 Jan5 Purchased goods from Mohan on credit 6000 Jan 7 Paid into Bank 5000 Jan 10 Purchased furniture 2000 Jan 20 Sold goods to Suresh on credit 5000
2. Journalize the following transactions of Mr.Moorthi June (08) 3 Received cash from Ramkumar 60000 4 Purchased goods for cash 15000 11 Sold goods to Damodaran 22000 13 Paid to Ramkumar 40000 17 Received from Damodaran 20000 20 Bought furniture from Jagadeesan 5000 27 Paid rent 1000 30 aid salary 2500
3. Enter the following transactions in the Journal of Bhagwat and sons.. 2006 Amount in Rs January 1 Tarun started business with cash 1,00,000 January 2 Goods purchased for cash 20,000 January 4 Machinery Purchased from Vishnu 30,000 January 6 Rent paid in cash 10,000 January 8 Goods purchased on credit from Anil 25,000 January 10 Goods sold for cash 40,000 January 15 Goods sold on credit to Gurmeet 30,000 January 18 Salaries paid. 12,000 January 20 Cash withdrawn for personal use 5,000
4. Journalize the following transactions in the books of John for the month of October 2013.
June 2014 Particulars Rs. 1 st John started business with cash 70,000 2 nd Purchased furniture for cash 10,000 4 th Purchased goods for cash 20,000 5 th Bought goods from Rahim 25,000 7 th Sold goods for cash 44,000 9 th Sold goods to Mahesh 30,000 10 th Paid cash to Ramesh 15,000 11 th Received cash from Ramanath 10,000 18 th Purchased goods from nil Kumar 12,000 20 th Purchased computers on credit from Shivshankar 28,000 29th Paid salaries 7,000 30 th Withdrew cash for personal use from the office 10,000 30 th Paid wages 5,500
5. Pass journal entries in the books of Ms Lily Jan 1. Commenced business with Cash 26000, Stock 2800 and Furniture 90000
Jan. 2 Goods purchased for cash 1 4,000 Jan. 3 Paid freight 500 Jan. 7 Goods sold to Manoj on credit 5,000 Jan. 8 Paid for stationery 2,000 Jan. 10 Paid for Rent 1,000 Jan. 13 Cash received from RaghuDas 16,400 Allowed him discount 600 Jan. 15 Paid Premium 4,200 Jan. 20 Paid to postage 1,000 Jan. 25 Paid for salaries 500 Jan. 30 Commission received 1,000
6. Mr Kumar has the following transactions in the month of April .Write journal entries for the transactions 10 th April : commenced business with Cash 25000 and Furniture 3000
11 th April purchased goods from Veeru for Rs 20000 13 th April purchased goods for Cash Rs 15000 14 th April Purchased goods from Abhiram for cash Rs 9000 15 th April bought goods from Shyam on credit Rs 12000 16 th April sold goods worth Rs 15000 to Tarun 20 th April Sold goods to Utsav for cash 6000 22 nd April Returned goods to Veeru 3000 23 rd April goods returned from Tarun Rs 1000 New concepts: Purchase Return and Sales Return
7. Pass journal entries in the books of Mr Ram for the month of January 11 th Paid wages Rs 7000 15 th Paid rent by cheque Rs 6000 17 th Purchased stationary and paid by cheque Rs 8900 20 th Received interest Rs 640 21 st Withdrew from bank Rs 5600 22 nd Received by cheque Rs 450 23 rd Bought additional capital Rs 30000 24 th Withdrew from bank for personal use Rs 4000 25 th Received Rs. 9500 from Mahesh and allowed him a discount of Rs 500 26 th Paid Laxman Rs 2300 in cash and received a discount of Rs 200
LEDGER 1. Journalise the following transactions of Mr.Ravi and post them in the ledger and balance the same. June 1 Ravi invested Rs.5,00,000 cash in the business 3 Paid into Bank Rs.80,000
5 Purchased building for Rs.3,00,000 7 Purchased goods for Rs.70,000 10 Sold goods for Rs.80,000 15 With drew cash from bank Rs.10,000 25 Paid electric charges Rs.3,000 30 Paid Salary Rs. 15,000 2. Journalise the following transactions and post them in the ledger January 1 Commenced business with cash 50000 January 3 Paid into bank 25000 January 5 Purchased furniture for cash 5000 January 8 Purchased goods and paid by cheque 15000 January 14 Purchased Goods from K. Murthy 35000 January 18 Cash Sales 32000 January 20 Sold Goods to Ashok on credit 28000 January 25 Paid cash to K. Murthy in full settlement 34200 January 28 Cash received from Ashok 20000 January 31 Paid Rent for the month 2000 January 31 Withdrew from bank for private use 2500
