PRACTICAL PROBLEMS

From the following Trial Balance of M/s Ajay and Vijay, you are required to prepared Trading :and Profit
1.
March, 2009 and Balance Sheet as on that date
and LossAccount for the vear ended 31st
2009
Trial Balance as on 31" March,
Debit Amt. Credit Amt.
Particulars

Capital A/es Ajay 60,000

vijay 46,700 35,000
Purchases and Sales 28,000
85,000
Sundry Debtors and Creditors 5,000
25,000
6,000
Bills Receivable and payable 4,600 1,800
Commission 18,000
Opening stock 9,900
Wages 13,500
Investment 3,600
Postage and Telegrams 1,200
Insurance 40,700
Plant and Machinery 18,000
Furniture 2,500
Cash in hand 3,200
Carriage 400
Bad debts
7,000
Prepaid Rent 10,500
Salaries
2,12,800 2,12,800
Adjustments :
1) The closing stock is valued at 31,000.
Outstanding expenses were wages 1,400, salaries 800.
3) Depreciate Plant and Machinery by 10%o.
4 Insurance 500is paid in advance.
5) Provide for further bad debts of 1,500.
6 Commission due but not received 1,200.
Ans.: Gross Profit 36,800, Net Profit 13,630, Balance Sheet total? 1,41,830
2 Sanjay and Sudhir are partners sharing profit and losses in the ratio 3:2. The Trial Balance of the firn on
31" March, 2010 was as follows:
Trial Balance as on 31" March, 2010
Particulars Amt. Particulars Amt.
Opening stock 20,000 Capital A/Cs Sanjay 40,000
Purchases 30,000 Sudhir 30,000
Debtors 12,000 Sales 70,000
Wages
Salaries
5,000 Sundry Creditors 21,000
10,000 Bills payable 20,000
Land and Building 30,000 Discount 5,000
Plant and Machinery 25,000 Outstanding Rent 1,500
Furniture l6,000
Advertisement (for 2years) 6,000
Bills Receivable 8,000
Insurance 2,000
Drawings Sanjay 2,000
Cash in hand
Sudhír 3,000
Rent 5,500
Power and Fuel 10,000
3,000
1,87,500 1,87,500
 Adjustments:
Stock on hand on 31st March, 2010 was at 35,000.
1)
2)
Write off 2,000, for further Bad debts and maintain R. D.D. at 5% on debtors.
3)
Depreciate Land and Building at 5% and Machinery at 10%.
4)
Outstanding expenses were wages 2,000 and salary 1,000.
Credit purchases amnounted to 4,000 were not recorded in the books of accounts.
5)
Provide interest on Partners Capital at 5% p.a.
6) Erom the above Trial Balance and adjustments prepare Trading and Profit and Loss Account for the
vear ended 31st March, 2010 and Balance Sheet as on that date.
Ans.: Gross Profit 41,000, Net Profit? 10,000, Balance Sheet total 128,000

3
Bohan and Roshan are partners in 'Shan Traders' sharing profits and losses in the ratio of 2:1.From the
ollowing Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended
31"March, 2011 and Balance Sheet as on that date

Trial Balance as on 31" March,2011

Particulars Amt. Particulars Amt.

Opening stock 32,000 Sales 1,93,500

Purchases 64,000 Sundry Creditors 15,000
Plant and Machinery 30,000 Unpaid Wages 1,500
Furniture 18,500 Return outward 2,500
Carriage 1,500 Capital A/c Rohan 90,000
Wages and Salaries 35,000 Roshan 50,000
Bills Receivable 5,000
Sundry Debtors 32,000
Conveyance 4,000
Rent, Rates and Taxes 2,000
Return Inward 3,500
Cash in hand 14,750
Land and Building 83,500
Bad debts 1,750
Patents 25,000
3.52.500 3,52,500

