FINAL ACCOUNTS WITH ADJUSTMENTS

PROFORMA OF TRADING ACCOUNT

Trading Account
(For the year ending 31st March/December, 20XX)
Dr.

Cr.
Particulars

To Opening Stock
To Purchases
- Purchases Returns
- Drawings of Goods
- Goods Donated
- Goods given as
sample
To Carriage Inward
To Cartage
To Freight on purchases
To Wages
+ Outstanding Wages
- Prepaid Wages
To Clearing charges
To Octroi
To Custom Duty
To Royalty
To Fuel & Power
To Water Charges
To Import Duties
To Dock Charges
To Manufacturing/ Factory
+ Outstanding Exp
- Prepaid Exp
To Factory Rent
To Gross Profit
Transferred to P/L a/c

Amount
Rs.

Particulars

By Sales
- Sales Returns
By Insurance Claim
(Loss of Stock)
By Closing Stock
By Gross Loss
Transferred to Profit
And Loss a/c
(as the case may be)

Amount
Rs.

PROFORMA OF PROFIT & LOSS ACCOUNT

Profit & Loss Account
(For the year ending 31st March/December, 20XX)
Dr.

Cr.
Particulars

To Gross Loss b/f

To Interest on Loan
To Interest on Capital
To Bad Debts
To Trade Expenses
To Discount Allowed
To Salaries
To Legal Expenses
To Office Exp
(Establishment Exp)
To Commission
To Office Rent
To Salaries & Wages
To Office Lighting
To Audit Fee
To Bank charges
To Repairs
To Carriage outward
To Travelling Expenses
To Postage and Telegram
To Stable expenses
To Depreciation
To Net Profit transferred to
Capital Account

Amount
Rs.

Particulars

By Gross Profit b/f

By Interest Received
By Interest on Drawings
By Rent Received
By Commission received
By Discount received
By Income from
Investments
By Income from
Consignment
By Income from Joint
venture
By Sundry Income
By Net Loss transferred to
Capital Account (as the
case may be)

Amount
Rs.

PROFORMA OF BALANCE SHEET

Balance Sheet
(As on 31st March/December, 20XX)
Dr.

Cr.
Liabilities

Capital
+ Net Profit (if any)
+ Interest on Capital
- Drawings
- Interest on Drawings
- Goods withdrawn for
private use
- Net Loss (if any)
Mortgage
+ Interest Due
Loans
+ Interest due
Income received in
advance
Outstanding Expenses:
For Wages
For Salaries
For Sundry expenses
Bank overdraft
+ Interest on Overdraft
Bills Payable
Creditors
- Reserve for Discount
Total

Amount
Rs.

Assets

Goodwill
Land
Patents
Building
- Depreciation
Plant & Machinery
- Depreciation
Furniture & Fixtures
- Depreciation
Investments
+ Interest due
Prepaid expenses
Bills Receivable
Accrued Income
Debtors
- New Bad Debts
- Reserve for Bad
Debts
- Reserve for Discount
Stock in Trade (Closing
Stock)
Cash at Bank
Cash in hand
Total

Amount
Rs.

PROBLEMS
1. Prepare the Trading and Profit and Loss Account and Balance Sheet of Sujata
Traders for the year ended 31st March, 2013 from the following Trial BalanceParticulars

Cash in hand
Salaries
Purchases
Sales Returns
Sundry expenses
Tax and Insurance
Bad Debts
Investments
Debtors
Opening stock
Drawings
Furniture
Bills Receivable
Total

Debit
Rs.
3,000
5,000
24,000
2,000
5,000
1,000
1,000
4,000
4,000
6,000
7,800
1,200
6,000
70,000

Particulars

Capital
Bank Overdraft
Sales
Purchases Returns
Reserve for Bad debts
Commission
Bills Payable

