Problem # 1

The following is the Trial Balance of AB Co. Ltd. as at 31.12.2013:

Debtors
VAT Current A/c
Notes receivable
Machinery
Account receivable
12% Investment (01.04.2013)
Labor expenses
Returns
Purchases
Rent
Opening inventory
Goods sent on consignment
Payroll expenses
Travelling expenses
Goods sent on sale or return
Insurance premium
Cash balance
Bank balance
Repair expenses
Commission
Advertisement
Bad Debts expense
Furniture
Share Call A/c
Total

AB Co. Ltd.
Trial Balance
31.12.2013
Taka
Creditors
10,000 Capital
9,500 16% Loan (01.07.2013)
30,000 Returns
20,000 Sales
40,000 Commission
40,000 Allowance for Bad Debts expense
4,600 Account Payable
256,590
5,600
94,000
10,000
10,000
1,900
5,000
400
600
19,500
3,400
3,000
6,000
3,120
10,500
7,500
591,210
Total

Taka
127,500
40,000
2,000
375,430
4,650
4,000
37,630

591,210

Additional information:
1. Closing inventory: cost price Tk. 120,000, market price Tk. 125,000;
2. Goods of the value of Tk. 10,000 was destroyed by fire on 20.12.2013, a claim has been lodged
with the insurance company, which acknowledges 80%;
3. Prepaid labor expense Tk. 4,000; whereas Payroll expenses due for November and December;
4. Insurance Premium has been paid up-to March 31. 2014;
5. Of the account receivable Tk. 3,000 is unrecoverable; an allowance of 5% is to be created;
6. Scrutiny of accounts reveals that a credit purchase of Tk. 5,000 remains unrecorded;
7. Goods of the value of Tk. 1,000 distributed free of cost;
8. Depreciation to be charged on non-current assets at 5% p.a.;
9. 75% of the advertisement expenses to be deferred;
10. All the goods sent on consignment has been sold out at Tk. 12,000. Agent is entitled to a
commission of 10%;
11. Neither the confirmation regarding the goods sent on sale or return basis been received nor the
maturity date been expired;
12. The management decides to create of reserve fund by transferring Tk. 10,000;
13. Tax rate to be assumed at 40%;
14. Capital of the company is consisted of 50,000 shares of Tk. 10 each. The company issued 18,000
shares. Subscriptions were received for 15,000 shares. Per share Tk. 8.5 called up.
Required:
(a) Statement of Comprehensive Income for the year ended on 31.12.2013, and
(b) The Statement of Financial Position as at that date.

Problem # 2

From the following Trial Balance of Kamrul & Co. Ltd. and the additional information given below,
prepare a Statement of Comprehensive Income for the year ended at 31.12.2013 and the Statement of
Financial Position as at that date.
Kamrul & Co. Ltd.
Trial Balance
31.12.2013
Debtors
Taka
Creditors
Taka
Purchase of goods
1,120,00 Sale of goods
1,492,000
0
Opening inventory
108,000 Discount on purchase
9,400
Import Duty
84,000 Discount
17,400
Carriage on Purchases
42,000 Commission
18,600
Carriage on Sales
36,000 10% Loan (01.01.2012)
120,000
Labor
58,000 Notes payable
36,000
Payroll
68,000 Depreciation Reserve- Machinery
72,200
Petty expenses
18,000 Depreciation Reserve- Furniture
22,800
Export Duty
25,000 Allowance for B/D expense
7,000
Discount
13,600 Capital (Tk. 8 Per share)
640,000
Commission
17,400 Account Payable
70,000
Advertisement
41,000 General Reserve
26,000
Insurance Premium (up-to 31.03.2013)
30,000
Notes Receivable
64,000
Machinery
380,000
Furniture & Fittings
120,000
Office Expenses
6,000
Rent
41,000
Bad Debts Expense
3,000
Cash
37,000
Bank
61,000
Account Receivable
150,000
VAT current A/c
8,400
Total
2,531,40
Total
2,531,400
0
Additional information:
1. Closing inventory Tk. 160,000;
2. Included in the closing inventory goods of the cost of Tk. 20,000, which was sold at a profit of
20% on cost. The buyer did not take the delivery. It is not recorded in the books;
3. Rent payable Tk. 3,000 whereas payroll paid in advance Tk. 1,000;
4. VAT of Tk. 900 paid on advertisement, which is included in VAT Current A/c;
5. VAT of Tk. 3,000 collected form customer erroneously included in Sales;
6. Depreciation to be charged at 10% on the book value of machinery and furniture & fittings;
7. Withdrawn by the owner goods of the value of Tk. 2,000 (cost price Tk. 1,500), which is
included in Sales at cost price;
8. General Manager is entitled to a commission of 5% net profit after charging his commission;
9. Yearly insurance premium is Tk. 24,000 paid up-to 31st March of the following year;
10. Bad debts expense is to be increased to Tk. 9,000, and an allowance for bad debts expense of
5% is to be created on account receivable;
11. Petty expense includes office consumable of the cost of Tk. 5,000;
12. Capital of the company is consisted of 100,000 shares of Tk. 10 each.

