CA FOUNDATION – JAN 25
ACCOUNTING
FINAL ACCOUNTS
Format of a Trading Account:
TRADING A/C
for the year ending.
Dr Cr
Particulars Amount Particulars Amount
To Opening Stock By Sales
To Purchases Less : Sales Returns or
Less : Purchase Returns or Returns inwards
Returns outward By Closing Stock
To Wages By Gross loss
To Wages & Salaries (if any) transferred to
To Direct Expenses Profit and Loss A/c
To Carriage,or (Balancing figure)
To Carriage inwards,
To Carriage on Purchase
To Gas, Fuel and Power
To Freight and cartage
To Manufacturing Expenses,
or
Productive Expenses
To Factory Expenses, such as :
Factory Lighting
Factory Rent etc.
To Dock charges and Clearing
charges
To Import Duty or Custom Duty
To Royalty
To Gross Profit
Transferred to P & L A/c
(Balancing Figure)
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
Format of Profit and loss Account:
PROFIT AND LOSS A/C
for the year ending.
Dr Cr
(Transferred from Trading A/c) (Transferred from Trading A/c)
Office expenses :- By Rent from Tenant
To Salaries By Rent (Cr.)
To Salaries & Wages By Discount received
To Rent, Rates & Taxes Or Discount (Cr.)
To Printing & Stationery By Commission Received
To Postage By Interest on Investments
To Lighting By Dividend on Shares
To Insurance Premium By Bad-Debts Recovered
To Telephone Charges By Income from other Sources
To Legal Charges By Profit on sale of Assets
To Audit Fees By Miscellaneous Income
To Travelling Expenses By Net Loss (if any)
To Establishment Expenses Transferred to Capital A/c
To Trade Expenses
To General Expenses
Selling and Distribution
Expenses:
To Carriage Outwards, or
Carriage on Sales
To Advertisement
To Commission
To Brokerage
To Bad-debts
To Export duty
To Packing charges
To Delivery Van Expenses
To Stable expenses
Miscellaneous expenses :-
To Discount Allowed
To Repairs
To Depreciation
To Interest (Dr.)
To Bank Charges
To Entertainment Expenses
To Conveyance Expenses
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
To Donation and Charity
To Loss on Sale of Assets
To Net Profit-
Transferred to Capital A/c
Format of Balance Sheet:
BALANCE SHEET
as at ………..
Liabilities Amount Assets Amount
Capital ₹ Current Assets :- ₹
Add : Net Profit Cash in Hand
Less : Drawings Cash at Bank
Less : Income Tax Bills Receivable
Less : Life Insurance Short Term Investments
Premium Sundry Debtors/Book Debts
Closing Stock
Reserves Prepaid Expenses(3)
Accrued Income
Current Liabilities :- Non-Current Assets :-
Bank Overdraft Furniture
Bills Payable Loose Tools
Sundry Creditors Motor Vehicle
Outstanding expenses Plant and Machinery
Unearned Income Land and Buildings
Non-Current Liabilities :- Patents and Trade Marks
Long term loans Goodwill
Long Term Investments
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
QUESTION
Prepare a Trading Account for the year ended 31st March, 2019 from the
following balances :-
Particulars ₹ Particulars ₹
Opening Stock 2,00,000 Purchases Return 60,000
Purchases 10,00,000 Sales Return 1,00,000
Sales 25,00,000 Carriage on Purchase
Freight 32,500 Carriage on sales 40,000
Wages 1,50,000 Factory Rent 50,000
Factory Lighting 54,000 Office Rent 2,20,000
Coal, Gas and Water 11,000 37,500
Closing Stock is valued at ₹3,00,000.
(GP 10,52,500)
QUESTION
From the following information, prepare the Trading Account for the year ended
31st March, 2019 :
Adjusted Purchases ₹24,00,000; Freight and Carriage Inwards ₹20,000; Freight
and Carriage Outwards ₹ 15,000; Wages ₹1,70,000; Fuel and Power ₹30,000; Office
Rent ₹18,000; Trade Expenses ₹ 10,000; Sales ₹30,00,000; Closing Stock ₹ 1,50,000.
