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Foundations of Accounting
Foundations of Accounting
16
6. Show the Accounting equation on the basis of the following transactions:
S. No Particulars Amount (Rs.)
1 Mohan commenced business 80,000
2 Withdrew for private use 1,500
3 Purchased goods on credit 13,000
4 Purchased goods for cash 9,000
5 Paid wages 200
6 Paid to creditors 9,000
7 Sold goods on credit 16,000
8 Sold goods for cash (Cost price was Rs. 3,000) 5,000
9 Purchased Furniture 1,000
17
Foundations of Accounting
3. Journalize the following the transactions and Prepare the Ledger accounts.
Date Particulars Amount (Rs.)
1-4-07 Business started with a capital 90,000
3-4-07 Deposited into bank 50,000
10-4-07 Purchased goods for cash 10,000
15-4-07 Purchased goods from Arun 11,000
20-4-07 Cash withdrawn from bank 25,000
25-4-07 Sold goods for cash 20,000
30-4-07 Sold goods for Bhargav 22,000
18
Date Particulars Amount (Rs.)
25-6-07 Sold goods to Murthy for cash 16,600
27-6-07 Goods returned to Raju 1,500
29-6-07 Goods returned by Murthy 2,500
30-6-07 Cash deposited into bank 50,000
19
Foundations of Accounting
20
Date Particulars Amount (Rs.)
11-11-07 Purchased Typewriter from Rakesh 10,000
12-11-07 Sold goods for cash 11,000
13-11-07 Sold goods by cheque 12,000
14-11-07 Sold goods to Vipul 13,000
15-11-07 Sales returns for cash 1,000
16-11-07 Sales returns by cheque 2,000
17-11-07 Sales returns from Vipul 3,000
18-11-07 Sold Land for cash 14,000
19-11-07 Sold Building by cheque 15,000
20-11-07 Sold Motor Car to Venkat 16,000
21-11-07 Cash paid to Mukesh 14,000
22-11-07 Cash received from Vipul 5,000
23-11-07 Cheque issued to Rakesh 10,000
24-11-07 Cheque received from Venkat 11,000
25-11-07 Cash paid to Mohan 5,500
26-11-07 Cheque issued to Murali 6,500
27-11-07 Cash received from Radha 7,500
28-11-07 Cheque received from Krishna 8,500
29-11-07 Cash paid to Gopal 9,500
30-11-07 Cash received from Govind 10,500
10. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars Amount (Rs.)
1-4-07 Paid salaries 2,000
3-4-07 Paid rent to Land lord by cheque 3,000
5-4-07 Paid wages to laborers 2,500
7-4-07 Paid interest to Rakesh 3,500
10-4-07 Paid commission to Rajiv by cheque 4,000
13-4-07 Paid for stationary 500
15-4-07 Paid insurance by cheque 4,500
17-4-07 Paid for postage 300
22-4-07 Received commission from Arun 2,200
24-4-07 Received interest by cheque 3,300
26-4-07 Received rent from tenant 4,400
28-4-07 Received salaries by cheque 4,400
30-4-07 Received commission by cheque from Murthy 5,500
21
Foundations of Accounting
11. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars Amount (Rs.)
1-5-07 Salaries paid in cash 2,100
4-5-07 Wages paid 2,200
6-5-07 Rent paid by cheque 2,300
9-5-07 Interest paid 2,400
11-5-07 Commission paid by cheque 2,500
13-5-07 Postage paid by cheque 2,600
15-5-07 Insurance premium paid by cheque 2,700
18-5-07 Paid for printing 2,800
20-5-07 Paid for advertisement 2,900
22-5-07 Received commission 3,000
23-5-07 Interest received by cheque 3,100
25-5-07 Rent received by cheque 3,200
28-5-07 Paid for repairs 3,300
31-5-07 Paid carriage by cheque 3,400
12. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars Amount (Rs.)
1-6-07 Cash with drawn for personal use 5,000
4-6-07 Cheque with drawn for private use 6,000
7-6-07 Goods with drawn for domestic use 7,000
11-6-07 Goods purchased for personal Use 8,000
15-6-07 Rent paid for the residential portion of the proprietor 9,000
18-6-07 Furniture purchased for house hold purpose payment 10,000
made by cheque
20-6-07 Son’s college fee paid by cheque 11,000
23-6-07 Bicycle purchased for the proprietor Son 12,000
26-6-07 Jewellery purchased for the Proprietor wife 13,000
30-6-07 Goods withdrawn for personal use 14,000
13. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars Amount (Rs.)
1-7-07 Cash withdrawn for personal use 5,500
3-7-07 Cheque withdrawn for domestic use 6,500
6-7-07 Goods withdrawn for private use 7,500
10-7-07 Income Tax paid by cash 8,500
12-7-07 Life Insurance premium paid by cheque 9,500
15-7-07 Goods purchased for private use 10,500
18-7-07 Furniture purchased by cheque for private use 11,500
20-7-07 Rent paid for the Residence of the proprietor by cheque 12,500
22-7-07 Goods withdrawn for personal use 13,500
25-7-07 Goods purchased for private Use 14,500
28-7-07 Son’s college fee paid by Cheque 15,500
31-7-07 Jewellery purchased for proprietor’s wife 16,500
22
14. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars Amount (Rs.)
1-8-07 Salaries paid 5,000
3-8-07 Salaries payable 4,000
4-8-07 Rent paid 6,000
7-8-07 Rent payable 3,000
9-8-07 Wages paid 7,000
10-8-07 Wages payable 2,000
11-8-07 Commission received 5,500
13-8-07 Commission receivable 4,500
15-8-07 Interest received 6,500
17-8-07 Interest receivable 3,500
19-8-07 Rent received 7,500
20-8-07 Rent Receivable 2,500
22-8-07 Carriage paid on purchases 4,400
24-8-07 Carriage paid on sales 5,500
26-8-07 Carriage on purchases by cheque 6,600
31-8-07 Carriage paid on Sale by cheque 7,700
15. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars Amount (Rs.)
1-9-07 Insurance paid 2,000
3-9-07 Insurance payable 2,500
5-9-07 Commission received 3,000
7-9-07 Commission receivable 3,500
10-9-07 Wages paid by cheque 4,000
12-9-07 Wages payable 4,500
15-9-07 Commission received by cheque 5,000
16-9-07 Commission receivable 5,500
18-9-07 Carriage paid on purchases 6,000
20-9-07 Carriage paid on sales 6,500
22-9-07 Salaries paid by cheque 7,000
23-9-07 Salaries payable 7,500
26-9-07 Rent received 8,000
27-9-07 Rent receivable 8,500
29-9-07 Carriage paid on purchases by cheque 9,000
30-9-07 Carriage paid on sales by cheque 9,500
16. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars Amount (Rs.)
