Question 1

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 2,500 By Sales 15,400
To Purchases 12,500 (-) Return Inward 450 14,950
(-) Return Outward 600 11,900 By Closing stock 1,550
To Manufacturing Expense 800 By Gross Loss 1,500
To Wages 3,000
(-) Prepaid 200 2,800

18,000 18,000

To Gross Loss b/d 1,500 By Rent 160

To Trade Expense 800 By Net Loss 2,750
To Carriage outward 250
To Bad debts 300
To Repairs 60

2,910 2,910

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 12,000 Cash at Bank 1,000
(-) Drawings 1,100 Plant & Machinery 5,000
(-) Net Loss 2,750 8,150 Debtors 2,500
Bills Payable 700 Prepaid wages 200
 Creditors 1,400 Closing Stock 1,550

10,250 10,250

Question 2

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 2,000 By Sales 16,400
To Purchases 10,500 (-) Sales return 300 16,100
(-) Purchase Return 500 10,000 By Closing stock 1,000
To Manufacturing Expense 800 By Gross Loss 950
To Wages 5,000
To Fuel and Power 100
To Carriage 150

18,050 18,050

To Gross Loss b/d 950 By Net Loss 2,700

To Trade Expense 700
To Rent 400
To Repairs 50
To Bad debts 200
To Depreciation - Plant & Machinery 400

2,700 2,700
 Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 10,000 Plant & Machinery 4,000
(-) Drawings 1,000 (-) Depreciation 400 3,600
(-) Net Loss 2,700 6,300 Cash at Bank 1,000
Creditors 1,200 Sundry Debtors 2,400
Bills Payable 500 Closing Stock 1,000

8,000 8,000

Question 3

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 3,460 By Sales 15,450
To Purchases 5,475 (-) Sales return 200 15,250
(-) Purchase Return 125 5,350 By Closing stock 3,000
To Wages 1,000
To Gross Profit 8,440

18,250 18,250

To Advertising 450 By Gross Profit b/d 8,440

To Interest 118 By Commission 375
To Taxes & Insurance 1,250 By Provision for Bad debt 200
(+) Outstanding 120 1,370 (-) Bad debt 125 75
 To General Expense 782
To Salaries 2,300
(+) Outstanding 300 2,600
To Net Profit 3,570

8,890 8,890

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 12,500 Furniture & Fittings 640
(+) Net Profit 3,570 16,070 Motor Vehicles 6,250
Bank Overdraft 2,850 Building 7,500
Sundry Creditors 2,500 Cash in Hand 650
Outstanding salaries 300 Sundry Debtors 3,800
Outstanding taxes 120 Closing Stock 3,000

21,840 21,840

Question 4

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 4,000 By Sales 41,000
To Purchases 20,000 By Closing stock 11,000
To Wages 6,000
To Carriage 500
To Gross Profit 21,500

52,000 52,000

To Salaries 2,000 By Gross Profit b/d 21,500

To Interest 400 By Discount 500
To Rent 600
To Depreciation - Furniture & Fixtures 500
To Depreciation - Land & Building 500
To Net Profit 18,000

22,000 22,000

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 8,000 Furniture & Fixtures 5,000
(+) Net Profit 18,000 26,000 (-) Depreciation 500 4,500
Sundry Creditors 1,500 Cash in Hand 500
Cash at Bank 2,000
Land & Building 10,000
(-) Depreciation 500 9,500
Closing Stock 11,000

27,500 27,500
Question 5

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 6,000 By Sales 22,120
To Purchases 17,980 (-) Return Inward 60 22,060
To Gross Profit 2,580 By Closing stock 4,500

26,560 26,560

To Heating & Lighting 130 By Gross Profit b/d 2,580

To Salaries 2,150 By Discount 890
(+) Outstanding 350 2,500 By Net Loss 495
To Printing 450
To rates, Taxes & Insurance 380
To Discount Allowed 400
To Depreciation - Fixtures & Fitting 45
To Depreciation - Freehold Premises 60

3,965 3,965

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 15,340 Cash in Hand 60
(-) Net Loss 495 14,845 Cash at Bank 1,770
Outstanding salaries 350 Fixtures & Fitting 450
 Sundry Creditors 3,780 (-) Depreciation 45 405
Bills Payable 3,750 Freehold premises 3,000
(-) Depreciation 60 2,940
Bills Receivable 1,650
Sundry Debtors 11,400
Closing Stock 4,500

22,725 22,725

Question 6

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 2,000 By Sales 11,000
To Purchases 6,500 By Closing stock 3,000
To Wages 1,750
(+) Outstanding 200 1,950
To Gross Profit 3,550

