Accoutancy Notes

H.S.
C OMTEX CLASSES 6 YEAR

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OMTEX CLASSES
6th years of success
BOOK KEEPING
AND
ACCOUNTANCY
NAME :- ______________________________
STANDARD: -S.Y.J.C (Second year junior college)
CLASSES :- OMTEX CLASSES

FOR PRIVATE CIRCULATION ONLY
“You don’t know what you can do until you try”
“IF YOU ARE SATISFIED WITH OUR TEACHING TELL TO OTHERS IF NOT TELL TO US”
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BOOK KEEPING & ACCOUNTANCY
H.S.C OMTEX CLASSES 6 YEAR
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Preface
It gives us great pleasure to present this thoroughly revised edition of
Omtex Book – Keeping and Accountancy for Standard XII, prepared
according to the pattern prescribed by the board.
A thorough study and practice of this edition with the help of Omtex
guidance (teaching + coaching) will enable the students to pass the HSC
Examination with flying colours.
Meticulous care has been taken to make this edition of Omtex Book –
Keeping and Accountancy perfect and useful in every respect. However,
suggestions, if any, for its improvement are most welcome.
- Omtex
Note: - No part of this book may be copied, adapted, abridged or translated, stored in any
retrieval system, computer system, photographic or other system or transmitted in any
form or by any means without a prior written permission of the Omtex classes.
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CH: - 1. B VALUATION OF GOODWILL
Note: - One practical problem on Valuation of Goodwill carrying 5 marks and one theory question on Computer
Awareness carrying 5 marks will be asked in Q. 2 of the Board Paper in option to one practical problem on
Depreciation carrying 10 marks. The students may either attempt problem on Depreciation or Goodwill and theory
question on Computer Awareness.
Valuation of Goodwill: - As prescribed in the syllabus, the value of goodwill as on a particular date is
ascertained by using any one of the following methods:
i. The Average Profit Method and
ii. The Super Profit Method.
INTRODUCTION
Goodwill is an intangible (non – visible) fixed asset having a realizable (economic) value. It is the reputation of
business. Valuation of goodwill is very important in the case of admission, retirement and death of partners.
DEFINITION OF GOODWILL
Eric L. Kohler defined goodwill as under:
“Goodwill is the excess of the price paid for the business as a whole over the book value or over the computed value
of all tangible assets purchased. Normally, goodwill thus acquired is only one type appearing on book of account and
in financial statement.”
We can define goodwill as under:
“Goodwill is a monetary value of the reputation of a concern in terms of its future earning capacity.”
PROBLEMS
1. The profits of the firm for the last five years are 2002 Rs. 20,000; 2003 Rs. 16,000; 2004 Rs. 24,000; 2005 Rs. 8000;
2006 Rs. 12,000. Calculate the goodwill of the firm. [Ans. Rs. 16,000]
2. Mona, Reena and Sona have been carrying on a partnership business and good will of their firm is to be valued at three
st
years purchase of the average profit for the last five years. The profit and losses for the last five years have been. 1
nd rd th th
Year Rs. 16,000, 2 Year, 15,000, 3 Year, 8,000(Loss), 4 Year, 7,000, 5 Year, 10,000. [Ans. Rs. 24,000]
3. Calculate the good will from the following information goodwill is valued at three years purchase of average profit of
the last six years. Profit and losses of the business in the last six years are as follows, [Ans. 95,000]
1st year, Rs, 40,000(Profit)
2nd Year, Rs, 60,000(Profit)
3rd Year, Rs, 10,000(Loss)
4th Year, Rs, 50,000(Profit)
5th Year, Rs, 30,000 (Loss)
6th Year, Rs, 80,000(Profit)
4. Calculate the value of goodwill according to average profit method. Goodwill is valued at three years purchase of last
four year average profit. The profits and losses for the last four years are. [Ans. Rs. 27,000]
1st Year Rs, 10,000(Profit)
2nd Year Rs, 12,000(Profit)
3rd Year Rs, 4,000(Loss)
4th Year Rs, 18,000(Profit)
5. The profit of a firm for the four years from 1991 to 1994 where_ [Ans. Rs. 1, 02,000]
1991 Rs, 40,000
1992 Rs, 45,000
1993 Rs, 55,000
1994 Rs, 53,000
Calculate the goodwill of the firm at 2 yrs. Purchase of the average profit for the last three years.
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5. Mr. X a businessperson has earned the following profits in the last five years. [Ans. Rs. 2,99,460]
1995 1, 05,800
1994 1, 02,600
1993 98,400
1992 96,800
1991 95,500
Value goodwill of Mr. X on the basis of three years purchase of average of the past five years.
6. Good will is valued at three years purchase of last five years average profit. The profits for the last 5 years are. [Ans. 0]
1st Year 4,800(p)

2nd Year 7,200(L)
3rd Year 10,000(L)
4th Year 3,000(P)
5th Year 5,000(L)
Note: - Since the company’s average profit is negative. Therefore the firm’s goodwill is zero.
7. Compute the goodwill the following case good will is valued at three years purchase of average profit of five
years. The Profit of the five years were_ [Ans. Rs. 26,400]
1st Year 5,800
nd
2 Year 7,400
3rd Year 20,000
4th Year 3,500
th
5 Year 7,300
8. Sales of trader for 3 years ended 30th June 1995 are as follows
1995 Rs, 5, 50,000
1994 Rs, 5, 46,000
1993 Rs, 5, 25,000
The profit margin for the 3 years ended 30th June 1995 was 10%, 12%, 12% respectively. For the purpose of
selling the business of the trader, goodwill is to be valued at 2 years purchase of the average profit of the last
3 years. Find the value of good will. [Ans. Rs. 1, 22,680]
9. From the following particulars, value good will of 2 yrs. Purchase of last 5 years. [Ans. Rs. 70,326]
Year ended Turn over Net profit
31-12-1990 5,15,000 5%
31-12-1991 5,45,600 6%
31-12-1992 5,35,800 7%
31-12-1993 5,40,900 7.5%
31-12-1994 5,60,800 7%
10. A firm with an average capital employed of Rs. 1, 60,000 is expected to earn Rs, 40,000 per annum in future.
Calculate goodwill at three times the super profit taking the normal rate of return as 15%. [Ans. Rs. 48,000]
11. Capital employed on 31st Dec, 1990 was Rs, 1, 00,000/-. The Profits earned by the business for the last 5 years where.
1986 30,000
1987 40,000
1988 50,000
1989 40,000
1990 60,000
Normal rate of return is 15%. Good will is valued at 3 years purchase of the super profits of the business. Find out the
value of goodwill. [Ans. Rs. 87,000]
12. The books of a business showed that the capital employed on 31 st December, 1992 was Rs.1, 00,000/-. Profits for the
last five years are 1988, 1989, 1990, 1991 & 1992 were Rs, 60,000, Rs, 55,000, Rs, 75,000, Rs, 85,000 & Rs, 65,000
respectively. Goodwill is valued at 2 years purchase of the Super profit of the business. N.R.R. is 10%. [Ans. Rs. 1,
16,000]
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13. M/s XYZ partnership firm earned net profit during the last four years were Rs, 7,000. Rs, 13,000. Rs, 12,000
and Rs, 8,000. The capital investment made in the firm was Rs, 50,000. N.R.R on capital is 15%. The
remuneration of the partners during the period is Rs, 500 p.a. Good will is valued at 2 Yrs purchase of
Average super profit of the above mentioned years. [Ans. Rs. 4,000]
14. M/s Vijay trading company earned net profit during the last four years was follows.
1st Year Rs, 57,000
nd
2 Year Rs, 44,000
3rd Year Rs, 61,000
4th Year Rs, 58,000
The capital investment made by the company is Rs, 1, 50,000. Normal Rate of return on capital is 20%. The
remuneration of the partners during this period is Rs, 500 p.m. Good will is valued at 2 years purchase of Average
Super profit of above mentioned period. [Ans. Rs. 38,000]
15. The average net profit expected in the business by ABC firm is Rs, 36,000 per year. The average capital employed
in the business by the firm is Rs, 2, 00,000. The Rate of interest expected from capital invested in the business is
10%. The remuneration of the partners is estimated to Rs, 6,000 P.a. Calculate the value of goodwill based on 2
years purchase of super profit. [Ans. Rs. 20,000]
16. M/s Rajesh Trading company earned net profit during the last four years were Rs, 15,000, Rs, 28,000, Rs, 30,000 & Rs,
40,000. The capital investment made by the company is 1, 00,000. Normal rate of return on capital is 15 %. The
remuneration of the partners during this period is Rs, 1,000p.a. Good will is valued at 2 years purchase of average
super profit of the above mentioned period. [Ans. Rs. 24,500]
17. The present average net profit of Braful, Shobha partnership firm before detecting partner’s remuneration is Rs,
27,000 p.a. The capital employed in the business by the partner Braful Rs, 1, 00,000 & Shobha Rs, 50,000. The profit
expected from the total capital invested is 10% p.a. The total remuneration is estimated to be Rs, 6,000 per annum.
Find out the value of goodwill on the basis of 2 years purchase of super profit. [Ans. Rs. 12,000]
18. The following balance sheet of Kantilal, Chandrakant.
st
Balance sheet as on 31 March, 1995
Liabilities Amount Assets Amount
Capital Machinery 50,000
Kantilal 90,000 Building 41,000
Chandrakant 70,000 Investments 30,000
Reserve Fund 44,000 Stock 20,000
Creditors 38,000 Debtor 66,000
Bank 30,000
Profit/loss A/c 5,000
2,42,000 2,42,000
st
The net profits of the firm for the year ended 31 March, 1995 were Rs, 15,000 Rs, 25,000 Rs, 26,000. Ascertain the
value of good will at 2 years purchase of the super profit of the 3 years taking the normal rate of return on capital
employed is 10%. [Ans. Rs. 4,200]
19. The following is the balance sheet of M/s Anna and Chunna as on 31st March 1995.
st
Balance sheet as on 31 march, 1995.
Capital Machinery 10,000
Anna 1,64,000 Building 26,000
Chunna 40,000 Plant 56,000
Creditors 35,000 Stock 56,000
Profit/ Loss A/c 3,040 Debtor 19,040
Bank 75,000
2, 42, 040 2, 42, 040
st
Net profits for the past 3years are 1 year Rs, 43,350, 2nd year Rs, 36870, 3rd year Rs, 32,280
Normal rate of return on capital employed is 10%. Calculate the value of goodwill at 2years purchase of the average
super profit. [Ans. Rs. 33,592]
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20. The average annual profit earned by a firm is Rs. 30, 000 including Rs. 2,000 p.a. received as interest on Non –
Trading Investment and this average is expected to continue in the future except for the following.
a. Rent paid in the past for temporary premises at Rs. 500 per month will no longer have to be paid as the firms
own premises are now ready.
b. b. Salaries Rs. 7,000 p.a. paid in the past will increase by 20% in the future. Calculate goodwill at 3 times the
Average Expected Profit. [Ans. Rs. 97,800]
21. The firm of Mr. X and Mr. Y earned average annual profit of Rs. 60,000. The profit includes Rs. 5,000 p.a. as
interest on non – trading investment. The firm is expected to maintain the profit except the following.
1. The firm was conducting the business from rented premises. Rent paid Rs. 600 p.a. The premises of the firm
are now ready for conducting the business.
2. The business of the firm was managed by one manager who was paid salary of Rs. 6,000 p.a. Mr. X has
decided to manage the firm and replace the manager. Services of Mr. X will be worth Rs. 1,000 p.a.
Calculate Goodwill at 2 years purchase of average profit. [Ans. Rs. 1, 21,200]
22. Priti and Pritam are partners sharing profits and losses in the ratio of 3:2. They admit Prasad for 1/6th share. For
the purpose of admission of Prasad, goodwill of the firm should be valued on the basis of 3 years purchase of the
last 5 years average profit. The profits were. [Ans. Rs. 1,20,000]
Year 1990 – 91 1991 – 92 1992 – 93 1993 – 94 1994 – 95
Profits Rs. 60,000 62,500 45,000(L) 42,500 80,000
23. Raghunath’s revenue statements for the 3 years ended 31st Dec. were as under:
Particulars 1995 (Rs.) 1996(Rs.) 1997(Rs.)
Sales 50000 70000 100000
Less: Cost of Sales (30000) (50000) (50000)
Gross Profit 20000 20000 50000
Less : Expenses (24000) (10000) (20000)
Net Profit (-) 4000 (+)10000 (+)30000
Calculate the value of good will at 2 years purchase of the average profit, earned in the past 3 years.
[Ans. Rs. 24,000]
24. Raj Kumar revenue statements for the 3 years ended 31 Dec. were as under:
Particulars 1995 (Rs.) 1996(Rs.) 1997(Rs.)
Sales 50000 70000 100000
Less: Cost of Sales (10000) (50000) (50000)
Gross Profit 40000 20000 50000
Less : Expenses (22000) (10000) (20000)
Net Profit (+)22000 (+)10000 (+)30000
Calculate the value of good will at 2 years purchase of the average profit, earned in the past 3 years. [Ans. Rs. 41,333]
HOME WORK SECTION

1. Mahipati and Ganpati are partners sharing profits and losses in the ratio of 4:3. They admitted in
partnership Shripati for 1/8 share. For the purpose of admission of Shripati, goodwill of the firm should be
valued on the basis of 2 years purchase of the last 5 years average profit.
1991 – 92 Rs. 75,000
1992 – 93 Rs. 1,00,000
1993 – 94 Rs. 1,25,000
1994 – 95 Rs. 85,000
1995 – 96 Rs. 1,15,000
Calculate the goodwill of the firm. [Ans. Rs. 2,00,000]
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2. Jaya and Maya are carrying on a business in partnership for last 12 years. Goodwill of the firm is to be valued at 3
½ years purchase of the average profit of last 6 years.
2000-01 Rs. 2,20,000(Profit)
2001-02 Rs. 1,20,000(Loss)
2002-03 Rs. 2,60,000(Profit)
2003-04 Rs. 1,80,000(Loss)
2004-05 Rs. 2,90,000(Profit)
2005-06 Rs. 3,20,000(Profit)
2006-07 Rs. 2,10,000(Profit)
You are required to calculate the value of Goodwill of the firm. [Ans. Rs. 4, 55,000]
[Note: - Last 6 years are to be counted in reverse order of years given. Therefore, profit given for the year (2000 – 01) is to be ignored].
3. Vijay and Azim carrying on a business in partnership for last 5 years. Goodwill of the firm is to be valued at 3
years purchases of the average profits of last 5 years. The profits and losses for the last 5 years were:
1996-97 (Profit) Rs. 32,000
1997-98 (Profit) Rs. 30,000
1998-99 (Loss) Rs. 16,000
1999-2000 (Profit) Rs. 14,000
2000-01 (Profit) Rs. 20,000
You are required to calculate the value of goodwill of the firm. [Ans. Rs. 48,000]
4. The following is the Balance Sheet of Ashok and Nayan:
st
Balance Sheet as on 31 March 2007.
Capital Plant and Machinery 1,78,000
Ashok 1,00,000 Furniture 62,000
Nayan 1,20,000 Stock 48,000
General Reserve 78,000 Debtors 40,000
Profit & Loss A/c 56,000 Bank 35,000
Sundry Creditors 36,000 Prepaid Expenses 27,000
3,90,000 3,90,000
The trading result for the last four years was 2003 – 04: Rs. 65,000 (Profit), 2004 – 05: Rs. 5,000(loss), 2005 – 06: Rs. 78,000
(Profit) and 2006 – 07: Rs. 92,000 (Profit). Calculate the value of goodwill of the firm at 2 ½ years’ purchases of the super
profit considering the Normal rate of return on the capital employed is 13%. [Ans. Rs. 37,475]
5. Calculate the value of goodwill of the firm from the following information:
i. Total capital employed in the business Rs. 4,00,000.
ii. Net profits of the firm or the past three years were Rs. 53,800, Rs. 45,350, Rs. 56,250.
iii. Normal rate of return at 10%.
iv. Goodwill is to be valued at three years purchase of super profit. [Ans. Rs. 35,400]
st
6. Following is the Balance Sheet of Mr. Atul as on 31 March, 1993:
Capital 77,500 Fixed Assets 85,000
General Reserve 22,500 Current Assets 50,000
Creditors 40,000 Prepaid Advertisement 10,000
Bills Payable 5,000
1,45,000 1,45,000
The net profits for the last three years were Rs. 19,500; Rs. 22,500; Rs. 30,000. Calculate the value of goodwill at two times
of super profit, taking into consideration the standard rate of return on the capital employed is 15%. [Ans. Rs. 21,000]
Note: Capital Employed = Partners’ Capital + General Reserve + Accumulated Profit – Unadjusted losses – Expenses yet to
be written off.
IMPORTANT POINTS TO REMEMBER

1. Any Number which is followed by the word Years Purchase / Times / Thrice / Twice are considered as number of
years purchase.
2. If Number of Years of purchase is not given then assume it as 1 years purchase.
3. If there is a continuous loss in the Firm then the Good will of the Firm would be Zero (0).
4. If the total Profits/ Loss are negative then also the goodwill will be Zero.
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CH. 1.B. COMPUTER AWARENESS
Answer the following questions

1. What is the computer hardware?
Computer hardware refers to physical components like input devices, central processing unit and output devices of a
computer system.
2. Explain about the components of computer hardware?