1-9-07 Insurance paid 2,000
3-9-07 Insurance payable 2,500
5-9-07 Commission received 3,000
23
Foundations of Accounting
24
19. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars
1-2-07 Purchased goods from Sundeep Rs. 10,000.
4-2-07 Sold goods to Pradeep Rs. 15,000.
6-2-07 Goods returned to Sundeep Rs. 1,000.
9-2-07 Goods returned by Pradeep Rs. 1,500.
10-2-07 Cash paid to Sundeep Rs. 4,000.
12-2-07 Cash received from Pradeep Rs. 3,500.
15-2-07 Cash paid to Sundeep Rs. 4,600 infullsettlement of his account.
17-2-07 Cash received from Pradeep Rs. 9,800 infullsettlement of his account.
20-2-07 Cash paid to Rakesh Rs. 6,700 infullsettlement of Rs. 7,000.
23-2-07 Cheque received from Sanjay Rs. 5,900 infullsettlement of Rs. 6,000.
Venkat became insolvent and Rs. 0.50 in a Rupee received from him for the total
26-2-07
amount of Rs. 9,000.
Suresh became insolvent and Rs. 0.40 in a Rupee received from his estate for the
28-2-07
total amount of Rs. 10,000.
20. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars
1-3-07 Purchased goods from Madhuri for Rs. 10,000.
3-3-07 Sold goods to lakshmi Rs. 12,000.
5-3-07 Purchased goods from Anitha for Rs. 15,000.
7-3-07 Sold goods to Sudha for Rs. 18,000.
10-3-07 Purchased goods from Radha for Rs. 20,000.
12-3-07 Cash paid to Madhuri for Rs. 9,750 infullsettlement of account.
15-3-07 Cash received from Lakshmi for Rs. 11,600 infullsettlement of her account.
18-3-07 Cheque issued to Anitha Rs. 14,500 infullsettlement of her account.
20-3-07 Cheque received from Sudha for Rs. 17,400 infullsettlement of her account.
Cash Rs. 10,000 and cheque for Rs. 9,000 paid to Radha infullsettlement of her
22-3-07
account.
25-3-07 Sold goods to Manju for Rs. 22,000.
27-3-07 Manju became insolvent and received Rs. 0.25 in a Rupee from her.
Cash Rs. 2,000 and cheque for Rs. 2,400 received from Geetha infullsettlement of
29-3-07
Rs. 4,500.
Swetha became insolvent and Rs. 0.60 in a Rupee received from her for the total
31-3-07
of Rs. 5,000.
21. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars
Business started by Murthy with cash Rs. 40,000, with Furniture Rs. 50,000 and
1-1-08
with Machinery Rs. 60,000.
4-1-08 Purchased goods from Suresh Rs. 10,000 of which Rs. 3,500 paid in cash.
8-1-08 Purchased goods from Ramesh Rs. 11,000 of which Rs. 5,000 paid by cheque.
25
Foundations of Accounting
Date Particulars
Purchases goods from Kamesh Rs. 12,000 of which Rs. 7,000 paid by cash and
11-1-08
the balance paid by cheque.
Purchased goods from Mukesh Rs. 15,000 of which Rs. 5,000 paid in cash and
14-1-08
Rs. 5,000 by cheque.
18-1-08 Sold goods to Avinash Rs. 16,000, of which Rs. 9,000 received in cash.
22-1-08 Sold goods to Nithish Rs. 17,000, of which Rs.8,000 received by cheque.
Sold goods to Mallesh Rs. 18,000, of which Rs. 10,000 received by cash and Rs.
26-1-08
8,000 by cheque.
Sold goods to Suresh Rs. 21,000, of which Rs. 7,000 received in cash and Rs.
31-1-08
7,000 by cheque.
22. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars
1-10-07 Purchased goods from Raju Rs. 10,000, Trade Discount-10%.
3-10-07 Sold goods to Murthy Rs. 20,000 Trade Discount-5%.
6-10-07 Purchased Horse by cheque Rs. 12,000.
10-10-07 Purchased shares in Reliance Rs. 15,000 and payment made by cheque.
12-10-07 Purchased goods from Suresh Rs. 16,000, Trade Discount-10%.
15-10-07 Sold goods to Ramesh Rs. 18,000, Trade Discount-6%.
18-10-07 Purchased the Horse for Rs. 8,000.
20-10-07 Purchased shares in Satyam Computers and payment made by cheque Rs. 13,000.
22-10-07 Purchased Government bonds Rs. 14,000.
Purchased goods from Ravi Rs. 22,000, Trade Discount-10% of which 50% paid
24-10-07
in cash at a cash discount of 10%.
Sold goods to giri Rs. 10,000, Trade Discount-10% of which received in cash at a
26-10-07
cash discount of 10%.
Purchased goods from Kiran Rs. 5,000, Trade Discount-10%, cash Paid are a
31-10-07
discount of 10%.
23. Journalize the following transactions and Prepare the Ledger accounts.
Date Particulars
1-11-07 Depreciation on Furniture for Rs. 5,000.
3-11-07 Depreciation on Machinery at 10% on Rs. 1, 00,000.
7-11-07 Interest on Capital Rs. 3,000.
10-11-07 Interest on Drawings Rs. 1,000.
24. Write the Opening entry for the following on 1-12-2007.
Particulars
Debit Balances:
Cash in Hand-Rs. 1,000, Cash at Bank-Rs. 5,000, Furniture-Rs. 15,000, Machinery-Rs. 50,000,
Ajay-Rs. 10,000, Vijay-Rs. 12,000, Kumar-Rs. 15,000.
Credit Balances:
Radha-Rs. 10,000, Krishna-Rs. 13,000, Gopi-Rs. 9,000, Bank Overdraft (OD)-Rs. 6,000.
26
25. Write the Opening entry for the following on 1-1-2008.
Particulars
Debit Balances:
Cash in Hand-Rs. 1,500, Cash at Bank-Rs. 2,000, Furniture-Rs.5, 000, Plant-Rs. 20,000,
Debtors: Suresh-Rs. 6,000, Ramesh-Rs. 7,000, Harish-Rs. 8,000.
Credit Balances:
Loan from Bank-Rs. 10,000, Creditors: Hari-Rs.5,000, Giri-Rs. 4,000, Suri -Rs. 3,000-Capital-
Rs. 40,000.
26. Pass the Journal Entries for the information and transactions.
Particulars
Date Particulars
3-2-08 Purchased goods from Ravi Rs. 10,000, Trade Discount-10%.
6-2-08 Sold goods to Sunil Rs. 20,000, Trade Discount-7%.