14,000 14,000

To Discount Allowed 250 By Gross Profit b/d 3,550

To Interest on Capital 400
To office Expenses 250
To Rent & Taxes 100
(-) Prepaid 20 80
To Salaries 285
 (+) Outstanding 50 335
To Depreciation - Plant & Machinery 300
To Net Profit 1,935

3,550 3,550

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 7,500 Debtors 1,500
(+) Net Profit 1,935 9,435 Cash at Bank 115
Creditors 500 Furniture & Fixtures 150
Outstanding salaries 50 Prepaid Rent 20
Outstanding wages 200 Bills Receivable 750
Bills Payable 350 Plant & Machinery 3,300
(-) Depreciation 300 3,000
Land & Building 2,000
Closing Stock 3,000

10,535 10,535

Question 7

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 11,300 By Sales 55,000
To Purchases 40,000 (-) Sales return 300 54,700
(-) Purchase Return 580 39,420 By Closing stock 12,300
To Gas & Water 480
To Wages 1,250
(+) Outstanding 200 1,450
To Carriage 750
To Gross Profit 13,600

67,000 67,000

To Salary & Wages 800 By Gross Profit b/d 13,600

(+) Outstanding 100 900 By Commission 500
To Rent, Rates & Taxes 700 (+) Accrued 300 800
To Insurance Premium 1,000
To Discount Allowed 300
To Provision for Doubtful Debt 500
To Depreciation - Machinery 700
To Net Profit 10,300

14,400 14,400

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 20,000 Cash in Hand 1,000
(+) Net Profit 10,300 30,300 Cash at Bank 5,700
Outstanding salaries 100 Debtors 10,000
Outstanding wages 200 (-) Provision 500 9,500
 Loan 5,000 Machinery 7,000
Creditors 8,000 (-) Depreciation 700 6,300
Bills Payable 1,500 Building 10,000
Accrued Commission 300
Closing Stock 12,300

45,100 45,100

Question 8

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 15,547 By Sales 33,394
To Purchases 25,361 (-) Return Inward 263 33,131
(-) Return Outward 155 25,206 By Closing stock 14,640
To Carriage 1,762
To Motive Power (Production) 175
To Gross Profit 5,081

47,771 47,771

To rates & Taxes 151 By Gross Profit b/d 5,081

(-) Unexpired 30 121
To Printing & Stationery 368
To Depreciation - Furniture & Fixtures 45
To Bad debts written off 381
(+) Further bad debt 300 681
To Trade Expense 1,267
 To Salaries 825
(+) Outstanding 200 1,025
To Net Profit 1,574

5,081 5,081

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 22,000 Unexpired Rates & Taxes 30
(+) Net Profit 1,574 23,574 Furniture & Fixtures 450
Outstanding salaries 200 (-) Depreciation 45 405
Loan 11,000 Sundry Debtors 25,300
Sundry Creditors 19,894 (-) Bad debt 300 25,000
Petty cash 88
Cash at Bank 2,105
Freehold premises 12,400
Closing Stock 14,640

54,668 54,668

Question 9

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 16,200 By Sales 65,300
To Purchases 47,000 By Closing stock 18,640
To Productive wages 7,200
To Factory Power 2,240
To Gross Profit 11,300

83,940 83,940

To Charity 100 By Gross Profit b/d 11,300

To Car Expense 1,100 By Discount 1,320
To Depreciation - Motor Car 400
To Provision for Bad debt W.N. 1 664
To Taxes & Insurance 1,315
(-) Carried forward 100 1,215
To Depreciation - Machinery 934
To General Expense 2,500
(+) Outstanding 200 2,700
To Telephone Charges 500
5,007

12,620 12,620

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 24,500 Cash 75
(+) Net Profit 5,007 Motor Car 2,000
(-) Drawings 1,500 28,007 (-) Depreciation 400 1,600
 Bank Overdraft 3,350 Debtors 6,280
Bills Payable 3,850 (-) Provision 314 5,966
Loan 7,880 Carried over insurance 100
Creditors 2,500 Machinery 9,340
Outstanding General Expense 200 (-) Depreciation 934 8,406
Building 11,000
Closing Stock 18,640

45,787 45,787

Question 10

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 40,000 By Sales (Goods sold) 1,15,000
To Purchases (material) 51,000 (-) Sales return 2,000 1,13,000
(-) Purchase Return 2,650 48,350 By Closing stock 46,000
To Wages 20,000
To coal & Cake (Factory) 5,000
To Carriage Inward 1,000
To Oil, Greese & Water 600
To Gross Profit 44,050