Problem # 3

From the Trial Balance of Ankhi Ltd. and the additional information given prepare a Statement of
Comprehensive Income for the year ended on 31.12.2012 and a Statement of Financial Position as at that
date.

Debtors
Purchases of Goods
Opening Inventory
Carriage & Octroi Duty
Sales returns
Payroll & travel expense of salesmen
Labor
Payroll
Packing materials
Stationery & printing
Bonus & entertainment
Bad debt expense
Land & building
Motor vehicle
Patent (10 years)
Furniture
Share Call A/c
Income tax paid on source
Account receivable
Bank
Cash
Notes receivable
Discount allowed
Demurrage
Petty cash expense
Payroll paid in advance
Total

Ankhi Ltd.
Trial Balance
31.12.2013
Taka
Creditors
232,500 Capital
19,000 General Reserve
13,250 Employee Benevolent Fund
3,900 Account Payable
16,400 Notes Payable
10,000 Commission received
12,300 Purchases returns
9,450 Sale of goods
7,350 VAT Current A/c
9,650
1,050
87,500
37,500
15,000
30,000
2,500
2,000
34,000
14,100
49,000
17,250
3,250
2,350
2,150
4,000
635,450
Total

Taka
155,000
59,100
25,350
24,000
11,500
12,000
6,350
334,000
8,150

635,450

Additional information:
1. Closing inventory has been valued Tk. 25,000 at cost and market price Tk. 23,000;
2. Sales includes Tk. 20,000 being goods sent on Sale or Return Basis at a profit of 25% on cost,
confirmation of this sale has not yet been received;
3. Sales returns of Tk. 4,000 has not been recorded;
4. A note of Tk. 2,000 was discounted, which was dishonored after maturity, not recorded in the
books of accounts;
5. Allowance for bad debts expense to be created at 5%;
6. Furniture of the value of Tk. 20,000 was bought on 01.07.2013;
7. Rate of depreciation:
- land & building @ 5%,
- motor vehicle @ 20%,
- furniture @ 10% p.a.;
8. Outstanding labor Tk. 2,000 and commission pre-received tk. 3,000;
9. Motor vehicle sold at Tk. 12,500 (book value Tk. 20,000) included in sales;
10. Stock of packing materials Tk. 1,450;

11. Capital of the company is consisted of 50,000 equity shares of Tk. 10 each;
12. Assume anything where you think fit.
Problem # 4

Given below the Trial Balance of Ishtiaq & Co. Ltd. as at 31.12.2013:

Debtor
Insurance premium
Notes Receivable
Cash on hand
Machinery
Balance with bank
Account Receivable
Repair expenses
Labor expenses
12% Investments
Commission expenses
Returns
Advertisement expenses
Purchases
Bad debts expenses
Rent
Opening inventory
Furniture
Travelling expenses
Payroll expenses
Total

Ishtiaq & Co. Ltd.