The computer hardware comprises of the following components.
1. Input devices: - The data is required to be transmitted to computer for processing. It is done with the help of
input devices like punch card reader, paper tape reader, mark and character reader, keyboard, speech recognizer etc.
2. Central processing Unit: - This unit processes raw data according to the instructions given to the computer. It has
mainly three parts. Control unit, Arithmetic / Logic unit and memory unit.
3. Output devices: - The processed data is to be made available to the user in the form required by him. For this
purpose the following devices are used. Printers, visual display unit etc. This is necessary to provide back up
storage. It may be in the form magnetic tapes, magnetic discs, floppies, C.D.s etc.
3. Write a short note on – second generation computers.

The computers of the second generation: - We are initially characterized by either magnetic drum or magnetic
core storage later on they used transistors in place of vacuum tubes the transistors being small in size occupied
lesser space and power. They were less expensive and generated less heat as compared to the vacuum tubes. The
computer became compact. These computers were also applied in other field such as scientific and mathematical
application in addition to application in the fields of business and industry. The United States of America had more
than 5000 computers. Some of the important second generation computers are IBM – 1620, IBM – 1401, IBM –
7094, CDC – 1604, CDC – 3600, RCA – 501 and UNIVAC – 1108 of these the most popular model of the second
generation was IBM – 1401.
4. Write short notes on ‘Third Generation Computers’ (1965 – 71)

In the early sixties integrated circuits were developed which were later on used in computers. Integrated circuits
(I.C.) improved secondary stage devices, new input – output devices such as Visual Display Unit (V.D.U) and high
speed printers. These computers came to be known as Mini computers. I.C.’s were more efficient and they were
having much higher speed than transistors. Because of the I.C.’s it became possible to have lot of functions from
computers. They had a very large memory. Also many computer languages were introduced.
5. Write short note on “Fourth Generation of Computers” (1971 – 85)

In 1971, Intel corporation developed and I.C. which was a revolutionary in a computer world. Later in 1974,
another breed of computer known as Micro computers came into existence and which became popular during the
fourth phase. The computer which used large scale integrated circuits used micro – processor chips like 8080,
8085, 8086, 6800, 68000 of this 8086 and 68000 are 16 Bit chips and rest are 8 Bit chips. It reduced the size and
increased the number of functions. Secondary devices are further developed. These computers left no field in
human life uncovered. Some of the important models of fourth generation are Intel 4004, Apple I & II, DCM
Spectrum, 2X – Spectrum, BBC’s ACCOM, IBM Compatibles etc. and Sinclair’s ZX – 81.
6. Write short notes on – First generation Computers.

The first generation computers were voluminous computers in which electronic valves were used. They were built
by using vacuum tube. As the vacuum tubes were used as an electronic component, the computers were very large
in size. ENIAC was the first computer of this category. Thus, the computer from ANIAC to IBM – 650 belongs to this
generation. The data manipulation capacity of ENIAC was thirty times more than the previous computers vacuum
tubes were replaced by the transistors. Transistors were very small in size and weighs as compared to vacuum
tubes and consumed very low power.
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7. Write short notes on Central Procession Unit.

It is popularly known as the heart, Brain and Nervous system of the computer. It provides central control of the
operation of the whole computing machine. The CPU is known as a part of the computer system. The CPU consists
of a memory unit, control unit and An Arithmetic and logic unit.
i. Memory unit: - A memory unit of the central processing unit is a place where the computer program and data
are stored during processing. A memory unit is a random access storage device comprising number of storage
locations. The data which is to be stored in the memory unit for processing are fixed by the computer program.
The main or internal memory is called as primary storage. It normally consists of the program to be executed
and the data required by the program.
ii. The Control Unit: - All the operations carried out by the computer are directed by the control unit. A control
unit is called as the nerve centre of the computer since it controls and co – ordinates all hardware operations.
The program and data are transferred from the input device into the memory as directed by the control unit
during the execution of the program each instruction is retrieved in turn from the memory and interpreted. A
control unit informs the Arithmetic logic unit as to how precisely the operation to be preformed. It directs the
transfer to the Arithmetic logic unit of any item of data that is required for operation.
iii. The Arithmetic Logic Unit (ALU): - The arithmetic logic unit comprises a number of accumulators and registers.
Accumulator means a register and associated equipment in the arithmetic unit of the computer where
arithmetic and logical operations are performed. A register is a hardware device for holding data to be operated
upon. The ALU obtains the data from the main memory as per the direction given by the controlling unit based
on the program given to it. This data is loaded into accumulators in the ALU. The ALU operates on the data
which is available in the main memory. The ALU after processing the data sent to output device.
8. EXPLAIN THE IMPORTANCE OF COMPUTER IN MODERN AGE.

Today computers are put to a variety of uses. They have been designed with highly improved performances.
Computers can be used to process voluminous data at a high speed. As regards its application in the field of
accounting, a computer should be able to deal with routine accounting. It means all normal accounting processes
such as financial transactions should be dealt with the use of a computer. All cash and bank transactions, handling
of accounts of debtors and creditors and calculation of wages and salaries etc should be handled with the use of
computer. In addition, computers can be put to other popular uses such as production, programming and control,
flexible budgetary control, variance analysis, sales and forward trends etc.
Following points explain the importance of computer in modern age.
Speed: - In the modern world, the desire of a man to complete tasks within the stipulated time limits has been, to
a large extent, fulfilled by using a computer. Computers enable us to do arithmetical computations with a high
degree of speed and ease. It has enables us to do things, which would have been almost impossible earlier. The
speed which computers functions are measured in Pico seconds (1/1000 of Nano – second). Thus, computers are
capable of making millions of computations per second. Hence, a powerful computer is capable of completing the
tasks in less than an hour, which could have taken a year for a group of people to compute.
Accuracy: - Computers are not only fast in completing a job at a great speed, but it is also performed with a high
degree of accuracy. Sometimes, it is common to say that there is a “Computer error”. As a matter of fact, it is
“Human error” and not a “Computer error” since a computer carries out the instructions efficiently given by the
programmer. As such, if the instructions are faulty, the errors creep in the computer’s output. Therefore, if the
computer is provided with accurate data and instructions, there will be no error in the output given by a
computer. Thus, a computer offers the greatest advantage of achieving high degree of accuracy in accounting
processes.
Diligence: - By doing similar job continuously, human beings get tired which results into some mistakes. As against
this, a computer is capable of doing the same job continuously error free. A computer takes the same time to
complete the first calculation as well as the 10000th calculation. Thus, the degree of diligence possessed by a
computer is impossible in case the same job is done by human beings.
Storage: - Another advantage offered by a computer is that of its enormous capability to store data. A computer is
capable of storing data along with the instructions given by the programmer in the primary (main) memory. In
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case, the primary memory is not sufficient it can be stored in its secondary (auxiliary) memory. There are various
devices used for storing the secondary memory. Some of the common devices used in secondary memory are
Compact Disks, Tapes, Drums, pen Drives etc. Having large capacity to store data.
Versatility: - A computer possesses great versatility, which is capable of performing arithmetic calculations, logic
operation of comparison and moving data within different sections of the computer and in input and output
operations. Although, a computer lacks a brain of its own, it can be put to a varied uses such as preparation of
mark – lists, financial accounting, share analysis etc. Further, a computer can produce results almost in whatever
form it is most suitable.
Miscellaneous: - In addition to the above – mentioned advantages, a computer can offer economies in the form of
effective managerial control, saving in labour cost because it is fully automatic.
9. EXPLAIN THE ROLE OF COMPUTER IN ACCOUNTING.

Ans. The role of computer in accounting is explained as follows.
1. For various reasons, every business organization is required to prepare and maintain various books of account.
The computer is used by many business organizations to carry out accounting operations at a greater speed
and accuracy.
2. The computer is useful for classifying, processing, analyzing, tabulating, recording and interpreting the
accounting data for various purposes.
3. It is useful for improving the financial system of the organization.
4. With the help of the computer, accountants can easily, accurately and speedily prepare the different source
documents like voucher, invoice, quotation, receipt, etc.
5. The computer is useful for recording accounting entries in the journal and posting such entries in the ledger. It
is also used to prepare trial balance, final account, accounting statements like Balance sheet, etc.
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CH. 2. BILLS OF EXCHANGE

Note: - In Q.3 of the Board paper, one problem on Renewal of bills of exchange and another problem on dealing of
multiple bills by a drawer (one drawer and multiple drawees) will be asked. Students are required to attempt any one
out of these two.
BILLS OF EXCHANGE: - “A Bills of Exchange is a Negotiable (exchangeable) Instrument, containing an unconditional

order signed by the maker (drawer) directing a certain person (drawee) to pay a certain sum of money only to the
bearer of the Instrument.”
ESSENTIAL FEATURES OF BILL OF EXCHANGE

1. A bill of exchange must be in written form.
2. It must contain an order. It should not be in the form of a request. The order may be in the shape of a request
but it must be imperative (very important or compulsion).
3. It should be an unconditional order. There should be no condition for making payment.
4. It must be signed by the maker. A bill of exchange without the signature of the maker becomes invalid.
5. It must specify the definite amount to be paid.
6. It must contain an order to pay a certain sum of money only.
7. The amount must be payable to a person whose name is specified in the bill or to his order or to the bearer.
8. A bill of exchange must be dated.
THERE ARE THREE PARTIES IN THE BILL OF EXCHANGE.
1. DRAWER: - The drawer is the person or the party who draws the bill. He is the creditor and he has to receive the
money from other person.
2. DRAWEE: - The drawee is the person or the party on whom the bill is drawn. He is a debtor and he has to pay the
amount to the drawer. Once he accepts the bill he becomes and ‘Acceptor’.
3. PAYEE: - The payee is the person or the party to whom the bill is made payable. If the bill is made payable to the
drawer himself, the drawer and the payee are the same person.
4. TERM OF THE BILL: -A bill of exchange is subject to certain terms and conditions. Such terms and conditions include
period of the bill, place of payment, amount of the bill, etc.
5. GRACE DAYS/ DAYS OF GRACE: - While calculating the due date of any time bill, three extra days knows as days of
grace should be added to the specified period mentioned in the bill. For example, a bill drawn on 15 th January,
2007 for two month will become due on 18th March, 2007.
6. DUE DATES / MATURITY DATES: - The date on which the Bill is ready for the payment is known as due date or
maturity date of that Bill. If the due date falls on Sunday or any other public holiday the payment of the bill
should be made on the immediately preceding working day. If a bill falls due for payment on 15th August, it must
be paid on 14th August. If a bill falls due on 26th January, it must be paid on 25th January. In case 25th January is
Sunday the payment must be made on 24th January.
7. HONOUR OF THE BILL: - When the bill is paid on the due date is known as honor of the Bill.
8. DISHONOUR OF THE BILL: - When the Bill is not paid on the due date then it is known as dishonour of the bill.
9. RETIREMENT OF THE BILL: - When the Bill is paid before the due date then it is known as retirement of the Bill.
10. HUN DIES: - When the subject matter of the Bill is in Indian language say Tamil, Telungu, Guajarati, Hindi etc. then
it is known as hundies.
11. ACCEPTANCE OF THE BILL: - When the drawee puts the signature on the bill then it is known as acceptance of the
bill.
 THERE ARE TWO TYPES OF ACCEPTANCE
1. GENERAL ACCEPTANCE: - When the bill is accepted without any terms and conditions then it is known as general
acceptance.
2. QUALIFIED ACCEPTANCE: - When the bill is accepted with certain terms and conditions then it is known as
qualified acceptance.
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THE QUALIFIED ACCEPTANCE MAY BE DONE IN ANY ONE OF THE FOLLOWING WAYS.
i. Qualified as to the amount:- The drawee may not agree to pay the full amount mentioned in the bill. He may
agree to pay only a part of the amount mentioned in the bill. This type of acceptance is called qualified as to the
amount.
ii. Qualified as to the Time: - If the drawee changes the period of the bill, it is called qualified acceptance as to the
time.
iii. Qualified as to the place: - In this case, the drawee agrees to pay the amount at a particular place and there
only.
iv. Qualified as to parties: - In this case, the bill is accepted by one or more of the drawees and not by all the
drawees.
v. Conditional Acceptance: - When the drawee accepts the bill subject to the fulfillment of a condition, it is called a
conditional acceptance.
1. DRAFT: - Before the acceptance of the bill, it is known as draft.
2. ENDORSEMENT OF BILL: - When the ownership of the bill is transferred then it is known as endorsement of Bill.
There are two parties in the endorsement of Bill.
3. ENDORSER: - A person who transfers the ownership of the bill is known as endorser.
4. ENDORSEE: - A person on whom the bill has been transferred is known as endorsee.
5. TYPES OF BILL: - There are two types of Bill
6. INLAND BILL: - A bill which is drawn & made payable in the same country, it is known as Inland bill.
7. FOREIGN BILL: - A bill which is drawn in one country & made payable in another country then it is known as foreign
bill.
8. NOTING CHARGES: - It is a fee charged by the Notary Public, In case of dishonour of Inland bill. Notary Public is a
government officer who is appointed to register the dishonour bill.
9. PROTESTING: - It is also a fee charged by the government in case of foreign bill.
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Pro Forma of a bill of exchange
BILL OF EXCHANGE
STAMP ________________
________________
(Drawer’s Name &
Address)
_______________
(Date of Bill drawn)
______________ after date, pay __________________________________________________
_________________________ or his / her order, the sum of Rupees _____________________
_______________________________________________ only for value received.
Rs. ______________/-
Sd /-
_______________
(Drawer’s Name)
To
___________________ Accepted
(Drawee’s Name) Sd/-
___________________ _______________
___________________ (Drawee’s name)
(Drawee’s Address) _______________
(Date of acceptance)
Notes: -
1. If the question includes “Prepare a demand bill” or if the term is “On demand”, or if the period
is not given at all, the wording will be: “On demand, pay ………”
2. If the term given in “45 days after acceptance/sight”, the wording will be: “Forty – five days
after acceptance / sight, pay ………”
3. If instead of the term, the due date itself is given the wording will be: “On such and such a
date, pay ………”
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PREPARE A BILL OF EXCHANGE FROM THE FOLLOWING DETAILS. [Q. 1. (F) - 5 Marks]
1. Drawer : Gayathri, Neelam Bhawan, Kalyan
Drawee : Suganya, Dastur Nagar, Amravati
Payee : Umesh Narigrekar, Deogad
Period : 90 days
Amount : Rs. 7,555
th
Date of bill : 15 March 1995
th
Accepted on : 20 March 1995
th
2. On 10 March, 1995 Rajesh Bhoyar, Gandhinagar, Nagpur draws a 2 months bill for Rs. 3,000 on Samira Choudhary,
th
Main Road, and Belapur. Samira Choudhary accepted the bill on 15 March 1995
3. Drawer : Manish, 35, Lakhani Apartment, Ulhasnagar

