(A) Balance Shect Aairs

(D) Statement of
(C) Satencnl of Accounts shown :
Closing Stock ppering in the Irial Balance is
Ts.
(A) O the Dr. side of Irading Ac
(B) On the Cr side of Irading A/c Sheet
Balance
(D) On
(0 of of
Cr sideside
On the Assets Lrading A/c and on thc Assets side of Balance Sheet

grossproit is 25% on sales andd

l6. Caleulate thc gross
sold are 1,80,000
profitif rate of
(B) 36,000
costol gond
(A) Ro0,000
(O) 45,000
(D) 30,000 (CA-CPT. June 2013,
? 8,500)
Opening Stock
30,700
Purchascs
7 4,800
Direct Wages
Interest on Loan 7 2,800
Closing Stock 9,000
Cost of goods soldwill be (B) 32,000
(A) 30,000 (D) 40,000
(C) 35,000
18. If sales are 2,000 and the rate of gross profit on cost of goods sold is,25%, then
the cost of goods sold will be:
(A) 1,600 (B) 1,500
(C) 1,700 (D) 1,800 (CA-CPT, June 2013,
40,000; Opening Stog
19. Cost of Goods Sold 1,50,000; Closing Stock
T60,000; Amount of purchase will be
(A) 1,30,000 (B) 1,70,000
(C) S0,000 (D) None of these (CA-CPT, June 2013,
1. (D) 2. (C) 3. (B) 4. (D) 5. (A) 6. (B) 7. (B) 8. (B) 9.(D
[Ans.
10. (D) 11. (A) 12.(C) 13. (D) 14. (B) 15. (C) 16. (A) 17. (C)
18. (A) 19. (A)]

PRACTICAL QUESTIONS
(0. Nos. 1 to 21 are strictly in the serial order of illustrations)
Q. 1. Prepare a Trading Account from the following particulars for the year ended
31st March, 2017 :
Particulars Particulars
22,000
Opening Stock 2,50,000| Purchases Returns 36,000
Purchases 7,00,000 Sales Return 15,000
Sales 18,00,000 Custom Duty 60,000
Wages 2,06,000 Gas, Fuel and Power 8,000
Carriage Inward 34,000| Dock Charges
FINANCIAL STATEMENTS 19.39

Carriage Outward 96,000

20,000 Factory Lighting
Manufacturing Expenses 2,48,000Office Lighting 5,000

Closing Stock is valued at R6,00,000.

|Ans. Gross Profit R7,69,000.1
0. 2 (A). From the following information, prepare the Trading Account for the
vear ended31st March, 2017:
Adjusted Purchases R15,00,000; Sales 21,40,000: Returns Inwards 40,000;
Freight and Packing R15,000; Packing Expenses on Sales 20,000; Depreciation
F36,000: Factory Expenses T60,000; Closing Stock 1,20,000.
|Ans. Gross Profit 5,25,000]
Hints :
1. Adjusted Purchases =Net Purchases +Opening Stock -Closing Stock.
2. Closing Stock will not be shownon the credit side of Trading A/c since it has already
heen adjusted while calculating adjusted purchases.
3. Packing Expenses on Sales' and Depreciation' are indirect expenses and hence not
debited to the Trading A/c.
Q.2 (B). Calculate Gross Profit from the following information :
Closing Stock 70,000
Wages 40,000
Salary 30,000
Sales 6,88,000
Adjusted Purchase 5,50,000
(Delhi 2016)
[Ans. Gross Profit 798,000]
Q.3.Ascertain cost of Goods Sold and Gross Profit from the following :
Opening Stock 32,000
Purchases 2,80,000
Direct Expenses 20,000
Indirect Expenses 45,000
Closing Stock 50,000
Sales 4,00,000
Sales Returns 8,000
|Ans. Cost of goods sold 2,82,000; Gross Profit 1,10,000.]
Note : Indirect Expenses willnot be considered while computing the Cost of Goods Sold.
Q. 4. Calculate Gross Profit on the basis of the following information :

Purchases 6,80,000
Return Outwards 30,000
Carriage Inwards 20,000
 19.40 FINANCIAL STATEMENTS

