PERFORMA OF FINAL ACCOUNT

TRADING ACCOUNT OF M/S.........

for the year ending on.............

PARTICULARS

AMOUNT

PARTICULARS

Rs. P.

Rs. P.

To Opening Stock

.................. By Sales

To Purchases

..................

Less : Purchases Returns

Goods Sold
Less : Sales Returns

or Returns Outward
(or Returns Cr. Bal)

AMOUNT

(or Returns Inward)

..................

To Expenses incurred in bringing

(or Returns Dr. bal)

By Closing Stock

..................
..................

the
By Gross Loss Transferred to
goods to their present
Profit and Loss A/c

condition
and location Wages, or
Wages and Salaries or
Productive Wages or

..................

Manufacturing Wages
To Carriage, or
Carriage Inward, or
Carriage on Purchases or

..................

..................

Freight Inward

..................

To Octroi

..................

To Dock Charges (Inward)

..................

To Customs Duty on imported

goods
To Motive Power, Coal, Gas,
..................
Water and Oil, Grease, etc.
..................
Fuel, Heating and Lighting
To Royalties based on Production
..................
To Gross Profit transferred to
Profit and Loss Account

..................

..................

PROFIT AND LOSS ACCOUNT

for the year ending on.............

PARTICULARS

AMOUNT

PARTICULARS

AMOUNT

To Gross Loss transferred

(from Trading Account)

By Gross Profit transferred

xxxx

from Trading Account

xxxx

To Salaries

xxxx

By Rent from Tenants

xxxx

To Rent, Rates and Taxes

xxxx

By Discount (Cr.)

xxxx

To Printing & Stationery

xxxx

By Commission

xxxx

To Postage & Telegrams

xxxx

By Interest (Cr.)

xxxx

To Legal Charges

xxxx

By Bad Debts Recovered

xxxx

To Telephone Exp.

xxxx

By Apprentice Premium

xxxx

To Insurance Premium

xxxx

By Income from

xxxx

To Entertainment Exp.

xxxx

Investments
xxxx
By Dividends on Shares
To Repairs an Renewals

xxxx

xxxx

To Interest on Loan

xxxx

(Cr.)

xxxx

To Interest on Capital

xxxx

By Miscellaneous Income

xxxx

To Sundry Trade Expenses

xxxx

By Profit on Sale of Assets

To Loss on Sale of Assets

xxxx

By Net Losstransferred to

To Conveyance

xxxx

To Charity

xxxx

To Bank Charges

xxxx

To Office Expenses

xxxx

To Establishment Exp.

xxxx

To General Expenses

xxxx

To Loss in Exchange

xxxx

By Difference in exchange

Capital Account

xxxx

To License Fee

xxxx

To Brokerage

xxxx

To Electricity Exp.

xxxx

To Loss by Fire, Theft

xxxx

To Commission

xxxx

To Advertisement

xxxx

To Cartage outward

xxxx

To Export Duty

xxxx

To Discount

xxxx

To Packing Expenses

xxxx

To Traveling Exp.

xxxx

To Bad Debts

xxxx

To Audit Fees

xxxx

To Depreciation

xxxx

To Net Profit transferred to Cap.A/c

xxxx

xxxx

xxxx

BALANCE SHEET OF..........

as at..............

LIABILITIES

AMOUNT

ASSETS

AMOUNT

RS. P.

Capital

Rs. P.

Goodwill

..........

Land and Buildings

..........

Plant and Machinery

..........

Motor Van

..........

Computer

..........

..........

Books

..........

..........

Furniture

..........

..........

Closing Stock

..........

Bank Overdraft

..........

Debtors

..........

Loans

..........

Investment

..........

Sundry Creditors

..........

Bills Receivable

..........

Bills Payable

Cash at Bank

..........

Tax Payable

Cash in Hand

..........

Add: Net Profit

........

..
Add: Intt. On Capital

.........

.
Less: Net Loss

........

..
Less: Drawings
..........
Less: Int. on Drawings

...........

..........

..........

FINAL ACCOUNT
Q. 1 From the following balances extracted from the books of Mr. S on 3st December, 1993,
prepare a Trading Account, P & L A/c and a Balance Sheet.
Closing Stock valued on that date was Rs. 15,000.
Dr. Balances

Rs.