Drawee : Elavarasan, 23, Prasad Bhawan, Thane (East)
Payee : Subhash Ambarnath
Period : 90 days
Amount : Rs. 9,755
th
Date of Bill : 15 March, 1995
th
Accepted on : 20 March, 1995
4. Drawer : Madhavan nayar, Gandhi Chauk, Dhamangaon

Drawee : Shri Atul Khatke, Mandrup Road, Solapur
Payee : Shri Ranjeet Chavan, Ambajogi
Amount : Rs. 5,000
Period : 90 days.
th
Date of Bill : 15 March, 1995
th
Accepted on : 20 March, 1995
5. Drawee : Sanath Jayasurya, Nehur Road, Solapur.

Drawer : M. Sudhakaran, Shivaji Nagar, Nanded.
Period : 3 Months.
th
Date of Bill : 5 February,1996
Amount of the Bill : Rs. 4000/-
th
Accepted On : 9 February,1996
6. Drawer : Jayewardene, 44, M.G. Road, Nanded.

Drawee : Pankaj Pawar, 70, Bhavani Galli, Solapur.
Payee : Ramchandra Rampure, Rampur.
Period : 60 days.
th
Date of Bill : 28 January, 1995
th
Date of Acceptance : 29 January, 1995
Amount of the Bill : Rs. 2,800/-
7. Drawer : Peterson, Main Road, Jalgaon.

Drawee : Basant, Sandesh, Nandura.
Payee : Uma Chandak, Khamgaon.
Amount : Rs. 2500/-
Period : 2 months.
st
th
8. Drawer : Shekhar Desai, Shastri Road, Mahad.

Drawee : Sharad Verma, Narayanpeth, Pune
Payee : Mukund Pande, Panel.
Amount : Rs. 3,500/-
Period : 3months.
st
Date of Bill : 21 June, 1995
th
Bill accepted : for 3,000 on 25 June, 1995.
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9. Drawer : Vijay Bhat, Main Road, Nagpur.

Drawee : Ashok Kulkarni, M.G. Road, Nagpur.
Payee : Anil Jadhav, Pune.
Amount : Rs. 6,950.
Period : 80 days.
th
Date of Bill : 7 March, 1996.
th
Accepted on : 10 March, 1996. For 90 days.
10. Drawer : Namdev Tukaram, Paithan.

Drawee : Nivruti Sopan, Dehu.
Payee : Vitthal Pandurang, Pandharpur.
Amount : Rs. 5,111
Period : 3 months
th
Date of Bill : 17 August, 1995
th
Date of Acceptance : 20 August, 1995
11. Drawer : Priti Chavan, Chandika Road, Malvan.
Drawee : Snehlata Patil, Prashant Nagar, Ambajogai
Payee : Archana Ghime, Amaravati
Amount of Bill : Rs, 10,000/-
Period : 2 months.
st
th
12. Drawer : Shri Ravindra Patil, Housing Society, Ambajogai

Drawee : Shri Bhaurao Deshmukh, Bazar Chauk, Dhamangaon
Payee : Shri Prasad Shendage, Malvan
Amount : Rs. 7,500/-
Period : 3 months
st
th
13. Drawer : Abhijit Patil, Vikram nagar, Patna.

Drawee : Tejas Kapare, Kothrud, Pune.
Payee : Amey Patki, Nagpur.
Amount : Rs. 7500
Period : 60 days
Term : After sight
st
Date of Bill Drawn : 1 June 2006
th
Date of Acceptance : 11 June 2006
Accepted bill for Rs. : 7000 only.
14. Drawer : Yamini Gupta, Sarvapriya Vihar, Delhi
Drawee : Kamini Sharma, Raj baug, Agra.
Period : 100 days.
Term : After A\acceptance
st
Amount : Rs. 10,500/-
rd
15. Drawer : Vilas Patil, 20, M.G. Road, Pune.
Drawee : Vikas Pawar, 31, S.V. Road, Nasik
Payee : Viraj Potade, 41, A.B. Road, Sholapur,
Period : 3 months
Amount Rs : 7500
st
rd
th
16. On 10 March, 1995, Rajesh Bhoyar, Gandhinagar, Nagpur draws a 2 months bill for Rs. 3,000 on Samir Chaudhary
th
Main Road, Belapur. Samir Chaudhary accepted the bill on 15 March, 1995.
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TRADE BILLS {IN THE BOOKS OF DRAWER} & TRADE BILLS {IN THE BOOKS OF DRAWEE}
1. On 1st March, Sushi sells goods worth Rs. 10,000 to Narendra. On the same day, Sushi draws a bill on
Narendra for the amount at 3 months. Narendra accepts the bill. On the date of maturity, Narendra honoured
the bill. Give journal entries in the books Sushi.
2. On 1st July, Sham sells goods worth Rs. 20,000 to Ram. On the same day, Sham draws a bill on Ram for the
amount at 2 months. Ram accepts the bill. Ram pays the amount of the bill on due date. Give journal entries in
the books of Sham.
3. On 1st January, 2005; Bhaskar purchased goods from Randhir on credit worth Rs. 5,000. On the same day
Bhaskar gave an acceptance to the Bill drawn by Randhir at 3 months for Rs. 5,000. Randhir discounted the bill
with his Bank at 6% p.a. on 4th January, 2005. On the maturity of the Bill, Bhaskar paid the amount of Bill. Give
journal entries in the Books of Randhir
Note: - Here the bill accepted by Randhir was discounted with the Bank. Hence, there will be no entry on the
maturity as the amount will be received by the Bank.
4. Anand brought goods worth Rs. 4,500 from Samant on August 1, 2006. On the same day, Anand accepted
the bill for Rs. 4,500 at 3 months drawn by Samant. Samant got the bill discounted with his bank at 6%. Before
the due date, Anand informed Samant about his inability to pay the amount of bill. He further requested him to
accept Rs. 2,500 in cash and immediately draw upon him a new bill for the remaining amount at 2 months
together with interest at 8% p.a. Samant agreed. The second bill was duly paid on maturity. Give journal entries
in the books of Samant. Note: - Here 1st part payment is made and then the interest is charged.
5. On 1st March, Ramchandra sold goods to Raman worth Rs. 8,000/- and Raman accepted the Bill for Rs.
8,000/- at 3 months drawn by Ramchandra. Ramchandra discounted the bill with his bank @ 6% p.a. On due date
the bill was dishonoured and Raman requested Ramchandra to accept Rs. 4,000/- immediately and draw upon
him a new bill for the remaining amount at 3 months together with an interest at 10% p.a. Ramchandra agreed.
The second Bill was duly honoured. Give Journal entries in the books of Ramchandra.Note: - Here 1st part
payment is made and then the interest is charged.
6. Premlal sold goods to Sunderlal worth Rs. 10,000/- and Sunderlal accepted the bill for Rs. 10,000/- at 3
months drawn by Premlal. Premlal Discounted the bill with his bank @ 6 % p.a. on due date the bill was
dishonoured and Sunderlal requested Premlal to accept Rs. 4,000 immediately and draw upon him a new bill for
the remaining amount at 3months together with an interest at 10% p.a. Premlal agreed and the second bill was
duly honoured. Give the Journal entries in the books of Premlal. Note: - Here 1st part payment is made and then the
interest is charged.
7. Archana purchased goods from Babita on Credit for Rs. 20,000. On next day Archana paid Rs. 10,000 to
Babita and accepted a bill drawn by Babita for the balance amount for four months. Babita discounted the bill
with her bank for Rs. 9600/- Before the due date Archana approached Babita with a request to renew the Bill
Babita agreed with the condition that Archana should pay Rs. 6000 with interest of Rs. 120 and accept a new bill
for the balance. The arrangement was duly carried out. New bill is met on the due date. Pass journal entries in
the books of Babita. Note: - Here 1st interest is charged and then the part payment is made.
8. Baloo owes Kaloo Rs.8000. Kaloo then draws a bill for Rs. 8000 on Baloo for a period of three months.
Baloo accepts and return it to Kaloo. Kaloo discounted the bill with his bank at 12 % p.a. On due date, the bill was
dishonoured noting charges amount to Rs. 30. Kaloo then draws a bill for the balance plus interest of Rs. 170.
Before the due date of this bill Baloo pays the amount at a discount of Rs. 40 to retire the bill. Pass Journal
Entries in the books of Kaloo. Note: - Here only the interest is charged and there is no part payment occurs.
9. Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts the bill and return to Minal. Minal
discounted the bill @ 12 % p.a. with the bank. On Maturity Usha finds herself unable to make payment of the bill
and requested Minal to renew the bill. Minal accepts the proposal on the condition that Usha should Pay Rs.
2,000 in cash and accept a new bill at one month along with interest at 10% p.a. These arrangements were
carried through. Usha retires the bill by paying Rs. 3015/- Pass Journal Entries in the books of Minal. Note: - Here
1st part payment is made and then the interest is charged.
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TH
10. On 15th March, Ahmed sold goods worth Rs. 1,600 to Awasthi and draws upon him a bill at 4 months for the amount.
th
Awasthi returned the bill to Ahmed with his due acceptance. On 15 April, Awasthi retired the bill under rebate of 5%
per annum. Give Journal entries in the books of Ahmed.
MISCELLANEOUS PROBLEM
11. On 1st April 1979, Pawan draws a bill for Rs. 6,000/- on Sanjay for a period of 4 months. The bill is duly accepted by
th th
Sanjay. On 5 April, Pawan endorses the bill in favour of Lalit. However on 25 July, Sanjay approaches Pawan and
requests that the bill is to be renewed for a further period of 4 months at 12% interest p.a. Pawan agrees and Pays the
necessary amount to Lalit. The new bill is duly accepted and paid by Sanjay. Pass journal entries in the books of Pawan.
12. Rupali accepted a bill for Rs. 2,000/- drawn by Deepali at three months. Deepali got the bill discounted with her bank
for Rs. 1,900. Before the due date Rupali approached Deepali for renewal of the bill. Deepali agreed on the condition
that Rs. 1,000/- be paid immediately together with interest on the remaining amount at 6% p.a. For balance Rupali
should accept a new bill for three months. These arrangements were carried through but afterwards, Rupali become
Insolvent and only 40 % of the amount could be recovered from her estate. Give journal entries in the books of
Deepali.
13. Chanda accepted a bill for Rs. 6,000 drawn by Nanda at three months. Nanda got the bill discounted with his bank for
Rs. 5,700. Before the due date, Chanda approached Nanda for renewal of the Bill. Nanda agreed on the condition that
Rs. 3,000 is paid immediately together with an interest on remaining amount at 18% p.a. for four months and for the
balance Chanda should accept a new bill. But afterwards Chanda become insolvent and only 25% of the amount could
be recovered from her estate. Pass journal entries in the books of Nanda.
14. Pankaj draws a bill on Anil worth Rs. 8,000 for three months which was accepted by Anil. On the same date Pankaj
discounted the bill with his bank @ 10 % p.a. On the due date Anil dishonoured his acceptance. Anil paid Rs. 4,000/- to
Pankaj and accepted a fresh bill for two months for the balance including interest of Rs. 40. Anil became insolvent
before the maturity of the bill and 50 paisa in a rupee was received at first and final dividend from his estate. Give
Journal entries in the books of Pankaj.
15. Bhagwan sold goods to Deo for Rs. 3,000. On the same date Deo accepted a bill for 2 months. Bhagwan endorsed the
bill to Ishwar. On the due date of the bill, Ishwar informed that the bill is dishonoured and the noting Charges were Rs.
20. Bhagwan drew a new bill on Deo for the amount due including noting charges and an interest of Rs. 130. Before
the due date of the second bill Deo become bankrupt and 20 paisa in a rupee was received from his estate as first and
final dividend. Pass the necessary journal entries in the books of Bhagwan.
16. Mahindra sold goods to Ravindra worth Rs. 6000 and for that Ravindra accepted a bill drawn by Mahindra for 3
months. After a month Mahindra discounted the bill with his bank at 10 % p.a. On the due date Ravindra dishonoured
his acceptance. Ravindra paid Rs. 3, 000 to Mahindra and accepted a fresh bill for 3 months for the balance including
interest @ 8% p.a. Before Maturity of the Bill Ravindra become insolvent and 50 paisa in a rupee was discovered from
his estate as first and final dividend. Give Journal entries in the books of Mahindra and Ravindra.
17. Prakash drew a bill for Rs. 4,000 on Anand on 1st May, 1976 for three months. This was for the amount which Anand
st
owed to Prakash. Anand accepts the same and return it to Prakash who discounted at his bank for Rs. 3,900. On 1
Aug, 1976 Anand requested Prakash to renew the bill and Prakash agreed on the condition that Rs. 1,000 is paid
immediately and Anand should accept the new bill for 3 months for the balance payable plus interest of Rs. 45. These
st
arrangements were carried through. However, on 1 October, 1976, Anand retired his acceptance for Rs. 3, 035. Pass
journal entries in the books of Prakash and Anand
18. On 1st January, 1988 Vandana drew a bill for Rs. 6,000 for 2 months periods on Latha. Latha duly accepted the bill. On
th
4 January 1988 Vandana discounted the bill with her bank for Rs. 5850. However, on the due date the bill was
dishonoured. Latha agreed to accept a new bill with an interest of Rs. 100 for a period of one month. The bill was duly
met on the due date. Give the journal entries in the books of Vandana and show Vandana’s account in the books of
Latha.
19. Mukund owes (be obligated) Prakash Rs. 4000 for which Prakash draws a bill for 2 months on 1 st February, 1989.
th
Mukund accepts it and returns it to Prakash. On 4 March, 1989, Mukund approaches Prakash and request him to
accept Rs. 1000 in cash and draw a fresh bill for 3 months for the balance plus interest @ 10% p.a. Prakash accepts the
st
request and draw a bill accordingly which is accepted by Mukund. On 1 June 1989 Mukund retired his acceptance
under discount of Rs. 30/-. Pass journal entries in the books of Prakash and prepare Prakash account in the ledger of
Mukund.
17
TH
20. Abhay draws a bill on Ajay for Rs. 1,400 at 3 months. Ajay accepts the bill and returns it to Abhay. The bill is sent
to the bank for collection. On maturity – Ajay finds he unable to make payment of the bill and request Abhay to renew
it. Abhay accepts the Proposal on the condition that Abhay should pay Rs. 700 in cash along with noting charges of Rs.
10 and draw a renew bill for one months for the balance. These arrangements were carried through. Afterwards Ajay
retired the bill by paying Rs. 695. Give journal entries in the books of Abhay and Ajay.
21. Krishna accepted a bill for three months drawn by Rama for Rs. 4000. Rama discounted the bill with the bank at
Rs. 3900. On the date of maturity, the bill was dishonoured. Rama paid noting charges for Rs. 20 Krishna paid half the
mount for the bill and full amount of the noting charges and accepted a bill for the balance including interest of Rs. 50.
The second bill was duly honoured. Pass necessary journal entries in the books of Rama and show Krishna’s account.
22. Jain purchased goods worth Rs. 3,000 from Sharma on 1st June 1977 and gave him acceptance on 3rd June for a
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period of three months. On 15 June Sharma discounted the bill for Rs. 2980. On 6 September, when the bill was
presented for payment. Jain dishonoured the same. Rs. 20 was paid as noting charges. Pass journal entries in the
books of Sharma and Sharma’s account in the books of Jain.
23. Sagar owes Sindhu Rs. 8000 Sagar accepted a bill for 3 months by Sindhu for Rs. 8000. Sindhu discounted the
bill with bank at Rs. 7800. On the due date, the bill was dishonoured. Noting charges amounted to Rs. 20. Sagar Paid
half the amount of the bill and full amount of the noting charges including interest of Rs. 100. Pass journal entries in
the books of Sindhu and show the account of Sagar.
24. On 1st January, 1982 Shri Jameersheth of Jalgaon sold goods to Shri Nanchand of Nanded for Rs. 80,000. On
the same date Shri Jameersheth drew a bill on Shri Nanchand for the same amount for three months. Shri Nanchand
th
accepted the bill and returned the same to Shri Jameersheth on 4 January, 1982. Shri Jameersheth discounted the bill
with the banker at 10 % p.a. On the due date bank informed that the bill was dishonoured and Shri Nanchand
requested Shri Jameersheth to accept Rs. 40000 immediately and draw upon him the new bill for the remaining
amount for two months together and interest at 12% p.a. Shri Jameersheth agreed and the second bill was duly
honoured. Pass the necessary Journal entries in the books of Shri Jameersheth of Jalgaon and show Shri Jameersheth’s
account in the books of Shri Nanchand of Nagpur.
25. Ameet draws a bill for Rs. 7500 on Tushar for four months. Ameet discounts the bill with the bank at 8%p.a. On
the due date Tushar requested Ameet to accept Rs. 4,700 (including Rs. 200 for interest) and to draw a bill for the
balance of three months. Ameet agrees this proposal. Before the due date of the new bill Tushar retires the bill for Rs.
2960. Pass the journal entries in the books of Tushar and open Tushar’s account in the books of Ameet.
26. Akbar owed to Barbar Rs. 6,000. Akbar accepted the bill drawn by Barbar for the amount at four months.
Barbar discounted the bill with his bank for Rs. 5850. Before the Due date, Akbar approaches Barbar with the request
for renewal of the bill. Barbar agreed on the condition that Rs. 4,000 is paid immediately in cash together with an
interest on the remaining amount at 12%p.a. for three months and for the balance Akbar should accept a new bill at
three months. These arrangements were carried through. Barbar endorsed the new bill to Kadar. Akbar met the bill on
due date. Give the transaction in the books of Akbar and prepare Akbar’s account in the books of Barbar.
27. Sonia draws a bill on Moni for Rs. 6,000 at 4 months. Moni accepts the bill and returns it to Sonia who
discounts the bill with the bank at a discount of 8%p.a. Before the due date of Bill Moni requested Sonia to accept Rs.
4000 in cash and draw a bill for the balance plus interest at 12%p.a. for two months. Sonia draws a bill as the request is
agreed. The bill is sent to bank for collection. On the due date the bill was honoured. Pass the necessary journal entries
in the books of Sonia and Moni.
28. Journalize the following transactions in the books of Kamesh:
a. Nanda informs Kamesh that Shanti’s acceptance for Rs. 4,000 endorsed to Nanda has been dishonoured and
noting charges have been Rs. 100
b. Ashok renews his acceptance to Kamesh for Rs. 2400 by paying Rs. 800 in cash and accepting a new bill for the
balance plus interest @ 12 p.a. for 3 months.
c. Deva’s acceptance to Kamesh Rs. 12,000 is retired one month before its due date at a discount of 12% p.a.
d. The bank informs Kamesh that Sudhakar’s acceptance for Rs. 4,000 has been dishonoured and it has paid noting
charges Rs. 80.
29. Journalise the following transactions in the books of Kailash.
a. Sandeep informs Kailash that Vila’s acceptance for Rs. 8,000 endorsed to Sandeep has been dishonoured. Noting
Charges amounted to Rs. 200.
b. Kalpana renews her acceptance to Kailash for Rs. 7,500 by paying Rs. 3,500 in cash and accepting a fresh bill for
the balance plus interest at 10% p.a. for 3 months.
c. Uma retired her acceptance to Kailash for Rs. 3,000 by paying Rs. 2,900 in cash.
d. Kailash sent a bill of Anita for Rs. 6,000 to bank for collection. But Bank informed that the bill has been
dishonoured by Anita.
18
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30. Journalise the following transactions in the books of Rahul.

