ILLUSTRATION 1

Trial Balance for the financial year (FY) ended 31st March 2022 of M/s Deepakshi shows
following details:
Particulars
Debit (`) Credit (`)
Purchase & Sales
10,00,000 12,00,000
Debtors & Creditors
5,00,000 4,00,000
Opening Stock
2,00,000
Closing Stock
3,00,000
Other Expenses & Incomes
7,00,000 9,00,000
Fixed Assets & Long Term Liabilities
25,00,000 6,00,000
Capital
21,00,000

52,00,000 52,00,000
Additional Information: Creditors balance as on 1st April, 2021 is ` 3,00,000.
You are required to calculate cost of goods sold and amount paid to creditors during the year.
ILLUSTRATION 2
`
Opening Inventory 1,00,000
Purchases 6,72,000
Carriage Inwards 30,000
Wages 50,000
Sales 11,00,000
Returns inward 1,00,000
Returns outward 72,000
Closing Inventory 2,00,000
Required
From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended
31st March, 2022 and Pass necessary closing entries in the journal proper of M/s. ABC Traders

ILLUSTRATION 3
Revenue, Expenses and Gross Profit Balances of M/s ABC Traders for the year ended on 31st
March 2022 were as follows:
Gross Profit ` 4,20,000, Salaries ` 1,10,000, Discount (Cr.), ` 18,000, Discount (Dr.) ` 19,000, Bad
Debts ` 17,000, Depreciation ` 65,000, Legal Charges ` 25,000, Consultancy Fees ` 32,000,
Audit Fees ` 1,000, Electricity Charges `17,000, Telephone, Postage and Telegrams ` 12,000,
Stationery ` 27,000, Interest paid on Loans ` 70,000.
Required
Prepare Profit and Loss Account of M/s ABC Traders for the year ended on 31st March, 2022.
Show necessary closing entries in the Journal Proper of M/s. ABC Traders also.

ILLUSTRATION 4
On 1st April 2021 provision for Doubtful Debts existed at ` 40,000. Trade receivables on
31.03.2021 were ` 15,00,000; bad debts totaled ` 1,00,000. It is required to write off the
bad debts and create a provision equal to 5% of the Trade receivables’ balances.
Show how you would compute the amount debited to the Profit and Loss Account.

ILLUSTRATION 5
The following is the Trial Balance of C. Wanchoo on 31st March, 2022.

Trial Balance on 31st March , 2022

Particulars
` `
Capital Account
10,00,000
Inventories as on 1st April,2021
2,00,000
Cash in hand
1,44,000
Machinery Account
7,36,000
Purchases Account
18,20,000
Wages Account
10,00,000
Salaries Account
10,00,000
Discount Allowed A/c
50,000
Discount Received A/
30,000
Sundry Office Expenses Account
6,00,000
Sales Account
50,00,000
Sums owing by customer (Trade receivables)
8,50,000
Trade payables

3,70,000

Value of Closing Inventory on 31st March, 2022 was ` 2,70,000

Prepare closing entries for the above items and Prepare Trading and Profit and Loss
Account.

ILLUSTRATION 6
Given below Trial Balance of M/s Dayal Bros. as on 31st March, 2022 :
Particulars
Debit Balances Credit Balances

` `
Capital A/c
7,00,000
Land and Building
3,00,000
14% Term Loan
4,00,000
Loan from M/s. D & Co.
4,60,000
Trade receivables
4,20,000
Cash in hand
20,000
Inventories in Trade
6,00,000
Furniture
2,00,000
Trade payables
40,000
Advances to Suppliers
1,00,000

Net Profit
1,00,000
Drawings 60000
1700000
1700000
Required
Prepare Balance Sheet as on 31st March, 2022.

ILLUSTRATION 7
The balance sheet of Thapar on 1st April, 2021 was as follows:

Liabilities Amount Assets Amount

Trade payables 1500000 Plant & Machinery 3000000
Expenses payable 150000 Furniture & Fixture 300000
Capital 5000000 Trade receivables 1400000
Cash at bank 650000
Inventories 1300000
6650000 6650000
During 2021-22, his Profit and Loss Account revealed a net profit of ` 18,30,000. This was after
allowing for the following :
(a) Rent received from property let out ` 3,00,000.
(b) Depreciation on Plant and Machinery @ 10% and on Furniture and Fixtures @ 5%.
(c) A provision for Doubtful Debts @ 5% of the trade receivables as at 31st March, 2022.
But while preparing the Profit and Loss Account he had forgotten to provide for (1) outstanding
expenses totaling ` 1,80,000 and (2) prepaid insurance to the extent of ` 20,000.
His current assets and liabilities on 31st March, 2022 were: Inventories ` 14,50,000; Trade
receivables ` 20,00,000; Cash at Bank ` 10,35,000 and Trade payables ` 11,40,000.
During the year he withdrew ` 6,00,000 for domestic use.
Required
Draw up his Balance Sheet at the end of the year.