Capital
Household Expenses

1,28,200
10,000

Sales
Return inwards

1,80,000
4,000

Return outwards
Purchases
Cash at Shopk

6,000
1,50,000
1,600

Bank Overdraft
Interest on Overdraft

15,000
1,500

Creditors
Stock at the Commencement
Freight
Rent and Taxes
Debtors
Commission

17,800
18,000
8,500
7,000
32,600
3,000

Freehold Property

30,000

Sundry Expenses

3,900

Salaries and wages

1,800

Insurance Premium

1,600

Typewriter

39,800
8,000

Interest
Carriage inwards

2,200

20,000

Life Insurance Premium

Motor Vehicle

Rs.

800
2,000

Carriage outwards

800

Power

2,200

Audit Fee

1,700

Lighting

2,000
TOTAL

3,50,000

3,50,000

Q. 2 From the following balances of the ledger of Mr. Allen, prepare Trading and
Profit and Loss Account and Balance Sheet :
Dr. Balances

Rs.

Rs.

Stock on 30-6-2007

30,000

Stock on 30-6-2008

46,200

Purchases and Sales

2,30,000

3,45,800

12,500

15,200

Returns
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 and Telegram

710

Travelling expenses

4,250

Drawings

7,200

Depreciation

1,000

General Expenses

8,350

Capital

89,760

Investments

8,000

Interest on Investments

800

Custom Duty on imported goods

4,500

Cash in hand

2,570

Banker's Account

5,200

Commission

4,600

Loan on Mortgage

4,400
30,000

Interest on Loan

3,000

B/P

2,280

B/R

4,540

Income Tax

3,000

Horses and Carts

20,300

Discount on Purchases

1,600
TOTAL

5,21,740

5,21,740

Ans. Gross Profit Rs. 38,400, Net Profit Rs. 20,370,

Balance Sheet Rs. 1,64,110
Q. 3 From the following balances of S Ltd. prepare Final Accounts as on 31st March,
2008 :
Rs.

Rs.

Stock on 01-4-2007

23,500 Freight In

1,100

Purchases

46,800 Freight Out

3,000

Sales

1,30,000 Rent (Factory 1/3, Office 2/3)

Productive Expenses

7,500

27,000 Legal Expenses

800

Unproductive Expenses

5,800 Miscellaneous Receipts

Trade Expenses

1,200 Sundry Debtors

30,000

Returns In

6,600 Sundry Creditors

12,200

Returns Out

2,800 Donation

Loose Tools

7,200 Bad-Debts

4,750

Trade Marks

5,000 Bad-Debts Recovered

4,000

Discount Cr.

2,100 Sales Tax Collected

3,900

Salaries

9,600 Bank Charges

2,800

Fixed Deposit with P.N.B.

500

600

10,000 Loan on Mortgage

Cash in Hand

20,000

1,300 Interest on Loan

Motor Vehicles

2,400

50,000

Leasehold Land

60,000

Capital

1,37,450

Life Insurance Premium

6,000

Value of Closing Stock was Rs. 36,500 on 31st March 2008.

Q. 4 From the following Trial Balance of Jercy as at 31st December, 2007, prepare
Trading

and

Profit

and

Loss

Account

and

Balance

Sheet:
Dr. Balances

Rs.

Cr. Balances

Rs.

Opening Stock

15,500

Capital

60,000

Land and Building

35,000

Loan

Machinery

50,000

@9%

9,600

Furniture & Fixtures

5,000

Sundry Creditors

2,100

Purchases

1,06,000

Purchase Returns

2,07,300

Salaries

11,000

Sales

1,200

General Expenses

2,500

Discount

Rent

3,000

Postage and Telegrams

1,400

Stationery

1,300

Wages

26,000

Freight on Purchases

2,800

Carriage on Sales

4,000

Repairs

4,500

Sundry Debtors

30,000

Bad Debts

600

Cash in Hand

100

Cash at Bank

6,400

Sales Returns

5,100

from

Mrs.

