CSS Accountancy & Auditing Simple Final Accounts

Adam’s Learning Centre, Lahore

CSS Accounting & Auditing
Topic Vise Past Papers (Solutions)
Simple Final Accounts
Q.1 CSS – 2015, Paper # 1, Section – A, Q. # 2) (20 Marks)
a. Income Statement
Malcom's
Income Statement / Profit & Loss Account
For the Year ended 30th June 2012
Accounts £ £ £
Sales 243,000
Less Cost of goods sold (144,000)
Gross Profit 99,000
Less Other Expenses
Wages Expenses 14,250
Plus Wages Payable 750 15,000
Rent Expenses 13,500
Plus Rent Payable 3,000 16,500
Insurance Expenses 2,000
Less Prepaid Insurance (1,000) 1,000
Sundry Expenses 3,000
Depreciation Vehicle 5,250
Bad debts (Further) 2,650
Provision for bad debts 2,000
(22650 - 2650 = 20000 * 10%)
Total Other Expenses (45,400)
Net Profit 53,600

b. Adjusting Entries
No. Accounts £ £
1 Wages A/c 750
Wages payable A/c 750
2 Rent Expenses A/c 3,000
Rent Payable A/c 3,000
3 Prepaid Insurance A/c 1,000
Insurance Expenses A/c 1,000
4 Depreciation Expense A/c 5,250
Vehicle A/c 5,250
5 (i) Bad Debts A/c 2,650
Debtors A/c 2,650
5 (ii) Profit & Loss A/c 2,000
Provision for bad debts A/c 2,000
(22650 - 2650 =20000*10%=2000)
Note: While recording depreciation of Vehicle Direct write off method is applied as there is no provision for
depreciation A/c is available in trial balance otherwise provision for depreciation A/c could be credited
instead of Vehicle A/C.
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CSS Accountancy & Auditing Simple Final Accounts

c. Balance Sheet
Malcom's
Balance Sheet /Statement of Financial Position
as on 3th June 2012
Accounts £ £ £
Assets
Fixed Assets
Vehicle 1,000
Less Depreciation (5,250) 15,750
Current Assets
Cash at bank 4,500
Stock 36,000
Debtors 22,650
Less Bad debts (Further) (2,650)
20,000
Less Provision for B/D (2,000) 18,000
Prepaid Insurance 1,000
Total Current Assets 59,500
Total Assets 75,250
Liabilities & Capital
Capital
Capital as at 1st July 2011 29,000
Plus Net Profit for the year 53,600
82,600
Less Drawings (32,100) 50,500
Current Liabilities
Wages Payable 750
Rent Payable 3,000
Creditors 21,000
Total Current Liabilities 24,750
Total Liabilities & capital 75,250

Work Sheet

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 CSS Accountancy & Auditing Simple Final Accounts

Malcom's
Work Sheet
For the Year ended 30th June 2012
Trial Balance Adjustments Adjusted TB Income Statement Balance Sheet
Accounts Dr. Cr. # Dr. # Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Capital account as at 1st July, 2011 29,000 29,000 29,000

Creditors 21,000 21,000 21,000

Debtors 22,650 5 (i) 2,650

5 (ii) 2,000 18,000 18,000

Cost of goods sold 144,000 144,000 144,000

Drawings 32,100 32,100 32,100

Sales 243,000 243,000 243,000

Stock 36,000 36,000 36,000

Vehicles 21,000 4 5,250 15,750 15,750

Wages Expenses 14,250 1 750 15,000 15,000

Sundry Expenses 3,000 3,000 3,000

Rent Expenses 13,500 2 3,000 16,500 16,500

Insurance Expenses 2,000 3 1,000 1,000 1,000

Cash at bank 4,500 4,500 4,500

Wages Payable 1 750 750 750

Rent Payable 2 3,000 3,000 3,000

Prepaid Insurance 3 1,000 1,000 1,000

Depreciation Vehicle 4 5,250 5,250 5,250

Bad Debts 5 (i) 2,650 2,650 2,650

Provision for bad debts 5 (ii) 2,000 2,000 2,000

Total 293,000 293,000 14,650 14,650 296,750 296,750 189,400 243,000 107,350 53,750

