Accounts

1. rading& Profit & Loss alc of M/s. Durga & Co. for the vear ended 31st December
2002
Dr
Rs
Particulars Rs. Particulars
50000
To Opening Stock 1000By Sales
1300
To Purchase 39000 Less Retuns Inwards
48700
Less Retums outwards 500
25000
38500 By Closing Stock
2800
800
30600
To Wages
To Carriage Inward
To Gross Profit c/d
73700
73700
1100By Gross Profit b/d.
To Insurance
30600
To Commission 800| By Discounts
400
700
To Interst on Capital
To Sationery
To Trade Expenses
Cr
450
200
1
100
To Rent and Taxes
To Carriage outward
1450
25200
To Net Profit transferred to
capital a/c
31000
| 31000
Balance Sheet of M/s. Durga & Co. as on December 31, 2002
Liabilities Amount Assets
Amount
Rs.
Rs.
Creditors 19650 Cash in Hand 500

2. 4750
3000 Cash at Bank
Bills payable
4500
25000
30000
17900 Bill Regivable
Capital
25200 Stock
Add. Net Profit
43100 Sundry Debtors
1000
Office Fixtures
65750
65750

3. 108 Accounting for Managemen
BOORS OF RAJAN JEWELERS
rading and Profit and Loss Account for the year ended 31.12.199
Rs
Particulars Particulars
R
72,000 By Sales
3,50,000
To Opening mventory
80,000
To Purchases
2.25,000 By Closing Inventory
L.ess Retums
1,800
2.23,200
Less Drawings 1,800 2,21,400
To Gross Profit cid 1,36,600
4,30,000
4,30,000
To Salaries 1,36,600
30,000 By Gross Profit b/d
Add Outstanding
33,000 By Commission 7,500
3,000
To Advertisement
22,000
Less Prepard
2.000 20,000
To Reparis and maintenance 13,000
To General Expenses 16,000
To Insurance
7,000
To Depreciation:
Pumiture 750
Motor Car 3,000
Building 21,290
To Interest on Capital 30,000
To Net profit to Capital alc 60
1.44,100
1,44,100
Balance Sheet as on 31.12.1995
Liabilities Rs. Assets Rs.
5,00,000
30,000
4,25,800
21,290 4.04,510
15,000
750
30,000
3,000
Building
Capital
Add Interest on capital Less Depreciation
Net Profit 60 Furniture
S,30,060
1,800 5,28.260 Motor Car
Less Depreciation
14,250
Less Drawings
Sundry Creditors: Less Depreciation
Closing Inventory
56,000Sundry Debtors:
3,000
32,000
24.000
27,000
80,000
Ram
Shyam
Outstanding SaBaries
Sanjay
Kishore
12,000
20,000
18,000
Raghav 50,000
2.000
Prepaid Advertisenment
Cash at bank
6,000
3,500
5.87.260
Cash in hand
5,87.260

4. Note: Goods used tor domestic purpose shouid D
The following is the trial balance of Kamal Enterprises for the year ended 31st December
1996. you are required to prepare a Profit and Loss a/c and Balance Sheet after taking into
Rs.
1,50,300
5,000
llustrátion 3
account the adjustments given below.
Credit balances
Rs.
500 Sales
Debit balances
Cash in hand
1,200 Purchase returns
6,000 Accounts Payable
15,000 Bills Payable
1,200 Discount received
3,500 Dividendreceived
6,000 Rent receive
24,000 Capital
Cash at bank
12,000
Office furniture
8,000
Accounts Receivables
1,000
Commission
2,000
Bills Receivables
3,500
Power and fuel
27,000
Plant and Machinery
2,000
Office expenses
Carriage inwards
Carriage outwards
Rent, rates, and taxes
1,200
3,500
1,700
25,000
Leasehold Premises
Wages 30,000
Salaries 7,000
Opening lnventory
Sales Returns
Purchases
12,000
2,000
60,000
Drawings 7,000
2,08,800 2,08,800
Adjustments:
1. Closing Inventory as on 31.12.1996 Rs. 18,000
2. Depreciate Plant and Machinery at 10%.
3 Salaries outstanding Rs.1,000; Power and fuel outstanding, Rs.2,000.
4 Rs.5,000 was spent on erection of plant and machinery, but wrongly included under
wages.
5. Provide for bad and doubtful debts for Rs.1 500.
6. Discount earned but not received Rs.100.
7 Commission due but not recorded Rs.200
8. Rent received includes Rs.500 received in advance.
[M.C.A., May 1998, Madras University] )
Solution
BOOKS OF KAMAL ENTERPRISES
Trading and Profit and Loss account for the year ended 31-12-1996
ParticularTs
To Opening Inventory
To Purchases
Rs.
Particulars
12,000 By Sales Rs.
1,50,300
2,000 1,48,300
18,000
60,000
Less Returns Less Returns
5,000 55,000 By Closing Inventory
To Carriage inwards
1,200