a. Pradeep informed Rahul that, Vijay’s acceptance for Rs. 1,000 endorsed to Pradeep has been dishonoured.
Noting charges amounted to Rs. 50.
b. Nilesh renews his acceptance to Rahul for Rs. 600 by paying Rs. 200 in cash and accepting a fresh bill for
balance plus interest at 12% p.a. for 3 months.
c. Prashant’s acceptance to Rahul for Rs. 3,000 retired one month before due date at a discount of 12% p.a.
d. Bank informs Rahul as to the dishonour of Aviraj’s acceptance for Rs. 1,000 to Rahul, discounted with the
bank. Noting charges are Rs. 20.
31. Journalize the following transactions in the books of Maharaja.
a. Ayub informs Maharaja that Sadashiv’s acceptance for Rs. 2,000 endorsed by Ayub has been dishonoured,
noting charges amounted to Rs. 150
b. Pankaj renews his acceptance to Maharaja for Rs. 1200 by paying Rs. 400 in cash and accepting a fresh bill
for the balance plus interest at 12% p.a. for 3 months.
c. Vaibhav’s acceptance to Maharaja for Rs. 6000 retired one month before the due date at a discount of
12%p.a.
d. Bank informs Maharaja as to the dishonour of Kasam’s acceptance for Rs. 2000 to Maharaja discounted with
Bank noting charges Rs. 200.
32. Journalise the following transactions in the books of Mr. Ashok Agrawal.
a. The bank informed Mr. Ashok Agrawal that Kamlesh’s acceptance for Rs. 12,000 sent to bank for collection
had been honoured and bank charges debited were Rs. 60.
b. Discharged Dr. Ashok Agrawal’s acceptance to Mahesh for Rs. 15,250 by endorsing Prakash’s acceptance to
Mr. Ashok Agrawal for Rs. 15,100.
c. Vishal renewed his acceptance to Mr. Ashok Agrawal for Rs. 11,200 by paying Rs. 6000 in cash and accepting
a fresh bill for the balance plus interest @ 12% p.a. for three months.
d. Karthik who had accepted Mr. Ashok Agrawal’s bill of Rs. 14,000 was declared bankrupt and only 45% of the
amount due could be recovered from his estate.
33. Journalise the following transactions in the books of Ashwin.
a. Bank informed that Sachin’s acceptance for Rs. 5,750 sent to bank for collection had been honoured and
bank charges debited were Rs. 50.
b. Nitin renewed his acceptance for Rs. 7,200 by paying Rs. 2,200 in cash and accepting a new bill for the
balance plus interest @8% p.a. for 3 months.
c. Discharged our acceptance to Pravin for Rs. 4,250 by endorsing Bhavin’s acceptance to us for Rs. 4,000.
d. Jatin who had accepted Ashwin’s bill of Rs. 8,500 was declared insolvent and only 40% of the amount due
could be recovered from his estate.
34. Journalise the following transactions in the books of Kamalakar.
a. Nisha informs Kamalakar that Shanti’s acceptance for Rs. 14,000 endorsed to Nisha has been dishonoured
and noting charges have been paid Rs. 200.
b. Asha renews hare acceptance to Kamalakar for Rs. 12400 by paying Rs. 6000 in cash and accepting a new bill
for the balance plus interest @ 12% p.a. for 3 months.
c. Devika’s acceptance to Kamalakar for Rs. 42000 is retired one month before its due date at a discount of 12% p.a.
d. The bank informs Kamalakar that Sindhu’s acceptance for Rs. 15000 has been dishonoured and it has paid
noting charges Rs. 100.
e. Bank informs Kamalakar that Sangita’s acceptance for Rs. 12000 which was sent to bank for collection has
been dishonoured.
35. Journalise the following transactions in the books of Ranbir.
a. Sonam informs Ranbir that Salman’s acceptance for Rs. 3200 endorsed to Sonam has been dishonoured and
the noting charges amounted to Rs. 80.
b. Ravindra renews his acceptance to Ranbir for Rs. 4,800 by paying Rs. 1800 in cash and accepted a fresh bill
for the balance, plus interest @ 12% p.a for 2 months.
c. Dilip’s acceptance to Ranbir for Rs 8000 is retired one moth before the due date at a discount of 12% p.a.
d. The bank inform Ranbir that Shirin’s acceptance for Rs 5500 to Ranbir discounted with the bank earlier has
been dishounred and the noting charges
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CH. 3. DEPRECIATION
Note: - As per the syllabus of Standard XII (SYJC), the students are required to study the following two methods of depreciation only, viz.
i. Fixed Instalment Method / Original Cost Method / Straight Lime Method / Equal Instalment method.
ii. Reducing Balance Method / Written Down Value Method / Diminishing Balance Method.
PROBLEMS
1. A company purchased Machinery worth Rs. 2, 00,000 on 1st January, 1974. Accounting year of the Company
closes on 31st December every year. Company provides depreciation at 10% p.a. on the original cost. On 31st
December, 1976 the machinery was sold for Rs. 1, 20,000. Give the machinery Account for three years. [F.I.M]
2. Aurangabadkar purchased furniture worth Rs. 20,000 on 1-4-73. He charges depreciation at the rate of 10%
on the Reducing Balance method. On 1 – 7 – 75, he sold out a part of the Furniture for Rs. 2,000, the original cost
of which on 1 – 4 – 73 was Rs. 4,000. The financial year of Aurangabadkar ends on 31st March every year. You
are required to prepare his furniture account for the first four years, and to pass journal entries for the transactions
of the third year. [W.D.V.]
3. A Good – luck manufacturing Co. Ltd. Luck now purchased new machinery for Rs. 45,000 on 1st January,
1975 and immediately spent Rs. 5,000 on its fixation and erection. In the same year on 1st July additional
machinery costing Rs. 25,000 was purchased. On 1st July 1977 the machinery purchased on 1st January, 1975
became obsolete and was sold for Rs. 30,000. Depreciation was provided for annually on 31st December at the rate
of 10% per annum on Fixed Instalment method. You are required to prepare Machinery Account for the period from 1975 to 1977. [F.I.M]
4. A company purchased a machine worth Rs. 2,00,000 on 1st Jan. 1976. On 1st Jan 1977, the company purchased
an additional machine for Rs. 40,000. On 1st July 1978, the company sold the machine purchased on 1st Jan 1977
for Rs. 32,000. Company writes off depreciation at the rate of 10% on the original cost and the accounts are closed
every year on 31st Dec. Show the Machinery Account and Depreciation Account for the three years ending 31st
Dec. 1976, 1977 and 1978 under Fixed Instalment Method. [F.I.M]
5. Vishal Traders, Bombay, purchased Machinery on 1-1-1970 for Rs. 68,000 and paid installation charges Rs.
2,000 and decided to depreciate the machinery at 10% per annum under the fixed instalment system. On 1-7-1972
machinery having an original cost of Rs. 10,000 was sold for Rs. 5,000 and on the same date new machinery was
purchased for sr. 10,000. Give the required journal entries and also write up the Machinery Account for 1 – 1 –
1970 to 31 – 12 – 72 assuming the accounts of the firm are closed on every 31st December. [F.I.M]
6. M/s Amol Industries, Pune, purchased machinery for Rs. 19,400 on 1st January, 1976, and spent Rs. 600 for
its erection. On 1st July 1976, additional machinery costing Rs. 10,000 was acquired. On 1st July 1978 the
machinery purchased on 1st January, 1976 was sold for Rs. 12,000 and on the same date fresh machinery was
purchased at a cost of Rs. 16,000. Depreciation was provided annually on 31st December at the rate of 10% on the
original cost. Give the machinery account and deprecation account for 1976, 1977 and 1978. [F.I.M]
7. M/s. Deepali International bought furniture worth Rs. 24,000 on 1 – 4 – 1977 and additional furniture on 1 – 10
– 1977 worth Rs. 16,000. They charged depreciation at 15% p.a. on Fixed Instalment basis. On 1 – 10 – 1979 they
sold out one cupboard for Rs. 2,200 original cost of which on 1-4-1977 was 4,000. On the same date a new
cupboard was purchased for Rs. 8,000. Show the furniture account and depreciation account for the year 1977-78,
1978-79 and 1979-80 assuming that the financial year closes on 31st March every year. [F.I.M]
8. Kamlesh bought the machine costing Rs. 11,000/ - on 1st January, 1977. He had to pay Rs. 1,000/- towards its
installation. He writes off depreciation @ 10% of the original cost every year. His books are closed on 31st
December every year. On 1st July, 1979 he disposed off the machine for Rs. 6,000/- Give journal entries in the
books of Kamlesh for all these years till 31st December, 1979. [F.I.M]
9. M/s Tarachand Traders purchased machinery worth Rs. 45,000 on 1st January, 1978. On 30th June, 1978
additional machinery worth Rs. 25,000 was purchased. On 31st December, 1979 machinery which had cost Rs
4,000 on 1st January, 1978 was sold for Rs. 3,200. On 31st December, 1980 a machinery costing Rs. 10,000 on 1st
January, 1978 was sold for Rs. 6,250. Prepare Machinery account and depreciation account for the years ending
31-12-1978, 31-12-1979 and 31-12-1980 after providing depreciation @ 10% p.a. on straight line method. [F.I.M]
20
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10. M/s B. Bijapure and Co. Ltd. Of Ahmednagar purchased on 1st January, 1978 the machinery costing Rs.
1,00,000. On 1st July, 1979 additions were made worth Rs. 20,000. On 1st March, 1980 additions were made to the
amount of Rs. 12,000. On 30th June, 1981, machinery which had original value of Rs. 16,000 on 1st January, 1978
was sold for Rs. 10,000. Depreciation was to be charged @ 10% p.a. on original cost. Show Machinery account in
the book of M/s B. Bijapure and Co. Ltd., of Ahmednagar for the years from 1978 to 1981. The financial years
closes on 31st December, every year. [F.I.M]
11. M/s Joshi Bros., Jalgaon purchased on 1st January, 1967 a cost of Machinery for Rs. 17,400 and spent Rs.
600 on its erection. On 1st January, 1968, another set of machinery was purchased at Rs. 10,000. On 1st July, 1969,
the machinery purchased on 1st January, 1967, was sold at Rs. 8,000 and the same date a fresh machinery was
purchased at Rs. 15,000. Depreciation was charged at 10% p.a. under straight line method on the original cost of
asset on 31st December every year. Prepare Machinery account for the three years, i.e. 1967, 1968 and 1969 and
Depreciation account for the same period in the books of Joshi Bros. Jalgaon. [F.I.M]
12. M/s Sharad Agency showed a debit balance of Rs. 36,000 to the Machinery account on 1-7-1978. The
original cost of machinery was Rs. 60,000. On 1st January, 1979 Sharad Agency bought an additional machinery of
Rs. 48,000 and spent Rs. 2,000 for its installation. One more machinery costing Rs. 25,000 was purchased on 30 –
6 – 1979. On 30-6-1980 a part of machinery acquired on 1st January, 1979 was sold for Rs. 7,250 the original cost
of which was Rs. 10,000. On 31st -12-1981 the Agency sold out the machinery for Rs. 16,000 which was
purchased on 30-06-1979. Agency charged 10% Depreciation on fixed instalment basis and their financial year
closes on 30th June every year. Show machinery account for the years 1978-1979, 1979-1980, 1980-1981 and
1981-1982. [F.I.M]
13. Janab Hasansab of Hyderabad made furniture for his own office on 1st October 1975. For this he had spent
Rs. 36,000 on materials and Rs. 16,000 on wages. He estimated he life of the furniture to be 10years. He also
estimated that its expected scrap value at the end of its life would be Rs. 12,000. He closed his books of accounts
on 31st March every year. He sold the entire furniture for Rs. 40,000 on 1st October 1978. Show the furniture
account and depreciation account for the year ended 31st March, 1976, 31st March 1977, 31st December 1978 and
31st December 1979. [F.I.M]
14. The accounting year of M/s Kothari Fine Printers ends on 31st December every year. They decided to
depreciate their machinery at 10% p.a. on fixed instalment system. Taking into consideration the following
information, prepare machinery account and depreciation account for the three years ending 31st December, 1982,
1983 and 1984.
 On 1st January, 1982 machinery worth Rs. 20,000 was purchased. On 1st July, 1982, another machinery
costing 12,000 was purchased.
 Machinery the cost of which on 1st January, 1982 was Rs. 5,000 was sold for Rs. 3,000 on 1st July 1983.
 A few machine of the value of Rs. 8,000 was purchased on 30th June, 1984. [F.I.M]
15. M/s Mallikarjun Bros. Wasim purchased on 1st January 1982 machinery for Rs. 47,000 and spent Rs. 3,000
on its erection. On 1st July, 1982 additional machinery costing Rs. 5,000 was purchased. On 1st April, 1983 the
machinery purchased on 1st July, 1982 was sold for Rs. 3,000 and on the same date new machinery was purchased
for Rs. 12,000. Depreciation is to be charged at 10% p.a. under straight line method on 31st December, every year.
Prepare machinery account for 3 years from 1st January, 1982 and pass journal entries for the year 1983 in the
books of M/s Mallikarjun Bros. [F.I.M]
