PROBLEMS ON FINAL ACCOUNTS: 1) Prepare Trading and Profit & Loss Account for the year ended 31st

march 2008 and the Balance sheet as on that date from the Trial Balance of Mr.Rama Rao. Debit Balance Drawings Goodwill Land and Buildings Plant and Machinery Loose Tools Bills Receivable Stock 1st April 2007 Purchases Wages Carriage Outwards Carriage Inwards Coal Salaries Rent Rates and Taxes Discount Cash at bank Cash in hand Sundry Debtors Repairs Printing and stationary Bad Debts Advertisement Sales Returns Furniture General Expenses Amount 45,000 80,000 60,000 40,000 3,000 3,000 40,000 2,51,000 20,000 500 1,000 5,800 35,000 2,800 1,500 25,000 400 45,000 1,800 500 1,200 3,500 2,000 11,200 5,250 6,84,450 Adjustments 1. Closing stock Rs.35000. 2. Depreciate Plant & Machinery, Tools & Furniture by 10% and Land & Buildings by 5% 3. Provide Rs.1,500 for wages. 4. Advertisements Prepaid are Rs.500. 5. Provide 5% on Debtors against Bad Debts and 2% against discount. Credit Balance Capital Bills Payable Creditors Purchase Returns Sales Amount 1,60,000 33,800 70,000 2,650 4,18,000

6,84,450

2) On 31.12.2004 the following Trial Balance was prepared from the books of Mr. Raju. Debit Balance Sundry Debtors Bills Receivable Plant & Machinery Purchases Freehold premises Salaries Wages Postage & stationery Carriage in Carriage out Bad debts General charges Cash at bank Cash in hand Closing stock Vehicles Amount 50,600 5,000 75,000 90,000 50,000 11,000 14,400 750 750 1,000 950 1,500 5,300 800 29,000 1,650 3,37,700 Adjustments 1. Raju gets a salary of Rs.9,000 per annum. 2. Allow 5% interest on Capital. 3. Bad Debts provision to be adjusted to 2 % on sundry debtors. 4. 2 % of the net profit to be credited to Reserve. 5. It was discovered in January 2004 that stock sheets as on 31.12.2003 were overcast by Rs.1,000. You are required to prepare Trading and Profit & Loss A/c for the year ended 31 st Dec, 2004 and a Balance Sheet as at that date. Credit Balance Sundry Creditors Capital Bad debts provisions Bills payable Reserve Sales Amount 10,000 70,000 1,000 5,000 20,000 2,31,700

3,37,700

3. The trial balance of Mr.Chakravarty as on 31.12.2004 was as follows: Debit Balance Purchases Debtors Opening stock Wages Salaries Furniture Postage Power and Fuel Trade expenses Bad debts Loan at 10% to Amar Cash in hand and Bank Drawings Amount 1,62,505 50,200 26,725 23,137 5,575 7,250 4,226 1,350 5,831 525 3,000 10,000 4,452 3,04,776 Credit Balance Sales Reserve for DD Creditors Bills payable Outstanding wages Trade expenses accrued but not paid Capital Amount 2,52,600 5,200 30,326 3,950 2,000 700 10,000

3,04,776

Prepare trading a/c and P/L a/c for the year ended 31.12.2004 and a Balance sheet as on that date taking into account the following information: 1. Depreciation on furniture is to be charged at 10% pa. 2. Debtors include an item of Rs.500 due from a customer who has become insolvent (Nothing shall be received from his estate) 3. Reserve for doubtful debts to be maintained at 5% on debtors. 4. Goods valued at Rs.1,500 has been destroyed by fire and the insurance company has admitted the claim for Rs.1,000. 5. Stock as on 31.12.2004 was 12,250.