Net Profit 53,600 53,600

Grand Total 243,000 243,000 107,350 107,350

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CSS Accountancy & Auditing Simple Final Accounts

Q. 3 CSS – 2013, Paper # 1, Section – A, Q.# 2) (20 Marks)

a. Income Statement
Name of Business
Income Statement / Profit & Loss Account
For the Year ended 31st December 2011
Accounts Rs. Rs. Rs.
Sales ,720,000
Less Sales Return (85,000)
Net sales 8,635,000
Less Cost of goods sold
Opening Stock 1,677,800
Plus Purchases 2,050,800
Less Purchase return (106,000)
Add Carriage In 55,000
Net Purchases 1,999,800
Less Closing Stock (1,400,000)
Material Used 2,277,600
Wages Expense 858,000
Plus Outstanding Wages 60,000 918,000
Cost of goods sold (3,195,600)
Gross Profit 5,439,400
Less Other Expenses
Coal & Gases 234,160
Carriage out 22,160
Salaries 1,414,560
Plus Outstanding Salaries 120,000 1,534,560
Rent, Rates & Taxes 113,000
Discount 60,520
Prov. For Discount 34,200
Repairs & maintenance 74,600
Plus Outstanding R & M 1,500 76,100
Printing & Stationery 20,600
Bad Debts 48,520
Provision for Bad debts 90,000
Advertisements 140,840
Plus Outstanding Advertisements 20,000 160,840
General Expenses 10,040
Depreciation–Plant & Machinery 160,000
Depreciation–Loss Tools 12,000
Depreciation–Furniture 4,800
Depreciation–Land & Buildings 60,000
Total Operating expenses (2,841,500)
Net Profit 2,597,900

Note: While recording depreciation of Vehicle Direct write off method is applied as there is no provision for
depreciation A/c is available in trial balance otherwise provision for depreciation A/c could be credited
instead of Asset Accounts.

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CSS Accountancy & Auditing Simple Final Accounts

b. Adjusting Entries

No. Accounts Dr. Rs. Cr. Rs.

1 Closing Stock A/C 1,400,000
P & L A/C 1,400,000
2 Depreciation Exp. P & M A/C 60,000
Plant & Machinery A/C 160,000
2 Depreciation Exp. Loose Tools A/C 12,000
Loose Tolls A/C 12,000
2 Depreciation Exp. Furniture A/C 4,800
Furniture A/C 4,800
2 Depreciation Exp. L & B A/C 60,000
Land & building A/C 60,000
3 Wages Expense A/C 60,000
Outstanding Wages Exp. A/C 60,000
3 Advertisement Expense A/C 20,000
Outstanding Advertisement A/C 20,000
3 Salaries Expense A/C 20,000
Outstanding Salaries Exp. A/C 120,000
3 Repair & Maintenance Expense A/C 1,500
Outstanding R & M Exp. A/C 1,500
4 P & L A/C 90,000
Provision for Bad Debts A/C 90,000
4 P & L A/C 34,200
Provision for Discount A/C 34,200

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CSS Accountancy & Auditing Simple Final Accounts

c. Balance Sheet
Name of Business
Balance Sheet /Statement of Financial Position
as on 31st December 2011
Accounts Rs. Rs. Rs. Rs.
Assets
Fixed Assets Cost Depreciation NBV
Goodwill 3,618,200 …. 3,618,200
Land & Buildings 2,400,000 60,000 2,340,000
Plant & Machinery 1,600,000 160,000 1,440,000
Loose Tools 120,000 12,000 108,000
Furniture 48,000 4,800 43,200
Total fixed assets 7,549,400
Current Assets
Cash in hand 18,600
Cash at bank 1,016,840
Stock 1,400,000
Debtors 1,800,000
Less Prov. For B/D (90,000)
1,710,000
Less Prov. for Discount (34,200) 1,675,800
Bills receivable 145,800

Total Current Assets 4,257,040

Total Assets 11,806,440
Liabilities & Capital
Capital
Capital as at 1st July 2011 6,400,000
Plus Net Profit 2,597,900
8,997,900
Less Drawings (1,813,800) 7,184,100
Current Liabilities
Bills Payable 1,352,000
Creditors 3,068,840
Payable–Wages 60,000
Payable–Advertisements 20,000
Payable–Salaries 120,000
Payable–R & M 1,500
Total Current Liabilities 4,622,340
Total Liabilities & capital 11,806,440

d. Worksheet

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 CSS Accountancy & Auditing Simple Final Accounts