16. Good luck Manufacturing Co. Ltd., Jalgaon purchased new machinery for Rs. 45,000 on 1st January 1981
and immediately spent Rs. 5,000 on its fixation and erection. In the same year on 1st July additional machinery
costing Rs. 25,000 was purchased. On 1st July 1983 the machinery purchased on 1st January 1981 become absolute
and was sold for Rs. 30,000. Depreciation was provided for annually on 31st December at the rate of 10% p.a. on
Fixed Instalment Method. You are required to prepare machinery account and depreciation account for the period
from 1981 to 1983. [F.I.M]
17. On 1st January, 1981 Messrs Heera and Co. Kalyan purchased machinery for Rs. 80,000 and spent Rs.
5,000 on its installation. On 1st July in the same year they purchased another machine for Rs. 60,000. On 31st
December, 1982 the machinery purchased on 1st January 1981 was sold for Rs. 68,000. On 1st January 1983 a new
machine was installed at a cost of Rs. 70,000. Messrs Heera and Co. Charge depreciation @10% p.a. on the
original cost. The accounts are closed on 31st December every year. Show Machinery account and Depreciation
account for the year 1981, 1982 and 1983. [F.I.M]
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18. Arun Traders, Nasik, purchased machinery on 1st July, 1984 for Rs. 14,000 and decided to depreciate the
machinery at 10% p.a. under straight line method. On 1st January, 1985, new machinery was purchased for Rs.
20,000. On 1st July, 1986, machinery purchased on 1st July, 1984, was sold for Rs. 10,000 and on 31st December,
1986, new machinery was purchased for Rs. 25,000. Prepare machinery account and deprecation account for the
years 1984, 1985 and 1986 assuming that the financial year ends on 31st December every year. [F.I.M]
19. Ameet Traders, Sinner, purchased furniture on 1-1-1984 for Rs. 15,000. In the same year on 1st July additional
furniture was purchased for Rs. 8,000. On 1-7-1985, the furniture purchased on 1-1-1984 was sold for Rs. 10,000
and on the same day new furniture was purchased for Rs. 12,000. The firm charged depreciation at 10% p.a. on
Reducing Balance method. Prepare – Furniture account deprecation account for the years ending on 31st December
1984, 1985 and 1986. [W.D.V.]
20. Deepak Washing Company, Shahpur, purchased a washing machine on 1st January 1980 for Rs. 40,000. On 1st
July, 1980 another machine costing Rs. 20,000 was purchased. On 1st July, 1982, the machine acquired on 1st
January, 1980 was sold off for Rs. 27,000 and on the same date a new machine was purchased at a cost of Rs.
15,000. Depreciation was provided annually on 31st December @ 10 % p.a. on the original cost. Show machinery
account and Depreciation account for the years 1980, 1981 and 1982. [F.I.M]
21. Warner Trading Co. purchased some machinery on 1st Jan. 1986 costing Rs. 88,000 and spent Rs. 2,000 on
its erection. On 30th June, 1986, additional machinery is purchased for Rs. 10,000. On 31st December, 1987 a part
of the machinery was sold for Rs. 2,100 which had a cost price of Rs. 4,000 on 1st January, 1986. Prepare
Machinery account for the years 1986, 87 and 88 and pass journal entries for the year 1987 assuming that
Machinery is depreciated at 10% p.a. on Diminishing balance method on 31st December, each year. [W.D.V.]
22. M/s Joshi and company purchased one machinery on 1st January, 1983 costing Rs. 8,000. On the same date
firm spent Rs. 2,000 for its erection. On 1st July, 1983 additional Machinery was purchased for Rs. 20,000. The
machine costing Rs. 10,000 on 1st January, 1983 was sold out on 30th June 1985 for Rs. 6,250. On the same date a
new machine costing Rs. 32,000 was purchased. Every year on 30th June, depreciation at the rate of 10% on cost
price of machinery was charged. Prepare Machinery account and deprecation account for three years i.e. 1982 –
83, 1983-84 and 1984-1985 in the books of the firm. [F.I.M]
23. Ram and Shyam Co. Purchased machinery on 1-1-1986 for Rs. 2,00,000 and spent Rs. 10,000 on its
installation. On 1st July, 1986 they purchased another machine for Rs. 1,50,000. On 31-12-1987 the machinery
purchased on 1st January, 1986 was sold for Rs. 1,60,000. On 1-1-1988 another new machine was purchased at
cost of Rs. 1,75,000. Depreciation was charged @ 10% p.a. on the original cost. The account are closed on 31st
December every year. Show Machinery account and deprecation account for the year 1986, 1987 and 1988.
[F.I.M]
24. The company purchased machinery worth Rs. 36,000 on 1-4-1987 and spent Rs. 4,000 towards installation
charges. The company depreciates the machinery at the rate of 10% p.a. on original cost. On 1-10-1989 the
company sold out a part machinery for Rs. 3,200. The original cost of the sold machinery on 1-4-1987 was Rs.
6,000. On 1-10-89 the company purchased machinery for Rs. 10,000. As the company closes the financial year
31st March every year. Prepare Machinery account and the deprecation account for the years 1987-88, 1988-89 and
1989-90. [F.I.M]
25. SATYA RAJ automobiles Ltd. purchased a machine for Rs. 60,000 on 1st July, 1988. On 1st January, 1989
Company purchased an additional machine costing Rs. 20,000. On 31st December, 1990 the machinery purchased
on 1st July 1988 become obsolete and was sold for Rs. 40,000. Depreciation was provided annually on 31st
December at the rate of 10% p.a. on the Reducing Balance method. Prepare Machinery account and Depreciation
Account for the period from 1988 to 1990. [W.D.V.]
26. On 1st January, 1988, Nitin and Co. Bombay purchased Machinery for Rs. 50,000. On 1st July 1988
additional machinery purchased for Rs. 20,000. On 30th June 1990, the company sold a machine costing Rs.
10,000 on 1st January 1988 for Rs. 6,000. Company closes the account on 31st December, every year decided to
charge 10% p.a. deprecation on original cost of the machinery. Prepare Machinery account and Depreciation
account for 1988, 89 and 90. [F.I.M]
27. On 1st January, 1985, Sunil Traders purchased machinery for s. 20,000. On 1st July 1985, they purchased
further machinery costing Rs. 10,000. On 1st July, 1987 they sold for Rs. 6,000 the machine purchased on 1st
January, 1985, and bought another machine for Rs. 12,000 on the same date. Depreciation was provided on
machinery @ 10% p.a. on the Diminishing Balance method and the financial year closes on every 31st December.
Prepare the Machinery account and the Depreciation account for the years 1985, 1986, 1987 and 1988. [W.D.V.]
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28. Dhoni Manufacturing Co. purchased a Machine worth Rs. 77,600 and installs it at a cost of Rs. 2,400 on 1st
July 1986. On 1st January 1987 an additional Machine costing Rs. 40,000 was purchased. The machine purchased
on 1st January, 1987 having become obsolete was sold for Rs. 22,000 on 1st July 1989 and a new machine worth
Rs 60,000 was purchased on 1st August, 1989. The deprecation is provided annually on 31st December, at 10% p.a.
on original cost of machinery. Show machinery account for the years 1986, 1987, 1988 and 1989. [F.I.M]
29. Shirish Enterprises purchased a machinery costing Rs. 36,000 on 1-4-1989 and was installed on the same date.
The installation expenses amounted to Rs. 4,000. The firm decided to charge depreciation at 10% p.a. on straight
line method. On 1-10-91 a part of machinery with an original price of Rs. 6,000/- (including the installation
charges) was sold for Rs. 3,200 and a new machinery costing Rs. 10,000 was purchased on the same date. The
firm closes its books of accounts on 31st March every year. Prepare Machinery account and Depreciation account
for the year 1989-90, 1990-91 and 1991-92 in the books of the firm. [F.I.M]
30. S. Narayan from Bombay purchased Furniture for his office costing Rs. 1,04,000 on 1st July 1987. Estimated
life of the Furniture is 10 years and scrap value Rs. 24,000. The Furniture was sold on 31st December 1990 for Rs.
70,000. The accounts are closed on 31st December every year. From the above information prepare Furniture
account and Depreciation account for the years 1987, 1988, 1989 and 1990, by charging depreciation under Fixed
Instalment Method. [F.I.M]
31. On 1st January 1990 Ashok and Co. Ltd., Aurangabad, purchased Machinery for Rs. 1,00,000. On 1st July
1990 additional Machinery purchased for Rs. 40,000. On 30th June 1992, the company sold a machine (costing Rs.
20,000 on 1st January 1990) for Rs. 12,000. Company closes the accounts on 31st December every year and
decided to charge 10% p.a. depreciation on original cost of the machinery. Write Machinery account for the year
1990, 1991 and 1992. Give journal entries for the year 1992 only. [F.I.M]
32. Rahul Gupta Trading Co., Kalyan purchased furniture on 1.1.1992 for Rs. 25,000. In the same year on 1st
July additional furniture was purchased for Rs. 10,000. On 1st July 1993 the furniture purchased on 1.1.1992 was
sold for Rs. 15,000 and on the same date new furniture was purchased for Rs. 12,000. The company charges
depreciation at 8% p.a. on reducing balance method. Prepare Furniture account and deprecation account for 3
years. Assuming that the accounting year of the company closes on 31st December every year. [W.D.V.]
33. On 1st July, 1992, Ajanta Traders, Pune, acquired a building for Rs. 8,00,000. On 1st April, 1993, an
extension was made to the above building by spending Rs. 4,00,000. On 1st October 1994, half of the building was
sold through a broker for Rs. 5,60,000 and brokerage at 2% of the selling price was paid. Depreciation is charged
on 31st March every year at 10% p.a. under the Diminishing Balance Method. Prepare the Building Account and
the Depreciation account for three years. [W.D.V.]
34. Mona Trading Company of Amravati purchased machinery for Rs. 65,000 on 1st January, 1992 and
immediately spent Rs. 5,000 on its fixation and erection. In the same year on 1st July, additional machinery
costing Rs. 30,000 was purchased. On 1st July 1994 the machinery purchased on 1st January, 1992 became obsolete
and was sold for Rs. 51,000. On 1-10-94 a new machine was also purchased for Rs. 41,000. Depreciation was
provided annually on 31st December at the rate of 12% Per annum on fixed instalment method. Prepare Machinery
account and depreciation account from 1992 – 1994. [F.I.M]
35. On 1 – 1 – 1992 Vijay Traders purchased furniture for Rs. 15,000. On 1 – 7 – 1992 additional furniture was
purchased for Rs. 8,000. On 30 – 6 – 1993 the furniture purchased on 1 – 1 – 1992 was sold for Rs. 10,000 and on
1 – 7 – 1993 new furniture was purchased for Rs. 12,000. The firm charged depreciation at 10% p.a. under the
reducing balance method. Prepare furniture account and deprecation account for the years 1992, 1993, 1994
assuming that the accounting year of the firm is calendar year. [W.D.V.]
36. M/s Jalaram Mill, Mulund, showed a debit balance of Rs. 32,000 to the Machinery A/c on 1 st April,
2001(Original cost of the Machinery was Rs. 40,000). On 1 st October, 2001 the Mill bought additional Machinery for
Rs. 15,000 and spent Rs. 1,000 for its installation. One more machinery costing Rs. 20,000 was purchased on 31 st
March, 2003. Depreciation is charged on 31 st March, every year at 10% p.a. under the Diminishing Balanced Method.
On 31st March, 2004, the machinery which was purchased on 1 st October, 2001 was sold for Rs. 12000. Prepare
Machinery A/c and Depreciation A/c for the years 2001 – 2001, 2002 – 2003 and 2003 – 2004. (Feb, 2008) [W.D.V.]
37. On 1st April, 2004 Saikripa enterprises purchased two computers of Rs. 40,000 each. On 1 st October, 2004 they
purchased one more computer for Rs. 40,000. On 1st October, 2006 they sold one computer, which was purchased on 1 st
April, 2004 for Rs. 18,780. Depreciation on computers was provided @ 10% p.a. on diminishing balance method and
the financial year closes on 31st March every year. Prepare computer A/c depreciation A/c for years 2004 – 05, 2005 –
06 and 2006 – 07. (September. 2008) [W.D.V.]
38. M/s J.K. Company, Maroda, purchased machinery for Rs. 80,000 on 1 st April 2002. Company purchased additional
machinery for Rs. 36,000 on 1st October, 2003. The company charges depreciation @10% p.a. on the original cost. The
financial year of the Company ends on 31st March every year. On 30th September, 2004 a part of the machinery, original
cost of which was Rs. 30,000 on 1st April, 2002 was sold by the Company for Rs. 22,000. Prepare Machinery account
for 3 years and give journal entries for the year 2002 – 2003. [F.I.M]
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CH. 4. JOINT VENTURE ACCOUNTS [12 MARKS]
Method I When Separate set of Books is maintained.