Carriage Outwards 15,000

Wages 50,000
3/4 of the goods are sold for 6,00,000.
Ans. Gross Profit Z60,000.
NOre : Carriage Outwards will not be considered while computing the
Cost of Goods Sold
Q 5(A). Calculate Closing Stock and Cost of Goods Sold :
Opening Stock 5,000; Sales 16,000; Carriage Inwards 1,000; Sales Returns
KI,000; Gross Profit T6.000: Purchase 10.000: Purchase Returns 900.
(Chandigarh 2011)
[Ans. Cost of Goods Sold 9,000: Closing Stock 6,100|
Q. 5(B). Calculate Closing Stock from the following :
Particulars Particulars

Opening Stock 38,000 Sales 3,60,000

Purchases 3,40,000 Return Inwards 5,000
Return Outwards 4,000Gross Loss 20,000
Freight Inwards 26,000

[Ans.Cost of Goods Sold 3,75,000; Closing Stock 25,000.]

Q. 6. From the following information, prepare the Trading Account for the year
ended 31lst March, 2017:

Cost of Goods Sold 12,10,000

Opening Stock 50,000
Closing Stock 80,000
Carriage Inwards 15,000
Sales 15,00,000
[Ans. Gross Profit 2,90,000.]
Hints :
1. Cost of GoodsSold = Opening Stock + Purchases + Carriage Inwards -Closing Stock
2. Closing Stock and Carriage Inwards will not be shown in Trading A/c because they have
already been adjusted while calculating the cost of goods sold.
Q. 7 (a). Calculate gross profit and cost of goods sold from the following
information :
Net Sales 8,00,000
Gross Profit is 40% on Sales
[Ans. Gross Profit 3,20,000; Cost of Goods Sold 4,80,0001
Q. 7 (6). Calculate gross profit and cost of goods sold from the following
information :
Net Sales Z12,00,000
Gross Profit 33%
3 on Sales
[Ans. Gross Profit R4,00,000; Cost of goods sold 8,00.0001
FINANCIAL STATEMENTs 19.41

0. 8. Calculate the gross profit and cost of goods sold from the following
information :
Net Sales 9,00,000
Gross Profit is 20% on cost.
|Ans. Gross Profit : R1,50,000; Cost of Goods Sold: 7,50,000]
Q.9. Ascertain the value of closing stock from the following
Opening Stock 1,20,000
Purchases during the year 9,30,000
Sales during the year 15,60,000
Rate of Gross Profit 40% on Sales

[Ans. Closing Stock 1,14,000.1

Q. 10. Calculate closing stock from the following details :
Opening Stock 4,80,000
Purchase 13,60,000
Sales 19,50,000
G.P. is 30% on Cost.
[Ans.Closing Stock 3,40,000]
0. 11.Calculate Net Sales and G.P. from the following :
Cost of Goods Sold 4,50,000
G.P. 25% on Sales
[Ans.Net Sales 6,00,000; G.P. 1,50,000]
Q. 12. Prepare Profit and Loss Account for the year ended 31st March, 2017 from
the following particulars
Particulars Particulars
General expenses 12,000 Gross profit 7,69,000
Charity 3,000 Carriage Outwards 20,000
Office Lighting 5,000Office Expenses 16,000
Law Charges 5,800 Fire Insurance Premium 18,000
Advertisement 14,200Telephone Expenses 13,500
Bank charges 1.200 Establishment expenses 2,500
Commission 7,000 Miscellaneous Expenses 7,100
Rent, Rates and Taxes 30,000 Discount Received 6,200
Interest on investments 12,000Traveller's salary 60,000
Sundry Receipts 6,000| Repair 4,300
Indirect expenseS 2,100 Commission Cr. 2,000
Printing and Stationery 1,500

[Ans. Net Profit 5, 72,000.]

Hint : Interest on Investments is an income.
 FINANCIAL STATEMENTS
19.42
profit, operatingprofit and net& profit
Sons
on the
Q. 13. Calculate the amount of gross Rajiv for the
basis of the following balances extracted from the books of M/s
year ended March 31, 2017.
50,000
Opening Stock 11,00,000
Net Sales 6,00,000
Net Purchases 60,000
Direct Expenses 45,000
Administration Expenses 65,000
Selling and Distribution Expenses 20,000
Loss due toFire 70,000
Closing Stock
3,50,000; Net Profit ?3,30,000.1
[Ans. Gross Profit 4,60,000,Operating Profit
Q. 14. Calculate operating profit from the following :
5,00,000
Net Profit
Dividend Received
6,000
12,000
Loss on sale of Furniture
50,000
Loss by Fire
Salaries
1,20,000
Interest on Loan from Bank 10,000
Rent Received 24,000
Donation
5,100

[Ans. Operating Profit 5,47, 100.]

