FINANCIAL ACCOUNTING

MODULE 3 – FINAL ACCOUNTS

WORKSHEET
1. Calculate the Gross Profit from the following data for the year ended
31st March, 20X1.

Rs. Rs.
Opening Inventory 40,000 Purchases Return 12,000
Purchases 2,00,000 Sales Return 20,000
Sales 5,00,000 Carriage on purchases 8,000
Freight and Octroi 6,500 Carriage on sales 10,000
Wages 30,000 Factory Rent 12,000
Factory Lighting 10,800 Office Rent 7,500
Coal, Gas and Water 2,200 Import Duty 32,000
Closing Stock is valued at Rs. 60,000.

2. From the following information, find the Cost of goods sold and Gross
Profit for the year ended 31st March, 20X1.

Rs. Rs.
Adjusted Purchases 24,00,00 Office Rent 18,000
0
Freight and Carriage 20,000 Trade Expenses 10,000
inwards
Freight and carriage 15,000 Sales 30,00,00
outwards 0
Wages 1,68,000 Closing Inventory 1,50,000
Octroi charges 2,000 Fuel and power 30,000

3. From the following particulars, prepare a Statement of Profit and Loss

for the year ending 31st March, 20X1:

Rs. Rs.
Opening Inventory 2,00,000 Commission paid 2,400
Purchases 19,00,00 Commission Received 6,000
0
Sales 25,00,00 Travelling Expenses 4,800
0
Purchases Return 70,000 Office Expenses 3,500
Sales Return 1,00,000 Interest on Long term 22,000
loans
Wages 80,000 Dividend on 2,800
Investments
Advertising 12,000 Printing and stationery 3,600

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 Salaries 1,78,000 Loss on sale of 35,000
Machinery
Rent and Taxes 62,000 Carriage outwards 1,400
Lighting 15,000 Loss by theft 25,100
Gain on sale of 50,000
building
Closing inventory was valued at Rs. 2,50,000.

4. From the following particulars, prepare a Statement of Profit and Loss

for the year ending 31st March, 20X1:

Debit Items Rs. Credit Items Rs.

Purchases 60,000 Capital 1,13,075
Sales Returns 1,500 Sales 1,27,000
Plant and machinery 90,000 Purchases Return 1,275
Opening Inventory 40,000 Discount Received 800
Discount allowed 350 Sundry Creditors 20,000
Bank charges 100 Bills payable 5,000
Sundry Debtors 45,000
Salaries 7,000
Wages 10,000
Freight inwards 1,000
Freight outwards 1,200
Rent, rates and taxes 2,000
Advertisements 2,000
Cash at Bank 7,000

Total 2,67,150 2,67,150

Closing inventory was valued at Rs. 35,000.

5. From the following balances of Sreeram, prepare a Balance Sheet as at

31st March, 20X1.

Particulars Debit Credit

Plant and Machinery 8,00,000
Land and Building 6,00,000
Furniture 1,50,000
Cash in hand 20,000
Bank Overdraft 1,80,000
Debtors and Creditors 3,20,000 2,40,000
Bills Receivable and Bills Payable 1,00,000 60,000
Closing Inventory 4,00,000
Investments (Short-term) 80,000
Capital 15,00,000

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 Drawings 1,30,000
Net Profit 6,20,000
TOTAL 26,00,000 26,00,000