(GP 3,80,000)
Hint:
(1) Adjusted Purchases = Net Purchases + Opening Stock - Closing Stock
(2) Closing Stock has not been shown on the credit side of Trading A/c since it has already been
adjusted while computing the adjusted purchases.
QUESTION
From the following information, prepare a Trading Account for the year ending
31st March, 2019 :
₹
Opening Stock 40,000
Purchases 4,20,000
Expenses on Purchases 8,000
Expenses on Sales 15,000
Wages 30,000
Sales 6,00,000
Closing Stock 52,000
(Gross Profit 30,000)
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
QUESTION
In a burglary at the godown of Hansraj Traders on the night of 14th July, 2016,part of the stock
was stolen. From the following particulars, find out the estimated value of loss of stock by theft:
₹
Stock on 1st April, 2016 60,000
Purchases from 1st April to 14th July, 2016 4,10,000
Sales from 1st April to 14th July, 2016 6,00,000
Stock remaining after burglary 12,000
The normal rate of gross profit for his business is 30% of selling price.
(Closing Stock 50,000 ; Value of Stock stolen 38,000)
QUESTION
Calculate closing stock from the following details :
₹
Opening Stock 20,000
Cash Sales 60,000
Credit Sales 40,000
Purchase 70,000
Rate of Gross profit on cost 33.33%
(Closing Stock ₹ 15,000)
QUESTION
Calculate Net Sales and Gross Profit from the following information :
Cost of Goods Sold ₹ 1,00,000
Gross Profit 20% on Sales
(Net sales ₹1,25,000 GP: ₹25,000)
QUESTION
From the following particulars, prepare a Profit & Loss Account for the year
ending 31st March, 2019 :
Particulars ₹ Particulars ₹
Gross Profit 10,52,500 Discount allowed 15,000
Trade Expenses 10,000 Lighting 3,900
Carriage on Sales 50,000 Commission Received 4,200
Office Salaries 79,000 Bad-debts 6,000
Postage 3,600 Discount Cr. 3,000
Office Rent 37,500 Interest on Loan 11,000
Legal Charges 2,000 Stable Expenses 7,000
Audit fee 8,000 Export Duty 11,500
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
Donation 5,500 Miscellaneous Income 2,500
Sundry Expenses 1,800 Unproductive Expenses 20,500
Selling Expenses 26,600 Travelling Expenses 12,500
(Net Profit 7,50,800)
QUESTION
Given below is the Trial Balance of Gopi Chand Bros. as at 31st March, 2020.You are required to
prepare a Trading and Profit & Loss A/c for the year ended 31st March 2020 and Balance Sheet
as at that date :-
Debit Balances ₹ Credit Balances ₹
Opening Stock 45,000 Sundry Creditors 22,100
Purchases 1,20,000 Return outwards 2,500
Return inwards 3,200 Sales 3.50,000
Carriage inwards 2,400 Capital 2,00,000
Carriage outwards 1,500 Loan from Bank 24,000
Office furniture 8,000 Discount Received 2,000
Sundry Debtors 68,000 Commission 1,600
Dock Charges 5,000
Electric Power 10,000
Fuel, Gas and Water 12,000
Bad-debts 1,100
Advertisement 25,000
Salary 36,000
Cash in hand 8,100
Cash at Bank 30,000
Motor Vehicles 58,000
Motor Repairs 3,000
Interest on Bank Loan 2,400
Rent and Insurance 24,500
Business Premises 1,06,000
Household expenses 33,000
6,02,200 6,02,200
Stock at the end ₹75,000.