Total

Credit
Rs.
35,000
4,000
20,000
3,000
2,000
1,000
5,000

70,000

Adjustments1. Salaries Rs.200 and Tax Rs.400 are outstanding while insurance for Rs. 50 is
prepaid.
2. Reserve for Bad debts is to be kept at Rs. 1,000
3. Depreciation on Furniture is to be charged @10%
4. Closing stock is valued at Rs. 9,000
2. The following Trial Balance is extracted from the books of Mr. Sandeep for the
year ended 31st March, 2013

Particulars

Cash in hand
Purchases
Sales Returns
Office expenses
Tax and Insurance
Bad debts
Debtors
Investments
Opening Stock
Drawings
Furniture
Bills Receivable

Total

Debit
Rs.
1,500
12,000
1,000
2,500
500
500
5,000
4,000
3,000
1,400
600
3,000

35,000

Particulars

Capital
Bank Overdraft
Sales
Purchases Returns
Reserve for Bad debts
Commission
Bills Payable
Creditors

Total

Credit
Rs.
16,000
2,000
9,000
2,000
1,000
500
2,500
2,000

35,000

Adjustments1 Closing stock was valued Rs. 4,500

2 Salary Rs. 100 and Tax Rs. 200 are outstanding whereas Insurance Rs. 50
is prepaid
3 Commission received in advance Rs. 100
4 Interest accrued on Investments Rs. 210
5 Interest on overdraft is unpaid Rs. 300
6 Reserve for bad debts is to be kept Rs. 1,000
7 Depreciate furniture by 10%
3. M/s. Kavita Constructions prepare the following Trial Balance for the year
ended 31st March, 2013. You are required to draw up the final accounts.
Particulars

Cash in hand
Purchases
Sales Returns
Office Exp.
Travelling exp.
Tax and Insurance
Bad Debts

Debit
Rs.
1,500
13,000
1,000
2,100
400
500
400

Particulars

Capital
Bank Overdraft
Sales
Purchases Returns
Reserve for Bad debts
Creditors
Loan

Credit
Rs.
12,000
2,000
16,000
2,000
1,000
4,000
1,000

Debtors
Wages
Carriage
Investments
Opening Stock
Drawings
Furniture
Bills Receivable

Total

6,600
550
450
4,000
4,000
1,400
1,600
3,500

41,000

Interest Received
Bills Payable

Total

500
2,500

41,000

Adjustments1 Unexpired Insurance Rs.40

2 Outstanding tax Rs. 120
3 Accrued commission Rs. 250
4 Closing stock Rs. 4,500
5 Unearned interest Rs. 150
6 Depreciation on furniture 5%
7 Bad debts to be written off Rs. 600 and reserve for doubtful debts @5% on
debtors is to be created.
4. Prepare Final Accounts from the following Trial Balance and adjustments for
the year ended 31st March , 2013 Particulars

Purchases
Sales Returns
Bad debts
Debtors
Bills Receivable
Drawings
Opening Stock
Wages
Salaries
Factory expenses
Rent and Rates
Insurance
Prepaid Insurance
Investments
Accrued Interest
Furniture

Debit
Rs.
1,60,000
4,200
350
40,000
12,600
4,900
22,050
18,600
4,800
10,320
2,430
2,250
250
18,200
180
3,200

Particulars

Sales
Purchase Returns
Bad Debt Reserve
Creditors
Bills Payable
Capital
Outstanding Wages
Interest

Credit
Rs.
2,40,000
3,100
1,000
25,000
8,000
25,000
400
2,050

Cash in Hand

Total
Adjustments-

220

3,04,550

Total

3,04,550

1 Depreciate Furniture by 10%

2 Goods worth Rs.120 were given in charity
3 Goods worth Rs. 250 are distributed free as sample
4 Goods worth Rs. 500 taken by the proprietor for personal use
5 Goods worth Rs. 1200 were destroyed by fire and the insurance company
accepted claim for Rs. 800
6 Reserve 5% on debtors for doubtful debts
7 Closing stock was valued Rs. 16,400