ILLUSTRATION 8
Balance Sheet as at 31st March, 2022
Liabilities Amount Assets Amount
Mahendra & Sons 560000 Cash in hand 43000
Capital 2000000 Cash at bank 267500
Trade receivables 749500
Closing inventory 900000
Machinery & 600000
Equipment
2560000 2560000
From the above given balance sheet prepare the relevant opening entry.

ILLUSTRATION 9
Shri Mittal gives you the following Trial Balance and some other information:
 Trial Balances as on 31st March, 2022
Particulars
Dr(Rs) Cr(Rs)

Capital
8,70,000
Purchases & Sales
Opening Inventory
72,000
Trade receivables and Trade payables 90,000
1,70,000
14% Bank Loan (loan taken at year end)
2,00,000
Overdrafts (overdraft taken at year end)
1,12,000
Salaries
2,70,000
Advertisements
1,10,000
Other expenses
60,000
Returns 40,000
30,000
Furniture 4,50,000
Building 8,90,000
Cash in Hand 2,000
Input CGST 9,000
Input SGST
9,000
Output IGST
15,000
Closing Inventory on 31st March, 2022 was valued at ` 1,00,000.
Required
Prepare final accounts of Shri Mittal for the year ended 31st March, 2022.

ILLUSTRATION 10
Mr. Mohan gives you the following trial balance and some other information:
Trial Balance as on 31st March, 2022

Particulars
Debit Credit
Capital
6,50,000
Sales
9,70,000
Purchases
4,30,000
Opening Inventory
1,10,000
Freights Inward
40,000
Salaries
2,10,000
Other Administration Expenses
1,50,000
Furniture
3,50,000
Trade receivables and Trade payables
2,10,000 1,90,000
Returns
20,000 12,000
Discounts
19,000 9,000
Bad Debts
5,000
Investments in Government Securities
1,00,000
Cash in Hand and Cash at Bank
1,89,000
Input CGST
10,000
Input SGST
10,000
Output CGST
8,000
Output SGST
8,000
Output IGST
6,000

18,53,000 18,53,000
Other Information:
(i) Closing Inventory was ` 1,80,000;
(ii) Depreciate Furniture @ 10% p.a.
Required
Prepare Trading and Profit and Loss Account for the year ended on 31.3.2022 and Balance Sheet
of Mr. Mohan as on that date.

ILLUSTRATION 11
The Balance Sheet of Mr. Popatlal, a merchant on 31st March, 2022 stood as below:
 Liabilities Amount Assets Amount
Capital 2,40,000 Fixed asset 1,25,600
Trade payables 1,64,000 Inventory 2,06,400
Bank overdraft 1,46,000 Trade 1,88,000
receivables
Less: Provision (6,200) 1,81,800
Cash 36,200
5,50,000 5,50,000
Required
Show opening journal entry on 1st April, 2022 in the books of Mr. Popatlal

ILLUSTRATION 12
The following is the schedule of balances as on 31.3.22 extracted from the books of Shri
Gavaskar, who carries on business under the same name and style of Messrs Gavaskar
Viswanath & Co., at Mumbai:

Particulars Dr. Cr.