Purchased goods from Gopi Rs. 30,000, Trade Discount-10%, cash paid at a Cash
10-2-08
Discount-10%.
Sold goods to Govind Rs. 40,000, Trade Discount-10%, cash received at a Cash
12-2-08
Discount-10%.
15-2-08 Depreciation on Machinery-Rs. 6,000.
18-2-08 Depreciation on Furniture-Rs. 7,000.
20-2-08 Interest on Capital-Rs. 9,000.
22-2-08 Interest on Drawings-Rs. 1,500.
25-2-08 Horse purchased by Cheque-Rs. 10,000.
27-2-08 Shares purchased in a Company-Rs. 12,000.
29-2-08 Purchased government bond by Cheque-Rs. 15,000.
27. Anand Raj was carrying on business as general merchant on 1-March-2007 his assets and liabilities
were as under
Assets: Furniture-Rs. 8,000, Stock-Rs. 35,000, Bank-Rs.14,000, Cash-Rs. 1,000, Vijay-Rs. 2,500,
Gopal-Rs. 2,500 and Govind-Rs. 2,000.
Liabilities: Due to Laxman-Rs. 9,000, Due to Vasanth-Rs. 6,000.
His Transactions were as follows, after passing the opening entry, pass journal entries for the
following transaction.
Date Particulars
2-3-07 Additional capital brought into the business Rs. 50,000.
3-3-07 Cash deposited into bank Rs. 25,000.
4-3-07 Purchased goods for cash Rs. 10,000.
27
Foundations of Accounting
Date Particulars
5-3-07 Purchased goods from Kumar Rs. 11,000.
6-3-07 Purchased goods by cheque Rs. 12,000.
7-3-07 Purchased goods from Vasanth for cash Rs. 13,000.
Purchased goods from Raju for Rs. 30,000, for which Rs. 10,000 paid in cash and
8-3-07
Rs.10,000 by cheque.
9-3-07 Purchases returns for cash Rs. 1,000.
10-3-07 Purchases returns to Kumar Rs. 1,100.
11-3-07 Purchases returns by cheque Rs. 1,200.
12-3-07 Purchases returns to Vasanth Rs. 1,300.
13-3-07 Purchased furniture for cash Rs. 15,000.
14-3-07 Purchased Machinery by cheque Rs. 16,000.
15-3-07 Purchased Land from Srikanth Rs. 17,000.
16-3-07 Purchased Typewriter from Godrej Ltd by cheque Rs. 18,000.
17-3-07 Sold goods for cash for Rs. 20,000.
18-3-07 Sold goods by cheque Rs. 21,000.
19-3-07 Sold goods to Gopal Rs. 22,000.
20-3-07 Sold goods to Govind for cash Rs. 23,000.
Sold goods to Kiran for Rs. 45,000 of which Rs. 15,000 received in cash, Rs.
21-3-07
15,000 by cheque.
22-3-07 Sales returns for cash Rs. 2,000.
23-3-07 Sales returns by cheque Rs. 2,100.
24-3-07 Sales returns by Gopal Rs. 2,200.
25-3-07 Sales returns from Govind Rs. 2,300.
26-3-07 Sold Plant for cash Rs. 25,000.
27-3-07 Sold Motor Car by cheque Rs. 26,000.
28-3-07 Sold Machinery to Lokesh Rs. 27,000.
29-3-07 Sold Furniture to Ajith for cash Rs. 28,000.
30-3-07 Cash paid to Kumar Rs.6,000.
31-3-07 Cheque issued to Srikanth Rs.7,000.
1-4-07 Cash received from Gopal Rs. 8,000.
2-4-07 Cheque received from Lokesh Rs. 9,000.
3-4-07 Cash paid Anand-Rs.9,400 infullsettlement of Rs.10,000.
4-4-07 Cheque issued to Prasad for Rs. 4,500 infullsettlement of Rs. 5,000.
5-4-07 Cash received from Sathish Rs. 7,900 infullsettlement of Rs. 8,200.
28
Date Particulars
6-4-07 Cheque received from Mohan for Rs. 9,250 infullsettlement of Rs. 9,500.
Vamsi became insolvent and Rs. 0.50 in a Rupee received from him for the total
7-4-07
amount of Rs.10,000.
Krishna became insolvent and Rs. 0.30 in a Rupee received from his estate for the
8-4-07
total amount of Rs. 5,000.
9-4-07 Salaries paid Rs. 2,000
10-4-07 Salaries payable Rs. 3,000
11-4-07 Rent paid by cheque Rs.4,000
12-4-07 Rent payable Rs. 5,000
13-4-07 Interest paid by cash Rs. 2,000 and paid by cheque Rs. 3,000.
14-4-07 Commission received Rs. 6,000.
15-4-07 Commission receivable Rs. 7,000.
16-4-07 Interest received by cheque Rs. 8,000.
17-4-07 Interest receivable Rs. 9,000.
18-4-07 Rent received by cash Rs. 4,000, received by cheque Rs. 6,000.
19-4-07 Wages paid to Rakesh Rs. 1,000.
20-4-07 Carriage paid to Rajendra by cheque Rs.2,000.
21-4-07 Interest received from Geetha Rs. 3,000.
22-4-07 Salaries received from Sita by cheque Rs. 4,000.
23-4-07 Cash withdrawn for personal use Rs. 5,500.
24-4-07 Cheque withdrawn for private use Rs. 6,500.
25-4-07 Goods withdrawn for domestic use Rs. 7,500.
26-4-07 Goods purchased for Personal Use Rs. 8,500.
27-4-07 Income tax paid in cash Rs. 9,500.
28-4-07 Life Insurance premium paid by cheque Rs. 10,500.
29-4-07 Jewellery purchased for the proprietor’s wife Rs. 11,500.
30-4-07 Proprietor’s son college fee paid by cheque Rs.12,500.
1-5-07 Bi-cycle purchased for the proprietor son Rs. 13,500.
2-5-07 Purchased goods from Rajiv Rs. 10,000, Trade Discount-10%.
Purchased goods from Sanjay Rs. 20,000, Trade Discount-10%, cash paid at a
3-5-07
Cash Discount-10%.
4-5-07 Sold goods to Manoj Rs. 20,000, Trade Discount-5%.
Sold goods to Ajay Rs. 10,000, Trade Discount-10% of which received in cash at
5-5-07
a cash discount-5%.
29
Foundations of Accounting
Date Particulars
6-5-07 Purchased Horse by cheque Rs. 20,000.
7-5-07 Purchased shares in Reliance Company Rs. 18,000 and payment made by cheque.
8-5-07 Purchased Government bonds Rs. 16,000.
9-5-07 Depreciation on Furniture Rs. 4,000.