1. Dimple and Simple entered into a joint venture. They agreed to share profits and losses in the proportion of
their initial contributions to the joint venture. They opened a joint Bank A/c. and deposited Rs. 60,000 and Rs. 40,000
respectively as initial contributions. They made cash purchases of Rs. 70,000. They also paid Rs. 4,500 for insurance
and freight and Rs. 1,750 for sundry expenses. At the end of the venture, the sales amounted to Rs. 1, 10,000/- There
was unsold stock of goods worth Rs. 5000. Simple took over the unsold stock. The Joint Venture was closed. prepare
Joint Venture A/c. Joint Bank A/c and Co – ventures A/c. Also pass journal entries.
2. A and B entered in to Joint Venture to construct a building for X enterprises limited. The contract price was Rs. 2,
50,000. They opened joint bank account and deposited Rs. 1, 20,000 and Rs. 60,000 respectively and agreed to share
profits and losses in the ratio 3: 2. The following transactions were made from Joint Bank A/c: Wages – Rs. 70,000
and Material purchases – Rs. 1, 25,000. Apart from this A supplied material of Rs. 12,000 and B paid the architect fees
of Rs. 2,500 on completion of construction. X enterprises Ltd. paid the full amount and unsold stock was taken over
by B at an agreed value of Rs. 15,000. Prepare Joint venture A/c, Joint Bank A/c and Co – venturer’s A/c. Also pass
journal entries.
3. Suresh and Ramesh entered into a joint venture to construct a building at a contract price of Rs. 7,00,000.
They agreed to share profits and losses in the ratio of 2:1. Suresh deposited Rs. 5, 00,000 and Ramesh Rs. 1,00,000
into joint bank. The transactions were as follows.
1. Purchase of materials Rs. 3, 50,000, (2)Tools and equipment Rs. 1, 00,000, (3) Wages Rs. 1,20,000
2. Architect fees Rs. 25,000
3. Besides these, Suresh supplied material worth Rs. 15,000 and Ramesh supplied material worth Rs. 13,500.
Building was ready and contract price received. Prepare Joint venture A/c, Joint Bank A/c & Co – Venturer’s
A/c. Also pass journal entries.
4. Ashok, Kishor & Anup undertook the construction of an office building at a contract price of Rs. 10,00,000.
Receivable in cash Rs. 6,00,000 and Rs, 4,00,000 in shares. They agreed to share profits and losses equally. They
opened the joint bank a/c and contributed the following amount. Ashok – Rs. 3,00,000, Kishor - Rs. 3,00,000, and
Anup – Rs.2,00,000. Ashok paid Rs. 10,000 as architect fees, Kishor brought in the venture mixture of Rs. 25,000 and
Anup brought in motor truck of Rs. 55,000. The following transactions were made from Joint bank A/c. Purchase of
material Rs. 4, 50,000, Plant – Rs. 30,000 and freight and wages – Rs. 1, 50,000. At the close of the venture, Ashok
took away the unused material worth Rs. 8,000. Kishor took away the mixture worth Rs. 15,000 and Anup took away
the truck worth Rs. 35,000. The scrap value realised of the plant was Rs. 6,000. The Contract price was received in full
and Kishor took over the shares for Rs. 4,10,000. Prepare Joint Venture A/c, Joint Bank A/c & co – ventures A/c. Pass
journal entries.
5. Sanjay, Ajay and Vijay entered into a Joint venture for construction of a building for contract price of Rs. 6,
00,000. Payable in cash Rs. 4,00,000 and Rs. 2,00,000 in debentures. They decided to share profits and losses in the ratio of
their initial contributions. They opened Joint Bank A/c. where Sanjay deposited Rs. 3,00,000 Ajay Deposited Rs. 2,00,000
and Vijay deposited Rs. 1,00,000. The following payments are made out through Joint Bank A/c Purchase of material Rs.
2,50,000, Plant Rs. 45,000, Wages – Rs. 77,000 and other charges Rs. 11,000. Sanjay brings truck of Rs. 40,000. Ajay brings
materials of Rs. 55,000 and Vijay brings mixture of Rs. 10,000. At the end of the venture unused material was taken over by
Sanjay for Rs. 5,000. Ajay took over mixture for Rs. 15,000 and Vijay took over Plant for Rs. 12,000. The truck was sold in
the market for Rs. 22,000. Contract price was received and debentures were taken over by Vijay for Rs. 1,90,000. Prepare
Joint Venture A/c., Joint Bank A/c., Co – ventures A/c and also passes journal entries.
6. Harish, Iqbal and Joseph undertook to construct a building for Prabhu & Co. at a contract price of
Rs. 2, 50,000. The price was to be paid as follows: Rs. 2,00,000 in cash and balance in preference shares of the
company. Profit was agreed to be divided in the ratio of 2:2:1. The participants contributed cash as follows. Harish Rs.
30,000 Iqbal Rs. 25,000 and Joseph Rs. 20,000. These amount were credited to a joint bank A/c. Iqbal was to be paid
a remuneration of Rs. 1,500 for managing the business. Harish prepared the plats and paid Rs. 3,500 for them. Iqbal
brought a concrete mixture for Rs. 12,000 and Joseph brought a truck for Rs. 25,000. They brought Plant for Rs.
15,000 Material for Rs. 1,20,000 and paid wages Rs. 1,05,000. When the contract was completed Harish took over
unused material for Rs. 10,000. Iqbal took back the concrete mixture for Rs. 11,000 and Joseph agreed to take back
the truck for Rs. 18,000. The plant was sold as scrap for Rs. 6,000. When the contract price was received, Harish
agreed to take over preference shares at a discount of 20%. All the accounts were closed. Prepare Joint venture A/c,
Joint Bank Account and the Co – venturer’s account also pass journal entries.
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7. X and Y enter into a joint venture to build a multi – storied building. They agree to share the
profit and losses equally up to Rs. 50,000 of the profit or loss from the venture. Thereafter, the profit and
losses are to be shared in the following proportion. X = 3/5; Y = 2/5. X contributes plant and machinery worth
Rs. 40,000 and meets registration expenses worth Rs. 10,000. Y contributes the plot on which the building is to
be built, valued at Rs. 1,00,000. Other expenses incurred are : Fuel and electricity charges : Rs. 40,000; Raw
Materials : Rs. 1,60,000; Labour charges : Rs. 75,000; Advertisement expenses : Rs. 5,000. All the above expenses
were met from the Bank A/c. opened for the joint venture. At the end of the venture, X agreed to take the plant
and machinery valued at Rs. 10,000. Y sold off the multi storied building for a total of Rs. 7,20,000 and collected
all dues from the buyers, except for one flat, valued at Rs. 1,80,000 which he kept for himself in lieu of his
expected share of profit. The ventures who had agreed to maintain their venture accounts in separate sets of
books, ask you to prepare the Joint venture A/c, Joint Bank A/c and Venturer’s Capital A/c. Also pass journal
entries.
8. X, Y and Z entered into a joint venture to construct a premises and the contract price was Rs. 4,00,000.
Payable Rs. 2,00,000 in cash and Rs. 2,00,000 in shares. X,Y and Z contributed Rs. 1,00,000 each. The following
payments were made through bank: Raw materials Rs. 75,000; Transportation charges Rs. 25,000; Machinery Rs.
50,000; Insurance Rs. 25,000. Besides this X paid other expenses Rs. 20,000. Y paid for mixture worth Rs. 20,000
and Z brought in materials of Rs. 20,000. After completion X and Z took over unused materials of Rs. 5,000 each
and Y took over the mixture for Rs. 10,000. The scrap of plant was sold for Rs. 8,000. Due to a certain defect,
contract price was reduced by Rs. 10,000 and shares were taken over by X at a premium of 5%. Prepare Joint
Venture A/c. Joint Bank A/c and Co – venturer’s.
9. X,Y and Z entered into a Joint Venture to sell a certain plot of land. They contributed Rs. 25,000 each.
They purchased land of 5,000 sq. m. at Rs. 10 per sq. m. 1/5th of the land was left over for public roads and the
balance was divided into 8 plots of equal size. A plan was got prepared for Rs. 2,000 and other expenses were Rs.
3,500. 5 plots were sold @ Rs, 15 per sq. m. and 3 plots were sold @ Rs. 14 per sq. m. Prepare joint venture A/c
Joint Bank A/c and Co – Venturer’s A/c. Pass journal entries.
10. A, B & C entered into a joint venture sharing profits and losses in the ratio of their initial contributions. They
opened a Joint Bank A/c. wherein they deposited Rs. 1,00,000 Rs. 1,50,000 and Rs. 2,00,000 respectively.
Expenses made through Joint Bank were as follows. Purchase of Raw material Rs. 50,000. Paid architect fees Rs.
10,000, Plant Rs. 25,000 Besides this, A brought in mixture of Rs. 20,000, B paid insurance charges Rs., 5,000 and
C brought in machinery worth RS. 12,000. At the end of the venture, A took back the mixture worth Rs. 5,000, B
took back the unused materials for Rs. 4,000 and C took back the machinery for Rs. 8,000. Scrap of plat realized
Rs. 2,000. On completion they received the contract price Rs. 1,00,000 in cash and Rs. 1,00,000 in debenture
which where taken over by A at a loss of Rs. 10,000. Prepare Joint Venture A/c Joint Bank A/c and Co – venture
A/c. Pass Journal entries.
11. Ram and Rajiv entered into a Joint venture to construct a conference hall at a contract price of Rs.
3,00,000. Ram contributed Rs. 1,00,000 and Rajiv contributed Rs. 1,50,000. Ram brought in material worth Rs.
2,000 and Rajiv Paid transportation charges worth Rs. 6,000 Plant was purchased for Rs. 50,000 and material
worth Rs. 2,00,000 were also purchased. On completion, plant was sold for Rs. 20,000. Due to certain defect, one
bill of Rs. 20,000 was not recovered and the balance was received in cash. Venturers share profits in the ratio of
their initial contributions. Prepare Joint Venture A/c, Joint Bank A/c and Co – venturer’s A/c and pass Journal entries.
12. X and Y entered into a Joint Venture to construct a building for Rs. 4,00,000. Rs. 1,00,000 was to be
received in shares. X contributed Rs. 1,50,000 and Y contributed Rs. 1,00,000. X brought in Plant of Rs. 30,000
and Y brought in mixture of Rs. 10,000. Following expenses were paid from Joint Bank A/c. Insurance Rs. 5000
wages Rs 10,000 and other expenses Rs. 5,000. Materials worth Rs. 2,10,000 were purchased on credit from Z.
After contract was over X took over plant for Rs. 5,000. Y took back the mixture for Rs. 5,000. Materials (unused
stock) was sold for Rs. 10,000. Contract price was received and Z’s A/c was settled for Rs. 2, 00,000. They shared
profit in the ratio of their initial contributions and shares were taken over by X at a profit of Rs. 5,000. Prepare
Joint Venture A/c Joint Bank A/c Co venturer’s A/c. Also pass journal entries.
13. A and B entered into a joint venture to construct a building for Rs. 1,00,000. Both contributed Rs.
30,000 each. A brought in material of Rs. 5,000 and B brought in plant of Rs. 10,000. Material of Rs. 40,000 were
purchased on credit from C. Insurance charges Rs. 500 and transportation cost Rs. 2,500 were paid from Joint
Bank A/c. Settle C’s A/c by accepting a bill. After contract was over plant was depreciated by 30%, half of it was
taken over by A at book value other half was sold for Rs. 2,000. Contract price was received in full. The bill was
duly honoured. Prepare Joint venture A/c Joint Bank A/c and Co – venturer’s A/c. Also pass journal entries.
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14. A and B entered into a Joint Venture. They agreed to share profits and losses in the proportion of their
initial contributions. They opened a Joint bank A/c. And deposited Rs. 1,50,000 out of which A deposited Rs. 1,00,000.
Cash purchases worth Ts. 90,000 were made. They also paid Rs. 10,000 for other expenses. B was to be paid a
remuneration of Rs. 4,000 for managing the business. At the end of the venture the sales amounted to Rs. 1,40,000
out of which Rs. 40,000 was sold on credit to C. B was also to be paid a commission of 5% on Sales. C was allowed a
discount of 5% while receiving the payment from him. The unsold stock of goods amounting to Rs. 2,000 was taken
over by A. the joint venture was closed. You are asked to prepare Joint Venture A/c Joint Bank A/c Co – venturer’s A/.c.
Also pass journal entries.
15. Rahul and Kunal entered in to a joint venture and both contributed Rs. 1,00,000 each. They decided to
share profits and losses equally upto Rs. 20,000 and any further profits or losses would be shared in the ratio of 3:2.
Cash purchases were Rs. 1,20,000 while credit purchases from Vivek amounted to Rs. 50,000. Rahul paid Rs. 5,000 for
insurance while Kunal Paid Rs. 8,000 for transportation. All the goods were sold on credit to Arun for Rs. 1,70,000 who
accepted a bill of exchange for the same. The bill was discounted with the bank at a discount of 5%. Kunal was to be
given a commission of 2% on sales. Vivek’s A/c was settled for Rs. 48,000. The Joint venture was closed. Prepare Joint
Venture A/c; Joint bank A/c; Co – venturer’s A/c. Also pass journal entries.
16. A and B entered into a Joint venture. They contributed Rs. 75,000 each and purchases a plot of 6,000
sq. m. @ Rs. 20 per sq. m. Besides this A got the plat prepared for Rs. 2,000 and B paid the stamp duty of Rs. 3,000.
Fencing expenses were Rs. 5,000 and other expenses amounting to Rs. 3,000 were paid from Joint Bank A/c Later on ,
th
1/6 of the land was left over for roads and the balance was divided into 10 equal plots. 5 plots were sold for Rs. 30
per sq. m. and 4 plots were sold for Rs. 40 per sq. m. Remaining one plot was taken over by A for Rs. 10,000. Prepare
Joint Venture A/c. Joint Bank A/c and Co – Venturer’s A/c. Also pass the necessary Journal Entries.
17. Anik and Sridhar entered into a joint venture to deal in a certain plot of land. Both contributed
Rs. 1,00,000 each towards the Joint Bank A/c. The plot which measured 12,000 sq. m. was purchased for Rs.
1,50,000. The various expenses amounted to Rs. 15,000. According to the plan, 3,000 sq. m. was used for
roads and the remaining area was divided into 3 plots of 2,000 sq. m. each and 3 plots of 1,000 sq. m. each.
The bigger plots were sold @ Rs. 18 per sq. m. each and the smaller plots @ Rs. 22 per sq. m. Anik was to
get a commission of 3% on sale of big plots and Sridhar 5% on sale of the smaller plots. Their profit sharing
ratio was equal. Prepare Joint Venture A/c Joint Bank A/c. and Co – venturer’s A/c Also pass journal entries.
HOME WORK
18. Pramod and Amit jointly undertook to construct a factory building for a limited company. The contract price
was Rs. 5, 00,000 and was received after work has been completed. They contributed_ Pramod Rs. 80,000 & Amit Rs.
40,000 and deposited in Joint Bank Account. They agreed to share profit or Loss in the capital ratio. Pramod got plans
ready and paid Rs. 5, 000 for that Amit brought into the venture Plant and Machinery valued at Rs. 20, 000 and a
motor truck at Rs. 16, 000. For the purpose of erection of factory building, materials of the value of Rs. 3, 50, 000 were
purchased and wages paid Rs. 60, 000. They also paid other sundry expenses amounting to Rs. 25, 000. The contract
was completed and the company settled their account fully. Uninsured Material valued at Rs. 4, 000 was taken over by
Pramod. The plant and Machinery was sold as scrap for Rs. 3, 000 and Amit took back the motor truck at an agreed
value of RS. 5000. You are required to show Joint venture A/c, Joint Bank A/c in the books of the Joint venture.
19. Raj and Dev entered into a Joint venture to prepare film for the Government which agrees to pay Rs. 2, 00,
000. A Bank account was opened in their joint names. Raj contributing Rs. 20, 000 and Dev Rs. 30, 000. They are to
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share the profits and losses in proportion of 2/5 and 3/5 respectively. Payments made out of Joint Banking Accounts were_
a. Purchase of Equipments Rs. 12, 000, 2.Hire charges of Equipments Rs. 10, 000
b. Wages Rs. 90, 000, 3.Materials Rs. 20, 000
c. Office Expenses Rs. 10, 000
Raj Paid Rs. 4, 000 for other expenses. The film was completed and the Government paid the amount by cheque. The joint