Name of Business
Work Sheet
For the Year ended 31st December 2011

Trial Balance Adjustments Adjusted TB Income Statement Balance Sheet

Accounts Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cap ital 6 ,4 0 0 ,0 0 0 6 ,4 0 0 ,0 0 0 6 ,4 0 0 ,0 0 0
Drawing s 1,8 13 ,8 0 0 1,8 13 ,8 0 0 1,8 13 ,8 0 0
Go o d will 3 ,6 18 ,2 0 0 3 ,6 18 ,2 0 0 3 ,6 18 ,2 0 0
Land & Build ing s 2 ,4 0 0 ,0 0 0 2 6 0 ,0 0 0 2 ,3 4 0 ,0 0 0 2 ,3 4 0 ,0 0 0
Plant & M achinery 1,6 0 0 ,0 0 0 2 16 0 ,0 0 0 1,4 4 0 ,0 0 0 1,4 4 0 ,0 0 0
Lo o s e To o ls 12 0 ,0 0 0 2 12 ,0 0 0 10 8 ,0 0 0 10 8 ,0 0 0
Bills Receivab le 14 5,8 0 0 14 5,8 0 0 14 5,8 0 0
Bills Payab le 1,3 52 ,0 0 0 1,3 52 ,0 0 0 1,3 52 ,0 0 0
Cred ito rs 3 ,0 6 8 ,8 4 0 3 ,0 6 8 ,8 4 0 3 ,0 6 8 ,8 4 0
Purchas e Returns 10 6 ,0 0 0 10 6 ,0 0 0 10 6 ,0 0 0
Sales 8 ,72 0 ,0 0 0 8 ,72 0 ,0 0 0 8 ,72 0 ,0 0 0
Sto ck, 1s t J an 2 0 11 1,6 77,8 0 0 1,6 77,8 0 0 1,6 77,8 0 0
Purchas es 2 ,0 50 ,8 0 0 2 ,0 50 ,8 0 0 2 ,0 50 ,8 0 0
Wag es 8 58 ,0 0 0 3 6 0 ,0 0 0 9 18 ,0 0 0 9 18 ,0 0 0
Carriag e Outward 2 2 ,16 0 2 2 ,16 0 2 2 ,16 0
Carriag e inward 55,0 0 0 55,0 0 0 55,0 0 0
Co al & g as es 2 3 4 ,16 0 2 3 4 ,16 0 2 3 4 ,16 0
Salaries 1,4 14 ,56 0 3 12 0 ,0 0 0 1,53 4 ,56 0 1,53 4 ,56 0
Rent, Rates & Taxes 113 ,0 0 0 113 ,0 0 0 113 ,0 0 0
Dis co unt 6 0 ,52 0 6 0 ,52 0 6 0 ,52 0
Cas h at Bank 1,0 16 ,8 4 0 1,0 16 ,8 4 0 1,0 16 ,8 4 0
Cas h in Hand 18 ,6 0 0 18 ,6 0 0 18 ,6 0 0
Sund ry Deb to rs 1,8 0 0 ,0 0 0 1,8 0 0 ,0 0 0 1,8 0 0 ,0 0 0
Rep airs & maintenance 74 ,6 0 0 3 1,50 0 76 ,10 0 76 ,10 0
Printing & Statio nery 2 0 ,6 0 0 2 0 ,6 0 0 2 0 ,6 0 0
Bad Deb ts 4 8 ,52 0 4 8 ,52 0 4 8 ,52 0
Ad vertis ements 14 0 ,8 4 0 3 2 0 ,0 0 0 16 0 ,8 4 0 16 0 ,8 4 0
Sales Returns 8 5,0 0 0 8 5,0 0 0 8 5,0 0 0
Furniture 4 8 ,0 0 0 2 4 ,8 0 0 4 3 ,2 0 0 4 3 ,2 0 0
General Exp ens es 2 10 ,0 4 0 2 10 ,0 4 0 2 10 ,0 4 0
Clo s ing Sto ck 1 1,4 0 0 ,0 0 0 1,4 0 0 ,0 0 0 1,4 0 0 ,0 0 0
P & L (Clo s ing Sto ck) 1 1,4 0 0 ,0 0 0 1,4 0 0 ,0 0 0 1,4 0 0 ,0 0 0
Dep riciatio n–Plant & M achinery 2 16 0 ,0 0 0 16 0 ,0 0 0 16 0 ,0 0 0
Dep riciatio n–Lo s s To o ls 2 12 ,0 0 0 12 ,0 0 0 12 ,0 0 0
Dep riciatio n–Furniture 2 4 ,8 0 0 4 ,8 0 0 4 ,8 0 0
Dep riciatio n–Land & Build ing s 2 6 0 ,0 0 0 6 0 ,0 0 0 6 0 ,0 0 0
Payab le–Wag es 3 6 0 ,0 0 0 6 0 ,0 0 0 6 0 ,0 0 0
Payab le–Ad vertis ements 3 2 0 ,0 0 0 2 0 ,0 0 0 2 0 ,0 0 0
Payab le–Salaries 3 12 0 ,0 0 0 12 0 ,0 0 0 12 0 ,0 0 0
Payab le–Rep airs & M aintenance 3 1,50 0 1,50 0 1,50 0
Pro vis io n fo r b ad d eb ts 4 9 0 ,0 0 0 9 0 ,0 0 0 9 0 ,0 0 0
P & L (Pro vis io n fo r Bad d eb ts ) 4 9 0 ,0 0 0 9 0 ,0 0 0 9 0 ,0 0 0
Pro vis io n fo r d is co ut 4 3 4 ,2 0 0 3 4 ,2 0 0 3 4 ,2 0 0
P & L (Pro vis io n fo r Dis co unt) 4 3 4 ,2 0 0 3 4 ,2 0 0 3 4 ,2 0 0
To ta l 19 ,6 4 6 ,8 4 0 19 ,6 4 6 ,8 4 0 1,9 2 8 ,3 0 0 1,9 6 2 ,5 0 0 2 1,3 7 2 ,5 4 0 2 1,3 7 2 ,5 4 0 7 ,6 2 8 ,10 0 10 ,2 2 6 ,0 0 0 13 ,7 4 4 ,4 4 0 11,14 6 ,5 4 0
N e t P ro f it 2,597,900 2,597,900
To ta l 10 ,2 2 6 ,0 0 0 10 ,2 2 6 ,0 0 0 13 ,7 4 4 ,4 4 0 13 ,7 4 4 ,4 4 0