CASH BOOK 1. Prepare A Single Column Cash Based On The Transactions Below Jan 1 Started business with cash ... Rs. 1,000 3 Purchased goods for cash ... Rs. 500 4 Sold goods ... Rs. 1,700
5 Cash received from Siva ... Rs. 200 12 Paid Balan ... Rs. 150 14 Bought furniture ... Rs. 200 15 Purchased goods from Kala on credit ... Rs. 2,000 20 Paid electric charges ... Rs. 225 24 Paid salaries ... Rs. 250 28 Received commission ... Rs. 75
2. Compile three column cash book of Mr.Sundar from the following transactions for the August 1.Sundar started business with cash Rs.2,00,000 2 Deposited into Bank Rs.50,000. 4 Cash purchases Rs.5,000. 5 Purchases by cheque Rs.6,000. 6 Goods sold to Nathan on credit Rs. 5,000. 8 Received cheque from Mano Rs.490, Discount allowed Rs.10. 10 Paid carriage Rs.1,000. 12 Withdrew from Bank for office use Rs.10,000. 15 Paid to Sundari Rs.4,960, Discount allowed by her Rs.40. 20 Received a cheque for Rs.4950 from Nathan in full settlement of his account, which is deposited into Bank.
3. Prepare a cash book with cash, bank and discount columns from the transactions given below: Jan 1 Cash Balance Rs.75,000. Bank Balance Rs. 45,000. 3 Deposited into bank Rs.60,000. 4 Bought furniture and paid by cheque Rs.7,500
5 Paid for repair Rs.650. 6 Goods purchased and paid by cheque Rs.12,500. 10 Received a cheque for Rs.21,000 from Chandran and allowed him discount Rs.200. 13 Gave Muthu a cheque for Rs.11,500 and received a discount of Rs.150. 20 Withdrew from bank for office use Rs.2,500. 28 Withdrew from bank for personal use Rs.500. 4. Enter the following transactions in Mural's cash book with column for discount, cash & bank for the year 2012 April1 Cash balance Rs.60000. o Bank balance Rs.10,500. 4 Received Rs.2,000 from Manoj in cash. Allowed him discount of Rs.100. 7 Cash sales Rs.2,000. 10 Furniture purchased Rs.800 by cheque. 12 Paid rent by cheque Rs.1,500. 15 Paid Rs1250 to Karthikeyan by cheque. 18 Cash sales Rs.15,000. 20 Paid packing charges Rs.500. 24 Paid Murugan Rs.4,000. Discount allow by him Rs.50. 26 Paid into bank Rs.5,000.
TRIAL BALANCE 1. Prepare a trial balance as at March 31, 2012 based on the following balances:
ACCOUNT TITLE AMOUNT(Rs) Capital 1,00,000 Drawings 16000
Machinery 20,000 Sales 2,00,000 Purchases 2,10,000 Sales return 20,000 Purchase return 30,000 Wages 40,000 Goodwill 60,000 Interest received 15,000 Discount allowed 6,000 Bank overdraft 22,000 Bank loan 90,000 Debtors 75000 Creditors 60,000 Cash 54000 Stock on 1 st April 2011 16000
2. The following balances are extracted from the books of Mr.Raj .Prepare Trial Balance as on 30.6.2013. Capital 4,70,200 Machinery 1,58,800 Cash in hand 6,000 Sundry Debtors 48,000 Building 3,20,000 Repairs 5,400 Stock 33,000 Insurance premium 3,300 Sundry creditors 26,000 Sales 2,90,000 Commission paid 750 Telephone charges 6,450 Rent & Taxes 6,300 Furniture 11,000 Purchases 1,65,000
Discount earned 1,100 Salaries 70,600 Loan from Mohammed 51,000 Discount allowed 650 Bank overdraft 5,900 Drawings 5,000 Bills receivable 8,600 Bad debts 1,350 Bills payable 6,000
3.Prepare Trial Balance as on 31.12.2000 from the following balances of Mr. Vasu
1. XYZ Ltd. maintains a current account with the federal bank. As on 31 st March 2006, the bank column of its cashbook showed a debit balance of Rs, 20,000. However, the bank statement showed a different balance as on that date. The following are the reasons for such a difference: Cheque deposited but not yet credited by the bank- 4,000 Cheque issued but not yet presented -9,000 Bank charges -1,000 Cheques received by the bank directly -6,000 Insurance premium paid by the bank as per standing instructions not yet intimated -3,000