Adjustments :
1) Closing stock : Cost price 25,000 and market price 30,000.
debited to Building account.
2) An amount of 3,500 spent for repairs to Building is
3) Depreciate plant and Machinery and Building at 5% p.a.
4) Goods of ? 750 taken by Roshan for this personal use.
S) Included in wages advances given to workers 3,000.
6) Provide 1,500 for bad and doubtful debts on Debtors.
2,26,250
Ans.: Gross Profit ? 88,750, Net Profit 70,500, Balance Sheet total R

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 4 Given below is the Trial Balance of M/s Roma and Mona partnership firm. Prepare Trading and Profit
and Loss Account for the year ended 31" March, 2012 and Balance Sheet as on that date
TrialBalance as on 31" March, 2012
Debit Balance Amt. Credit Balance Amt.

Stock on lstApril, 2011 52,000 Provident fund 50,000

Sundry Debtors 84,000 Interest on P. F, Investment 2,800
Bad debts 3,000 Sundry Creditors 84,000
Premises 77,000 Rent received 9,600
Salaries 28,000 Reserve for DoubtfulDebts 2,000
Motor Vehicle A 50,000 Discount received 3,600
Purchases t 1,76,000 Sales 3,20,000
Provident Fund Investment 50,000 Capital A/c Roma 50,000
Provident Fund contribution 5,500 Mona 50,000
Wages
Rent (for 10 months)
22,000
16,000
Office Expenses 5,000
Discount allowed 2,500
Cash in hand 1000
5,72,000 5,72,000

Adjustments :
1) Stock on 31st March, 2012 was valued at 80,000.
2) Goods of 6,000 were sold and despatched on 27th March, 2012, but no entry was made in the books of
accounts.
3) Write off Bad debts of 4,000 and provide for R. D. D. at 5% on sundry debtors.
4) Provide reserve for discount on debtors at 2% and on creditors at 3%.
5) Outstanding wages 4,000 and outstanding salaries 3,066.
6) Depreciate Motor Vehicle at 5% p.a.
Ans.: Gross Profit ? 1,52,000, Net Profit 91,020, Balance Sheet Total 3,35,566
Note: Interest on P.F. Investment should be shown to the liability side of the Balance sheet as it is not the
business income.

5 From the following Trial Balance of M/sKale and Gore, you are required to prepare Trading and Profit and
Loss Account for the year ended 31st March, 2013 and Balance Sheet on that date. They share profitsand
losses in their capital ratio.
Trial Balance as on 31 March, 2013
Debit Balance Amt. Credit Balance Amt.

Opening stock 28,000 Capital A/c Kale 80,000

Purchases 1,16,400 Gore 40,000
Trade Expenses 2,400 Sundry Creditors 54,000
6,200 Sales 2,12,000
Royalties Reserve for Doubtful Debts 1,800
Wages and Salaries 14,800
Advertisement 8,200 Bills payable 36,000
Salaries 11,000
Plant and Machinery 44,000
Freehold Property 36,000
Office Rent 4,000
Motor Van
Bills Receivable 63,000
Sundry Debtors 16,000
Cash in hand 60,000
Bad debts 10,000
1,000
General exxpenses 2,800
4,23,800 4,23,800
 Adjustments :
1) Closing stock was valued at cost 76,.000 while its market price was
80,000
2) Uninsured goods worth 10,000 were stolen.
3) Goods worth 10,000 were sold and delivered on 31st March, 2013, but on entry is passed sales
b00k.
4) Depreciate Plant and Machinery at 10% and Motor van at 15% p.a.
5) Bills Receivable includes a dishonoured bill
6) Create reserve for doubtful debts at 5% on
a of4,000,A
Debtors.
Ans.: Gross Profit 1,40,200, Net Profit 87,450, Balance Sheet Total 2,97,450
6 Given below is the TrialBalance of M/s Seeta and GGeeta as on 31st March, 2010, You are
required to
prepare Trading and Profit and ILoss Account for the vear ended 31st March, 2010 and Balance Sheet
on that date.