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CSS Accountancy & Auditing Simple Final Accounts

Q. 7 CSS – 2004, PAPER # 1, Q. # 5, Compulsory Question (40 Marks)

a. Income Statement
Name of Business
Income Statement / Profit & Loss Account
For the Year ended 31st December 2003
Accounts Rs. Rs. Rs.
Sales 121,850
Less Sales Return (285)
Net sales 121,565
Less Cost of goods sold
Opening Stock 15,040
Plus Purchases 85,522
Add Carriage In 1,291
Net Purchases 86,813
Less Closing Stock (15,500)
Cost of goods sold (86,353)
Gross Profit 35,212
Add Other Incomes
Interest Income 340
Add Interest Receivable 210 550
Rental Income 150
Total Other Incomes 700
Less Other Expenses
Carriage out 800
Provision for Bad debts 1,000
Establishment 2,135
Taxes & Insurance 783
Add Outstanding taxes 150
Less Unexpired Insurance (50) 883
Bad debts 613
Audit Fee 400
General charges 3,950
Travelling Expenses 325
Discount (Dr.) 620
Depreciation–Motor Truck 2,400
Depreciation–Furniture 164
Salaries Expenses 500
Total Other expenses (13,790)
Net Profit 22,122
b. Adjusting Entries
No. Accounts Dr. Rs. Cr. Rs.
(i) Closing Stock A/C 15,500
P & L A/C 15,500
(ii) Depreciation Exp. Motor Truck A/C 2,400
Motor truck A/C 2,400
(ii) Depreciation Exp. Furniture A/C 164
Furniture A/C 164
(iii) P & L A/C 1,000
Provision for Bad Debts A/C 1,000
(iv) Salaries Expense A/C 500
Outstanding Salaries Exp. A/C 500
(iv) Taxes & insurance Expense A/C 150
Outstanding Taxes Exp. A/C 150