1,59,000 1,59,000

To Electricity (Office) 1,200 By Gross Profit b/d 44,050

To Unproductive Wages 1,800
To Discount and Allowances 1,500
To Salaries 5,000
(+) Outstanding 1,000 6,000
To Carriage outward 500
To Printing & Stationery 450
To General Expense 800
To Advertisement 500
To Provision for Doubtful Debt W.N. 1 2,725
To Rent, Rates & Taxes 2,800
(-) Prepaid 300 2,500
To Depreciation - Plant & Machinery 2,000
To Net Profit 24,075

44,050 44,050

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 2,03,000 Furniture & Fixtures 1,200
(-) Drawings 15,000 Cash in Hand 400
(+) Net Profit 24,075 2,12,075 Loose tools 3,000
Sundry Creditors 40,000 Freehold premises 90,000
Bills Payable 3,800 Work Extension 7,500
Outstanding salaries 1,000 Sundry Debtors 45,000
(-) Bad debt 500
(-) Provision 2,225 42,275
Cheque in Hand 25,000
Prepaid Rent 300
Bills Receivable 3,200
Plant & Machinery 40,000
 (-) Depreciation 2,000 38,000
Closing Stock 46,000

2,56,875 2,56,875

W.N. 1

Calculation of Provision for Bad debt

Particular Amount
Bad debt (Given in Balance sheet) Nil
(+) Further Bad debt (Given in adjustment) 500
(+) New provision for Bad debts 2,225
Amount to be shown in Profit & Loss Account 2,725

Question 11

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Purchases 1,16,000 By Sales 1,70,000
(-) Free Sample 700 1,15,300 (-) Return Inward 4,000 1,66,000
To Manufacturing Expense 8,000
(+) Outstanding 1,000 9,000
To Carriage Inward 2,000
To Gross Profit 39,700

1,66,000 1,66,000

To Discount Allowed 500 By Gross Profit b/d 39,700

To Provision for Doubtful Debt W.N. 1 3,150 By Interest on drawings 500
To Rent & Taxes 1,400
To Trade Charges 600
To Advertisement 1,200
(-) Carry forward 900 300
To Printing & Stationery 800
To Salaries 10,000
(+) Outstanding 2,000 12,000
To Free sample 700
To Depreciation - Plant & Fixtures 800
To Net Profit 19,950

40,200 40,200

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 30,000 Cash in Hand 3,000
(-) Drawings 4,500 Cash at Bank 6,000
(-) Interest on Drawings 500 Closing Stock 10,000
(+) Net Profit 19,950 44,950 Investment 15,000
Bills Payable 9,000 Bills Receivable 5,000
Outstanding salaries 2,000 Customer Account 25,000
Outstanding Manufacturing Expense 1,000 (-) Bad debt 2,000
Supplier Account 12,000 (-) Provision 1,150 21,850
Carry forward Advertisement 900
Plant & Fixtures 8,000
(-) Depreciation 800 7,200

68,950 68,950
W.N. 1

Calculation of Provision for Bad debt

Particular Amount
Bad debt (Given in Balance sheet) Nil
(+) Further Bad debt (Given in adjustment) 2,000
(+) New provision for Bad debts 1,150
Amount to be shown in Profit & Loss Account 3,150

Question 12

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 11,460 By Sales 1,40,370
To Purchases 80,000 (-) Sales return 4,240 1,36,130
(-) Purchase Return 2,820 77,180 By Closing stock 14,290
To Wages 6,280
To Carriage Inward 2,310
To Gross Profit 53,190

1,50,420 1,50,420

To Interest on Capital 5,000 By Gross Profit b/d 53,190

To Provision for Bad debt W.N. 1 2,420 By Discount 190
To Rates & Insurance 1,300 By Rent 2,100
(-) Unexpired 240 1,060 (+) Receivable 200 2,300
To Depreciation - Building 765
To office Expenses 1,340
To Printing & Stationery 660
To Postage & telegram 820
To Depreciation - Office Furniture 175
To Salary & Commission 9,870
(+) Outstanding 570 10,440
To Railway freight on sales 16,940
To Net Profit 16,060

55,680 55,680

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 1,00,000 Sundry Debtors 62,070
(+) Interest on Capital 5,000 (-) Bad debt 570
(-) Drawings 17,600 (-) Provision 3,690 57,810
(+) Net Profit 16,060 1,03,460 Bills Receivable 1,240
Sundry Creditors 18,920 Building 25,000
Outstanding salaries 570 (+) Addition to the building 7,000
(-) Depreciation 765 31,235
Receivable Rent 200
Cash at Bank 12,400
Cash in Hand 2,210
Office Furniture 3,500
(-) Depreciation 175 3,325
Closing Stock 14,290
Unexpired Insurance 240