Trial Balance
31.12.2013
Taka
Creditor
600 Account payable
14,250 Allowance for bad debts expense
900 Commission income
45,000 Sales
47,000 Returns
30,000 16% Loan
5,100 Capital
60,000
60,000
4,500
6,900
9,000
384,885
4,680
8,400
141,000
13,500
2,850
15,000
853,065
Total

Taka
56,445
6,000
6,975
540,645
3,000
60,000
180,000

853,065

Additional information:
(a) Closing inventory: cost price Tk. 180,000 and market price Tk. 187,500;
(b) Outstanding expenses: labor Tk. 6,000, payroll expenses of November and December, and interest
on loan for 6 months;
(c) Prepaid expenses: insurance expenses paid up-to 31st March, 2014;
(d) Income from investment is accrued for 9 months;
(e) Bad debts expenses is estimated to be Tk. 4,500 and allowance for bad debts expenses is 2%;
(f) Credit purchases of Tk. 7,500 is not recorded in books of accounts, though it has been included in
closing inventory;
(g) Goods sold for Tk. 25,000 not yet been delivered;
(h) It is the policy of the company to depreciate all non-current assets by 5% p.a. and to make a profit of
20% on all sales;
(i) Capital of the company: 50,000 shares of Tk. 10 each.
Required:
(a) Statement of Comprehensive Income for the year ended on 31.1202013, and
(b) Statement of Financial Position as at that date.

Problem # 5

The following is the Trial Balance of T Co. Ltd. as at 31.12.2013:

Debtor
Accumulated loss
VAT paid
Cash
Carriage inwards
Carriage outwards
Account Receivable
Duty
Labor expenses
12% Investments (01.07.2013)
General expenses
Returns
Advertisement expenses
Purchases
Rental expenses
Opening inventory
Furniture
Land and Building
Payroll expenses
Total

T Co. Ltd.
Trial Balance
31.12.2013
Taka
Creditor
20,000 Account payable
20,000 Allowance for bad debts expense
40,000 Investment income
10,000 Sales
8,000 Returns
86,000 Bank Overdraft
18,000 Capital (40,000 shares)
22,000
80,000
34,000
14,000
30,000
422,000
60,000
78,000
60,000
240,000
78,000
1,310,000
Total

Taka
100,000
6,000
4,000
742,000
6,000
52,000
400,000

1,310,000

Additional information:
(a) Closing inventor of Tk. 130,000 includes inventory of the value of Tk. 10,000 destroyed by fire;
(b) Opening inventory and closing inventory include consumables respectively Tk. 4,000 and Tk. 5,000,
consumables purchased during the year are Tk. 20,000;
(c) Labor expenses of Tk. 6,000 and VAT of Tk. 2000 remain outstanding whereas rent of Tk. 12,000 is
paid in advance;
(d) Payroll expenses include Tk. 8,000 given to an employee as loan;
(e) Of the account receivable Tk. 6,000 is irrecoverable, allowable allowance for bad debts expenses is
5%;
(f) Tk. 16,000 was hijacked from Cashier while he was going to deposit into bank;
(g) Non-current assets are subject to depreciation at 5% p.a.;
(h) Inventory worth Tk. 5,000 distributed among the customers free of cost;
(i) Sale without profit is Tk. 3,000;
(j) There is a claim against the business for Tk. 5,000, which is not acknowledged by the business yet.
Required:
(a) Statement of Comprehensive Income of T for the year ended on 31.1202013, and
(b) Statement of Financial Position as at that date.