6. From the following Trial Balance, you are required to prepare

Statement of Profit and Loss for the year ending 31ts March, 20X1 and
a Balance Sheet as on that date:-
Rs. Rs.
Stock on 1-4-20X0 28,200 Capital 1,20,000
Debtors 88,000 Bank Overdraft 26,400
B/R 8,800 Creditors 20,200
Repairs and Stores 3,200 Staff Provident Fund 12,000
Conveyance Expenses Provision for Bad 3,600
1,530
Debts
Brokerage Dividend on 2,400
800
Investments
Investments (Market Royalties 10,000
15,000
Value Rs. 20,000)
Purchase 1,54,000 Commission 6,000
Return Inwards Commission received 1,200
7,400
in advance
Octroi Duty 5,500 Sales 3,70,000
Coal, Gas and Water 800 Return onwards 8,200
Loan to Staff 11,600
Goodwill 25,000
Plant and Machinery 88,000
Live Stock 26,130
Building 50,000
Depreciation on Plant
12,000
& Machinery
Carriage 3,000
Drawings 9,600
Salaries 5,870
Bad Debts 2,200
Commission to
15,000
Salesman
Bank Charges 270
Donations 5,100
Advertisement 12,000
Accrued Rent 1,000
5,80,000 5,80,000
Adjustments:-
1. Commission to salesman is paid at 5% on net sales.
2. Advertising is to be written off over 3 years.

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3. Make a provision of 5% for bad debts and 2% for discount on debtors
taking into consideration that Rs. 20,000 included in debtors are
definitely good.
4. Interest at 10% p.a. is to be provided on Capital and Drawings.
Drawings are made evenly throughout the year on 15 th of each month
@ Rs. 800 per month.
5. During the year, a sum of Rs. 10,000 was paid as ground rent for 20X0-
X1 and 20X1-X2. This sum stands debited to Building A/c.
6. Stock at the end Rs. 24,000. In view of the constant fall in prices, it has
been decided to write off stock by 20%.

7. From the following balances and information, prepare Statement of

Profit and Loss for the year ended 31 st December, 20X1 and a Balance
Sheet as on that date:-

Rs. Rs.
Purchases 72,000 Sundry Debtors 38,000
Return Outwards 2,400 Sundry Creditors 15,600
Sales Capital 1,80,00
1,80,000
0
Return Inwards 5,000 Special Rebates(Dr.) 1,200
Opening Stock 26,500 Special Rebates(Cr.) 3,400
Telephone rent 1,200 Freight 4,200
Loan to Sudhir @ 10% Investments 15,000
25,000
p.a.
Interest on above 2,375 Dividends received 450
Rent paid 2,000 Bank Overdraft 8,700
Cash in Hand 7,000 Salary 31,120
Drawings 6,000 Deposit with D.C.M 20,000
Life Insurance Interest on Deposits 2,800
7,200
Premium
Plant and Machinery 1,00,000 Petty Cash 505
Gift to Sister-in-law 5,000 Manufacturing Wages 36,800
- - Outstanding Wages 8,000
Adjustments:-
1. Rs. 5,000 due from Kapil is included in Debtors while Rs. 3,600 due to
him is included in Creditors.
2. Make a provision of 5% on Sundry Debtors for Doubtful Debts.
3. Calculate interest on Loan, having regard to the fact that Rs. 10,000
was returned by Sudhir on 30th June, 20X1.
4. Telephone rent for one year was paid on 1 st May, 20X1.

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5. A claim of Rs. 20,000 for Workmen’s Compensation is being disputed in
the court.
6. Stock could not be taken on 31 st December, 20X1 but could be taken
only on 10th January 20X2. It was then valued at Rs. 44,300. Purchases
and sales between 1st January, 20X2 and 10th January, 20X2 were Rs.
2,500 and Rs. 4,000 respectively. Gross Profit included in these sales
was 20% on sales.

8. From the following balances and information, prepare Statement of

Profit and Loss for the year ended 31 st December, 20X1 and a Balance
Sheet as on that date:-