Trial Balance as on 31" March, 2010

Debit Balance Amt. Credit Balance Amt.

Current A/c Geeta 4,000 Capital A/c Seeta 1,20,000

Opening stock 88,000 Geeta 1.20,000
Purchases
1,76,000 Current A/c- Seeta 5,000
Wages 23,500 Sundry Creditors 1,03,000
Salaries
15,000 Bank overdraft 60,000
Office expenses 8,000 Sales 3,08,000
Bank charges 2,600
Legal charges 3,000
Machinery 90,000
Land and Building 1,30,000
Interest 3,600
Export duty 3,800
Bad Debts 4,000
Sundry Debtors 82,000
Travelling Expenses
Electricity charges
3,200 Capital
A/c
2,300
Furniture 35,000
8%Debentures 40,000
(Purchased on 1.10.2009)
Cash in hand 2000
7,16,000 7,16,000

Adjustments :
1) Stock on hand on 31stMarch, 2010 was valued at 80,000.
2) Goods costing? 16,000 destroyed by fire and Insurance company admitted aclaim of 13,000.
3) Provide for outstandingexpenses :Salaries3,000, Wages 2,400.
4 Depreciate Machinery at 10%p.a, Land and Building at 5% p.a.
5) Create Reserve for Bad and doubtful debts at 5% on Sundry Debtors.
6) Legal charges paid in advance 1,200.
7) Provide interest on capital at 8% p.a.
Ans.: Gross Profit 1,14,100, Net Profit 26,600, BalanceSheet TotalR 4,55,200

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7.
Madhuri and Minakshi are in partnership sharing profits and losses in the ratio 3:2. From the following
Trial Balance and adjustments given below, you are required to prepare Trading and Profit and Loss
Account for the year ended 31st March, 2012 and Balance Sheet on that date.
Trial Balance as on 31" March, 2012
Debit Balance Amt. Credit Balance Amt.
Building 4,00,000 Capital A/cs Madhuri 3,00,000
Plant and Machinery 1,20,000 Minakshi 2,00,000
Purchases 6,50,000 Sales 8,10,000
Carriage 7,000 Sundry Creditors 1,00,000
Opening stock 90,000 Outstanding salaries 4,200
Wages 35,000 8% Bank loan 1,00,000
Sundry Debtors 1,50,000 (Taken on 1.10,2011)
Salaries 28,000
Postage and Telegram 4,000
Insurance 5,000
Bad debts 3,000
Rent 4,000
Discount 3,200
Drawings Alc Madhuri 10,000
Minakshi 5,000
15,14,200 15,14,200
Adjustments :
) Stock on hand on 31st March, 2012 was valued at 1,10,000.
Depreciate Plant and Machinery at 10% p.a and Building at 5% p.a.
Prepaid InsuranceR1,500. 4) Create R. D. Dat 5% on Sundry Debtors.
Partners are allowed interest at 5% p.a. on their capitals.
) Salaries include 2,500 as advance to workers.
Ans.: Gross Profit 1,38,000, Net Profit 26,300, Balance Sheet Total 7,44,500
From the following Trial Balance of M/s Mahesh and Umesh, you are
required to prepare Trading anc
Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date. Profi
sharing ratio ofMahesh and Umesh was 3/5th and 2/5th respectively.
Trial Balance as on 31"March, 2013
Debit Balance Amt. Credit Balance Amt.
Investments 56,000 Capital A/c Mahesh 1,62,000
Carriage
Loose Tools
7,000 Umesh 1,08,000
17,000 Current A/c Mahesh 16,200
Building 1,50,000 Umesh 10,800
Salary 13,000 Sundry Creditors 99,000
Audit fees 8,500 Sales 4,20,000
Opening stock 83,000 Bank overdraft 56,400
Wages 7,500
Purchases 1,97,000
Motive Power 15,000
Bad debts 6,400
Printing and Stationery 4,000
Debtors 96,000
Cash at Bank 32,000
Machinery
Motor Van
72,000
88,000
8,72,400 8,72,400
 Adjustments :
1)
Stock on hand on 31st March, 2013 was valued at
2) Interest on partner's capital at 5% p.a was allowed. 76,000.
3) Goods worth 2,000 and 1,500 withdrawn by Mahesh and Umesh
4) Mahesh is entitled to get salary of 6,500 and Umesh is to be givenrespectively
2%
for their personal use.
2500 due from customer is not recoverable. commission on sales.
5)
6) Depreciate Motor Van at 8% p.a and Building at 7% p.a.
Ans.: Gross Profit 1,90,000, Net Profit 1,09,660, Balance Sheet Total ? 5,86,960
9. Mohini and Rohini are in partnership firm sharing profits and Josses equally. From the following Trial
Balance and adjustments given below, you are required to prepare
the year ended 31st March, 2010 and Balance Sheet as on that Trading and Profit and Loss Accountior
date.
Trial Balance as on 31" March, 2010
Particulars Debit Amt, Credit Amt.
Partner's Capital A/c Mohini 1,20,000
Rohini 90,000
Purchases and Sales 2,20,000 4,30,000
Sundry Debtors and Creditors 45,000 35,000
Bills Receivable and Bills Payable 45,000 50,000
Discount 4,000 3,500
Opening stock 25,000
Wages and Salaries 23,000
Manufacturing Expenses 9,000
Factory Insurances 5,000
Factory Building 1,30,000
Plant and Machinery 75,000
Advertisement (for 2 years w.e.f 1st Jan.2010) 10,000
Salaries and Wages 45,000
Warehouse rent 6,000
Import duty 11,500
Cash in hand 15,000
10% Government Bond 60,000
(purchased on 1st July, 2009)
7,28,500 7,28,500

