Q.

1) The following trial balance has been extracted from the books of Rajesh on 31st
December, 2016.

The following adjustments are to be made:

i Stock on 31st December, 2016 was Rs.  28,000
ii Unexpired insurance was Rs.  15,000
iii Provision for doubtful debts is to be maintained at 5% on sundry debtors.
iv Depreciate plant and machinery at 20%.
You are required to prepare trading and profit and loss account for the year ended 31st
December, 2016 and a balance sheet as on that date.

ANSWER:

In the books of Rajesh

For year ending 31st December, 2016
Trading A/c
Particulars Amount Amount Particulars Amount Amount

To Opening Stock 20,000 By Sales

To Purchase 2,70,000 i Credit 3,00,000

ii Cash
To Wages 62,000 1,72,000 4,72,000

By Closing Stock
To Gross Profit 1,48,000 28,000

Total 5,00,000 Total 5,00,000

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 In the books of Rajesh
For year ending 31st December, 2016
Profit & Loss A/c
Particulars Amount Amount Particulars Amount Amount
To Salaries 70,000 By Gross Profit 1,48,000
To Insurance 45,000 b/d
(-) Unexpired 15,000 30,000 By Discount 6,000
To Rents & Taxes 17,000 received
To Depreciation 20,000
To New provision
@5% on Debtor 2,500
(-) Old Provision 2,000
500
To Net Profit
16,500

Total 1,54,000 Total 1,54,000

Balance Sheet
as on 31st December,2016

Liability Amount Amount Asset Amount Amount

Capital 1,76,000 Plant & Machinery 1,00,000

(+) Net Profit 16,500 (-) Depreciation 20,000 80,000

(-) Drawing 44,000 1,48,500 Sundry debtors 50,000

(-) Provision for 2,500 47,500
doubtful debt
Bank Overdraft 20,000
Closing Stock
Sundry 24,000 28,000
Creditors Unexpired
Insurance 15,000

Suspense A/c 22,000

Total 1,92,000 Total 1,92,000

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Q.2) Given below are the balances of Pandian as on 31st March, 2016.

Adjustments:
i The stock value at the end of the accounting period was Rs. 5,000
ii Interest on capital at 6% is to be provided
iii Interest on drawing at 5% is to be provided
iv Write off bad debts amounting to Rs. 2,000
v Create provision for bad and doubtful debts on sundry debtors @ 10%
vi Prepare final accounts for the year ended 31st March, 2016.
ANSWER:

In the books of Pandian

For year ending 31st March, 2016
Trading A/c
Particulars Amount Amount Particulars Amount Amount
To Opening Stock 30,000 By Sales 59,700
To Purchase 10,000 By Closing Stock 5,000
To Wages 2,500

To Gross Profit 22,200

Total 64,700 Total 64,700

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 In the books of Pandian
For year ending 31st March, 2016
Profit & Loss A/c
Particulars Amount Amount Particulars Amount Amount
To Office Telephone 3500 By Gross Profit b/d 22,200
Expenses By Interest on
To General expense 9,000 Drawing 100
To Interest on To Net loss 1,400
Capital 7,200
To New provision
@10% on Debtor
To bad debt 2,000
2,000

Total 23,700 Total 23,700

Balance Sheet
as on 31st March ,2016

Liability Amount Amount Asset Amount Amount

Capital Business premises 60,000

(-) Net Loss 1,20,000 Goodwill 10,500

(-) Drawing 1,400 Sundry Debtor 22,000

(-) Interest on 2,000 (-) Bad debt written 2,000

off
(+) Interest on 100 2,000
Capital (-) Provision for
7,200 1,23,700 18,000
doubtful debt

Cash in hand 8,200

Cash at bank 30,000

Sundry Creditors
22,500 14,500
Bill receivable

Closing Stock 5,000

Total 1,46,200 Total 146,200

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 Q.3) (a) On 11st April, 2007, a limited company purchased a Machine for ₹ 1,90,000
and spent ₹ 10,000 on its installation. At the date of purchase, it was estimated that the
scrap value of the machine would be ₹ 50,000 at the end of sixth year.
Give Machine Account and Depreciation A/c in the books of the Company for 4 years
after providing depreciation by Fixed instalment Method. The books are closed on 31st
March every year.

ANSWER:
Cost of Machinery = (1,90,000+10,000) = 2,00,000.
Annual Depreciation (Fixed Installment Method) = Cost- Scrap value/ useful life.
= 2,00,000-50,000/6 = 25,000.