2. Make a bank reconciliation statement for Mr Mars ltd on December 31, 2013 to find out the balance as per pass book Balance as per cash book Rs.15000 Cheques deposited but not yet collected by the bank Rs.10000. Bank charges debited in the pass book Rs. 500 Cheque issued to Mr. Mahesh has not yet been presented for payment Rs. 25,000. Interest allowed by the bank Rs. 1000. Insurance premium directly paid by the bank as per standing instructions Rs. 5000. Interest allowed by the bank Rs 2500
3. X Ltd. maintains a current account with the Federal bank . As on 31 st March 2012, the bank column of its cashbook showed a debit balance of Rs, 25000. However, the bank statement showed a different balance as on that date. The following are the reasons for such a difference: Cheque deposited but not yet credited by the bank 3,000 Cheque issued but not yet presented 2,000 Bank charges debited 3,000 Cheques received by the bank directly 7,000 Insurance premium paid by the bank as per standing instructions not yet intimated 2,000
Prepare bank reconciliation statement and find out the balance as per the bank statement
UNIT -4 DEPERICATION ACCOUNTING
1. Jessica & Co purchased a fixed asset on 01.04.2002 for `5,00,000. Depreciation is to be provided at the rate of 15% annually, according to Straight Line Method. The books are closed on 31st March every year. Prepare Fixed Asset account for the first three years. 2. Bedi Brothers purchased a machine on 01.04.2000 for `5,00,000. On The firm charges depreciation at the rate of 15% per annum on Straight Line Method. The books are closed on 31st March every year. Prepare Machinery account for three years
3. M/s. Shankar & Co. purchased a Machinery on 1.1.2002 for Rs.10,00,000. The firm writes off depreciation at 10% on the original cost every year. The books are closed on 31st March every year, Prepare Machinery account and Depreciation account for the first three years
4. A firm acquired a machine on 1 st January 2006 at a cost of Rs 30000. the firm writes off depreciation at 10% per annum on the diminishing balance . Show the machinery account and depreciation account for 3 years.
5. A manufacturing concern whose books are closed on 31 st December purchased machinery for Rs 40000 on 1.1.2006. additional machinery was purchased for Rs 20000 on 1.7.2007 and from Rs 10000 on 1.4.2008. prepare a machinery account for 3 yrs writing off depreciation at 10%p.a on written down value method
6. Rajesh bought a machine for Rs 25000 on which he spent Rs 5000 transport, 1000 as brokerage and Rs 4000 for installation, the machine was depreciated at 10% p.a every year on written down value basis. After 3 yrs the machine was sold to Mr. Y for Rs 30500 and Rs 500 was paid as commission to the broker .Prepare machinery account for 3 years
7. Ram Manufacturing Company purchased on 1st April, 2009, machinery for Rs1,00,000. After having used it for three years, the owners sold the machinery for Rs85,000. Depreciation is to be provided every year at the rate of 10% per annum on the Fixed Instalment Method. Books are closed on 31st March every year. Find out the profit or loss on sale of machinery
INVENTORY VALUATION
1. The following is the record of receipts and sales of certain goods during the first week of JUNE 2010
Stock verification on 3 rd June , revealed a loss of 50 units Show valuation of stock on 7 th June 2010 FIFO WAC
2. The following is the record of receipts and sales of certain goods during the first week of August 2010 Date Receipts Units Rate (Rs) 1/8/10 Opening stock 500 8.00 per unit 2/8/10 Purchases 600 10.00 per unit 3/8/10 Issue 300 4/8/10 Purchases 100 10.20 per unit Date Receipts Units Rate (Rs) 1/6/10 Opening stock 1500 16 per unit 2/6/10 Purchases 600 20 per unit 3/6/10 Issue 600 - 4/6/10 Purchases 500 19 per unit 5/6/10 issue 500 6/6/10 Purchases 150 18.5 per unit 7/6/10 Issue 400
5/8/10 Issue 400 6/8/10 Purchases 200 10.50 per unit 7/8/10 Issue 400 Stock verification on 3 rd April , revealed a loss of 10 units Show the valuation of stock on 7 th August 2010 using FIFO WAC
3. Meena and Company Pvt Ltd provides you with the following information in respect of their purchases from 1 st to 5 th of May 2013.