(Gross Profit 2,29,900 ; Net Profit 1,40,000; BS 3,53,100)
QUESTION
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
From the following balances taken from the books of Murli Manohar & Sons, prepare Trading
and Profit & Loss Account for the year ended 31st March, 2019 and a Balance Sheet as at that
date. Stock in hand on 31st March, 2019 was ₹56,000.
Dr. Cr.
Name of Accounts Balances Balances
₹ ₹
Stock at Commencement 15,320
Purchases and Sales 1,00,000 1,20,000
Returns 2,200 3,000
Drawings and Capital 10,000 1,30,000
Cartage 2,200
Factory heating and lighting 6,600
Works expenses 15,200
Rent Received 7,300
Cash at Shop 800
Accounts Receivable
Kapil 8,000
Jadeja 5,000
Yadav 1,500
Accounts Payable
Parbhakar 16,000
Tendulkar 7,540
Horses and Carts 25,000
B/R and B/P 10,000 2,120
Rent paid 15,000
Fire Insurance Premium 4,800
Life Insurance Premium 6,000
Bank overdraft 67,000
Bank Interest 2,400
Telephone Expenses 3,000
Advertisement Expenses 5,200
Salaries and Wages 32,240
Freehold Property 81,000
Audit Fees 1,500
3,52,960 3,52,960
(Gross Profit 37,480 ; Net Loss 19,360 ; BS 1,87,300)
QUESTION
From the following balances prepare a Trading, Profit & Loss Account and Balance Sheet.
Particulars ₹ Particulars ₹
Carriage on Goods Cash in Hand 2,500
Purchased 8,000 Banker's A/c (Cr.) 30,000
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
Carriage on Goods Sold 3,500 Motor Car 60,000
ManufacturingExpenses 42,000 Drawings 8,000
Advertiement 7,000 Audit Fees 2,700
Freight 9,600 Plant 1,53,900
Lighting 6,000 Repairs to Plant 2,200
Customer's A/c 80,000 Stock at the end 76,000
Supplier's A/c 61,000 Purchases less Returns 1,60,000
Postage 800 Commission on Purchases 2,000
Fire Insurance Premium 3,600 Incidental Trade Exp. 3,200
Patents 12,000 Investments 30,000
Income Tax 24,000 Interest on Investments 4,500
Office Expenses 7,200 Capital A/c 1,00,000
Sales less Returns 5,20,000
Rent 12,000
Discount Paid 2,700
Discount on Purchases 3,400
(Gross Profit 2,98,400 ; Net Profit 2,55,400 ; BS 4,14,400)
QUESTION
From the following Trial Balance of Sh. Rama Nand Sagar, prepare Trading and Profit & Loss
Account for the year ended 31st March, 2019 and a Balance Sheet as at that date :-
Dr. Balances ₹ Cr. Balances ₹
Opening Stock 20,000 Sales 2,70,00
Purchases 80,000 Purchase Return 4,000
Sales Return 6,000 Discount 5,200
Carriage Inwards 3,600 Sundry Creditors 25,000
Carriage Outwards 800 Bills Payable 1,800
Wages 42,000 Capital 75,000
Salaries 27,500
Plant & Machinery 90,000
Furniture 8,000
Sundry Debtors 52,000
Bills Receivable 2,500
Cash in Hand 6,300
Travelling Expenses 3,700
Lighting (Factory) 1,400
Rent and Taxes 7,200
General Expenses 10,500
Insurance 1,500
Drawings 18,000
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
3,81,000 3,81,000
Adjustments : -
(1) Stock on 31st March, 2019 was valued at ₹24,000 (Realisable Value ₹ 30,000).
(2) Wages outstanding for March, 2019 amounted to ₹3,000.
(3) Salaries outstanding for March, 2019 amounted to ₹2,500.
(4) Prepaid insurance amounted to ₹300.
(5) Provide depreciation on Plant and Machinery at 5% and on Furniture at 20%.