venture was closed, Dev taking up equipment at a valuation of Rs. 6, 000. Show Joint venture A/c & Joint Bank A/c after the
final distribution.
20. Raghu and Ramesh entered into a joint venture to produce an advertisement film for Bharati Traders, at a
contract price of 40,000. Raghu contributed Rs. 10, 000 and Ramesh Rs. 20,000 and opened a joint account in the bank
with these contributions. Raghu purchases from his own funds raw film for Rs. 8, 000 and a Camera for Rs. 7,000 for
joint venture. They Paid from the Joint Bank Account: Artist’s fees Rs. 18, 000, Hire of sets Rs. 2,000 and technician
Charges RS. 10,000. The firm was completed but due to certain defects in the firm, the contract Price was reduced by
10% the amount being received by cheque from Bharati Traders. At the end of venture, the camera was sold for Rs.
5,000 and Ramesh took over the unused film for Rs. 400. Raghu and Ramesh shared profit and losses in the proportion
of 1:2 and settled account of the venture. Prepare the Joint venture Account the Joint Bank account and the accounts
of the Co – ventures.
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21. Suratwala and Bodochwala entered into a joint venture to construct a bridge of Koyna river at a contract
price of Rs. 7, 00, 000. Suratwala and Bodochwala introduced Rs. 1,50,000 and Rs. 1, 00, 000 and opened a joint
account in the bank. Suratwala supplied material worth Rs. 60, 000 and Bodochwala brought a Motor Truck costing Rs.
50, 000. Total Material used amounted to Rs. 2,50,000; payment for wages Rs. 3,00,000 and other expenses amounted
to Rs. 40,000. Suratwala took over unused material at Rs. 5, 000. Motor truck was sold as a scrap of Rs. 4,000 contract
prices was received in full on completion of contract. Prepare Joint Venture A/c, Co- venture’s accounts and Joint Bank
Account.
22. Shri Nandkarni of Nanded and Shri Kulkarni of Kolhapur undertook in January 1983 the construction of
“Ajanta Market Hall” for Rs. 5, 00, 000 to be completed within one year. On the same date Nandkarni brought in Rs. 5,
000 and Kulkarni brought Rs. 10,000. These amounts were deposited in a Joint Bank account which was newly opened
by them for the purpose. Both agreed to share profits and losses equally. The work was completed in time and the
following expenses were incurred and paid from Bank accounts, Material Rs. 2,30,000; Wages, Rs. 1,90,000 and Plant
Rs. 40,000. The payments were received in instalments but due to certain defects a bill of Rs. 15,000 was not paid.
When the work was over, as half of plant was taken over by Nandkarni @ 20% below while the other half could be sold
for Rs. 15,000.
Prepare: Joint venture A/c, Joint Bank A/c, Accounts of Co- ventures.
23. Doshi and Soman entered into a joint venture and agreed to share profits and losses in proportion of their initial
contribution to the joint venture. They opened a joint bank account and deposited Rs. 60,000 and 40,000 respectively
as initial contribution. They made cash purchases of Rs. 70,000 and paid Rs. 4,500 for Insurance and freight and Rs.
1750 for sundry expenses. At the end of the venture the sales amounted to Rs. 1, 10,000. The unsold stock of goods
worth Rs. 5,000 was taken over by Soman. Prepare Joint venture A/c, and Joint Bank A/c assuming that Joint venture is
closed and final settlement was made by the Co – ventures.
24. Latha and Kalai, entered into a joint venture. They agreed to share profits and losses in the proportion
of their initial contribution to the joint venture. They opened a joint Bank account and deposited Rs. 60, 000 and
40,000 respectively as initial contribution. They made cash purchases of Rs. 70,000. They also paid Rs. 4,500 for
insurance and freight and Rs. 1,750 for sundry expenses. At the end of the venture, the sales amounted to Rs. 1,
10,000. There was unsold stock of goods worth Rs. 5,000. Kalai took over the unsold stock. Prepare Joint Venture A/c,
Joint Bank A/c and Co – Ventures A/c.
25. Manoj and Ambalal enter into a joint venture to prepare a building for the government, who agrees to pay
Rs. 2,00,000. A Bank Account is opened in their joint names; Manoj contributing Rs. 25,000 and Ambalal Rs. 25,000 and
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it is agreed that they will share the profit and losses in the proportion of 2/5 and 3/5 respectively.
Payment made out of the Joint Bank accounts were:
Purchases of Equipments : Rs. 14,000
Hire Purchases of Equipments : Rs. 13,000
Wages : Rs. 85,000
Purchases of Materials : Rs. 18,000
Office expenses : Rs. 8,000
Manoj and Ambalal then paid Rs. 5, 000 and Rs. 3,000 respectively for other expenses. The building was completed the
government paid the amount by cheque and the joint venture was closed. Ambalal taking up the equipments at Rs.
4,000 and Manoj taking up the unused material at Rs. 2, 000. Prepare Joint Venture A/c, Joint Bank A/c and Co-
Venture’s A/c.
26. Anand and Vijay entered into a joint venture and agreed to share profits and losses in the ratio 3:4
respectively. Anand contributed Rs. 10,000 and Vijay Rs. 8,000 which they deposited into a joint bank account. Goods
worth Rs. 16,000 were purchased expenses of the venture amounted to Rs. 800. Goods were sold for Rs. 21,700. The
account between the parties was duly settled. Pass journal entries and open the necessary ledger accounts.
27. Ram and Shyam entered into a Joint venture and under took a building construction contract of M/s Anand
Traders Limited, Mumbai for Rs. 1,00,000. Ram brought in Rs. 25,000 and Shyam Rs. 15,000. They agreed to share
profit and losses equally. They also agreed to accept contract amount Rs. 80,000 cash and 20,000 in the form of
company’s fully paid up shares. After the completion of work they received the amount other details are as under.
Wages Rs. 40,000, Material Rs. 60,000. Ram supplied material for Rs. 5,500 and paid legal charges Rs. 1,500. Shyam
paid labour charges for Rs. 4,000. Ram agreed to take all shares for Rs. 16,000 and Shyam took over material for Rs.
3,000 Draw Journal entries and write ledger A/c
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28. Rajiv and Ashok enter into a joint venture as dealers in land and opened a joint Bank Account with Rs. 60, 000
forwards which Rajiv contributed Rs. 40, 000 and Ashok Rs. 20,000. They agree to share profits and losses in
proportion to their cash contribution. They purchased a plot of Land measuring 5,000 sq. yards for Rs. 50,000. It was
th
decided to sell the Land in smaller plots and a plan was got prepared at the cost of Rs. 1,200. In the said plan 1/5 of
the total area of the land was left over for public roads and the remaining land was divided into 8 plots of equal size.
Out of 8 plots 3 plots were sold @ Rs. 15 per square yard and the remaining 5 plots were sold @ Rs. 14 per square
yard. Expenses incurred in connection with the plots were registration expenses Rs. 4,000 stamp duty, Rs. 400. and
other expenses Rs. 1,000. Allow 2% on the sale proceeds as commission to Rajiv.
29. Suresh Somani and Bhagwan Jambe of Gangapur entered into a joint venture to sell computers and share
profits or loss in proportion of 1: 2 Suresh Somani contributes Rs. 5,00,000 and Bhagwan Jambe contributes Rs.
10,00,000. The amount was deposited in a joint Bank A/c. Suresh Somani bought 40 computers at Rs. 30,000 each and
paid for them for the Joint Bank A/c. Freight and Insurance premium of Rs. 4,000 and Rs. 12,000 respectively were paid
by Bhagwan form his private cash. 35 computers were sold at a price of Rs. 40,000 each 5 computers, which were
damaged in transit, were repaired by Bhagwan Jambe at a cost of Rs. 5,000 from his private cash. They were finally
sold by Bhagwan Jambe at Rs. 35,000 each and the proceeds were deposited in the Joint Bank A/c. Pass the Journal
entries assuming that the joint venture is closed.
30. Abuja and Saluja entered in a Joint Venture to purchase and sell plots. Abuja Contributed Rs. 4, 00,
000 and Saluja Rs. 2, 00, 000 and the amount was deposited into a joint Bank Account. The transactions of
the venture were as follows.
a. Purchased Land Rs. 2, 00, 000/-
b. Incurred development expenses Rs. 80, 000/-
c. Saluja paid registration fees Rs. 10, 000/-
d. ¾th of land was sold at Rs. 3,05,000/-
e. The remaining land was taken over by Abuja at Rs. 80, 000/-
f. The accounts between co – ventures were settled at the end of the joint venture.
Pass Journal entries to record the above transactions.
31. Sanjay, Ajay & Vijay undertook the construction of a building at a contract price of Rs. 10,00,000
payable in cash Rs. 7,50,000 and in 15%debentures Rs. 2,50,000/-
a. They decided to share the profits and losses in the proportion to their initial contribution. They opened
a joint Bank account where they have deposited the following initial amounts. Sanjay Rs. 4, 00,000, Ajay
Rs. 3, 00,000, Vijay Rs. 2, 00,000.
The following payments are made out through the Joint Bank Account.
Purchase of Materials Rs. 2, 50,000
Purchase of Plant Rs. 45,000
Payment of Wages Rs. 77,000
Payment towards other charges Rs. 11,000
Sanjay brings in material of Rs. 40,000
Ajay brings in material of Rs. 55,000
Vijay brings mixer worth Rs. 10,000
At the close of venture, Sanjay took the unused material for Rs. 5,000. Ajay took over the mixer and plant
for Rs. 27, 000/- The truck was sold in the market for Rs. 22,000. The contract price was received as per the
agreement and Vijay agreed to take over the Debentures for Rs, 1,90,000. Prepare Joint venture A/c, Joint
Bank A/c and Co – Venture’s A/c.
32. Girish, Manisha and Rajnish undertake the construction of an office building at a contract price of
Rs. 8, 00,000. The contract price is to be received Rs. 6,00,000 in cash and Rs. 4,00,000 in fully paid shares of that
company. They decide to share profits and losses equally. They opened a joint bank account and contributed the
following amounts: Girish Rs. 2,00,000 Manish Rs. 2,00,000 Rajnish Rs. 1,00,000.
Girish pays Rs. 10,000 as the fees of the Architect. Manish Brings into the venture Mixer worth Rs. 25,000. Rajnish
brings into the venture the motor truck worth Rs. 55,000. The following expenses were made from the Joint Bank
Accounts. Purchase of Materials Rs. 3, 50, 000,Purchase of Plant Rs. 30, 000, Freight and Wages Rs. 1,
50, 000. At the close of the venture, Girish took over the unused material worth Rs. 8,000; Manish took back mixer
worth Rs. 15000 and Rajnish took back the truck worth Rs. 35,000. The scrap value of the plant was realised at Rs.
6,000. The contract price was received in full and Manish took over the shares at the value of Rs. 4, 10,000 Prepare the
Joint venture A/c, Co – Venture’s A/c and Joint Bank A/c.
28
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33. Sagar and Pankaj entered into a joint venture and undertook building construction of Patel and
company Ltd., Bombay for Rs. 5, 00,000. They agreed to accept Rs. 1,00,000 in the form of shares of the
company and balance to be received in cash. Sagar contributed Rs. 1,25,000 Pankaj contributed Rs. 75,000
and deposited the same in the joint bank account. Sagar supplied materials of Rs. 35,000 and Pankaj paid
Rs. 20,000 for Architect’s fees. They paid from joint bank account for materials Rs. 2,80,000 and for wages
Rs. 1,20,000. On completion of work, they received contract price as per the agreement. Sagar took ass the
shares for Rs. 80,000 and Pankaj took over the unused material for Rs. 15,000 prepare joint venture, joint
bank and co – venture’s accounts in the books of the Joint venture.
34. Ram, Bharat & Laxman undertook the construction of a Bridge at a contract price of Rs. 5,00,000
payable in cash Rs. 4,00,000 and in debentures Rs. 1,00,000. They decided to share the profits and losses in
the proportion of their initial contribution. They opened a joint Bank account wherein they deposited they
deposited the following amounts Ram; Rs. 2,00,000, Bharat; Rs. 2,00,000 & Laxman Rs. 1,00,000.The
following payments are made through the Joint Bank Accounts, Purchases of cement Rs. 2,00,000.
Purchases of Steel Rs. 50,000. Payment of wages Rs. 75,000. and other charges of Rs. 15,000 Ram brings
truck of Rs. 60,000. Bharat brings materials of Rs. 80,000 and Laxman bring over the mixer worth Rs.
20,000.At the close of the venture, the unused materials were taken over by Ram for Rs. 10,000; Bharat
took over the mixer and steel for Rs. 35,000. The truck was sold in the market for Rs. 40,000. The contract
price was received as per the agreement and Laxman agreed to take over the debentures for Rs. 1,10,000.
35. Harbhajan Singh and Jogendra Singh entered into a Joint venture agreement to construct a
modern building for Mehta trading co, Amravati at a price of Rs. 2,00,000. This price was to be paid in cash
Rs. 1,50,000 and Rs. 50,000 by the issue of preference shares of his renowned company. They opened a
joint account with Punjab National Bank in which Harbhajan Singh deposited Rs. 1, 00,000 and Jogendra
Singh Rs. 75,000. They agreed to share profit and losses equally. Harbhajan Singh paid Rs. 10,000 as
architect’s fees for preparing plan of building. Jogendra Singh brought concrete mixer of Rs. 25,000. They
paid Rs. 20,000 for Plant; Rs.50,000 for purchase of materials; Rs. 25,000 for wages and Rs. 20,000 for
freight insurance and other charges. After the completion of contract, Harbhajan Singh took over the
unused material of Rs. 5,000 Jogendra Singh took back the concrete mixer at a valuation of Rs. 7,000.
Harbhajan Singh agreed to take over the preference share at S. 45,000.
Prepare joint venture A/c, Joint Bank A/c and Coventurers A/c
36. Anand, Balaji & Maganlal jointly signed a contract to construct a bridge for ABC OIL Co., Ltd. The
contract price was Rs. 7,00,000; Payable in cash Rs. 4,00,000 and Rs, 3,00,000 in debentures of the company
at par. Anand, Balaji and Maganlal deposited Rs. 1,00,000 Rs. 50,000 and Rs. 50,000 respectively in the
Joint Bank Account as their contributions. They are to distribute profit in the proportion of their
contribution. Anand paid Rs. 5,000 for the blue prints of the Bridge. Balaji acquired the plant and
equipment’s for Rs. 60,000 and paid for the same. Maganlal brought in vehicle worth Rs. 22,000. The
construction material was purchased for Rs. 4,20,000. The salaries and wages paid amounted to Rs. 30,000.
The miscellaneous expenses paid were Rs. 2,000. On completion of the construction of the bridge, the
company settled the accounts as per the contract. At the end, the unused construction material was taken
over by Anand for Rs. 5,000. The plant and equipment were deposited of for Rs. 40,000. The vehicle was
taken over by Maganlal for Rs. 12,000. The debentures were taken over by Balaji at a discount of 10% . You
are required to
Prepare: Joint Venture Account, Joint Bank account and Co – Venture Account and debentures Account.
37. Sudhir and Narendra Signed a contract jointly to construct an office building for Abhay Enterprises
Ltd. The contract price was Rs. 2,50,000. They opened a Joint Bank Account and deposited Rs. 1, 20,000 and
Rs. 60,000 respectively. They agreed to share the profits and losses in the ration of 3/5 th and 2/5th
respectively. The following transaction was made from the Joint Bank Account. Wages Rs. 70,000 Materials
purchased Rs. 1,25,000 Apart from the above transactions, Sudhir supplied material of Rs. 12,000 and
Narendra paid the architect’s fees Rs. 2500. On completion of the construction, Abhay Enterprises Ltd. paid
full amount. There was unused stock of materials which was taken over by Narendra at Rs. 15000.
Prepare Joint Venture Account, Joint Bank Account and Co – venture’s Account.
29
H.S.C OMTEX CLASSES 6 YEAR TH
Method II: When no Separate set of Books is maintained.