Problem # 6

The following is the Trial Balance of M Company Limited as at 31.12.2013:

Debtor
Leasehold Property (10 years)
Returns
Labor
Coal and electricity
Payroll expenses
Rental expenses
Carriage on purchases
Carriage on sales
Repairs and renewals
Promotional expenses
Purchases
Insurance premium
15% investments (01.07.2013)
Goods sent on consignment
Machinery
Furniture
Sundry account payable
Interest on loan
Cash
Opening inventory
Total

M Company Limited
Trial Balance
31.12.2013
Taka
Creditor
96,000 Capital: fully paid shares
8,400 15% Loan (01.01.2013)
33,000 General Reserve
4,800 Account payable
25,200 Returns
24,000 Sales
6,000 Apprenticeship premium
9,000 Allowance for bad debts expense
3,600 Investment income
36,000 Discount on purchases
303,000 Bank Overdraft
4,200
144,000
9,600
180,000
30,000
132,000
7,200
3,000
51,000
1,110,000
Total

Taka
300,000
120,000
60,000
60,000
15,000
387,600
8,800
6,000
5,400
7,200
140,000

1,110,000

Additional information:
(a) The company has been registered with a capital of Tk. 1,000,000 of the shares of Tk. 10, of which
shares of Tk. 400,000 have been issued for public subscription.
(b) Closing inventory valued at Tk. 213,000.
(c) Labor expenses include Tk. 12,000 spent for installation of a machine. This machine has been
installed on 01.07.2013. Cost of machine is Tk. 30,000.
(d) Payroll expense and rental expense are outstanding Tk. 4,800 and Tk. 2,400 respectively whereas
insurance premium of Tk. 1,200 is outstanding.
(e) Apprenticeship premium is for two years.
(f) Inventory worth Tk. 6,000 included in the purchases was used for pacing purposes.
(g) All the goods sent on consignment have been sold for Tk. 15,000. The agent is entitled to
commission at 10%.
(h) Sales include Tk. 15,000 for goods sent on Sale or Return Basis. Confirmation of sale has not been
received yet. Invoice price of all inventory include 20% profit on cost.
(i) Allowance for Bad Debts Expense is to be reduced to Tk. 4,500.
(j) Depreciation to be charged on furniture @ 10% and on machinery @ 5% p.a.
(k) Manager is entitled to a commission @ 2% after charging his commission.
(l) It is the practice of the company to transfer 10% of profit after tax , if any, to General Reserve.
(m) Assume tax rate @ 40%.
Required:

(a) Statement of Comprehensive Income of M Co. Ltd. for the year ended on 31.1202013, and
(b) Statement of Financial Position as at that date.
Problem # 7

From the following is the Trial Balance of P Co. Ltd. as at 31.12.2013.

Debtor
Furniture & Fittings
Opening inventory
Labor expenses
Carriage on purchases
Duty on purchases
Inventory purchases
Sales returns
Payroll expenses
Rental expenses
Interest on bank overdraft
Insurance premium (up-to 31.03.2014)
Bad debts expense
16% Investments
Account Receivable
Note Receivable
Cash balance
Machinery
Total

P Co. Ltd.
Trial Balance
31.12.2013
Taka
Creditor
48,000 Capital (Tk. 10 per share)
44,000 Sales
92,800 Purchases returns
6,400 Allowance for bad debts expense
4,000 Bank Overdraft
284,000 Account Payable
6,400 Income from Sub-let
27,200 Note Payable
9,600 15% Loan
400
3,200
2,400
160,000
272,000
40,000
400
400,000
1,400,800
Total

Taka
240,000
470,400
4,000
6,400
175,000
300,000
13,000
32,000
160,000

1,400,800

Adjustments:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)

Closing inventory Tk. 100,000.