1,22,950 1,22,950
Question 13

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 4,000 By Sales 40,000
To Purchases 10,000 (-) Return Inward 750 39,250
(-) Return Outward 200 9,800 By Closing stock 7,500
To Freight & Dock charges 1,200
To Wages 1,650
(-) Erection of Machinery 450 1,200
To Carriage Inward 600
To Gross Profit 29,950

46,750 46,750

To Depreciation - Machinery 486 By Gross Profit 29,950

To Provision for Doubtful Debt 500 By Accrued interest on john Loan 150
To Depreciation - Furniture & Fixtures 125 By Apprenticeship Premium 750
To Trade Expense 100 (-) Advance 500 250
To Travelling Expense 75
To rates & Taxes 175
To Printing & Stationery 125
To Discount Allowed 250
To Bad debts 1,050
To Fire Insurance premium 450
To Rent 550
To Salaries 2,750
To Carriage outward 1,250
To Interest on Capital 1,250
To Net Profit 21,214

30,350 30,350

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 25,000 Cash at Bank 1,750
(-) Drawings 1,500 Cash in Hand 125
(+) Interest on Capital 1,250 Investment 1,500
(+) Net Profit 21,214 45,964 John Loan 2,500
Bills Payable 1,250 (+) Accrued Interest 150 2,650
Sundry Creditors 7,900 Machinery 2,250
Advance Apprenticeship Premium 500 (+) Installation for Machinery 450
(-) Depreciation 486 2,214
Sundry Debtors 10,000
(-) Provision 500 9,500
Bills Receivable 1,750
Furniture & Fixtures 1,250
(-) Depreciation 125 1,125
Business Premises 27,500
Closing Stock 7,500

55,614 55,614
Question 14

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 1,600 By Sales 4,200
To Purchases 2,000 By Closing stock 1,600
To Wages 800
(+) Outstanding 150 950
To Carriage Inward 160
To Gross Profit 1,090

5,800 5,800

To Salary 800 By Gross Profit b/d 1,090

To Repairs 190 By Interest on drawings 100
To Rent 450 By Interest 1,350
(-) Prepaid 150 300 (+) Accrued 150 1,500
To Miscellaneous Expense 150 By Commission 1,600
To Bad debts 500 (-) Advance 200 1,400
(+) Further Bad debt 200 700 By Net Loss 640
To Interest on Capital 1,000
To Depreciation - Plant & Machinery 1,200
To Depreciation - Horses & Cart 390

4,730 4,730
 Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 20,000 Plant & Machinery 12,000
(-) Drawings 1,700 (-) Depreciation 1,200 10,800
(-) Interest on Drawings 100 Horses & Cart 2,600
(+) Interest on Capital 1,000 (-) Bad debt 390 2,210
(-) Net Loss 640 18,560 Debtors 3,600
Outstanding wages 150 (-) Bad debt 200 3,400
Creditors 2,000 Cash at Bank 2,600
Advance commission 200 Prepaid Rent 150
Accrued Interest 150
Closing Stock 1,600

20,910 20,910

Question 15

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 16,200 By Sales 65,360
To Purchases 47,000 By Closing stock 23,500
To Taxes & Insurance (Factory) 1315*1/5 263
To General Expense (Factory) 2500*1/5 500
To Wages 7,200
To Power 2,240
To Gross Profit 15,457
 88,860 88,860

To General Expense (office) 2500*4/5 2,000 By Gross Profit b/d 15,457

To Taxes & Insurance (office) 1315*4/5 1,052 By Provision for Bad debt 900
To Interest on bank overdraft (Outstanding) 700 (-) Bad debt 105
To Stationery 500 (-) Further Bad debt 160
(-) Prepaid 50 450 (-) Provision for bad debt 306 329
To Postage Expense 1,280 By Commission 1,320
To Depreciation - Scooter 240
To Depreciation - Machinery 934
To Charity 550
To Net Profit 9,900

17,106 17,106

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 24,500 Building 11,000
(-) Drawings 2,000 Machinery 9,340
(+) Net Profit 9,900 32,400 (-) Depreciation 934 8,406
Sundry Creditors 2,500 Sundry Debtors 6,280
Bank Overdraft 11,180 (-) Bad debt 160
Outstanding Interest on bank overdraft 700 (-) Provision 306 5,814
Bills Payable 3,850 Scooter 2,000
(-) Depreciation 240 1,760
Cash 100
Prepaid stationery Expense 50
Closing Stock 23,500
 50,630 50,630

Question 16

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 8,000 By Sales 56,040
To Purchases 33,800 (-) Return Inward 2,300 53,740
(-) Return Outward 1,600 32,200 By Closing stock 4,340
To Carriage Inward 700
To Gross Profit 17,180