Rs. Rs.
Purchases Sales 3,84,00
2,10,000
0
Wages and Salaries 16,200 B/P 2,500
Repairs and Renewals 2,100 Returns 2,000
Freight on Purchases Mortgage and Interest to 10,750
4,500
date
Furniture 6,000 Bad Debts recovered 1,650
Dead Stock 8,000 Interest on Govt. Bonds 500
Returns 5,200 General Reserve 6,800
Bank Balance 7,300 Sundry Creditors 24,000
Sundry Debtors 75,000 Outstanding Salaries 4,400
Advertisement X’s Capital 1,20,00
10,000
0
Unexpired Insurance 500 Y’s Capital 80,000
Miscellaneous
14,350
Expenses
Delivery van 1,98,100
Rent 8,400
10% Govt Bonds
(Purchased on 1st July 10,000
20X1)
Mortgage Interest 750
Stocks on 01.01.20X1 36,200
X’s Drawings 12,000
Y’s Drawings 12,000
6,36,60
6,36,600
0
Adjustments:-
1. Sales include sale of ‘Furniture’ on 30 th June, 20X1 at actual sale price
of Rs. 750. The book value of Furniture sold on that date was Rs. 1,000.

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2. Rs. 2,500 paid to Ajay against our acceptance was debited by mistake
to Ajay’s A/c and from there it was included in the list of Sundry
Debtors.
3. Depreciate furniture by 10% p.a. and Dead Stock by 20% p.a.
4. Private purchases of X amounting to Rs. 2,800 have been included in
Purchase Day book.
5. Advertisement Charges include unissued material of Rs. 4,000.
6. Provide for Interest on Capital at 8% p.a.
7. X drew Rs. 1,000 at the beginning of every month and Y drew Rs.
1,000 at the end of every month. Interest on drawings is to be
charged at 10% p.a.

9. Prepare Statement of Profit and Loss for the year ended 31 st

December, 20X1 and Balances Sheet as on that date.

Rs. Rs.
Opening Stock Sales 2,75,00
22,000
0
Purchases 2,05,00 Bank Overdraft 12,800
0
Postage and Account Payable 56,000
360
Telegram
Interest on Fixed Fixed Deposit 20,000
3,200
Deposits
Buildings 1,12,00 Interest on Bank Deposit 540
0
Charity 2,800 A’s Capital 75,000
Repairs 2,500 B’s Capital 25,000
General Expenses 5,440
Audit Fee 800
Landlord A/c 4,800
Accounts Receivables 20,000
Indirect Expenses 1,440
Bank Deposit 6,000
Loose Tools 8,000
Salaries 14,200
Carriage 4,500
Cash in hand 7,300
Security Deposit 28,000
A’s Drawings 16,000

4,64,34 4,64,34
0 0

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 Adjustments:-
1. Closing Stock was taken on 29th December, 20X1 and was valued at
Rs. 40,000. Purchases and Sales on 30 th and 31st December, 20X1
amounted to Rs. 1,500 and Rs. 1,200 respectively. These
transactions were duly passed through the books. The proportion of
Gross Profit included in these sales is to be taken as Cost plus 20%.
2. Two dishonored cheques for Rs. 1,000 and Rs. 800 respectively
have not been entered in the Cash Book. The first for Rs. 1,000 is
known to be bad. In the case of second cheque it is expected that
40 paise in the rupee will be received
3. Create Provision for Doubtful Debts @ 5%.
4. Rent paid to Landlord was debited to his personal account.
5. Provide for Interest on Capital at 12% p.a. and Charge Interest on
drawings at 15% p.a.

Home Work:

1. Calculate the Gross Profit from the following data for the year ended
31st March, 20X1.

Rs. Rs.
Opening Inventory 2,50,000 Purchases Return 22,000
Purchases 7,00,000 Sales Return 36,000
Sales 18,00,00 Custom Duty 15,000
0
Wages 2,06,000 Gas, Fuel and Power 60,000
Carriage Inwards 34,000 Dock Charges 8,000
Carriage outwards 20,000 Factory Lighting 96,000
Manufacturing 2,48,000 Office Lighting 5,000
Expenses
Closing Inventory is valued at Rs. 6,00,000.

2. From the following information, find the Gross profit for the year ended
31st March, 20X1.

Rs. Rs.
Adjusted Purchases 15,00,00 Depreciation 36,000
0
Sales 21,40,00 Factory Expenses 60,000
0
Returns Inwards 40,000 Closing Inventory 1,20,000
Freight and Packing 15,000

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Packing Expenses on 20,000
sales