Hint:Salaries will be ignored.

o. 15. A merchant has earned a Net Profit of 57,200for the year ended 31st
March, 2017. Other balances in his Ledger are as under :
Dr. Balances Cr. Balances
Cash at Bank 4,800 Bills Payable 3,200
Cash in Hand 1,200Creditors 61,300
Furniture and Fixtures 7,500| Loan 50,000
Debtors 80,100 Capital 3,32,300
Closing Stock 70,000
Motor Car 40,000
Building 1,50,000
Plant and Machinery 1,20,000
Bills Receivable 4,400
Investments 20,000
Drawings 6,000

Prepare his Balance Sheet as at 31st March, 2017.

[Ans.Balance Sheet Total 4,98,000.]
EINANCIAL STATEMENTS
19.43

o 16. The Trial Balance shows the following balances as at 31st March, 2017:
Dr. Balances Cr. Balances
Purchases 60,000 Capital 1,13,075
Sales Returns 1,500 Sales 1,27,000
Plant and Machinery 90,000 Purchases Returns 1,275
Opening Stock 40,000 Discount Received 800
Discount Allowed 350 Sundry Creditors 20,000
Bank Charges 100 Bills Payable 5,000
Sundry Debtors 45,000
Salaries 7,000
Wages 10,000
Freight : In 1,000
Freight : Out 1,200
Rent, Rates and Taxes 2,000
Advertisements 2,000
Cash at Bank 7,000
2,67,150 2,67,150

Closing Stock was valued at 35,000. Prepare Trading and Profit and Loss
Account for the year ended 31st March, 2017andBalance Sheet as at that date.
(Ans. Gross Profit 50,775; Net Profit 38,925 and Balance Sheet Total
R1,77,000.]
Q. 17. Following is the Trial Balance of Sh. Damodar Parshad as at 31st March,
2016 :
Dr, Balances Cr, Balances
Stock 1-4-2015 10,000| Discount Received 750
Purchases 58,000 Return Outwards 2,600
Wages 2,000| Sales 98,650
Returns Inwards 3,520 B/P 3,000
Carriage on Purchases 2,360 Sundry Creditors 5,600
Carriage on Sales 710 Creditors for Rent 500
Office Salaries 4,800 Capital 40,000
Duty on Imported Goods 2,700 Loan fromX 10,000
Rent and Taxes 2,400 Commission 1,200
Cash 1,100
Bank Balance 7,820
Bad-debts 600
Discount allowed 640
Land and Building 20,000
Scooter 6,600
Scooter Repairs 850
BIR 3,500
Commi
Sundry sDebtors
sion 1,800
25,400|
 EINANCIAL STATEMENT
19.44
Interest on N's Loan 1,500
6,000
Drawings 1,62,300 1,62,300
ended on
and
Prepare a Trading and Prolitdate. Loss Account
Stock
for the year
on 31st March,
2016 was ?22,000. 31-3-2016
and the Balance Sheet as at that The
33,320 and Balance Sheet Total
Ans. Gross Profit R44,670; Net Profit
T86,420.] written on the
Liabilities side and Interest on X's
Hints: -() Loan from X, will bethe Profit & Loss Account.
side of
odn NilI be written on the debit
on the Liabilitiesside.
(2) Creditors for Rent' willbe written
following balances extracted from the books of Sh. BadriVichel
2 8. From the P&L A/c and a Balance Sheet.
on 31st March, 2017, prepare a Trading Account,
Closing Stock valued on that date was 15,000.
Dr. Cr.

Capital 1,28,200
10,000
Household Expenses 1,80,000
Sales
Return inwards 4,000
Return outwards 6,000
Purchases 1,50,000
Cash at Shop 1,600
Bank Overdraft 15,000
Interest on Overdraft 1,500
Creditors 17,800
Stock at the Commencement 18,000
Freight 8,500
Rent and Taxes 7,000
Debtors 32,600
Commission 3,000 2,200
Freehold property 30,000
Sundry expenses 3,900
Salaries and wages 20,000
Life Insurance Premium 1,800
Insurance Premium 1,600
Motor Vehicle
39,800
Typewriter 8,000
Interest 800
Carriage inwards 2,000
Carriage outwards 800
Power
Audit Fee
2,200
1,700
Lighting 2,000
3,50,000|3.50,000
 FINANCIAL STATEMENTS 19.45

Ans Gross Profit ?16,300; Net Loss R22,200 and Balance Sheet Total
1,27,000.]
Hint : Life Insurance Premium is treated as Drawings.