Monthly payroll expenses and rental expenses are Tk. 2,400 and 600 respectively.
6 months income on investment is accrued and outstanding.
Allowance for bad debts expense is to be increased by Tk. 4,000.
Sale of old furniture made on 01.07.2013 for Tk. 2,000 is included in sales. Book value of the
furniture is Tk. 2,000.
A new machine costing Tk. 160,000 was installed on 1 st July, 2013. Installation charges of Tk.
40,000 are included in labor expenses.
Tk. 200,000 was taken by an employee as loan, of which Tk. 40,000 repaid without interest on 1 st
July, 2013.
Tk. 1,000 received in advance from sub-let.
Depreciation to be charged on Furniture and Fittings and machinery @ 10% p.a.
Manager is entitled to commission of 5% on net profit before tax.
Assume tax rate 40%.

Required:
(a) Statement of Comprehensive Income for the year ended on 31.12.2013, and
(b) Statement of Financial Position as at that date.

Problem # 8
From the following Trial Balance of M Manufacturing Co Ltd. as at 31.12.2013 and additional
information given below prepare a Statement of Comprehensive Income for the year ended on 31.12.2013
and a Statement of Financial Position as on that date.
M Manufacturing Co Ltd.
Trial Balance
31.12.2013
Debtor
Taka
Creditor
Taka
Production overhead
320,000 Sales revenue
10,800,000
Inventory carrying
43,000 Commission income
60,000
Import duty and Dock charge
147,000 Bank Overdraft
460,000
Legal expenses
75,000 Employees Benevolent Fund
960,000
Cash on hand
115,000 VAT received
1,620,000
Income tax paid in advance
160,000 Dividend received
40,000
VAT paid
1,030,000 Account Payable
1,100,000
Office appliances
500,000 General Reserve
1,800,000
Machinery
1,950,000 Capital (Tk. 10 per share)
4,960,000
Travelling and Communication exp.
95,000
Carriage out
140,000
Payroll exp. & commission to Salesmen
265,000
Payroll expenses
360,000
General expenses
120,000
Packing materials
250,000
Purchase of shares
400,000
Accounts Receivable
620,000
Lease Property (20 years)
400,000
Factory Building
1,750,000
Land & Building
2,200,000
Land development expenses
800,000
Repairs & White wash of building
60,000
Labor expenses
1,080,000
Payroll- Engineers & Factory Managers 12,000,000
Payroll- Foremen
480,000
Fuel & Power
720,000
Raw Materials Purchased
5,500,000
Opening Inventory:
Raw Material
200,000
Finished Products
800,000 1,000,00
0
Total
21,800,000
Total
21,800,000
Additional information:
(a) Closing inventory has been valued: Raw materials Tk. 150,000 and Finished product Tk. 900,000.
After this valuation inventory valued Tk. 200,000 was destroyed by fire. There was no insurance for
the closing inventory.
(a) On 01.07.2013 a machine costing Tk. 1,000,000 was installed. Installation cost was Tk. 100,000.
This cost is included in labor expenses.
(b) Interest on bank overdraft Tk. 120,000 due and outstanding whereas commission of Tk. 10,000
received in advance.
(c) Closing stock of packing materials Tk. 20,000.
(d) Inventory worth Tk. 20,000 has been returned from a customer due to low quality. It has not been
recorded in the books of accounts.
(e) General Manager is to get commission @5%.
(f) Rate of depreciation:

Problem # 9

Land & Building @ 5%,

Office Appliances @ 25%,
Factory Building @ 20%,
Machinery@ 10%.

From the following Trial Balance of ZEN Manufacturing Co. Ltd. as at 31.12.2013 and additional
information given below prepare a Statement of Comprehensive Income for the year ended on 31.12.2013
and a Statement of Financial Position as on that date. In this respect you can assume anything.
ZEN Manufacturing Co. Ltd.
Trial Balance
31.12.2013
Debtor
Opening inventory
Procurement of inventory
Production labor expenses
Rental expenses- factory
Repair expenses- factory
Coal, gas and fuel expenses
Carrying cost and Duty
Rent and Rates
Carrying cost- Sales
Payroll expenses- Drawing Office
Payroll expenses- Counting Office
Production cost- Miscellaneous
Administration expenses
Commission- Sales
Insurance expenses (2/3factory)
Royalty
Packing expenses
Machinery & equipment
Trade Marks
Land & Buildings
15% Post Office Savings (01.04.2013)
Fixed Deposits
Loose Tools
Furniture
Account Receivable
Cash on hand
Bank balance
Calls in Arrear A/c- equity share capital
VAT Current A/c
Total