Adjustments :
1) Closing stock was valued at market price 92,000 which is 15% above its cost price.
2) Goods costing 3,000 purchased and received on31 stMarch, 2010 were not recorded inpurchase book.
3) Depreciate Machinery at 10% p.a.
4) Outstanding Wages were 2,500.
5) Goods of ?2,000 were taken by Mohini for personal use but no entry was made in the books ofaccount.
6) Maintain R. D. Dat 5% on Sundry Debtors.
Ans.: Gross Profit 2,13,000, Net Profit 1,55,000, Balance Sheet Total 4,53,500

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10.
From the following Trial Balance of M/s Sajay and Vijay, you are required to prepare Trading and
Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date after
taking into consideration the adËustments given below.

TrialBalance as on 31" March, 2013

Debit Balance Amt. CreditBalance Amt.
Salaries and wages 12,000 Sales 1,10,000
Postage and Telegram 1,750 Sundry Creditors 72,700
Opening Stock 23,500 Bills Payable 40,000
Plant and Machinery 70,000 10% Bank loan (Taken 60,000
Advertisement 5,000 on 1st Oct. 2012)
Import duty 2,100 Outstanding Audit fees 5,900
Bad debts 1,000 Capital A/c
Purchases 98,500
Sanjay 45,000
Sundry Debtors 45,800
Vijay 45,000
Bills Receivable 16,700
Carriage outward 1,800
Wages and Salary 14,000
Printing and stationery 4,600
Cash in hand 1,850
Leasehold Premises 80,000
3,78,600 3,78,600

Adjustments :
1) Closing stock was valued at 30,000.
2) Postage stamps of? 250 and stationery of 400 are unused.
3) Goods of? 2,500 distributed as free samples.
4) Leasehold property is to be run for 10 years w.e.f. Ist October, 2012.
5) Depreciate Plant and Machinery at 10% p.a.
6) Mr. Rajan, our customer become insolvent and could not pay his debts ofI,500.
Ans.: Gross Profit 4,400, Net Loss 39,100
Balance Sheet Total ? 2,32,500