ANSWER:(Gross Profit=1,42,000
Net Profit=87,700
BalanceSheet=1,77,000)
QUESTION
From the following Trial Balance of Sh. Ved Vyas, prepare Trading and Profit & Loss Account for
the year ended 31st March, 2020 and Balance Sheet as at that date :
Dr. (₹) Cr. (₹)
Purchases and Sales 2,75,000 5,20,000
Returns Inwards 15,000
Returns Outwards 9,000
Carriage 12,400
Wages and Salaries 58,600
Trade Expenses 2,200
Rent 13,000
Insurance 2,000
Audit Fees 1,200
Debtors and Creditors 1,10,000 62,100
B/R and B/P 3,300 2,200
Printing and Advertising 5,500
Commission 1,000
Opening Stock 36,000
Cash in hand 12,800
Cash at Bank 26,800
Bank Loan 20,000
Interest on Loan 1,500
Capital 2,50,000
Drawings 15,000
Fixed Assets 3,00,000
8,77,300 8,77,300
Adjustments : -
1. Stock at the end ₹60,000.
2. Depreciate Fixed Assets by 10%.
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
3. Commission earned but not received amounts to ₹400.
4. Rent received in advance ₹1,000.
5. Allow 8% interest on Capital and charge ₹ 900 as interest on Drawings.
ANSWER:( Gross Profit=1,92,000
Net Profit=1,43,900
Balance Sheet=4,83,300)
QUESTION
Prepare Trading, Profit & Loss Account and Balance Sheet from the following particulars as at
31st March, 2017 :-
Dr.(₹) Cr. (₹)
Cash in hand 2,000
Cash at Bank 18,000
Purchases and Sales 2,20,000 3,50,000
Return Inwards 6,000
Return Outwards 7,500
Carriage on Purchases 4,400
Carriage on Sales 2,100
Fuel and Power 15,500
Stock (1-4-2016) 36,000
Bad-Debts 6,200
Bad-Debts Provision 2,500
Debtors and Creditors 82,000 30,000
Capital 2,17,000
Investments 20,000
Interest on Investments 2,000
Loan from X @ 18% p.a. 10,000
Repairs 1,520
General Expenses 10,600
Land & Buildings 1,80,000
Wages and Salaries 18,000
Miscellaneous Receipts 120
Bills Payable 5,200
Stationery 2,000
6,24,320 6,24,320
Adjustments :
(1) Write off ₹2,000 as Bad-debts and provision for Doubtful Debts is to be maintained at 5%
on debtors.
(2) Loan from X was taken on 1st August, 2016. No interest has been paid so far.
(3) Included in general expenses is insurance premium ₹1,200 paid for one year
ending 30th June, 2017.
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
(4) 1/3 of Wages and Salaries is to be charged to Trading A/c and the balance to
P & L A/c.
(5) Entire stationery was used by the proprietor for own purpose.
(6) Closing Stock was valued at ₹50,000.
ANSWER:(Gross Profit=1,19,600
Net Profit=84,900
Balance Sheet=3,46,300)
QUESTION
The following is the Trial Balance of Sh. Siya Ram as at 31st March, 2020.Prepare Trading and
Profit & Loss Account and Balance Sheet from the same :-
Dr. Balances ₹ Cr. Balances ₹
Materials Purchased 1,15,725 Sales 2,10,000
Administration Expenses 16,725 Outstanding Wages 800
Wages 42,775 Creditors 39,535
Freight 5,100 Capital 81,800
Rent 3,100 Bank 12,220
Petty Cash 175 Loan on Mortgage 16,000
Debtors 36,400 Income from Investments 925
Gift to Wife 2,500
Prize Distributed 200
Commission Paid 1,000
Commission Paid in Advance 400
Mortgage Interest 1,600
Loose Tools 5,000
Investments 8,500
Plant 60,000
Furniture 7,200
Leasehold Property 50,000
Patents 2,000
Depreciation on Furniture 800
Suspense Account 2,080
3,61,280 3,61,280
Adjustments : -
1. Closing Stock amounted to ₹20,000.
2. Goods costing ₹5,000 were sent to a customer on 'Sale on Approval Basis' for
₹6,400 on 29th March, 2020 and had been recorded in the books as actual sales.