0 19. From the following balances of the Ledger of Sh. Akhileshwar Singh,
prepare Trading and Profit & Loss Account and Balance Sheet:-
Dr. Cr.
Stock on 1-4-2016
30,000
Stock on 31-3-2017 46,200
Purchases and Sales 2,30,000 3,45,800
Returns 12,500 15,200
Commission on Purchases 1,200
Freight, Octroi and Carriage 26,000
Wages and Salary 10,800
Fire Insurance Premium 820
Business Premises 40,000
Sundry Debtors 26,100
Sundry Creditors 26,700
Goodwill 8,000
Patents 8,400
Coal, Gas and Power 7,600
Printing and Stationery 2,100
Postage 710
Travelling Expenses 4,250
Drawings 7,200
Depreciation 1,000
General Expenses 8,350
Capital 89,760
Investments 8,000
Interést on Investments 800
Custom Duty on Imported Goods 4,500
Cash in Hand 2,570
Banker's Account 5,200
Commission 4,600 4,400
Loan on Mortgage 30,000
Interest on Loan 3,000
B/P
B/R 2,280
4,540
Income Tax 3,000
Horses and Carts 20,300
Discount on Purchases 1,600
5,21,740 5,21,740
1AIs. Gross Profit 38.400: Net Profit 20,370 and Balance Sheet Total
?1,64,110.]
19.46 EINANCIAL STATEMENTS
Hints 1. Closing Stock appears inside the Trial Balance. As such, it will be shown only on
the Assets side.
on Investments? on the
2.
Investments' will be shown on the Assets side and Interest
credit side of Profit
& Loss Account.
3. Loan on Mortgage will be shown on the Liabilities side and 'Interest on Loan' on the
debit side of Profit & Loss
Account.
4. Income Tax willbe treated as Drawings.
ommission on Purchases will be shown on the debit side of Trading Account.
2 20. From the following balances prepare Final Accounts as at 3lst March
2017
Particulars
Particulars
Stock 1-4-2016 23,500 Freight In 1,100
Purchases 46,800 Freight Out 3,000
Sales 1,30,000 Rent (Factory 1/3, Office 2/3) 7,500
Productive Expenses 27,000|Legal Expenses 800
Unproductive Expenses 5,800 Miscellaneous Receipts 500
Trade Expenses 1,200 Sundry Debtors 30,000
Returns In 6,600 Sundry Creditors 16,100
Returns Out 2,800 Donation 600
Loose Tools 7,200 Bad-Debts 4,750
Trade Marks 5,000 Bad-Debts Recovered 4,000
Discount Cr. 2,100 Bank Charges 2,800
Salaries 9,600| Loan on Mortgage 20,000
Fixed Deposit with Punjab Interest on Loan 2,400
National Bank 10,000
Cash in Hand 1,300
Motor Vehicles 50,000
Leasehold Land 60,000
Capital 1,37,450
Life Insurance Premium 6,000
Value of Closing Stock was 36,500on 31st March. 2017.
[Ans. Gross Profit Z61,800; Net Profit 32,450; Balance Sheet Total 2,00,000.]
Hints :(1) Life Insurance Premium will be treated as Drawings.
(2) Loan on Mortgage' is a liability, whereas Interest on Loan' is an Expense.
0.21. Arrange assets in the order of permanence:
Sundry Debtors, Stock, Investment, Land and Building,Cash in Hand, Motor Vehicle,
Cash at Bank, Goodwill, Plant and Machinery, Furniture, Loose Tools, Marketable
Securities. (Delhi 2009) 6 Marks
Ans. (i) Goodwill (ii) Land and Building
(iii) Plant and Machinery (iv) Motor Vehicle
(v) Loose Tools (vi) Furniture
(vii) Investment (Long-Term) (viii) Stock
(ix) Sundry Debtors (r) Marketable Securities (Short-Term)
(xi) Cash at Bank (xii) Cash in Hand