4. From the following Trial balance of Mr.Sangeeth prepare Trading, P/L a/c and Balance sheet. The following trial balance was extracted from the books of Mr.Sangeeth as on 31.12.2004. PARTICULARS Capital Loans Sales Accounts payable Bills payable Purchase returns Dividend received Plant & Machinery Buildings Receivables Purchases Discount allowed Wages Salaries Traveling expenses Freight Insurance Commission paid Cash in hand Bank Repairs Interest on loan Opening inventory DEBIT CREDIT 25,000 5,000 35,000 4,000 5,000 2,000 3,000 13,000 17,000 9,650 18,000 1,200 7,000 3,000 750 200 300 100 100 1,600 500 600 6,000 79,000 Additional data: 1. Closing Inventory Rs.8,000 2. Depreciation on Plant and Machinery at 15% and on Building at 10%. 3. Provision for doubtful receivable Rs.500 4. Insurance prepaid Rs.50 5. Outstanding rent Rs.100 79,000

5. From the following trial balance of Miss.Rajeshwari, prepare trading and profit and loss a/c for the year ended 31.12.2004 and a Balance sheet as on that date: Debit Balance Opening stock Purchases Sales return Carriage inwards Carriage outwards Wages Salaries Plant and machinery Furniture Sundry Debtors Bills receivable Cash in hand Travelling expenses Lighting (Factory) Rent and taxes General expenses Insurance Drawings Amount 20,000 80,000 6,000 3,600 800 42,000 27,500 90,000 8,000 52,000 2,500 6,300 3,700 1,400 7,200 10,500 1,500 18,000 3,81,000 Credit Balance Sales Purchase returns Discount Sundry creditors Bills payable Capital Amount 2,70,000 4,000 5,200 25,000 1,800 75,000

3,81,000

Adjustments: 1. Stock on 31.12.2004 was valued at Rs.24,000 (Market value Rs.30,000) 2. Wages outstanding for December 2004 amounted to Rs.3,000 3. Salaries outstanding for December 2004 amounted to Rs.2,500 4. Prepaid insurance amounted to Rs.300 5. Provide depreciation on Plant and machinery at 5% and on furniture at 10%.

6. Following is the trial balance of Mr.A as at 31.12.2008: Debit Balance Mr.As current a/c Purchases Salaries Carriage on purchases Carriage on sales Lighting Rates and insurance Building Furniture Sundry Debtors Cash in hand Cash at bank Stock on 1.1.2008 Amount 1,500 6,99,20 0 4,200 400 500 300 400 27,000 6,000 8,000 250 1,500 61,250 8,10,500 Credit Balance Capital Loan from Karan @9% (on 1.4.08) Sales Discount Sundry creditors Amount 50,000 20,000 7,20,000 500 20,000

8,10,500

Prepare trading and P/L a/c for the year ended 31.12.2008 and a balance sheet as at that date after taking into account the following adjustments: 1. Stock on 31.12.2008 is Rs65,000. 2. Rates have been prepaid to the extent of Rs.175 3. Bad debts totaling to Rs.500 is to be written off. 4. A provision for doubtful debts at 5% on debtors is necessary. 5. Depreciate buildings @10% and furniture @5%. 6. The manager is entitled to a commission of 5% of net profits after charging such commission.

7. The Following is the trial balance of Mr.Rajath as on 31.12.2004. PARTICULARS DEBIT CREDIT Capital 12,500 Building 15,000 Furniture 1,320 Scooter 2,000 Returns 1,150 800 Opening stock 4,000 Purchases and sales 16,900 28,020 Bad debts 150 Carriage inwards 350 General expenses 600 Bad debts provisions 350 Bank Loan 2,500 Interest on Bank loan 150 Commission 450 Insurance and taxes 1,000 Scooter expenses 1,300 Salaries 2,200 Cash in hand 1,000 Debtors and Creditors 1,500 4,000 48,620 48,620

Prepare final accounts for the year ended 31.12.2004 after taking into account the following information: 1. Closing stock was valued at Rs.2,170. 2. Commission includes Rs.150 being commission received in advance. 3. Salaries have been paid for 10 months. 4. Bank loan has been taken at 12%pa interest. 5. Depreciate building by 5% and scooter by 10%. 6. Write off Rs.100 as further bad debts and maintain bad debts provision at 5% on debtors. 7. Scooter is used for the business as well as for private purposes equally.