58,080 58,080

To General Expense 1,200 By Gross Profit b/d 17,180

To Interest on Bank Loan 300 By Provision for Bad debt 700
(+) Outstanding 200 500 (-) Bad debt 300
To Taxes & Insurance 2,000 (-) Further Bad debt 200
To Scooter Expense 2600*50% 1,300 (-) Provision for bad debt 140 60
To Salaries 4,400 By Commission 900
(+) Outstanding 400 4,800 (-) Advance 300 600
To Depreciation - Scooter 2000*15% 300
To Depreciation - Building 1,500
To Net Profit 6,240

17,840 17,840
 Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 25,000 Building 30,000
(+) Net Profit 6,240 (-) Depreciation 1,500 28,500
(-) Drawings [1300 scooter expense + 300 Scooter depreciation] 1,600 29,640 Furniture 2,640
Bank Loan 5,000 Scooter 4,000
Outstanding Interest on bank loan 200 (-) Depreciation 600 3,400
Advance commission 300 Cash in Hand 2,000
Outstanding salaries 400 Debtors 3,000
Creditors 8,000 (-) Bad debt 200
(-) Provision 140 2,660
Closing Stock 4,340

43,540 43,540

Question 17

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 45,000 By Sales 4,35,000
To Purchases 2,95,000 (-) Sales return 7,000 4,28,000
(-) Purchase Return 4,000 2,91,000 By Closing stock 75,000
To Wages 40,000
(+) Outstanding 5,000 45,000
To Gross Profit 1,22,000

5,03,000 5,03,000
To Rent 5,000 By Gross Profit b/d 1,22,000
To Salaries 24,000 By Miscellaneous receipts 1,200
(+) Outstanding 1,200 25,200 By Accrued Interest 2,250
To Bad debts 1,000
(+) Further Bad Debt 500
(+) Provision for Bad debt 1,975
(+) Reserve for Discount on debtor 750
(-) Bad debt Reserve 800 3,425
To Depreciation - Furniture 300
To Depreciation - Plant & Machinery 2,400
To Advertisement 6,000
To Insurance Premium 1,500
To Trade Expense 2,000
To Net Profit 79,625

1,25,450 1,25,450

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 1,20,000 Furniture 1,500
(-) Drawings 21,000 (-) Depreciation 300 1,200
(+) Net Profit 79,625 1,78,625 Debtors 40,000
Outstanding salaries 1,200 (-) Bad debt 500
Outstanding wages 5,000 (-) Provision for Bad debt 1,975
Sundry Creditors 19,000 (-) Reserve for discount on debtor 750 36,775
Patents 4,800
Plant & Machinery 24,000
(-) Depreciation 2,400 21,600
6% Investment 50,000
Cash 12,200
 Closing Stock 75,000
Accrued Interest 2,250

2,03,825 2,03,825

Question 18

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 30,000 By Sales 3,54,000
To Purchases 1,50,000 (-) Return Inward 2,000 3,52,000
(-) Return Outward 1,500 1,48,500 By Closing stock 70,000
To Carriage Inward 1,500
To Manufacturing Expense 20,000
To Gross Profit 2,22,000

4,22,000 4,22,000

To Expense on sales 13,440 By Gross Profit b/d 2,22,000

To Rent, Rates & Taxes 8,960 By Accrued Interest 3,600
To Advertisement 4,000 By Rent 1,050
(-) Prepaid 3,200 800
To Salaries 12,000
To Provision for Doubtful Debt 4,500
To Bank Charges 350
To Discount Allowed 500
To Net Profit 1,86,100
 2,26,650 2,26,650

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 1,30,000 Cash in Hand 3,800
(+) Net Profit 1,86,100 3,16,100 Bank 10,000
Sundry Creditors 20,000 Prepaid Advertisement 3,200
Sundry Debtors 90,000
(-) Provision 4,500 85,500
Plant & Machinery 1,20,000
Loan to Mukherjee 40,000
Accrued Interest 3,600
Closing Stock 70,000

3,36,100 3,36,100

Question 19

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 43,450 By Sales 2,52,354
To Purchases 1,66,580 (-) Return Inward 14,844 2,37,510
(-) Return Outward 6,344 1,60,236 By Closing stock 33,160
To Production Expense 19,830
To Expense on Purchase 1,794
To Factory Lighting 784
To Factory fuel & Pointer 1,084
To Direct Expense 5,360
To Outstanding Wages 1,600
To Gross Profit 36,532

2,70,670 2,70,670

To Salaries 7,490 By Gross Profit b/d 36,532

(+) Outstanding 700 8,190
To Travelling Expense 1,850
To Carriage on sale 1,920
To Reserve for doubtful debt 2,390
To Rent, Rates & Taxes 3,530
(+) Outstanding 300 3,830
To office Expenses 5,556
To Discount Allowed 844
To Insurance Premium 1,140
(-) Prepaid 140 1,000
To Depreciation - Fixtures & Fitting 344
To Depreciation - Plant & Machinery 5,500
To Net Profit 5,108