10-5-07 Depreciation on Machinery at 10% on Rs. 50,000.
11-5-07 Interest on Capital Rs. 6,000.
12-5-07 Interest on Drawings Rs. 2,500.
13-5-07 Carriage paid on purchases Rs. 3,500.
14-5-07 Carriage paid in sales by cheque Rs. 4,500.
15-5-07 Purchased machinery for Rs. 20,000 and payment made by cheque.
16-5-07 Carriage paid on the above machinery Rs. 6,000.
17-5-07 Wages paid for the installation of above machinery Rs. 4,000.
18-5-07 Loan taken from Ravi Rs. 11,000.
19-5-07 Loan taken from Kavi Rs. 12,000 by cheque.
20-5-07 Loan given to Hari Rs. 13,000.
21-5-07 Loan given to Giri Rs. 14,000 by cheque.
22-5-07 House hold furniture brought into the business Rs. 15,000.
23-5-07 Cash withdrawn from bank Rs. 14,500.
24-5-07 Received Rs. 600 from Gowri which was return of previously as Bad debts.
Received Rs. 425 from Kiran whose account was return of as Bad previously by
25-5-07
cheque.
SUBSIDIARY BOOKS
1. In the Books of Rani, Prepare a Single column cash book for the month of February- 2008.
Date Particulars Amount (Rs.)
1-02-08 Cash in hand 10,200
3-02-08 Cash sales 11,200
5-02-08 Received from Pawan 1,600
7-02-08 Paid into bank 20,000
10-02-08 Paid for postage 400
12-12-08 Paid for wages 200
15-12-08 Interest received 400
20-12-08 Drawn from bank 4,400
25-12-08 Cash purchases 6,000
27-12-08 Cash sales 4,800
30
28-12-08 Received from Rajesh 2,200
29-12-08 Drawn for personal use 1,800
30-12-08 Deposited into bank 4,400
2. From the following particulars, Prepare a Single column cash book in the books of Ram Chandra
Rao for the month of December 2007.
Date Particulars Amount (Rs.)
1-12-07 Cash in hand 4,000
2-12-07 Received from Dinesh 2,400
4-12-07 Paid to Sunil 400
6-12-07 Cash purchases 200
8-12-07 Carriage paid 20
10-12-07 Cash sales 300
15-12-07 Payment for advertisement 100
12-12-07 Received from Panduranga 700
14-12-07 Cash sales 400
18-12-07 Cash purchases 700
20-12-07 Furniture purchased 200
23-12-07 Cash sales 400
25-12-07 Withdrawn for personal use 100
28-12-07 Paid to singh 300
29-12-07 Paid for storage 40
30-12-07 Salaries paid 150
30-12-07 Rent paid 80
3. In the Books of Abhiram, Prepare a Single column cash book for the month of November-2007.
Date Particulars Amount (Rs.)
1-11-07 Started business with a capital 50,000
2-11-07 Deposited into bank 40,000
4-11-07 Goods purchased for cash 2,400
6-11-07 Goods sold for cash 4,000
7-11-07 Payment for stationery 150
9-11-07 Received from Shashi 2,250
13-11-07 Payment to Gopal 1,050
15-11-07 Purchased Office furniture 1,250
17-11-07 Payment for advertisement 800
21-11-07 Received cash from Rakesh 3,000
23-11-07 Purchased goods from Siva for cash 1,800
31
Foundations of Accounting
32
23-9-07 Purchased stationary 400
26-9-07 Deposited into bank 1,200
28-9-07 Payment made to Singh and Discount received Rs. 40 1,560
30-9-07 Rent paid 1,600
30-9-07 Salaries paid 1,800
6. In the books of Ramsita, Prepare a Two column cash book for the month of August-2007.
Date Particulars Amount (Rs.)
1-8-07 Cash balance in hand 4,400
3-8-07 Cash sales 5,000
5-8-07 Cash purchases 2,400
6-8-07 Payment made to Manoj and Discount received Rs. 20. 1,380
9-8-07 Received from Anirudh and Discount allowed Rs. 100. 2,900
11-8-07 Commission received 2,800
13-8-07 Interest received 1,000
15-8-07 Received from Gopal infullsettlement of Rs. 5,000. 4,800
18-8-07 Payment made to Govardhan infullsettlement of Rs. 3,000 2,900
20-8-07 Rent received 3,200
22-8-07 Postal charges 400
25-8-07 Salaries paid 2,000
27-8-07 Wages paid 600
29-8-07 Withdrawn from bank 2,400
30-8-07 Deposited into bank 1,800
7. In the books of Varma and Co, Prepare a Three column cash book for the month of July-2007.
Date Particulars Amount (Rs.)
1-7-07 Cash balance 820
1-7-07 Bank balance 17,840
2-7-07 Sales for cash 9,000
3-7-07 Deposited into bank 8,000
5-7-07 Stationery purchases 200
Payment to Madhu by cheque and Discount received Rs. 560
8-7-07
40
12-7-07 Gave a cheque for cash purchases 3,000
15-7-07 Drew for personal use 1,000
Received from Sundeep, a cheque infullsettlement of Rs. 3,940
18-7-07
4,000
20-7-07 Withdrawn from bank 2,000
21-7-07 Payment of wages 200
25-7-07 Sundeep cheque dishonored and returned from the bank
31-7-07 Pass book shows the bank charges 20
33
Foundations of Accounting
8. In the books of Das and Co, Prepare a cash book, having cash, bank and discount columns for the
month of June-2007.
Date Particulars Amount (Rs.)
1-6-07 Opening balance of cash in hand 10,800
1-6-07 Opening bank balance 2,950
2-6-07 Cheque was issued to Suri and received a discount of Rs. 1,700
300.
3-6-07 Payment of salaries 2,300
5-6-07 Investments sold and received the cash for Rs. 9,800 out
of which Rs. 2,500 was deposited into bank.
6-6-07 Received in the form of cheque from Vikrant Rs. 1,550
infullsettlement of his account for Rs. 1,900.
9-6-07 Received from Nandu Rs. 2,300 and discount allowed Rs.
100.
10-6-07 Withdrew for personal use by cheque 350
11-6-07 Pass book balance of bank charges 20
14-6-07 Sumanth paid an interest to Das and Co. 280
16-6-07 Sale of goods 14,000
18-6-07 Collection of dividends by bank purchased from Rajesh 4,800
20-6-07 Payment of rent 800
9. Prepare a Three column cash book in the books of Pawan Kumar for the Month of May-2007.
Date Particulars Amount (Rs.)
1-5-07 Cash in hand 10,748
1-5-07 Bank balance 30,980
3-5-07 Goods sold for cash 12,800
5-5-07 Deposited into bank 14,000
6-5-07 Cheque received from Sathish 1,400
8-5-07 Deposited the cheque from Sathish into bank
Payment made to Ankit cheque Rs. 1,960 and Discount
10-5-07
allowed Rs. 40.