Opening stock 1000 units of a product @ Re1 lac; purchased 400 units @Rs.1,50000; issued 450 units; purchased 500 units @Rs.160000; issued 300 units. Compute the value of the inventory using FIFO method on the closing of 5.5.2013.
4. Prepare cost of goods sold and value of closing stock using FIFO method and weighted average value method from the following information in respect of certain customer of a bank branch. March 1 Opening stock 100 units Rs.50 per unit 4 Purchases 200 Rs. 55 per unit 10 Issues 100 15 Purchases 140 Rs.60 18 Issues 100 24 Purchases 80 Rs.65 30 Issues 200
FINAL ACCOUNTS UNIT 5
1. The balances from the books of Parimal Ghosh are given below. Prepare Trading and Profit & Loss Account for the year ended 31st March, 2007. Stock as on 1.4.2006 9480 Purchase Returns 1800 Purchases 50800 Advertising 1500 Wages 1200 Commission (Cr.) 3200 Salaries 3400 Rent f received 2800 Direct expenses 1320 Sales 72000 Rent & Taxes 850 Stock (31.3.2007) 10700 Bad Debts 250 Discount (Dr.) 360 Interest received 760
2. The balances from the books of are given below. Prepare Trading and Profit & Loss Account for the year ended 31st March, 2007. Stock as on 1.4.2006 90000 Purchase Returns 3000 Purchases 54000 Advertising 3400 Wages 7000 Commission (Cr.) 4300 Salaries 7500 Rent received 5000 Direct expenses 220 Sales 72000 Rent & Taxes 6000 Stock (31.3.2007) 45000 Bad Debts 400 Discount (Dr.) 300 Interest received 560
3. The following is the trial balance of Z Co Ltd as at 31 st December 2012. Particulars Amount Dr. Amount Cr. Stock as on 1 st Jan. 2012 90000 Sales 55000 Purchases 25000 Wages 23000 Discount 9000 Furniture & Fixtures 65000 Salaries 23000 Rent 10000 Sundry expenses 8000 Patent & Trade Mark 40000 Interest paid 20000 Share capital 500000 Debtors & Creditors 100000 110000 Plant and Machinery 230000 Cash & bank balance 95000 Bills Payable 55000 TOTAL 729000 729000
Prepare trading & Profit and loss a/c and balance sheet after taking into consideration the following adjustments: I) Stock on 31 st December 2012 was valued at Rs.40000 II) Depreciation on Furniture and Fixtures and Patents & Trade Mark is @ 5% each.
4. The following is the trial balance of Anand and Bros. Pvt. Ltd as at 31 st December 2012.
Particulars Amount Dr. Amount Cr. Stock as on 1 st Jan. 2012 130000 Sales 83000 Purchases 75000 Wages 24000 Discount 6700 Furniture & Fixtures 75000 Salaries 60000 Rent 29000 Sundry expenses 12000 Patent & Trade Mark 80000 Interest paid 6000 Share capital 700000 Debtors & Creditors 28000 323000 Plant and Machinery 564700 Cash & bank balance 90000 Bills Payable 61000 TOTAL 1173700 1173700
Prepare trading & Profit and loss a/c and balance sheet after taking into consideration the following adjustments: I) Stock on 31 st December 2012 was valued at Rs.40000 II) Outstanding salaries amounted to Rs. 800 III) Prepaid wages Rs. 900
Problem -5
6. The following is the trial balance of X Ltd as at 31 st December 2012.
Particulars Amount Dr. Amount Cr. Stock as on 1 st Jan. 2012 122000 Sales 214000 Purchases 65000 Wages 12000 Discount 22000 Furniture & Fixtures 30000 Salaries 22000 Rent 10000 Sundry expenses 4000 Patent & Trade Mark 100000 Interest paid 30000 Share capital 400000 Debtors & Creditors 75000 152000 Plant and Machinery 300000 Cash & bank balance 218000 Bills Payable 200000 TOTAL 988000 988000
Prepare trading & Profit and loss a/c and balance sheet after taking into consideration the following adjustments:
I) Stock on 31 st December 2012 was valued at Rs.50000 II) Depreciation on Plant and Machinery, Patents & Trade Mark is @ 10% each