Gurdeep

Singh 30,000

3,10,200

3,10,200

The following further information was given:

(a) Wages for December, 2007 amounting to Rs. 2,100 have not yet been paid.
(b) Included in General Expenses is Insurance Premium Rs. 600, paid for the year
ending 31stmarch, 2008.
(c) A provision for doubtful debts @5% on debtors is necessary.
(d) Depreciation is to be charged as follows:
Land and Building 2%, Machinery 10% and Furniture and Fixtures 15%.
(e) The loan from Mrs. Gurdeep Singh was taken on 1 st July, 2007. Interest has not
been paid yet.
(f)

The value of stock on hand on 31st Dec, 2007 was Rs. 14,900.

Q. 5 The following is the Trial Balance of Mr. G on 30th June, 2007 :

Dr. Balances

Rs.

Rs.

Cash in Hand

540

Cash at bank

2,630

Purchases Account

40,675

Sales Account

98,780

Returns Inward Account

680

Returns Outward Account

500

Wages Account

10,480

Fuel & Power Account

4,730

Carriage on Sales Account

3,200

Carriage on Purchase Account

2,040

Stock Account (1 July, 2007)

5,760

st

Building Account

30,000

Freehold Land Account

10,000

Machinery Account

20,000

Patent Account

7,500

Salaries Account

15,000

General Exps. Account

3,000

Insurance Account

600

Drawings Account

5,245

Capital Account

71,000

Sundry Debtors Account

14,500

Sundry Creditors Account

6,300

TOTAL

1,76,580

1,76,580

Taking into account the following adjustments, Prepare Trading Account and Profit and Loss
Account and the Balance Sheet:
(a) Stock on hand on 30th June, 2007 is Rs. 6,800.
(b) Machinery is to be depreciated at the rate of 10% and patents at the rate of 20%.
(c) Salaries for the month of June 2007 amounting to Rs. 1,500 were unpaid.
(d) Insurance includes a premium of Rs. 170 on a policy expiring on 31 st December
2007.
(e) Wages include a sum of Rs. 2,000 spent on the erection of a cycle shed for
employees and customers.
(f)

A provision for Bad and Doubtful Debts is to be created to the extent of 5 per cent
on Sundry Debtors.

Q. 6 The following trial balance is extracted from the books of a merchant

on 31st December 2007:
PARTICULARS

DR.

Cr.

Rs.
Furniture and Fittings

Rs.
640

Motor Vehicles

6,250

Buildings

7,500

Capital Account

12,500

Bad Debts

125

Provision for Bad Debts

200

Sundry Debtors and Creditors

3,800

Stock on January 1, 2007

3,460

Purchases and Sales

5,475

2,500
15,450

Bank Overdraft

2,850

Sales and Purchases Returns

200

Advertising

450

Interest Account

118

125

Commission

375

Cash

650

Taxes and Insurance

1,250

General Expenses

782

Salaries

3,300

34,000

34,000

The following adjustments are to be made:

(a) Stock in Hand on 31st December, 2007 was Rs. 3,250.
(b) Depreciate Building @5%, Furniture and Fitting @ 10% and Motor Vehicle @ 20%.
(c) Rs. 85 is due for interest on bank Overdraft.
(d) Salaries Rs. 300 and Taxes Rs. 120 are outstanding.
(e) Insurance amounting to Rs. 100 is prepaid.
(f)

One-third of the commission received is in respect of work to be done next year.

(g) Write off further Rs. 100 as Bad Debts and Provision for Bad Debts is to be made
equal to 5% on Sundry Debtors.
Prepare a Trading and Profit and Loss Account for the year ending 31 st December, 2007 and
a Balance Sheet as on that date.

Q. 7 From the following Trial Balance prepared from the books of Ashok on 31 st December
2007, prepare Trading and Profit and Loss Account for the year ending 31 st December, 2007
and Balance Sheet as on that date :
Particulars

Rs. P.

Particulars

Rs. P.

Gurdeep's drawings

10,550 Gurdeep's Capital

Bills Receivable

9,500 Loan at 6% p.a.

Plant and Machinery

Sundry

debtors

(Including

28,800 Sales
Mr.

20,000
3,56,430

Commission received

Gyan for dishonoured chequeRs.