Cash in hand 14,000.00

Cash at bank 26,000.00

8,60,000.
Sundry Debtors 00

6,20,000.
Stock on 1.4.2021 00

2,14,000.
Furniture & fixtures 00

1,60,000.
Office equipment 00

6,00,000.
Buildings 00

2,00,000.
Motor Car 00

4,30,000.
Sundry Creditors 00

3,00,000.
Loan from Viswanath 00

Provision for bad debts 30,000.00

14,00,000
Purchases .00

Purchase Returns 26,000.00

23,00,000
Sales .00
 Sales Returns 42,000.00

1,10,000.
Salaries 00

Rent for Godown 55,000.00

Interest on loan from
Viswanath 27,000.00

Rates & Taxes 21,000.00

Discount allowed to
Debtors 24,000.00
Discount received from
Creditors 16,000.00

Freight on purchases 12,000.00

Carriage Outwards 20,000.00

1,20,000.
Drawings 00

Printing and Stationery 18,000.00

Electricity Charges 22,000.00

Insurance Premium 55,000.00

General office expenses 30,000.00

Bad Debts 20,000.00

Bank charges 16,000.00

Motor car expenses 36,000.00

16,20,000
Capital A/c .00

47,22,00 47,22,00
TOTAL 0.00 0.00
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2022 and the
Balance Sheet as at that date after making provision for the following:
1. 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%.
2. Value of stock at the close of the year was ` 4,40,000.
3. Two month’s rent for godown is outstanding.
4. Interest on loan from Viswanath is payable at 12 percent per annum, this loan was taken
on 1.5.2021.
5. Provision for bad debts is to be maintained at 5 percent of Sundry Debtors.
6. Insurance premium includes ` 40,000 paid towards proprietor’s life insurance policy and
the balance of the insurance charges cover the period from 1.4.2021 to 30.6.2022.

ILLUSTRATION 13
Crimpson traders profit and loss account for the year ended 31st March, 2022 includes the
following information:
`
(i) Depreciation 57,500
(ii) Bad debts written off 21,000
(iii) Increase in provision for doubtful debts 18,000
(iv) Retained profit for the year 20,000
(v) Liability for tax 4,000
Required
State which one of the items (i) to (vi) above are – (a) transfer to provisions; (b) transfer to
reserves; and (c) neither related to provisions nor reserves.

PQ.1
From the following particulars extracted from the books of Ganguli, prepare trading and
profit and loss account and balance sheet as at 31st March, 2022 after making the
necessary adjustments:

Rs. Rs.
54050
Ganguli’s capital account(Cr.) As on 01/04/21 0 Interest received 7250
23400 Cash with traders Bank
Stock on 1.4.2021 0 Ltd. 40000
14480
Sales 00 Discount received 14950
Investments (at 5%) as
Sales return 43000 on 0/04/21 25000
12155 Furniture as on
Purchases 00 01/04/2019 9000
Purchases return 29000 Discounts allowed 37700
Carriage inwards 93000 General expenses 19600
Rent 28500 Audit fees 3500
Salaries 46500 Fire insurance premium 3000
12000
Sundry debtors 0 Travelling expenses 11650
Sundry creditors 74000 Postage and telegram 4350
10000
Loan from Dena Bank Ltd. (at 12%) 0 Cash in hand 1900
Deposit @ 10% as on 15000
Interest paid 4500 01/04/21(Dr) 0
Printing & Stationery 17000 Drawings 50000
Advertisement 56000
Adjustments:
(1) Value of stock as on 31st March, 2022 is ` 3,93,000. This includes goods returned
by customers on 31st March, 2022 to the value of ` 15,000 for which no entry has
been passed in the books.
(2) Purchases include furniture purchased on 1st January, 2022 for `10,000.
(3) Depreciation should be provided on furniture at 10% per annum.
(4) The loan account from Dena bank in the books of Ganguli appears as follows:
Rs. Rs.
To By
31-03- balance 10000 01-04- balance
2022 b/d 0 2021 b/d 50000
By Bank 50000
10000 1000
0 00
(5) Sundry debtors include ` 20,000 due from Robert and sundry creditors include
` 10,000 due to him.
(6) Interest paid include ` 3,000 paid to Dena bank.
(7) Interest received represents ` 1,000 from the sundry debtors (due to delay on their
part) and the balance on investments and deposits.
(8) Provide for interest payable to Dena bank and for interest receivable on
investments and deposits.
(9) Make provision for doubtful debts at 5% on the balance under sundry debtors. No
such provision need to be made for the deposits.

PQ.2
Sengupta & Co. employs a team of eight workers who were paid `30,000 per month each
in the year ending 31st March, 2021. At the start of financial year 2021-2022, the
company raised salaries by 10% to `33,000 per month each.
On October 1, 2021 the company hired two trainees at salary of `21,000 per month each.
The work force are paid salary on the first working day of every month, one month in
arrears, so that the employees receive their salary for January on the first working day
of February etc.
You are required to calculate:
(i) Amount of salaries which would be charged to the profit and loss for the year ended
31st March, 2022.
(ii) Amount actually paid as salaries during 2021-22
(iii) Outstanding Salaries as on 31st March, 2022.