12-5-07 Goods purchased for cash 5,000
14-5-07 Withdrawn from bank for Official purposes 10,000
Received a cheque from Lokesh for Rs. 1,900 and
15-5-07
Discount allowed Rs. 100.
18-5-07 Goods sold for cash 15,000
Cheque from Lokesh and the cash of Rs. 8,000 was
19-5-07
deposited into bank.
21-5-07 Payment for stationery 240
23-5-07 Commission paid to Rakesh 1,000
Received a cheque for Rs. 2,000 from Manohar and
25-5-07
deposited the same into Bank.
27-5-07 Lokesh cheque dishonored
34
29-5-07 Withdrawn through cheque for personal use. 1,600
Payment of salaries by cheque Rs. 3,000 and by cash Rs.
30-5-07
1,000.
As per the pass book, the bank charges are Rs. 40 and
31-5-07
insurance premium Rs. 1,040.
10. In the Books of Nirmala and Co, make out a Cash Book with Cash, Bank and Discount Columns for
the Month of April-2007.
Date Particulars Amount (Rs.)
1-4-07 Opening balance of cash in hand 600
1-4-07 Bank Over draft 900
1-4-07 Payment of salaries for the month of March 500
2-4-07 Goods purchased for cash 60
2-4-07 Sold goods for cash 160
A cheque was issued in favour of Kamesh and Co in the 520
3-4-07
settlement of his account for Rs. 540.
Received cash from Dhruva and Co and Discount 270
4-4-07
allowed for Rs. 30.
Chandu Bros issues a cheque infullsettlement of Rs. 380
5-4-07
400.
5-4-07 Deposited into bank. 400
A Cheque was issued for Ranga Bros for the purchase of 300
5-4-07
Furniture.
Cheque from Chandu Bros dishonored and Bank debits 4
6-4-07
in respect of charges.
6-4-07 Payment of rent by cheque 200
6-4-07 Collection of interest on securities by bank. 300
11. Narayan Owed Rs. 5,600 to the bank and had a cash balance of Rs. 920 on hand on 1-3-07. Prepare a
Three columnar cash book.
Date Particulars
2-3-07 Withdrawn cash for office use Rs. 3,200 and paid wages for Rs. 2,000.
7-3-07 Sold goods for cash Rs. 800 and purchased goods for Rs. 600.
9-3-07 Amit issued a cheque for Rs. 2,700 infullsettlement of his account for Rs. 2,800
and deposited the same into bank.
11-3-07 Issued a cheque to Rana Deep for Rs. 1,780 infullsettlement of Rs. 1,800.
15-3-07 Amount from the sale of old news papers Rs. 430.
17-3-07 Purchased bicycle by cheque for Rs. 2,300 and payment of Municipal taxes for
Rs. 400 by cash.
18-3-07 Amit cheque was dishonored and the bank has charged Rs. 10 towards the same.
20-3-07 Another cheque was issued by Amit for the total amount including bank charges.
21-3-07 The above cheque was deposited into bank.
12. In the Books of Rajdeep, Record the following transactions in the cash book on 14-02-2007 and
balance the same.
S.No Particulars
1. Balance at the beginning of the day:
35
Foundations of Accounting
S.No Particulars
Cash –Rs. 300.
AXIS bank-Rs. 50,000.
HDFC bank(Overdraft)-Rs. 6,000
2. Rama Chandra and Bros has issued a issued a cheque of Rs. 10,700
infullsettlement of invoice for 11,000. The cheque was deposited in HDFC bank,
who charged Rs. 6 towards collection charges.
3. Cash purchases of Rs. 20,000, paid the bearer cheque on AXIS bank.
4. Amount of Rs. 10,000 transferred from AXIS Bank to HDFC bank.
5. Withdrew Rs. 10,000 from AXIS Bank, Rs. 6,000 for office use and Rs. 4,000 for
personal use.
6. Advance salary was paid to manager Rs. 2,000 by bearer cheque on HDFC bank.
13. Enter the following transactions in the Petty cash book for the month of January-2008.
Date Particulars
1-1-08 Cash received from the chief cashier Rs. 300.
7-1-08 Postal stamps Rs. 80.
10-1-08 Stationery Rs. 32.
15-1-08 Carriage Rs. 16.
20-1-08 Auto fair to salesman Rs. 20.
22-1-08 Telegrams Rs. 25.
27-1-08 Tea to customers Rs. 15.
30-1-08 Stationery Rs. 36.
14. Prepare a columnar Petty cash book on Imprest system from the following particulars.
Date Particulars
1-2-08 Received for petty cash payment Rs. 2,000.
3-2-08 Paid for postage Rs. 120.
4-2-08 Paid for stationery Rs. 70.
6-2-08 Paid for advertisement Rs. 300.
7-2-08 Paid for wages Rs. 60.
9-2-08 Paid for carriage Rs. 50.
10-2-08 Paid for conveyance Rs. 200.
12-2-08 Paid for traveling expenses Rs. 400.
13-2-08 Paid for postage Rs. 80.
15-2-08 Paid for wages Rs. 90.
28-2-08 Paid for telegrams Rs. 50.
15. From the following transactions, Prepare Purchases book and the Ledger account.
Date Particulars
1-1-07 Purchased goods from Rakesh Rs. 10,000
5-1-07 Purchased goods for cash Rs. 12,000
10-1-07 Purchased goods from Sanjay Kumar Rs. 14,000
15-1-07 Purchased goods by cheque Rs. 16,000
20-1-07 Purchased goods from Murari Rs. 18,000
36
25-1-07 Purchases Furniture for cash Rs. 20,000
28-1-07 Purchased Machinery on credit Rs. 22,000
31-1-07 Purchased goods from Rakesh Rs. 24,000
16. In the books of Prasad and Co, Prepare purchases and purchases return books and the Ledger
accounts.
Date Particulars
1-2-07 Purchased goods form Subbu Rs. 10,000.
3-2-07 Purchased goods from Sailesh Rs. 12,000.
6-2-07 Purchased goods from Pandu for cash Rs. 14,000.
10-2-07 Purchased goods from Gowri by cheque Rs. 16,000.
12-2-07 Purchased goods for cash Rs. 18,000.
15-2-07 Purchased furniture from Ramesh on credit Rs. 20,000.
17-2-07 Purchases returns to Subbu Rs. 1000.
19-2-07 Purchases returns to Sailesh Rs. 1,200.
21-2-07 Purchases returns to Pandu Rs. 1,400.
23-2-07 Purchases returns to Gowri Rs. 1,600.