62,000 Sundry Creditors

1,000)

40,970

Wages (Manufacturing)

1,19,400

5,640
59,630

2,780

Returns inward

2,56,590

Purchases

5,620

Rent and Taxes

89,680

Stock on 1 Jan, 2007

11,000

st

Salaries

1,880

Travelling expenses

400

Insurance

530

Cash

18,970

Bank

3,370

Repairs and renewals

1,000

Interest of Loan

4,870

Interest and discount

3,620

Bad debts

8,970

Fixtures and Fittings

5,61,100

5,61,100

The following adjustments are to be made:

(a) Stock-in-trade in hand on December 31, 2007 Rs. 1,28,960.
(b) Write off half of Gyan's cheque.
(c) Create a provision of 5% on sundry debtors.
(d) Manufacturing wages include Rs. 1,200 for erection of new machinery purchased.
(e) Depreciate plant and machinery by 5% p.a. For fixtures and fittings by 10% per
annum.
(f)

Commission not earned but received amounts to Rs. 600.

Q. 8 On 31st December, 2007 the following Trail Balance was extracted from the books of Mr.
B.
Particulars

Rs. P.

Particulars

Rs. P.

Dr. Balances:

Rates Taxes and Insurance

2,891

Drawings

3,000

Advertising

3,264

Sundry Debtors

20,100

General Expenses

3,489

Interest on Loan

300

Bills Receivable

6,882

Cash in Hand

2,050

Cr. Balances:

Stock on 1st Jan, 2007

6,839

Capital

28,000

Motor Vehicles

10,000

Sundry Creditors

10,401

Cash at Bank

3,555

Loan on Mortgage

9,500

Land & Buildings

12,000

Bad Debts Reserve

710

Bad Debts

525

Sales

1,10,243

Purchases

66,458

Purchases Returns

1,346

Sales Returns

7,821

Discounts

540

Carriage Outward

2,404

Bills Payable

2,614

Carriage Inward

2,929

Rent Received

250

Salaries

9,097

Prepare Trading and Profit and Loss Account for the year ended 31 st December, 2007 and
Balance Sheet as on that date, after making adjustments for the following matters:

1. Depreciate Land and Building at 2-1/2 % and Motor Vehicles at 20%.

2. Interest on Loan at 6% p.a. Is unpaid for six months.
3. Goods costing Rs. 500 were sent to a customer on sale or return for Rs. 600 on
30thDecember, 2007 and had been recorded in the books as actual sales.
4. Salaries amounting to Rs. 750 and rates amounting to Rs. 350 are outstanding.
5. Prepaid Insurance amounted to Rs. 150.
6. The provision for Bad Debts is to be maintained at 5% on Sundry Debtors.
7. Provide for manager's Commission at 10% on net profits after charging such
commission.
8. Stock in hand on 31st December, 2007 was valued at Rs. 6,250.

Q. 9 From the following balances extracted from the books of Mr. A, prepare trading and
profit and loss account for the year ended 31.32007 and a balance sheet on that date:
Purchases

71,280

Computer at cost

Capital account

60,000

Creditors

13,000

(bought on 31.3.2007)

18,380

Bills Payable

10,220

Cash at Bank

4,000

Discount

22,000

Cash in Hand

2,836

Sales

60,720

Furniture and fittings at cost

1,540

Returns outwards

11,432

Rent

12,540

Rent due

320

Bills receivable

6,720

Trade Charges

920

Sundry debtors

34,156

Drawings

5,200

Discount

540

Wages

1,800

Salaries

16,780

Returns Inwards

1,000
1,77,692

1,77,692

Adjustments:
(a) Stock at the end at cost Rs. 25,600 (market-value Rs. 26,200).
(b) Rs. 6,000 paid to Mrs. Red against Bills payable were debited by mistake to Mr.
Green's account and included in the list of sundry debtors.
(c) Traveling expenses paid to sales representatives Rs. 5,000 for the month of March
2007 were debited to his personal account and included in the list of sundry debtors.
(d) Depreciation on furniture and fittings shall be provided at 10% p.a.
(e) Provide for doubtful debts at 5% on sundry debtors.
(f)

Goods costing Rs. 1,500 were used by the proprietor.

(g) Salaries included Rs. 12,000 paid to sales representative who is further entitled to a
commission of 5% on net sales.
(h) Stationery charges Rs. 1,200 due on 31.3.2007.
(i)

Purchases included opening stock valued at cost Rs. 7,000.

(j)

Sales representative further entitled to an extra commission of 5% on net profit

after charging his extra commission.