3. Make a provision for Doubtful Debts at 5% on debtors.
4. 1/5th of Loose Tools are to be written off this year.
5. General Manager is to be allowed a Commission of 5% on Net Profit before
charging his Commission.
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
ANSWER:(Gross Profit=65,000
Net Profit=38,000
Balance Sheet=1,87,855)
QUESTION
Prepare Trading and Profit & Loss Account for the year ended 31st March, 2020,
and a Balance Sheet as at that date from the following Trial Balance :-
Dr. Balances ₹ Cr. Balances ₹
Opening Stock 32,000 Sales less Returns 2,20,000
Purchases less Returns 76,000 Sundry Creditors 30,000
P. Kumar 3,000 Capital 67,800
Wages 15,400 Mortgage and interest to date
Carriage Inwards 2,600 Rent Outstanding 15,600
Carriage Outwards 1,500 1,000
Salaries 40,000
Advertisements 9,000
Trade Expenses 4,800
Rent 12,000
Establishment 5,400
Stable Expenses 2,100
Mortgage Interest 600
Sundry Debtors 40,000
Cash in hand 2,500
Machinery 87,500
3,34,400 3,34,400
Adjustments : -
(1) Closing Stock was ₹46,000.
(2) Provision for Doubtful Debts be created on Sundry Debtors @ 5% and a
provision for discount on Sundry Debtors at 2%.
(3) Salary of ₹3,000 paid to Sh. P. Kumar an employee of the firm, stand debited
to his personal account and it is to be corrected.
(4) A stationery bill for ₹200 remains unpaid and unrecorded.
(5) Write off one-third of advertisement expenses.
(6) Sundry Creditors include ₹ 10,000 loan taken from Mr. Sudhir on Sept. 1, 2019
bearing interest @ 12% p.a.
ANSWER:(Gross Profit=1,40,000
Net Profit=63,940
Balance Sheet=1,79,240)
CA SATHYA PHANEENDRA
CA FOUNDATION – JAN 25
QUESTION
The following is the Trial Balance of Mr. Atul as at 31st March, 2020 :
Debit Balances ₹ Credit Balances ₹
Stock (1st April, 2019) 50,000 Bank 24,000
Cash in Hand 10,000 Sales 12,40,000
Purchases 8,20,000 Returns 15,000
Returns 20,000 Outstanding Wages 26,000
Carriage 12,000 Sundry Creditors 75,000
Wages 60,000 Capital 3,20,000
Sundry Debtors 2,00,000
Motorbike 15,000
Salary 1,20,000
Printing andStationery 22,000
Insurance (Annual premium
paid on 1st January2020)
Plant and Machinery 16,000
Furniture 3,00,000
Accrued Income 40,000
Drawings 5,000
10,000
17,00,000 17,00,000
Prepare the Trading and Profit & Loss Account for the year ending 31st March
2020 and the Balance Sheet as on that date after taking into account the following
adjustments :
(i) Closing Stock was valued at ₹80,000. It includes goods costing ₹ 10,000 which were sold and
recorded as sales but not delivered to the customer.
(ii)On 1st January, 2020 a new machinery costing ₹80,000 was purchased on credit but no entry
has been passed.
(iii)Depreciation is to be provided @ 10% p.a. on all fixed assets.
(iv)Motorbike was sold at book value on 1st April, 2019 and the cash was used by Mr. Atul for
his personal use but it was left unrecorded.
(v) A fire occurred on 1st April, 2020 destroying goods costing ₹25,000.
(vi) 2/3rd of the expenses on carriage are related to the goods purchased and 1/3 rd are related
to sales.
ANSWER:(Gross Profit=3,67,000
Net Profit=1,81,000
Balance Sheet=6,81,000)
CA SATHYA PHANEENDRA