3. You are required, prepare a Trading and Profit and Loss Account for the year ending 31st
March, 2022 and a Balance Sheet as on that date from the Trial Balance given below

Particluars Rs. Particluars Rs.

Debit Balance:

3,50,000. 2,20,000.
Trade receivables 00 Salaries 00

Inventory 1st 5,00,000. 1,25,000.

April, 2021 00 Purchases 00

5,60,000. Plant & 15,70,000

Cash in hand 00 Machinery .00

3,00,000. Credit
Wages 00 balance:

50,000.0 25,00,000
Bad debts 0 Capital .00

Furniture & 1,50,000. Trade 9,00,000.

Fixtures 00 payables 00

1,50,000. 17,00,000
Depreciation 00 Sales .00
On 31st March, 2022 the Inventory was valued at `10,00,000
4. Mr. Kotriwal is engaged in business of selling magazines. Several of his customers pay
money in advance for subscribing his magazines. Information related to year ended 31st
March 2022 has been given below:
On 1.4.2021 he had a balance of ` 2,00,000 advance from customers of which ` 1,50,000
is related to year 2021-22 while remaining pertains to year 2022-23. During the year
2021-22 he made cash sales of ` 5,00,000. You are required to compute:
(i) Total income for the year 2021-22.
(ii) Total money received during the year if the closing balance in advance from
customers account is ` 1,70,000.

PQ.5
Mr. Birla is a proprietor engaged in business of trading electronics. An excerpt from his
Trading & P&L account is as follows:
 Trading and P&L A/c for the year ended 31st March, 2022
Particluars Rs. Particluars Rs.
45000
To Cost of Goods Sold 00 By Sales C
To Gross Profit c/d D E
F By Gross profit b/d D
26000 By Miscellaneous
To Rent 00 income E
13000
To Office expense 00
To Selling expense B
To Commission to 20000
Manager (on 0
Net Profit before
charging such
commission)
To net profit A
60000
G 00
Commission is charged at the rate of 10%.
Selling Expenses amount to 1% of total sales.
You are required to compute the missing figures

JUNE 24 MTP(1) [2(b)]The following are the balances as at 31st March, 2017 extracted from the
books of
Mr. XYZ.
``
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
Provision for doubtful
debts
3,200 Advertisement Expenses 3,350
Provision for Discount on Printing and Stationery 1,250
debtors 1,375 Cash in hand 1,450
Sundry Debtors 1,20,000 Cash at bank 3,125
Sundry Creditors 47,500 Office Expenses 10,160
Bad debts 1,100 Interest paid on loan 3,000
Additional Information:
1. Purchases include sales return of ` 2,575 and sales include purchases return of
` 1,725.
2. Goods withdrawn by Mr. XYZ for own consumption ` 3,500 included in
purchases.
3. Wages paid in the month of April for installation of plant and machinery
amounting to ` 450 were included in wages account.
4. Free samples distributed for publicity costing ` 825.
5. Create a provision for doubtful debts @ 5% and provision for discount on
debtors @ 2.5%.
6. Depreciation is to be provided on plant and machinery @ 15% p.a. and on
furniture and fittings @ 10% p.a.
7. Bank overdraft is secured against hypothecation of stock. Bank overdraft
outstanding as on 31.3.2017 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, 2017,
and a Balance Sheet as on that date. Also show the rectification entries.

JUNE 24 MTP (1)3(c)

Mr. Aman is running a business of readymade garments. He does not maintain his
books of accounts under double entry system. While assessing the income of Mr. Aman
for the financial year 2018-19, Income Tax Officer feels that he has not disclosed the
full income earned by him from his business. He provides you the following
information:
On 31st March, 2018
Sundry Assets `16,65,000
Liabilities `4,13,000
On 31st March, 2019
Sundry Assets `28,40,000
Liabilities `5,80,000
Mr. Aman’s drawings for the year 2018-19 `32,000 per month
Income declared to the Income Tax Officer `9,12,000
During the year 2018-19, one life insurance policy of Mr. Aman was matured and
amount received ` 50,000 was retained in the business. State whether the Income Tax
Officer's contention is correct. Explain by giving your working.