(v) Unexpired Insurance 50

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CSS Accountancy & Auditing Simple Final Accounts

Taxes & insurance Expense A/C 50

(vi) Interest receivable A/C 210
Interest Income A/C 210
(vii) Rent receivable A/C 150
Rental Income 150
Note 1: While recording depreciation of Various Assets Direct write off
method is applied as there is no provision for depreciation
A/c is available in trial balance otherwise provision for
Depreciation A/c could be credited instead of Assets Accounts.
Note 2: A bill receivable for Rs. 500 was discounted in December 2003
But was not due till January next. For this adjustment no entry
is required to record, just a disclosure in notes to the accounts
is sufficient.
c. Balance Sheet
Name of Business
Balance Sheet /Statement of Financial Position
as on 31st December 2003
Accounts Rs. Rs. Rs. Rs.
Assets
Fixed Assets Cost Dep. NBV
Building 70,000 70,000
Motor Trucks 12,000 2,400 9,600
Furniture 1,640 164 1,476
81,076
Investments 8,922
Total fixed assets 89,998
Current Assets
Cash in hand 988
Cash at bank 14,534
Stock 15,500
Debtors 15,600
Less Prov. For Bad debts (2,320) 13,280
Interest Receivable 210
Rent Receivable 150
Unexpired Insurance 50
Bills receivable 5,844
Total Current Assets 50,556
Total Assets 140,554
Liabilities & Capital
Capital
Capital as at 1st January 2003 92,000
Plus Net Profit for the year 22,122
Capital as at 31st Dec. 2003 114,122
Current Liabilities
Bills Payable 6,930
Creditors 18,852
Payable–Taxes 150
Payable–Salaries 500
Total Current Liabilities 26,432
Total Liabilities & capital 140,554
d. Worksheet

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 CSS Accountancy & Auditing Simple Final Accounts

Name of Business
Work Sheet
For the Year ended 31st December 2003

Trial Balance Adjustments Adjusted TB Income Statement Balance Sheet

Accounts Dr. Cr. # Dr. # Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Building 70,000 70,000 70,000
Motor Trucks 12,000 (ii) 2,400 9,600 9,600
Furniture 1,640 (ii) 164 1,476 1,476
Sundry Debtors 15,600 15,600 15,600
Sundry Creditors 18,852 18,852 18,852
Stock 15,040 15,040 15,040
Cash in hand 988 988 988
Cash at Bank 14,534 14,534 14,534
Bills Receivable 5,844 5,844 5,844
Bills Payable 6,930 6,930 6,930
Purchases 85,522 85,522 85,522
Sales 1,21,850 121,850 121,850
Capital 92,000 92,000 92,000
Carriage on Purchases 1,291 1,291 1,291
Carriage on Sales 800 800 800
Reserve for Bad Debts 1,320 (iii) 1,000 2,320 2,320
Establishment 2,135 2,135 2,135
Taxes & Insurance 783 (iv) 150 (v) 50 883 883
Interest (Cr.) 340 (vi) 210 550 550
Bad Debts 613 613 613
Audit Fee 400 400 400
General charges 3,950 3,950 3,950
Travelling Expenses 325 325 325
Discount (Dr.) 620 620 620
Investments 8,922 8,922 8,922
Sales Returns 285 285 285
Closing Stock (i) 15,500 15,500 15,500
P & L A/C (i) 15,500 15,500 15,500
Depriciation A/C M. Trucks (ii) 2,400 2,400 2,400
Depriciation A/C Furniture (ii) 164 164 164
P & L A/C (Reserve For B/D) (iii) 1,000 1,000 1,000
Outstanding Salaries (iv) 500 500 500
Outstanding Taxes (iv) 150 150 150
Salaries Expenses A/C (iv) 500 500 500
Unexpired insurance A/C (v) 50 50 50
Interest Receivable A/C (vi) 210 210 210
Rental Income A/c 150 150 150
Rent receivable A/C 150 150 150

Total 241,292 241,292 20,124 20,124 258,802 258,802 115,928 138,050 142,874 120,752
Net Profit 22,122 22,122
Total 138,050 138,050 142,874 142,874

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