36,532 36,532

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 1,86,460 Plant & Machinery 1,10,000
(-) Drawings 13,640 (-) Depreciation 5,500 1,04,500
(+) Net Profit 5,108 1,77,928 Fixtures & Fitting 3,440
Outstanding salaries 700 (-) Depreciation 344 3,096
Outstanding rent 300 Bank 4,490
 Creditors 45,360 Cash in Hand 136
Bills Payable 12,844 Customer 95,600
Outstanding wages 1,600 (-) Reserve for Doubtful Debt 2,390 93,210
Prepaid Insurance 140
Closing Stock 33,160

2,38,732 2,38,732

Question 20

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 75,000 By Sales 6,00,000
To Purchases 4,10,000 (-) Sales return 10,000 5,90,000
(-) Purchase Return 5,000 By Closing stock 70,000
(-) Loss by fire 25,000 3,80,000
To Gross Profit 2,05,000

6,60,000 6,60,000

To Establishment Expense 4,000 By Gross Profit b/d 2,05,000

To Trade Expense 10,000 By Commission 8,000
To Carriage on sale 2,500
To Printing & Stationery 2,000
To Rent, Rates & Taxes 23,000
To Postage Expense 4,000
To Insurance Premium 3,500
(-) Carry forward 500 3,000
To Salaries 1,06,500
To Bad debts 3,000
(+) Provision for Doubtful debt 5,000
(-) Reserve for Bad debt 4,000 4,000
To Depreciation - Plant & Machinery 22,500
To Depreciation - Furniture & Fixtures 1,250
To Net Profit 30,250

2,13,000 2,13,000

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 4,00,000 Sundry Debtors 1,03,000
(-) Drawings 30,000 (-) Bad debt 3,000
(+) Net Profit 30,250 4,00,250 (-) Provision 5,000 95,000
Supplier 50,000 Furniture & Fixtures 25,000
(-) Depreciation 1,250 23,750
Cash in Hand 31,000
Bank 1,02,500
Insurance claim on goods 25,000
Plant & Machinery 1,00,000
(+) Addition 25,000
(-) Depreciation 22,500 1,02,500
Carry forward insurance 500
Closing Stock 70,000

4,50,250 4,50,250
Question 21

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 15,000 By Sales 60,000
To Purchases 45,000 By Closing stock 19,200
To Wages 1,200
(+) Outstanding 300 1,500
To Gross Profit 17,700

79,200 79,200

To Interest on Loan 540 By Gross Profit b/d 17,700

(+) Outstanding 270 810 By Interest on drawings 300
To Printing & Stationery 6,000 By Rent 4,500
To Selling Expense 3,000
To Insurance 600
(-) Prepaid 180 420
To Interest on Capital 6,000
To Depreciation - Machinery 1,500
To Depreciation - Furniture & Fixtures 675
To Net Profit 4,095

22,500 22,500

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 60,000 Sundry Debtors 16,860
(-) Drawings 10,800 Live Stock 9,000
(-) Interest on Drawings 300 Furniture & Fixtures 4,500
 (+) Interest on Capital 6,000 (-) Depreciation 675 3,825
(+) Net Profit 4,095 58,995 Machinery 15,000
Outstanding interest on loan 270 (-) Depreciation 1,500 13,500
Outstanding wages 300 Prepaid Insurance 180
Sundry Creditors 6,000 Patents 12,000
Bank Loan @ 12% 9,000 Closing Stock 19,200

74,565 74,565

Accountancy Challenge

Question 1

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Purchases 2,35,000 By Sales 3,65,000
To Carriage 6,300 (-) Sales return 6,900 3,58,100
To Wages 27,700
(-) Installation of new machinery 2,000
(+) Outstanding 1,500 27,200
To Coal, Gas & Water 12,000
To Gross Profit 77,600

3,58,100 3,58,100

To fire insurance 2,800 By Gross Profit b/d 77,600

(-) Unexpired 700 2,100 By Apprenticeship Premium 5,000
To Bad debts 12,000 (-) Advance 2,500 2,500
(+) Provision for doubtful debt 1,500 By Discount 900
(-) Bad debt reserve 10,000 3,500
To Salaries 23,000
To Bank Charges 200
To rates & Taxes 8,000
(-) Unexpired 2,000 6,000
To Trade Expense 200
(+) Outstanding 400 600
To Depreciation - Land & Building 3,000
To Depreciation - Furniture 6,000
To Manager Commission 3,327
To Net Profit 33,273

