Final Accounts
Question 1:
State with reasons, whether the following statements are Ture or False:
(i) If Closing Stock appears in the Trial Balance then it does not enter in Trading Account. It is shown only in the Balance Sheet. [June 2024 (2 marks)]
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Practical Numericals
Quesiton 1:
From the following Trial Balance, prepare Final Accounts of Balchand for the year ending 31st March, 2025:
| Particulars | Dr (₹) | Cr (₹) |
| Salary | 5,400 | |
| Insurance | 2,500 | |
| Cash | 400 | |
| Purchases | 84,170 | |
| Rent | 3,150 | |
| Drawings | 2,100 | |
| Bills Payable | 3,900 | |
| Book Debts | 30,080 | |
| Opening Stock | 29,500 | |
| Bank Overdraft | 9,700 | |
| Carriage | 2,200 | |
| Creditors | 4,200 | |
| Trade Expenses | 4,900 | |
| Sales Returns | 4,700 | |
| Machinery | 20,000 | |
| Wages | 45,000 | |
| Sales | 1,47,200 | |
| Purchase Returns | 3,900 | |
| Capital | 58,900 |
Closing Stock ₹ 36,200.
[Answer: Gross Profit – ₹ 21,730; Net Profit – ₹ 5,780; B/S – 86,680]
Question 2:
From the following Trial Balance of Mr. Anand, prepare Trading and Profit & Loss A/c for the year ended 31st March, 2025 and draw the Balance Sheet as on that date:
| Particulars | Dr. (₹) | Cr. (₹) |
| Anand’s Capital | 60,000 | |
| Sundry Debtors | 30,660 | |
| Sundry Creditors | 24,400 | |
| Stock as on 1.4.2024 | 70,500 | |
| Purchases | 64,300 | |
| Return Outward | 1,200 | |
| Sales | 1,31,500 | |
| Return Inwards | 3,200 | |
| Salaries | 15,000 | |
| Office Expenses | 2,800 | |
| Bad Debts | 6,500 | |
| Rent & Taxes | 7,310 | |
| General Expenses | 1,350 | |
| Discount | 500 | |
| Carriage Outward | 5,120 | |
| Furniture | 6,300 | |
| Insurance | 900 | |
| Cash in hand | 600 | |
| Wages | 3,000 | |
| 2,17,600 | 2,17,600 |
Adjustments:
(i) Closing Stock ₹ 25,000.
(ii) Depreciation Furniture @ 10%.
(iii) Outstanding Salary ₹ 2,500.
(iv) Prepaid Insurance ₹ 100.
(v) Allow 5% p.a. Interest on Capital.
Question 3: [December 2023 (15 marks)]
The following is the schedule of balances as on 31.03.23 extracted from the books of M/s RM & Co.
Prepare Trading and Profit & Loss Account for the year ended 31st March 2023 and the Balance Sheet as at that date after making provision for the following:
(i) Value of stock as on 31.03.2023 is ₹ 4,10,000. This includes goods returned by customers on 31st March, 2023 to the value of ₹ 22,000 for which no entry has been passed in the books.
(ii) Purchases included furniture purchased on 01.10.2022 for ₹ 30,000.
(iii) Depreciate:
(1) Building by 5%.
(2) Furniture and Fixtures by 10%.
(3) Vehicles by 20%
(iv) Sundry debtors include ₹ 35,000 due from Goku and Sundry Creditors include ₹ 25,000 due to him.
(v) Provision for bad debts is to be maintained at 4% of Sundry Debtors.
(vi) Insurance premium includes ₹ 42,000 paid towards proprietor’s life insurance policy and the balance of the insurance charges cover the period from 1.05.2022 to 30.4.2023.
[Answer: Gross Profit – 8,66,000; Net Profit – 1,33,055; B/S – 30,79,055]
Question 4:
From the following schedule of balances extracted from the books of Mr. Piyush, prepare Trading and Profit and Loss Account for the year ended 31st March, 2024 and the Balance Sheet as on that date after making the necessary adjustments:
| Particulars | Dr (₹) | Cr (₹) |
| Capital Account | 8,85,000 | |
| Stock on 1.4.2023 | 3,86000 | |
| Cash in hand | 18,500 | |
| Cash in Bank | 73,500 | |
| Investment (at 9%) as on 1.4.2023 | 50,000 | |
| Deposits (at 10%) as on 1.4.2023 | 3,00,000 | |
| Drawings | 78,000 | |
| Purchases | 24,95,000 | |
| Sales | 29,86,000 | |
| Return Inwards | 1,10,000 | |
| Return Outwards | 1,38,000 | |
| Carriage inwards | 1,26,000 | |
| Rent | 66,000 | |
| Salaries | 1,15,000 | |
| Sundry Debtors | 2,35,000 | |
| Sundry Creditors | 1,37,500 | |
| Sales | 1,47,200 | |
| Bank Loan (at 12%) as on 1.10.2023 | 2,00,000 | |
| Furniture as on 1.4.2023 | 25,000 | |
| Interest paid | 12,500 | |
| Interest received | 28,500 | |
| Advertisement | 40,300 | |
| Printing & Stationery | 32,200 | |
| Electricity Charges | 57,700 | |
| Discount allowed | 55,200 | |
| Discount received | 24,600 | |
| Bad debts | 18,500 | |
| General expenses | 36,800 | |
| Motor Car Expenses | 8,500 | |
| Insurance Premium | 30,000 | |
| Travelling Expenses | 21,800 | |
| Postage & Courier | 8,100 | |
| Total | 43,99,600 | 43,99,600 |
Adjustments:
(i) The value of stock as on 31st March, 2024 is 7,65,000. This includes goods returned by customers on 31st March, 2024 to the value of 25,000 for which no entry has been passed in the books.
(ii) Purchases include one furniture item purchased on 1st January, 2024 for
10,000. Depreciation @ 10% p.a. is to be provided on furniture.
(iii) One months’ rent is outstanding and 12,000 is payable towards salary.
(iv) Interest paid includes 9,000 paid against Bank loan and Interest received pertains to Investments and Deposits.
(v) Provide for interest payable on Bank Loan and interest receivable on investments and deposits.
(vi) Make provision for doubtful debts at 5% on the balance under sundry debtors.
(vii) Insurance premium includes 18,000 paid towards proprietor’s life insurance policy.
[Answer: G/P – ₹ 7,57,000; N/P – ₹ 2,97,250; B/S – ₹ 14,44,750]