8. From the following trial balance prepare trading and profit and loss a/c and balance sheet as on 31.12.2004. PARTICULARS DEBIT CREDIT Capital 5,000 Cash in hand 750 Bank Overdraft @2% 1,000 Purchases and sales 6,000 7,500 Returns 500 1,000 Establishment charges 1,250 Taxes and insurance 250 Bad debts reserve 500 Bad debts 250 Debtors and Creditors 2,500 925 Commission 250 Investments 2,000 Opening stock 1,500 Drawings 700 Furniture 300 BR and BP 1,500 1,250 Collected sales tax 75 17,500 17,500

Adjustments: 1. Salary Rs.100 and taxes Rs.250 are outstanding. 2. Insurance Rs.50 prepaid. 3. Commission received in advance Rs.100. 4. Interest accrued on investment Rs.100 5. Bad debts Rs.500 6. Depreciate furniture by 10%. 7. Closing stock was valued at Rs.2250. 8. A fire occurred on 25th December 2004, in the godown and stock value of Rs.750 was destroyed. It was fully insured and the insurance co admitted the claim in full.

9. From the following information prepare trading and P/L a/c for the year ended 2004 and balance sheet as on 31.12.2004: PARTICULARS DEBIT CREDIT Drawings 4,500 Purchases and Sales 20,000 30,500 Adjustments: Return inwards 1,500 1. Closing stock was valued Opening stock 8,000 at Rs.7,000. Salary 4,200 2. Insurance was prepaid to Wages 1,200 the extent of Rs50. Rent 350 3. Outstanding salaries Bad debts 400 Rs.250 and wages Rs.150. Discount 700 1,900 4. Make provision for further Debtors and Creditors 14,000 10,000 bad debts Rs.500 and for Cash in hand 260 doubtful debts @ 5%. Cash at Bank 5,940 5. Calculate interest on Insurance 400 capital @ 5%. Trade expenses 300 6. Depreciate machinery by Printing 150 5% and furniture by 10%. Furniture 2,000 7. Provide for interest on Machinery 5,000 drawings Rs.200. Capital 24,000 8. Provide for discount on Bills payable 2,500 Creditors @ 1%. 68,900 68,900

PARTICULARS Capital Drawings Buildings Furniture and fittings Motor Van Loan from Hari @12% interest Interest paid on above Sales Purchases Stock as at 1.4.2004. Stock as at 31.3.2005. Establishment expenses Freight inwards Freight outwards Commission received Sundry Debtors Bank balance Sundry Creditors

DEBIT 15,000 7,500 25,000 15,000 450

CREDIT 1,00,000 18,000

1,00,000 75,000 25,000 32,000 15,000 2,000 1,000 7,500 28,100 20,500 9 2,28,55 0 10,000 2,68,500

10. The accountant of M/S Kasturi agencies extracted the following trial balance as on March 31,2005:

The accountant located the following errors but was unable to proceed further any more: a) A totalling error in bank column of payment side of cash book whereby the column was under totaled by Rs.500 b) Interest on loan paid for the quarter ending December 31,2004, Rs.450 was omitted to be posted in the ledger. There was no further payment of interest. c) You are required to set right the trial balance and to prepare the trading and profit and loss account for the year ended March 31,2005 and the balance sheet as at that date, after carrying out the following: 1. Depreciation is to be provided on the asset as follows: Buildings @ 2.5% pa. Furniture and fittings @ 10% pa. Motor van @ 10% pa. 2. Balance of interest due on the loan is also to be provided for.

11. The following is the trial balance of Detergent Company Ltd, as on 31.3.2005. The company has 20,000 shares of Rs.100each as registered capital.

10

PARTICULARS Share Capital (3000 shares of Rs.100each) Calls in arrears Reserve fund Buildings Fixed deposits Wages Machinery Furniture Purchases and Sales Salary Debtors and Creditors BR and BP Directors fees Returns Freight Manufacturing expenses Opening stock Interim dividend Audit fees Profit and loss a/c

DEBIT 16000 180000 30000 89000 80000 210000 60000 220000 61000 20000 15000 10000 5000 65000 25000 15000

CREDIT

11

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