25-2-07 Purchases returns for cash Rs. 1,800.
26-2-07 Purchased goods from Subbu Rs. 24,000 Trade Discount-10%.
27-2-07 Purchased goods from sailesh Rs. 26,000 Trade Discount-10%.
28-2-07 Purchased goods from suresh for cash Rs. 30,000.
17. From the following transactions, Prepare the Sales book and Ledger account.
Date Particulars
1-1-06 Sold goods to Rakesh Rs. 20,000
5-1-06 Sold goods for cash Rs. 24,000
10-1-06 Sold goods to Sanjay Kumar Rs. 28,000
15-1-06 Sold goods and a cheque was received for Rs. 32,000
20-1-06 Sold goods to Murari Rs. 36,000
25-1-06 Sold furniture for cash Rs. 20,000
28-1-06 Sold Machinery on credit Rs. 32,000
31-1-06 Sold goods to Rakesh Rs. 48,000
18. From the following transactions, Prepare Sales book and Sales returns book and Ledger accounts.
Date Particulars
1-2-06 Sold goods to Subbu Rs. 20,000.
3-2-06 Sold goods to Sailesh Rs. 24,000.
6-2-06 Sold goods to Panduranga for cash Rs. 28,000.
10-2-06 Sold goods to Gowri by cheque Rs. 32,000.
12-2-06 Sold goods for cash Rs. 36,000.
15-2-06 Sold furniture to Ramesh on credit Rs. 30,000.
17-2-06 Sales returns to Subbu Rs. 2000.
19-2-06 Sales returns to Sailesh Rs. 2,400.
21-2-06 Sales returns to Panduranga Rs. 2,800.
23-2-06 Sales returns to Gowri Rs. 3,200.
25-2-06 Sales returns for cash Rs. 3,600.
37
Foundations of Accounting
TRIAL BALANCE
1. From the following ledger balances, Prepare the Trial balance.
Particulars Amount (Rs.)
Capital 60,000
Stock 69,780
Carriage in 4,960
Returns out 3,360
Loan to Anil 4,000
Rent 3,280
Purchases of goods 51,880
38
Particulars Amount (Rs.)
Good will 6,920
Advertisement expenses 3,816
Bad debts 1,600
Cash in hand 248
Discount allowed 1,320
Drawings 13,000
Returns in 2,216
Furniture 5,500
Carriage out 2,900
Interest on the above loan 100
Commission received 520
Debtors 16,000
Creditors 12,000
Rent received 4,800
Cash at bank 2,000
Sales 1,11,616
Wages 3,616
2 The following Trial balance is prepared wrongly, Prepare the correct Trial balance.
Debit Balances Amount (Rs.) Credit Balances Amount (Rs.)
Purchases return 2,000 Cash in hand 1,000
Wages 4,000 Sales returns 4,000
Office expenses 6,000 Carriage out 1,000
Capital 11,000 Interest received 500
Discount received 600 Salaries 7,000
Rent received 400 Sales 22,000
Carriage in 500 Creditors 6,000
Loan from bank 7,000 Stock 5,000
Purchases 14,000 Machinery 10,000
Bank o/d 7,000
Debtors 4,000
Total 56,500 56,500
3. The following Trial balance is prepared wrongly, Prepare the correct Trial balance.
Debit Balances Amount (Rs.) Credit Balances Amount (Rs.)
Capital 44,000 Stock 20,000
Debtors 16,000 Creditors 24,000
Bank o/d 28,000 Machinery 40,000
Purchases returns 8,000 Cash in hand 4,000
General expenses 24,000 Sales returns 16,000
Purchases 52,000 Sales 88,000
Wages 20,000 Salaries 24,000
39
Foundations of Accounting
FINAL ACCOUNTS
1. Ascertain the Gross profit from the following figures.
Particulars Amount (Rs.)
Opening stock 40,000
Closing stock 60,000
Purchase of goods 1,60,000
Purchases returns 4,000
Sale of goods 3,20,000
Sales returns 6,000
Carriage in 4,000
Carriage out 8,000
Freight, Duty and Clearing charges 10,000
Rent, Rates and Taxes 7,000
2. Ascertain the Net Profit from the following Particulars.
Particulars Amount (Rs.)
Gross profit for the year 1,64,000
Salaries for the employees 36,000
Rent, Rates and Taxes 10,000
40
Depreciation on Machinery 16,000
Printing and Stationery for office 4,000
Commission received 3,000
Furniture and Fixtures 30,000
3. Prepare a Balance sheet from the following Information.
Particulars Amount (Rs.)
Creditors for purchases 2,00,000
Closing stock at the end of the year 1,00,000
Motor Van used for office 1,00,000
Good Will 1,00,000
Debtors for sales 4,00,000
Capital 10,00,000
Machinery 10,00,000
Loan 6,00,000
4. Ascertain the Cost of Goods of Sold.
Particulars Amount (Rs.)
Opening stock 40,000
Purchases 2,36,000
Direct expenses 44,000
Closing stock 60,000
5. Ascertain the Cost of goods sold.
Particulars Amount (Rs.)
Opening stock of goods 10,000
Closing stock of goods 12,000
Purchase of goods 1,00,000
Sale of goods 1,60,000
Return of purchases 2,000
Return of sales 3,600
Wages 9,800
Goods used by proprietor 400
6. Ascertain the Net profit from the following particulars.
41
Foundations of Accounting
7. Calculate the Gross profit from the following figures.
Particulars Amount (Rs.)
Cost of goods sold for the year 2,60,000
Sale of goods for the year 3,80,000
8. Pass necessary adjustments entries to the following.
Particulars Amount (Rs.)
Closing stock of goods 30,000
Outstanding salaries 2,400
Prepaid insurance 300
Interest accrued on investments 1,000
Premium received in advance 2,200
Provide as reserve for Bad and doubtful debts 800
9. A Trader’s Trail balance contains.
Particulars Amount (Rs.)
Sundry debtors for Sale of goods 1,00,000
Bad debts in Sundry debtors 2000
It is desired to provide for Doubtful at 5% of the Debtors. Make the Necessary provision and
show the treatment in the Final accounts.
10. On 1st January 2007 the Provision for Bad Debts stood at Rs. 4,200.During the year
Bad Debts totaled to Rs. 3, 600. At the end of the year Sundry Debtors were Rs. 1,00,000. The firm
wishes to maintain the Provision for Bad Debts @ 5% of Sundry Debtors. Give the Necessary
Journal Entries and the Provision for Bad Debts Account.
11. In a Trail Balance Debtors appear at Rs. 1, 22,000 and Creditors at Rs. 66,000. Let us provide for
Doubtful Debts at 5% on Debtors and Provide for Discount on Creditors at 2% after considering
the fact that included in Debtors is the amount of Rs. 2,000 due from shyam (one of the customers)
and included in creditors is the amount of Rs. 6,000 due to shyam.
