KS ACADEMY Final Accounts - 1

FINAL ACCOUNT MATERIAL – 1

1. The following is the schedule of balances as on 31.3.17 extracted from the books of Shri Gavaskar, who carries
on business under the same name and style of Messrs Gavaskar Viswanath & Co., at Bombay:
Particulars Dr. (Rs.) Cr. (Rs.)
Cash in hand 14,000
Cash at bank 26,000
Sundry Debtors 8,60,000
Stock on 1.4.2016 6,20,000
Furniture & fixtures 2,14,000
Office equipment 1,60,000
Buildings 6,00,000
Motor Car 2,00,000
Sundry Creditors 4,30,000
Loan from Viswanath 3,00,000
Provision for bad debts 30,000
Purchases 14,00,000
Purchase Returns 26,000
Sales 23,00,000
Sales Returns 42,000
Salaries 1,10,000
Rent for Godown 55,000
Interest on loan from Viswanath 27,000
Rates & Taxes 21,000
Discount allowed to Debtors 24,000
Discount received from Creditors 16,000
Freight on purchases 12,000
Carriage Outwards 20,000
Drawings 1,20,000
Printing and Stationery 18,000
Electricity Charges 22,000
Insurance Premium ! 55,000
General office expenses 30,000
Bad Debts 20,000
Bank charges 16,000
Motor car expenses 36,000

CA – Foundation 1 Final Accounts Material

KS ACADEMY Final Accounts - 1

Capital A/c 16,20,000

TOTAL 47,22,000 4722000
Prepare Trading and Profit and Loss Account for the year ended 31st March 2017 and the Balance Sheet
as at that date after making provision for the following:
(i) Depreciate: (a) Building used for business by 5 percent; (b) Furniture and fixtures by 10 percent; One
steel table purchased during the year for 14,000 was sold for same price but the sale proceeds were
wrongly credited to Sales Account; (c) Office equipment by 15 percent; Purchase of a typewriter during
the year for 40,000 has been wrongly debited to purchase; and (d) Motor car by 20%.
(ii) Value of stock at the close of the year was Rs.4,40,000.
(iii) Two month's rent for godown is outstanding.
(iv) Interest on loan from Viswanath is payable at 12 percent per annum, this loan was taken on 1.5.2016.
(v) Reserve for bad debts is to be maintained at 5 percent of Sundry Debtors.
(vi) 6 Insurance premium includes 40,000 paid towards proprietor's life insurance policy and the balance of
the Insurance charges cover the period from 1.4.2016 to 30.6.17.

2. From the following particulars extracted from the books of Ganguli, prepare trading and profit and loss account
and balance sheet as at 31st March, 2016 after making the necessary adjustments:
(Rs.) (Rs.)
Ganguli's capital account (Cr.) 5,40,500 Interest received 72,500
Stock on 1.4.2015 2,34,000 Cash with Traders Bank Ltd. 40,000
Sales 14,48,000 Discounts received 14,950
Investments (at 5%) as on
Sales return 43,000 1.4.2015 25,000
Purchases 12,15,500 Furniture as on 1-4-2015 9,000
Purchases return 29,000 Discounts allowed 37,700
Carriage inwards 93,000 General expenses 19,600
Rent 28,500 Audit fees 3,500
Salaries 46,500 Fire insurance premium 3,000
Sundry debtors 1,20,000 Travelling expenses 11,650
Sundry creditors 74,000 Postage and telegrams 4,350
Loan from Dena Bank Ltd. (at
12%) 1,00,000 Cash in hand 1,900
Deposits at 10% as on 1-4-
Interest paid 4,500 2015 (Dr.) 1,50,000
Printing and stationery 17,000 Drawings 50,000
Advertisement 56,000

CA – Foundation 2 Final Accounts Material

KS ACADEMY Final Accounts - 1

Adjustments :
(i) Value of stock as oh 31st March, 2016 is Rs.3,93,000. This includes goods returned by customers on
31st March, 2016 to the value of Rs.15,000 for which no entry has been passed in the books.
(ii) Purchases include furniture purchased on 1st January, 2016 for Rs.10,000.
(iii) Depreciation should be provided on furniture at 10% per annum.
(iv) The loan account from Dena bank in the books of Ganguli appears as follows:
31.3.2016 To balance c/d 1,00,000 1.4.2015 By balance c/d 50,000
31.3.2016 By Bank 50,000
1,00,000 1,00,000
(v) Sundry debtors include Rs.20,000 due from Robert and sundry creditors include Rs.10,000 due to him.
(vi) Interest paid include Rs.3,000 paid to Dena bank.
(vii) Interest received represents Rs.1,000 from the sundry debtors and the balance on investments and
deposits.
(viii)Provide for interest payable to Dena bank and for interest receivable on investments and deposits.
(ix) Make provision for doubtful debts at 5% on the balance under sundry debtors. No such provision need
to be made for the deposits.

3. The following are the balances as at 31st March, 2019 extracted from the books of Mr.XYZ.
Rs. Rs.
Plant and Machinery 19,550 Bad debts recovered 450
Furniture and Fittings 10,250 Salaries 22,550
Bank Overdraft 80,000 Salaries payable 2,450
Capital Account 65,000 Prepaid rent 300
Drawings 8,000 Rent 4,300
Purchases 1,60,000 Carriage inward 1,125
Opening Stock 32,250 Carriage outward 1,350
Wages 12,165 Sales 2,15,300
Advertisement
Provision for doubtful debts 3,200 Expenses 3,350
Provision for Discount on Printing and
debtors 1,375 Stationery 1,250
Sundry Debtors 1,20,000 Cash in hand 1,450
Sundry Creditors 47,500 Cash at bank 3,125
Bad debts 1,100 Office Expenses 10,160
Interest paid on loan 3,000
Additional Information :

CA – Foundation 3 Final Accounts Material

KS ACADEMY Final Accounts - 1

(i) Purchases include sales return of Rs.2,575 and sales include purchases return of Rs.1,725.
(ii) Goods withdrawn by Mr. XYZ for own consumption Rs.3,500 included in purchases.
(iii) Wages paid in the month of April for installation of plant and machinery amounting
(iv) Free samples distributed for publicity costing Rs.825.
(v) Create a provision for doubtful debts @ 5% and provision for discount on debtors @ 2.5%.
(vi) Depreciation is to be provided on plant and machinery @ 15% p.a. and on furniture and fittings @ 10%
p.a.
(vii) Bank overdraft is secured against hypothecation of stock. Bank overdraft outstanding as on 31.3.2019
has been considered as 80% of real value of stock (deducting 20% as margin) and after adjusting the
marginal value 80% of the same has been allowed to draw as an overdraft.
Prepare a Trading and Profit and Loss Account for the year ended 31st March, 2019, and a Balance Sheet as on
that date. Also show the rectification entries.

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CA – Foundation 5 Final Accounts Material