Illustration 1 From the following Trial balance prepare final accounts for the year ended 31st March

2010 for Naresh &Co. Particulars Capital & Drawings Purchase & Sales Goods Return Building Furniture Salary Wages Salary Payable Commission Cash Bank Creditors & Debtors Opening Stock of goods Discount Bills Payable Bad Debt Advance Wages LF No. Debit In Rs. 3,500 65,800 1,200 20,000 11,000 3,000 1,200 700 1,100 9,000 8,000 600 400 100 Credit In Rs 16,000 95,200 1,800

250 450 9,800 300 1,800

On 31st March 2010 Closing Stock is Rs. 19,200. (Ans: G.P. Rs.40,000, N.P. Rs.36,750)

Illustration 2 From the following transaction prepare final accounts for P. H. Traders for the year ended 31st march 2009 Trial balance as on 31-3-2009 Particulars Drawing Stock on 1-4-2008 Purchase Sales Return Bad Debt Discount Wages Postal Charges Printing & stationary Office rent Cash Bills Carriage inwards Carriage Outwards Rent & Taxes Furniture Vehicle Insurance Premium Debtors Railway Fare(for Goods) Salary Total Adjustments: 1. Closing Stock Rs. 65750 2. Salary payableRs. 1300 3. Advance insurance premium paid is Rs. 150 4. Commission receivable Rs. 200 5. Bad Debt Rs. 1000 occurred 6. Calculate depreciation 5 %on furniture & 10 % on vehicle Debit Amount Rs. 5,000 73,000 61,600 950 3,950 250 1,000 2,950 5,000 6,000 1,500 2,700 350 400 7,150 3,800 12,500 550 19,000 500 3,500 2,11,650 Particulars Capital Sales Purchase Return Discount Bank Bills 18% Loan from Mr.X Creditors Credit Amount Rs. 50,000 1,30,000 1,800 500 1,000 3,350 3,000 22,000

Total

2,11,650

7. Calculate interest on Capital as 10 % and provide interest on drawing Rs. 250 ( Ans: G.P. Rs.60,150, N.P. RS.22,760) Illustration 3. From the following balances derived from the Ledger of Harikrishna as on 31/03/93, prepare Trading account, Profit & Loss account for the year ended on 31/03/2009 and the Balance sheet as on date: Particulars Capital Opening Stock Sales Salary (Upto 28/2/2009) Debtors Carriage Outward Instruments (Tools) Bad debt returned Purchases Building Postage expenses Misc. expenses Drawings Discount received by the customers Insurance Premium (For the year ending on 30/6/2009) Adjustments: 1. The original cost of closing stock is Rs.85,000 but its market price is Rs.83,160. The stock is valued at the market price or at cost whichever is less. 2. Mahesh has purchased the goods of Rs.400 and it is returned on 20/12/2008, but not recorded in the books of accounts. 3. Depreciation is to be calculated at 10% on instruments and furniture. 4. The court fees of Rs.5,000 while purchasing the building is debited to misc. expenses. Amount Rs. 2,00,000 60,000 4,00,000 16,500 40,400 1,800 24,500 900 3,00,000 1,23,000 1,800 6,400 12,000 2,500 2,400 Particulars 15% Mortgage Loan (credit) (From 1/10/2008) Wages Goods returned by customers Creditors Rent Octroi Furniture Cash and Bank balance Interest on mortgage Loan Depreciation on Building Goods returned to the traders Outstanding Wages Bad debts Bad debts Reserve Furniture Sales A/C Amount Rs. 18,000 30,000 10,000 34,000 9,000 800 6,600 9,000 800 2,000 5,000 1,000 1,000 1,100 500

5. Rs.1,000 bad debts are to be written off and bad debts reserve on debtors is to be maintained @5%. 6. Shri Harikrishna has brought his personal furniture worth Rs4000 into the business as on 1/10/2008. It is not recorded in the books of account. 7. Interest on capital is to be calculated at 5%. 8. On 1/04/2008, one instrument with the original price of Rs.1200 was sold at Rs.1000/-. This amount is included in the sales. The price of the sold furniture is Rs.600 in the books.

(Answer: Gross Profit: Rs.85,960, Net Profit: Rs.30,710, Balance Sheet: 2,87,860)

Illustration no. 4 Prepare the final accounts for the year 2009-10 from the following trial balance of P.H. Mehta, after taking into account the adjustments. Debit Balance Drawings account Adjusted purchases Salary Carriage on purchases Carriage on sales Electricity expenses Insurance and taxes Building Furniture - Fittings Misc. Debtors Petty Cash Amount Rs. 2000 6,99,200 1,200 400 500 300 400 30,000 6,000 8,000 50 Credit Balance Capital account Sales Discount Creditors Amount Rs. 50,000 7,40,000 500 20,500

Bank Balance Closing Stock

1,700 61,250 8,11,000 8,11,000

Adjustments: 1) Rs.500 was debited to drawings account, it should have been debited to furniture account. 2) Rs.1,000 is debited to purchases, which is purchase materials for building. 3) Rs.500 was brought into the business by the proprietor, which is credited to sales account. 4) Depreciation should be calculated Rs.750 on building and 6% on furniture. 5) Write off bad debts RS.100 and bad debts reserve is to be maintained @ 5% on debtors. 6) Outstanding salary Rs.200, prepaid taxes Rs.60, Prepaid insurance Rs.100 and carriage inward to be paid on purchases is Rs.100. (Ans. G.P. 40,800 N.P. 1,110 B/S 1, 07,055) Illustration no.5 Prepare the trading account and profit and loss account for the year ended on 31/03/2011 and the balance sheet as on that date of Shri Mohanlal from the following trial balance and the adjustments. Name of the Accounts Debit Balance Rs. Stock of Goods (01/04/2010) Stock of Goods (31/03/2011) Bank and Cash Creditors and Debtors 12,000 14,000 1,000 24,000 8,000 14,000 Credit Balance Rs.

Octroi Trade expenses Capital and Drawings Goodwill Furniture and Fittings Stocks of packing materials (31/03/2011) Goods given as sample Purchases and Sales Advertisement expenses

5,000 7,000 4,000 15,000 17,000 2,000 1,000 41,000 1,000 1,43,000 1,43,000 1,00,000 20,000

Adjustments: 1) Personal expense of Rs.100 is debited in trading account by mistake. 2) The total of sales book for 31st March, 2011 is by mistake overcast by Rs.1000. 3) During the current accounting year one debtor Ashokbhai for Rs.4000 included in the debtors was declared insolvent and a dividend @ 25 paise per rupee from his assets is declared finally but no entry is passed for that. It is decided to maintain reserve for doubtful debts at 5% on debtors. 4) Fittings of the book value of Rs.2,000 is discarded as useless for which no entry is passed in the books. 5) The court has sanctioned a claim of Rs.2000 to a customer for non-fulfillment of a contract to supply the goods, 6) Outstanding octroi Rs.1000 are debited to octroi account, but outstanding octroi account is not written in the trial balance. (Ans. G..P.: 42,000 N.P.: 26,100 B/S 67,000)