12. On 1st January, 2007 the Provision for Doubtful Debts stood at Rs. 1,050.During the year Bad
Debts written off were Rs. 800. At the end of the year the Sundry Debtors were Rs. 20,000. The
firm wishes to maintain the Provision for Doubtful Debts at 5% on the Sundry Debtors. Give
Journal Entries to be passed on 31-Dec-2007.
13. The Reserve for Discount on Creditors as on 31-Dec -2007 was Rs. 1,800. During 2007 Discounts
Received from Creditors totaled Rs. 2,400. On 31-Dec-2007 the creditors totaled Rs. 60,000. The
Reserve for Discount on Creditors is to be Kept @2% of the Creditors. Give the required journal
entries and the Reserve for Discount on Creditors Account.
14. Show the treatment of the following items in profit and loss account and Balance sheet prepared at
the end of 2007.
42
15. The Closing Stock on 31st December 2007 was Rs. 70,000.There was a loss by fire of Rs. 20,000
in the first week of December 2007. Show how will you deal with this in case
a. Stock was not at all insured
b. Stock was fully covered by insurance.
c. Stock was partly covered by insurance and the claim of Rs. 7,000 was accepted by the
insurance company.
16. A plant of the Book Value of Rs. 1,60, 000 was Sold for Rs. 56,000 in part exchange for a new
plant costing Rs. 1, 40,800.The net invoice of Rs. 84,800 was passed through the invoice book.
Pass the Necessary Adjustments.
17. Included in the sales were Sales of Goods of Rs. 40,000 on Sale or return basis for which consent
of the customers was not received upto 31-Dec-2007, the day on which accounts are closed. Goods
Sold included Profit at 25% on Cost. Pass the Necessary Adjustments.
18. Closing Stock includes goods worth Rs. 11,600 has been credited to sales account. The machinery
account stood in the books at Rs. 16,000. Pass the necessary adjustments.
19. During the year 2007, a machine was purchased for Rs. 40,000 from Sree Ltd. Wages of workmen
who installed the machine amounted to Rs. 4,000. No entry has been passed. Pass the necessary
entry and show its impact on the Final accounts.
20. On 1st April 2004 the Provision for Doubtful Showed a Credit Balance of Rs. 6,000.During the
year the Bad Debts amounted to Rs. 5,100. The Sundry Debtors on 31-March-2005 were Rs.
1,80,000 and a Provision for Doubtful Debts at 5% is required to be maintained. The Bad Debts
during the year ended 31st March, 2006 amounted to Rs. 5,700. On 31st March, 2006 the sundry
debtors were Rs. 1,68,000 and a provision for doubtful debts at 5% is to be maintained. During the
year ended 31st March ,2007 the bad debts amounted to Rs. 2,400 and the book debts on this date
amount to Rs. 60,000 on which a 5% provision for doubtful debts and a 3% provision for discount
are to be maintained. Give the necessary ledger accounts and show these items will appear in the
profit and loss account and the balance sheet of each of these years.
21. On 1st January, 2005 the provision for doubtful debts account showed a credit balance of Rs.
45,000. During the year the bad debts amounted to Rs. 36,000.The debtors at 31-Dec-2005 were
Rs. 3,75,000 and a 5% provision for doubtful debts was required to be maintained. The bad debts
during the year 2006 were Rs. 18,750. On 31-Dec-2006 the debtors were Rs. 4,20,000 and a 5%
provision for doubtful debts was to be kept. In 2007, the bad debts were Rs. 6,000 and the debtors
at the end of the year amounted to Rs. 1, 20,000 on which 2.5%. Provision for Doubtful debts and
5% provision for discount are to be kept.
22. Show the necessary ledger accounts and also show how these items will appear in the profit and
loss account and balance sheet of each of three years.
23. A firm maintains a provision for bad debts at 6% and a provision for discount at 3% on debtors. It
also maintains a reserve for discount on creditors at 3% from the following particulars write up the
provision or reserve accounts for all the years.
Balance on 1st January, 2005
Provision for Bad Debts - Rs. 2,000.
Provision for Discount on Debtors - Rs. 1,200.
Reserve for Discount on Creditors - Rs. 750.
Total Debtors Were
On 31-12-2005 Rs. 48,000, after Writing off Bad Debts Rs. 1,200 and Allowing Discounts
Rs. 750.
On 31-12-2006 Rs. 32,000 after Writing off Bad Debts Rs. 400 and Allowing Discounts Rs. 500.
On 31-12-2007 Rs. 40,000 after Writing off Bad Debts Rs. 1,200 and Allowing Discounts Rs. 700.
The Creditors at the end of 2005, 2006 and 2007 were Rs. 32,000, Rs. 24,000 and Rs. 40,000
respectively. Discount Received during each of the years amounted to Rs. 800, Rs. 480 and
Rs. 720.
43
Foundations of Accounting
24. In the Books of Balaji and Company, Prepare a Trading, Profit & Loss Account for the year ended
31-Dec-2007 and a Balance sheet as on that date.
Particulars Amount (Rs.)
Capital 60,000
Drawings 12,000
Sundry creditors for purchases 86,000
Bills payable for purchases 8,000
Sundry debtors for sales 1,02,000
Bills receivable for sales 10,000
Loan advanced to Divya & Co. 24,000
Fixtures & Fittings 17,000
Opening stock of goods 94,000
Cash in hand 1,800
Cash at ICICI bank 25,000
Overdraft with HDFC bank 12,000
Purchases of goods 1,00,000
Duty and Clearing charges 7,000
Sales of goods 2,56,000
Salaries for the employees 19,000
Returns from the customers 2,000
Returns to the creditors 2,200
Commission and Travelling expenses 9,400
General expenses 5,000
Rent paid 4,000
Commission received 8,000
Adjustments
a. Closing Stock Rs. 1,00,000.
b. Interest to be received Rs. 400.
c. Outstanding salaries Rs. 1,000.
d. Depreciate Fixtures and Fittings by 5%.
e. Commission received in advance Rs. 1,200.
f. Allow interest on capital at 8%.
25. From the following Trail Balance of Nagendra as at 31-Dec-2007.Prepare Trading, Profit & Loss
account for the year ended 31-Dec-2007 and the Balance sheet as on that date:
Debit Balances Amount (Rs.) Credit Balances Amount (Rs.)
Stock 90,000 Capital 1,50,000
Plant and Machinery 1,50,000 Sales 8,41,500
Purchases 4,50,000 Sundry creditors 30,000
Trade charges 20,000 Bad debts provision 400
Carriage inwards 5,000 Bills payable 4,000
Carriage outwards 3,000
Factory rent 3,000
44
Debit Balances Amount (Rs.) Credit Balances Amount (Rs.)