81,000 81,000

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 4,50,000 Land & Building 60,000
(-) Drawings 35,000 (-) Depreciation 3,000 57,000
(-) Life Insurance 4,300 Debtors 30,000
(+) Net Profit 33,273 4,43,973 (-) Provision 1,500 28,500
Bills Payable 29,100 Unexpired Fire Insurance 700
Creditors 40,000 Cash in Hand 25,900
Outstanding wages 1,500 Cash at Bank 25,700
Advance Apprentice Premium 2,500 Plant & Machinery 2,30,000
Outstanding trade Expense 400 (+) Installation wages 2,000 2,32,000
Outstanding Manager Commission 3,327 Furniture 60,000
(-) Depreciation 6,000 54,000
Closing Stock 35,000
Unexpired rates & taxes 2,000
Bills Receivable 60,000
 5,20,800 5,20,800

Question 2

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 26,420 By Sales 91,230
To Purchases 42,160 (-) Sales return 1,760 89,470
(-) Purchase Return 8,460 By Closing stock 29,390
(-) Transfer to building 2,000 31,700
To Carriage on Purchase 4,370
To Wages 21,470
(-) Transfer to building 1,000 20,470
To Coal, Gas & Water 720
To Gross Profit 35,180

1,18,860 1,18,860

To Salaries 4,670 By Gross Profit b/d 35,180

To Bank Charges 140 By Provision for Bad debt (Trial balance) 2,470
To rates & Taxes 840 (-) Provision for Bad debt (Adjustment) 1,890 580
(-) Unexpired 240 600 By Apprentice Premium 500
To Trade Expense 1,990 (-) Advance 400 100
To fire insurance premium 490 By Discount 120
(-) Unexpired 125 365
To Interest on Capital 4,500
 To Depreciation - Plant & Machinery 1,427
To Depreciation - Land & Building 700
To Net Profit 21,588

35,980 35,980

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 90,000 Land & Building 25,000
(-) Drawings 6,840 (+) Transfer from purchases 2,000
(+) Interest on Capital 4,500 (+) Transfer from wages 1,000
(+) Net Profit 21,588 1,09,248 (-) Depreciation 700 27,300
Sundry Creditors 12,170 Plant & Machinery 14,270
Advance Apprentice Premium 400 (-) Depreciation 1,427 12,843
Furniture & Fixtures 1,250
Unexpired Rates & Taxes 240
Bills Receivable 1,270
Sundry Debtors 37,800
(-) Provision 1,890 35,910
Unexpired fire insurance premium 125
Cash at Bank 12,640
Cash in Hand 850
Closing Stock 29,390

1,21,818 1,21,818

Question 3
 Trading and Profit & Loss A/c
Particular Working Amount Particular Working Amount
To Opening Stock 60,000 By Sales 4,78,932
To Purchases 1,88,222 (-) Sales return 3,932 4,75,000
(-) Purchase Return 4,219 By Closing stock 1,38,629
(-) Personal use goods 1,200 1,82,803
To Factory Expense 12,000
To Carriage Inward 3,897
(+) Outstanding 203 4,100
To Coal, Gas & Water 11,769
To Gross Profit 3,42,957

6,13,629 6,13,629

To Bad debts 2,000 By Gross Profit b/d 3,42,957

(+) Further Bad debt 5,000 By Discount 1,182
(+) Provision for doubtful debt (Adjustment) 9,750 By Commission 377
(-)Provision for doubtful debt (Old) 3,876 12,874 (-) Advance 177 200
To Carriage outward 3,500
To Salaries 36,000
To Rent, Rates & Taxes 8,256
(-) Prepaid 256 8,000
To office Expenses 6,103
To Depreciation - Office Equipment's 2,500
To Depreciation - Plant & Machinery 25,000
To Depreciation - Furniture 2,000
To Depreciation - Motor Vehicles 3,000
To Manager Commission 24,536
To Net Profit 2,20,826
 3,44,339 3,44,339

Balance Sheet
Liabilities Working Amount Assets Working Amount
Capital 5,89,786 Debtors 2,00,000
(-) Drawings 7,000 (-) Bad debt 5,000
(-) Personal use goods 1,200 (-) Provision 9,750 1,85,250
(+) Net Profit 2,20,826 8,02,412 Furniture 40,000
Manager commission outstanding 24,536 (-) Depreciation 2,000 38,000
Creditors 1,77,538 Bank 15,000
Advance Commission 177 Prepaid Rent 256
Outstanding carriage inward 203 Bills Receivable 8,231
Plant & Machinery 5,00,000
(-) Depreciation 25,000 4,75,000
Office Equipment's 50,000
(-) Depreciation 2,500 47,500
Patents 36,000
Motor Vehicles 60,000
(-) Depreciation 3,000 57,000
Input CGST 2,000
Input SGST 2,000
Closing Stock 1,38,629