Taka
300
1,808
416
108
48
128
72
48
60
56
288
328
120
144
36
168
67
760
840
640
80
240
128
208
80
180
112
81
281
7,837

(Figures in taka column are in 0,000)

Creditor
Taka
Equity Share Capital
2,800
Preference Share Capital (01.07.2013)
400
Account Payable
106
Sales
4,472
Sale of old furniture (book value 20,000)
14
Interest on Post Office Savings
5
Interest on Fixed Deposits
19
Interest on Drawings
5
Miscellaneous receipts
16

Total

7,837

Additional information:
(a) Closing inventory is valued at Tk. 3,200,000.
(b) A fire broke in the godown of the company on 21.12.2013 which destroyed goods of the value of
Tk. 400,000. Insurance Company agreed to pay up-to 80% of the loss.
(c) Factory rent for 9 months.
(d) Loose tools values at the end of the year Tk. 1,000,000.
(e) 3 months interest of Post Office Savings is still due and outstanding.
(f) Installation cost of Machine Tk. 80,000 is included in production labor expenses.
(g) 10% interest is to be charged on capital.
(h) Purchase of furniture Tk. 200,000 is included in procurement of goods.

(i) Inventory of the value of Tk. 10,000 sold to Mr. X on credit. In the mean time Mr. X became
insolvent.
(j) Rate of depreciation on the closing balances: machinery & equipment @ 10%, land & Buildings @
5%, furniture @ 20%.
(k) 10% of the net profit after tax is to be transferred to General Reserve.
Problem # 10

The following is the Trial Balance of R R Co. Ltd. as at 31.12.2013:

Debtors
Goodwill
Patent
Machinery
Opening inventory:
Raw Material
10,000
Finished Products
20,000
Land & Building (2/3 factory)
Furniture & Fittings
Motor Vehicles
Direct Labor
Carriage
Factory expenses
Goods destroyed by fire
Purchase of Raw Materials
Payroll expenses
Office expenses
Insurance expenses (2:3 factory)
Advertisements
Bad Debts expenses
Accounts Receivable
Audit Fee
Note Receivable
Cash on hand
Mudaraba Bond
Total

R R Co. Ltd.
Trial Balance
31.12.2013
Taka
Creditors
80,000 Sales
30,000 Dividend from Mudaraba Bond
180,000 Capital
150,000 VAT Current A/c
Machine (01.07.2013 book value Tk.
30,000 8,000)
90,000 Allowance for Bad Debts Expense
36,000 Account Payable
50,000
90,000
10,000
60,000
16,000
260,000
50,000
8,000
18,000
12,000
2,000
96,000
8,000
36,000
8,400
40,000
1,360,400
Total

Taka
624,400
4,000
610,000
52,000
6,000
4,000
60,000

1360,400

Additional information:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Closing inventory: Raw Materials Tk. 14,000, Finished Products Tk. 24,000.
Insurance Company agreed to compensate the half of the loss for Goods destroyed by fire.
Increase the Allowance for Bad Debts Expense by Tk. 3,000
Create provision @ 2% on Account Receivable and Account Payable.
Goods of Tk. 4,000 distributed free of cost not been recorded in the books of accounts.
Depreciation to be charged on non-current assets at 5% p.a.;
75% of the advertisement expenses to be deferred;
The Directors decide to create of reserve fund by transferring Tk. 10,000
Tax rate to be assumed at 40%.

Required:
(a) Statement of Comprehensive Income for the year ended on 31.12.2013, and
(b) The Statement of Financial Position as at that date.