Discount 700
Insurance 1,400
Sundry debtors 1,20,000
Office rent 6,000
Printing and Stationery 1,200
Travelers salaries 5,600
Advertising 30,000
Bills receivable 12,000
Drawings 12,000
Salaries 30,000
Wages 40,000
Furniture 15,000
Coal and Gas 2,000
Cash in hand 4,000
Cash at bank 25,000
Total 10,25,900 10,25,900
Adjustments
a. Closing stock amounted to Rs. 70,000.
b. Depreciate Machinery by 10% and Furniture by 5%.
c. Raise the Bad Debts Provision to 5% on Debtors.
d. Outstanding Factory rent Rs. 600, Office rent Rs. 1,200, Wages Rs. 1,600 and Salaries Rs.
700.
e. Insurance prepaid Rs.200.
26. In the Books of Niranjan lal and Co, Prepare Final accounts for the year ended on 31-Dec-2006.
Particulars Amount (Rs.)
Buildings 1,40,000
Motor Car 24,000
Furniture 3,280
Debtors 31,200
Creditors 37,704
Stock 30,080
Cash in hand 1,976
Cash at bank 29,068
Bills receivable 11,688
Bills payable 13,860
Purchase of goods 1,71,044
Sale of goods 2,43,700
Capital 1,84,000
Carriage in 2,582
Reserve for Bad debts 2,640
45
Foundations of Accounting
46
e. Goods purchased on credit taken into stock but not recorded in the books Rs. 10,000.
f. Lighting Expenses are to be divided between Factory and Office in 2:1.
g. 5% Interest on Loan is outstanding.
h. 5% of the Profit is to be carried to Reserve Fund.
28. From the following particulars extracted from the books of Sai Ram and Co, Prepare Final
accounts for the year ended 31-Dec-2007, and a Balance sheet as on that date.
Debit Balances Amount (Rs.) Credit Balances Amount (Rs.)
Opening Stock 46,800 Capital 1,08,100
Drawings 10,000 Sales 2,89,600
Sales returns 8,600 Purchases returns 5,800
Cash in hand 380 Sundry creditors 14,800
Purchases 2,43,100 Loan from SBI @ 12% 20,000
Postage Telegrams 870 Interest on investments 1,450
Carriage inwards 18,600 Discount 2,990
Traveling expenses 2,330
Rent 5,700
Salaries 9,300
Sundry debtors 24,000
Interest on loan 900
Printing and Stationery 3,400
Advertisements 11,200
Cash with Andhra bank 8,000
Investment @ 9% p.a 35,000
Furniture on 1-1-07 1,800
Discount 7,540
General expenses 3,920
Audit fee 700
Fire Insurance premium 600
Total 4,42,740 4,42,740
Adjustments
a. Closing stock at the end of the year Rs. 78,600.
b. Includes in purchases the purchase of furniture on 30-6-2007 for Rs. 2,000.
c. Depreciation is to be provided on furniture at 10% p.a
d. Provide for interest payable to SBI and for Interest Receivable on Investments.
e. Provide reserve for Doubtful debts at 5%.
f. Interest on Capital and on drawings @ 4%.
29. In the Books of Bhagavan Raj, Prepare Final accounts for the year ended on 31-Dec-2006, and a
Balance sheet as on that date.
Debit Balances Amount (Rs.) Credit Balances Amount (Rs.)
Drawings 5,000 Capital 1,00,000
Freehold Property 30,000 Bills payable 2,850
Plant and Machinery 50,000 Creditors 20,000
47
Foundations of Accounting
48
Debit Balances Amount (Rs.) Credit Balances Amount (Rs.)
General Charges 340
Purchases 59,720
Interest on Loan 2,250
Sales Returns 7,000
Bad Debts 3,000
Depreciation on Plant 9,000
and Machinery
Total 4,97,040 4,97,040
Adjustments
a. Closing Stock Rs. 30,000.
b. Provision for Doubtful Debts is to be made upto 5%.
c. A fire occurred on 6th December 2007 and stock of Value of Rs. 12,000 was destroyed and the
insurance has admitted a claim of Rs. 10,000.
d. Goods costing Rs. 2,000 were used by proprietor.
e. Accrued Commission amounted to Rs. 1,200.
31. In the Books of Acharya, Prepare Final accounts for the year ended on 31-March-2006, and a
Balance sheet as on that date.
49
Foundations of Accounting
c. Unexpired Insurance Rs. 600.
d. On 24th March 2006, a fire broke out and destroyed stock of value of Rs. 20,000.The Insurance
Company admitted the claim for loss of stock of the value of Rs. 12,000 only and paid the
amount on 15th April 2006.
32. In the Books of Nagarajan, Prepare the Final accounts for the year ended on 31-March-2007, and a
Balance sheet as on that date.
50
33. In the Books of Gopinathan, Prepare the Trading account, Profit & Loss account and a Balance sheet
as on 31-Dec-2005.
51
Foundations of Accounting
You are required to prepare the Trading account, Profit & Loss a/c for the year ending March 31,
2007, and a balance sheet as on 31st March, 2007 after giving effect to above information.
35. The following is the trial balance of Mr. Anil Ltd as on 31-December 2007.
52
Particulars Debit Amount (Rs.) Credit Amount (Rs.)
Interest on loan 4,000
Advertisement expenses 24,000
Bad debts 2,000
Income from investments 4,000
Cash at bank 21,000
Discount (allowed and received) 4,050 2,800
Investments 40,000
Furniture and fittings 45,000
Audit fees 5,400
Insurance premium 2,400
Traveling expenses 2,200
Cash in Hand 5,400
Salaries 1,37,550
Wages 50,000
Buildings 2,50,000
Plant and Machinery 1,50,000
Total 18,06,800 18,06,800
Adjustments
a. Closing stock as on 31st December 2007 was Rs. 42,500.
b. The effect of the advertisement being not yet expired, ¼ of the amount of advertisement expense
is to be carried forward to the next year.
c. Depreciation
d. Furniture and fitting - 10%.
e. Plant & Machinery – 20%.
f. Building – 10%.
g. Salaries outstanding as on 31 December, 2007 were Rs. 12,450.
h. Provide 2% for discount on debtors and create a provision for bad and doubtful debts at 5% on
debtors.
i. Sundry debtors include an amount of Rs. 5,000 due from Mr. Aman and sundry creditors include
Rs. 3,000 due to Mr. Aman.
1. Trading account, Profit & Loss account of Mr. Anil for the year ended on 31 December 2007.
2. Balance sheet an on that date.
53