10,04,866 10,04,866
 Case study Question

Case study 1

Question 1

✓ Direct Expense = 𝐶𝑎𝑟𝑟𝑖𝑎𝑔𝑒 𝑖𝑛𝑤𝑎𝑟𝑑 + 𝐹𝑎𝑐𝑡𝑜𝑟𝑦 𝑅𝑒𝑛𝑡 + 𝐶𝑜𝑎𝑙. 𝑓𝑢𝑒𝑙, 𝑔𝑎𝑠 + 𝑊𝑎𝑔𝑒𝑠
✓ Direct Expense = 25,000 + 12,000 + 2,500 + 3,650 = 43,150

Option B

Question 2

✓ Cost of goods sold = 𝑂𝑝𝑒𝑛𝑖𝑛𝑔 𝑆𝑡𝑜𝑐𝑘 + 𝑁𝑒𝑡 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑠 + 𝐷𝑖𝑟𝑒𝑐𝑡 𝐸𝑥𝑝𝑒𝑛𝑠𝑒 − 𝐶𝑙𝑜𝑠𝑖𝑛𝑔 𝑆𝑡𝑜𝑐𝑘
✓ Cost of Goods sold = 22,500 + 1,50,000 − 20,000 + 43,150 − 55,000 = 1,40,650

Option C

Question 3

✓ Gross Profit = 𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 − 𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑

✓ Gross Profit = 3,00,000 − 25,000 − 1,40,650 = 1,34,350

Option A

Question 4

✓ Indirect Expense = 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑒𝑚𝑒𝑛𝑡 𝐸𝑥𝑝𝑒𝑛𝑠𝑒 + 𝑆𝑎𝑙𝑎𝑟𝑖𝑒𝑠 + 𝑇𝑟𝑎𝑣𝑒𝑙𝑙𝑖𝑛𝑔 𝐸𝑥𝑝𝑒𝑛𝑠𝑒 + 𝐴𝑢𝑑𝑖𝑡 𝑓𝑒𝑒𝑠

✓ Indirect Expense = 8,250 + 6,000 + 5,100 + 7,200 = 26,550
Question 5

✓ Adjusted Purchase = 𝑂𝑝𝑒𝑛𝑖𝑛𝑔 𝑠𝑡𝑜𝑐𝑘 + 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑠 − 𝐶𝑙𝑜𝑠𝑖𝑛𝑔 𝑆𝑡𝑜𝑐𝑘

✓ Adjusted Purchase = 22,500 + 1,50,000 − 20,000 − 55,000 = 97,500

Case Study 2

Question 1

✓ Closing Stock = 1.5 times of Opening Stock

✓ Closing Stock = 63,000 ∗ 1.5 = 94,500

Option A

Question 2

✓ Amount debited to Profit & Loss Account = 𝐵𝑎𝑑 𝑑𝑒𝑏𝑡 + 𝐹𝑟𝑒𝑖𝑔ℎ𝑡 𝑂𝑢𝑡𝑤𝑎𝑟𝑑 + 𝑃𝑎𝑐𝑘𝑎𝑔𝑖𝑛𝑔 (𝐼𝑛𝑑𝑖𝑟𝑒𝑐𝑡) + 𝑆𝑡𝑎𝑡𝑖𝑜𝑛𝑒𝑟𝑦 + 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑜𝑛 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 +
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛
✓ Profit & Loss (Debit) = 6,000 + 1,550 + 17,500 + 4,200 + 12,500 + 30,000 + 20,000 = 91,750

Option B

Question 3

Interest on Capital is shown on the Debit side of Profit & Loss Account while preparing final Accounts

Question 4
 10
✓ Depreciation on Building = 3,00,000 ∗ 100 = 30,000
10
✓ Depreciation on Furniture = 2,00,000 ∗ 100 = 20,000

✓ Total Depreciation = 30,000 + 20,000 = 50,000

Option C

Question 5

Trading and Profit & Loss A/c

Particular Working Amount Particular Working Amount
To Opening Stock 63,000 By Sales
To Purchases 3,17,750 Credit sales 4,25,000
To Factory Power expense 3,050 (-) Sales return 25,000
To Wages & Salary 25,000 (+) Cash Sales 1,00,000 5,00,000
To Gross Profit 1,85,700 By Closing stock 94,500

5,94,500 5,94,500

To Bad debts 6,000 By Gross Profit b/d 1,85,700

To Freight Outward 1,550
To Packaging (Indirect) 17,500
To Stationery 4,200
To Depreciation - Building 30,000
To Depreciation - Furniture 20,000
To Interest on Capital 12,500
To Net Profit 93,950

1,85,700 1,85,700
Option C