5. 110
To Wages
Less Erection charges
30,000
5,000
6.000
2,000
25.000
To Power and fuel
Add Outstanding 8,000
65,100
1,66.300
1.66.300
65,100
To Gross Profit c'd
By Gross Profit bid
8,000 By Discounts
received
Add Outstanding
To Salaries 7,000 1,000
1100
2.000
Add Outstanding 1,000
1,200
100
To Commission
1,400By
Dividends received
2,000By Rent received
3,500Less Received in advance
1.700
2,900
1,500
50,200
200
Add Outstanding
To Office expenses
3.500
500 3,000
To Carriage outwards
To Rent, rates and taxes
To Depreciation on Plant
To Provision for bad debts
To Net Profit transferred to Capital
Account
71,200
71,200
Balance Sheet as on 31.12.1996
Rs
500
Liabilities
Rs.
ASsets
Accounts Payable
Bills Payable
12,000Cash in hand
8,000Cash at bank
1,200
Accounts Receivables 15.000
1.500
Outstanding expenses:
Less Provision for bad debts 13.500
1,000
2,000
200
Salaries
Power and fuel
3,200 Bills Receivables
500Closing Inventory
3.500
18.000
100
Commission
Rent received in advance
Discounts eaned but due
27,000
50,200
77.200
Furniture 6,000
Capital
Add Net Profit
Plant and Machinery
Add Erection charges 24,000
5,000
Less Drawings 7,000 70,200
Less Depreciation
Leasehold Premises
93,900
29.000
2900 26,100
25.000
93,900
Tllustration 4
Fromthefollowing particulars taken from the books of Nirmal Traders, prepare Trading
and Profit and Loss account 1or the year ended 31st December 2000 and the Balance Sheet as
on that date.

6. J0,000
114 Buildings 3,000 27 05
19 68
Less Depreciation
79.650
From the following
trial
balance
extracted
from the
books Mr. Ramesh pren
Rs
epare
Trading and Profit and Loss
Account and
Balance
Sheet as on 30th June 1999:
Rs.
Illustration 6
Debit balances
2.630
Debit balances
540 Cash at bank
680
Cash in hand 40,675 Returns inwards
4,730
10,480Fuel
2,040 Carriage outwards
Purchases
3.200
Wages
40,000
Carriage inwards
5,760 Building
1,76,580
Stock [Ist July 1998] 20.000 Credit Balances:
98,780
Machinery 7,500 Sales
500
Goodwill
15,000 Returns outwards
71.000
Salaries
3,600 Capital
Insurance 6300
14,500 Sundry Creditors
Sundry Debtors
5,245
DrawingsS 1,76.580
Take into account the following adjustments:
(a) Depreciate Building at 10% and Machinery at 20%,
(b) Salaries outstanding Rs,2,000.
(c) Create a Reserve for bad and doubtful debts at 5% on sundry debtors.
(d) Closing stock was valued at Rs.6,800. (e) Insurance prepaid Rs.200.
[M.C.A., November 2001, Madras University]
Solution
BOOKS OF RAMESH
Trading Account for the year ended 30th June 1999
Particulars Rs. Particulars Rs.
Opening stock 5,760 By Sales
98,780
To Purchases 40,675 Less Retuns inwards bo 680 98,100
Less Returns outwards 500 40,175|By Cloasing stock 6800
To Carriage inwards 2,040
To Wages 10,480
To Fuel 4,730
To Gross Profit to P&L alc 41,715
1,04,900 1,04,900

7. 115
Preparation of Final Accounts
Profit and Loss Account for the year ended 30th June 1999
Particulars Rs. Particulars Rs.
To Salaries 15,000 By Gross Profit b/d 41,715
Add Outstanding
2,000 17,000
To Insurance
3,600
Less Prepaid 200 3,400
To Carriage outwards
3,200
To Reserve for bad debts o L 725
4,000 01
4,000
9,390
To Depreciation: Building
Machinery
To Net Profit to Capital a/c
41,715 41,715
Balance Sheet as on 30th June 1999
Liabilities Rs. Assets Rs.
Sundry Creditors 6,300 Cash in hand
540
Salaries outstanding 2,000 Cash at bank
2,630
Capital 71,000 Sundry debtors 14,500
Add Net Profit
9,390 Less Resserve for bad debts 725 13,775
80,390 Closing Stock
6,800
Less Drawings 5,245 75,145|Prepaid Insurance
200
Machinery 20,000
Less Depreciation
4,000 16,000
Building 40,000
Less Depreciation
4,000 36,000
Goodwill
7,500
83,445
83,445
llustration 7