In the books of Limited Company

Machinery A/c
Date Particulars LF Amount Date Particular LF Amount
1st To Bank A/c 2,00,000 31st By 25,000
April,07 (1,90,000+10,000) March,0 Depreciation
8 A/c 1,75,000
By Balance
C/d
2,00,000 2,00,000
1st To Balance b/d 1,75,000 31st By 25,000
April,08 March,0 Depreciation
9 A/c 1,50,000
By Balance
C/d
1,75,000 1,75,000
1st April To Balance B/d 1,50,000 31st By 25,000
09 March.1 Depreciation
0 A/c 1,25,000
By Balance
A/c
1,50,000 1,50,000
1st April, To Balance b/d 1,25,000 31st By 25,000
10 March,1 Depreciation
1 A/c 1,00,000
By Balance
c/d
1,25,000 1,25,000
1st April To Balance b/d 1,00,000
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5
 Depreciation A/c
Date Particulars LF Amount Date Particular LF Amount
1st April,07 To Machinery 25,000 31st By Profit & 25,000
A/c March,0 Loss A/c
8

25,000 25,000
1st April,08 To Machinery 25,000 31st By Profit & 25,000
A/c March,0 Loss
9

25,000 25,000
1st April 09 To Machinery 25,000 31st By Profit & 25,000
A/c March.1 Loss A/c
0

25,000 25,000
1st April 10 To Machinery 25,000 31st By Profit & 25,000
A/c March,1 Loss A/c
1
25,000 25,000

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 (b) On 1st July, 2005, Geeta Paper Limited purchased a Plant for ₹ 1,50,000 and paid ₹
10,000 as freight on its carriage. Depreciation was provided at 10% p.a. on the Written
Down Value Method on this plant. On 1st Oct., 2008, this plant was sold for ₹ 80,000.
Prepare Plant A/c for 4 years, assuming that the books are closed on 31st March every
year.
In the books of Geeta Paper Limited
Plant A/c

Date Particulars LF Amount Date Particular LF Amount

1st To Bank A/c 1,60,000 31st By Depreciation 12,000
July,05 (1,50,000+10,000) March,06 A/c (1,60,000@
10% for 1,48,000
9months)
By Balance C/d
1,60,000 1,60,000
1st To Balance b/d 1,48,000 31st By Depreciation 14,800
April,06 March,07 A/c (1,48,000 @
10%) 1,33,200
By Balance C/d

1,48,000 1,48,000
1st April To Balance B/d 1,33,200 31st By Depreciation 13,320
07 March.08 A/c (1,33,200
@10%) 1,19,880
By Balance A/c

1,33,200 1,33,200
1st April To Balance b/d 1,19,880 1st Oct,08 By Depreciation 5,994
08 A/c (1,19,880 @
10% for 6
months) 80,000
By Bank A/c 33,886
By Loss on Sale
(Asset) A/c
1,19,880 1,19,880
ANSWER:

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Q.4) Under which sub-headings will the following items be placed in the balance sheet
of a company as per Schedule III, Part I of the Companies Act, 2013.
(A)
i Capital reserves
ii Bonds
iii Loans repayable on demand
iv Vehicles
v Goodwill
vi Loose tools
ANSWER:

Item Heading Sub Heading

(i) Capital reserves Shareholder’s Funds Reserves and Surplus

(ii) Bonds Non-Current Liabilities Long-term borrowings

(iii) Loans repayable on demand Current Liabilities Short-term borrowings

(iv) Vehicles Non-Current Asset Tangible Fixed Asset

(v) Goodwill Non-Current Asset Intangible Fixed Asset

(vi) Loose tools Current Assets Inventories

(B)
i Long-term borrowings
ii Trade payables
iii Provision for tax
iv Securities premium reserve
v Patents
vi Accrued income
ANSWER:

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 Item Heading Sub-Heading

(i) Long-term borrowings Non-Current Liabilities Long-term borrowings

(ii) Trade payables Current Liabilities  Trade Payables

(iii) Provision for tax Current Liabilities  Short Term Provisions

Securities premium
Shareholder’s Funds  Reserves & Surplus
(iv) reserve

(v) Patents Non-Current Asset Intangible Fixed Asset

(vi) Accrued income Current Assets Other Current Assets

(C)
i Trade marks
ii Capital redemption reserves
iii Income received in advance
iv Stores and spares
v Office equipment
vi Current investments
ANSWER:

Item Headings Sub-Headings

(i) Trade marks Non-Current Asset Intangible Fixed Asset

(ii) Capital redemption reserves Shareholder’s Funds  Reserves & Surplus

(iii) Income received in advance Non-Current Liability Other Non-Current Liability

(iv) Stores and spares Current Assets  Inventories

(v) Office equipment Non-Current Asset Tangible Fixed Asset

(vi) Current investments Current Assets  Other Current Asset

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Q.5) Write the format of Income Statement as per Companies Act 2013 (Schedule III).

Figures as at Figures as at
the end of the end of
Note
  Particulars current the previous
No.
reporting reporting
period period

  1 2 3 4

I Revenue from operations      

II Other income      

III Total Revenue (I + II)      

IV Expenses:      

Cost of materials consumed      

Purchases of Stock-in-Trade      

Changes in inventories of finished goods      

work-in-progress and      

Stock-in-Trade      

Employee benefits expense Finance costs      

Depreciation and amortisation expense      

Other expenses      

Total expenses      

Profit before exceptional and extraordinary

V items and tax (III - IV)      

VI Exceptional items      

Profit before extraordinary items and tax (V -

VII VI)      

VIII Extraordinary items      

IX Profit before tax (VII- VIII)      

X Tax expense:      

  1. Current tax      

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  2. Deferred tax      

Profit (Loss) for the period from continuing

XI operations (VII-VIII)      

THANK YOU

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