I.e. Individual Books of Accounts are maintained.
1. Abhay Kumar and Jaywant entered into a joint venture to share profits and losses in equal proportion.
The following transactions were made:
a. Abhay Kumar brought goods for Rs. 60,000/-
b. Abhay Kumar paid for expenses incurred on the above purchases Rs. 3,500/-
c. Jaywant supplied goods of Rs. 24,000 from the stock.
d. Jaywant had to pay Rs. 600/- and Rs. 700/- for loading and freight respectively on supply of goods.
e. Abhay Kumar paid Rs. 350/- and Rs. 250/- for warehousing charges and other expenses respectively.
f. Abhay Kumar sold goods for Rs. 1,20,000/-
g. Jaywant sold goods for Rs. 10,000/-
h. The unsold stock of goods was taken over by Jaywant for Rs. 5,000/-
You are asked to prepare Joint Venture account and Co – venturers A/c in the books of both the parties. Also
pass journal entries.
2. A and B entered into a joint venture to sell carpets. A purchased 200 carpets at Rs. 20 each and B
purchased 100 at Rs. 25 each. A paid transportation expenses Rs. 500 and also paid freight Rs. 200. B Paid
advertising expenses Rs. 100. Later on A sold 150 carpets for Rs. 35 each and B sold 125 carpets for Rs. 30
each. Remaining 25 carpets were taken over by B for Rs. 500. Venturer’s settle their accounts. Pass journal
entries and ledger accounts in both the books.
3. Humayun and Phiroz entered into a joint venture. They agreed to share the profits and losses equally.
Following transactions were made by them.
i. Humayun bought goods Rs. 90,000
ii. Phiroz paid for freight Rs. 7000
iii. Phiroz sold goods Rs. 75,000
iv. Phiroz paid commission on sales Rs. 2500
v. Humayun paid for warehousing charges Rs. 3500
vi. Humayun sold rest of the goods Rs. 45,000
vii. Humayun paid commission on sales Rs. 3500
You are asked to show as to how the above transactions will be entered in the books of Humayun and Phiroz and
prepare journal entries.
4. Ramrao and Shamrao decided to undertake a business venture jointly. They agreed to share the profits
and losses in the proportion of 2/3 and 1/3 respectively. Ramrao supplied goods for the joint venture worth Rs.
15,000 and paid Rs. 650 for carriage and freight. Shamrao supplied goods worth Rs. 12,000 and spent Rs. 500 for
sundry expenses. Shamrao sold goods for Rs. 35,000. Shamrao is entitled to get a commission of 10% on sales as
per agreement. Shamrao settled the account of Ramrao by remitting the amount due by bank draft. Open the
necessary ledger account in the books of Ramrao and Shamrao and prepare journal entries.
5. East and West entered into a joint venture to share profits and losses in the ratio 2:1 to sell rice. East
purchased 100 bags of rice at Rs. 200 each. He also paid packing charges Rs. 2000 and freight Rs. 300. West paid
warehousing charges Rs. 1000 and sold all the bags for Rs. 300 each. He was entitled to a commission of 5% on
sales. They settled their account by a draft. Prepare necessary ledger accounts and pass Journal entries also.
6. Kapil and Rohan entered into a joint venture to deal in computers. They agreed to share profits and
losses in the ratio 3:2. Kapil purchased 20 computers @ Rs. 25,000 each and supplied 5 computers @ Rs. 20,000
each from his own shop while Rohan purchased 15 computers @ Rs. 24,000 each and got 5 computers from his
godown @ Rs. 20,000 each. Kapil paid for the transportation charges amounting to Rs. 30,000 while Rohan paid
for insurance and other charges totally amounting to Rs. 40,000. Finally all the computer were sold except 4
computers out of which both took back 2 computer each @ Rs. 17,000 each. Kapil sold 16 computers and Rohan
sold the remaining computers. The selling price of each computer was Rs. 32,000 each. Both the venturer’s were
to get 4% commission on the sales made by them. The venturers settle their accounts by a draft. You are
required to prepare Joint venture A/c and Co Venturer’s account in the books of both the parties. Also pass
journal entries in both books.
7. Jaganlal of Mumbai purchases cotton goods and supplied them to Babanlal of Delhi for sale on joint venture
basis. They have agreed to share the profits and losses equal proportion. Jaganlal bought goods worth Rs. 35,000/- and
sent them to Babanlal in Delhi. Jaganlal paid Rs. 2500 towards the freight charges. Jaganlal’s bill of exchange for Rs.
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20000 payable after 3 months drawn on Babanlal was accepted by Babanlal. Jaganlal discounted the same bill with
bank for Rs. 18200. Babanlal informed Jaganlal that he had incurred Rs. 4500 expenses and the entire goods were sold
for Rs. 50,000. Babanlal remitted the required amount to Jaganlal. You are required to prepare Joint venture A/c and
Coventurers’ account in the books of both the parties. Also pass journal entries.
8. Satish and Ramesh enter into a joint venture to deal in TV. Sets. Satish is to purchase TV sets in Mumbai and
sent it to Ramesh in Pune. They agreed to share profits and losses in the ratio of 3:1. Satish purchased 50 TV sets in
Mumbai costing Rs. 7000 each and paid Rs. 10,000 as transportation cost. Ramesh received the consignment and sold
all the TV sets at a lump sum price of Rs. 4, 45,000. Ramesh sent a draft of Rs. 75,000 to Satish as an advance. The
expenses incurred by Ramesh were Rs. 6000 to sell the TC sets. Venturer’s settle their accounts. You are requested to
open necessary ledger accounts in the books of both the parities. Also pass journal entries.
9. Mahesh and Kalpesh enter into a joint venture to share profits and losses in the proportion of 3:2. Mahesh paid
Rs. 25,000 for purchases of goods and supplied goods of Rs. 3500 from his stock. Kalpesh made purchases of R. 78000
for the joint venture in addition to goods supplied from his godown worth Rs. 14000. Mahesh accepted a bill drawn by
Kalpesh of Rs. 25000 which was discounted by Kalpesh for Rs. 24000 and the discount to be treated as an expense of
the joint venture. Kalpesh also received Rs. 5000 cash as an advance from Mahesh. The expenses of the joint venture
amounted to Rs. 10000 which were paid by Mahesh and Kalpesh equally. Mahesh sold goods amounting to Rs. 3000
and Kalpesh could sell goods worth Rs. 70000. The unsold goods were taken away by Mahesh for Rs. 4000. The
Coventurers’ are entitled for a commission of 10% of sales made by them. Venturer’s settled their accounts by cheque.
Prepare Joint venture account and coventurers’ account in the books of both the parties and also pass journal entries.
10. Usha and Sulbha decided to undertake a venture jointly. They agreed to share profits and losses in the ratio of ¾
and ¼ respectively. Usha supplied from her own stock goods worth Rs. 90,000 and paid Rs. 3,600 for freight. Sulbha
supplied goods worth Rs. 72,000 and spent Rs. 3,000 for sundry expenses. Usha drew a 4 months bill on Sulbha for Rs.
12,000 as an advance. The same was discounted by her at 15% p.a. and discount was charged to Joint Venture A/c.
Sulbha sold all the goods for Rs. 2,10,000. At the end of the venture, the accounts were settled. Give journal entries in
the books of Usha.
11. Narayani and Indrayani entered into a joint venture to buy and sell second – hand motor cars and agreed to
share profits & losses equally. Narayani purchased two cars for Rs. 75,000 and Rs. 78,000 respectively, paid Rs. 4,000
for repairing these cars and sold them for Rs. 1,30,000 and Rs. 1,40,000 respectively. Indrayani purchased three cars
for RS. 2,70,000 in all, incurred an expense of Rs. 4,000 for reconditioning these cars, sold two cars at a total price of
Rs. 2,40,000 and took over the third car at an agreed price of Rs. 90,000. Prepare the Joint Venture A/c and the Co
– Venture’s A/c in the books of each party assuming that the accounts between the co – ventures were
settled by cheque.
12. Pritam of Sindhudurg and Prasad of Ratnagiri entered into a joint venture to consign 100 computers to
Priti of Mumbai to sell at their joint risk which is in proportion of 2/3 and 1/3 respectively. Pritam supplied 55
computers at Rs. 25,000 each paying freight of Rs. 7,500 and other charges Rs. 1,500. Prasad suppled 45
computers at Rs. 24,000 each paying insurance Rs. 750, freight Rs. 350 and other charges Rs. 1,800. Pritam
advanced to Prasad Rs. 25,000 on account of venture. All the computers were sold by Priti for Rs. 28,00,000 out
of which she deducted 2% for her expenses and 2% for her commission on total sales. Priti remitted Rs.
13,00,000 to Pritam by bank draft and balance to Prasad by accepting a bil drawn by Prasad for one month. Pass
Journal Entries in the books of Pritam assuming that all accounts have been finally settled.
13. Ramsingh of Rampur and Narsingh of Nagpur entered into Joint Venture. They decided to send 500 TV sets to
Harsingh of Hyderabad on their joint risk. They share profits and losses in the ratio of 3/5 and 2/5 respectively.
Ramsingh sent 300 sets at Rs. 2,500/- each and paid Rs. 17,000/- for the expenditure of sending the goods. Narsingh
sent 200 TV sets at Rs, 2,000/- each and paid Rs. 13,000 for the expenditure of sending the goods. Ramsingh advanced
to Narsingh Rs. 50,000/- on account of Joint Venture. All the TV sets were sold by Harsingh for Rs. 14,00,000/- from
which he deducted 3% for his expenses and 2% commission on total sales and he remitted Rs. 10,00,000 to Ramsingh
and the balance amount to Narsingh. The co – venturers closed their venture and settled their accounts. Prepare:
Joint Venture A/c, Narsingh A/c, Harsingh A/c in the books of Ramsingh .
14. Anil and Sunil entered in to a joint venture to consign 500 bales of cotton to Mukesh to be sold on their
joint risk. Anil sends 150 bales at Rs. 300 each and pays Rs. 2000 for freight and insurance. Sunil purchases 350
bales at Rs. 250 each paying for insurance and other charges Rs. 4000. Anil advances a cheque of 12,000 to Sunil
and also accepts a bill for the same amount drawn by Sunil which was discounted by Sunil@ 90% of its value.
Mukesh sold all the bales @ Rs. 400 each. The expenses incurred by Mukesh are Rs. 5000 and his commission
was 10% of the sales value. Mukesh remits Rs. 100000 to Sunil and the balance to Anil by a cheque. Venturers
settle their accounts by a draft. Prepare joint ventures account and coventurers’ account in the books of both the
parties and pass journal entries.
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15. Nagpurkar of Warud and Warudkar of Akola entered into joint venture to sent oranges to M/s Modern
Fruit Co., Amrutsar on their Joint risks for sale. They decided to share profits and losses equally. Nagpurkar
purchased oranges of Rs. 2,40,000and paid for transportation, packing and insurance Rs. 70,000. Warudkar
purchased oranges of Rs. 3,70,000 and paid for transportation, packing and insurance Rs. 1,00,000. All the
oranges were sold by M/s Modern Fruit Co. For Rs. 10,00,000 from which company deducted Rs. 25,000 for
expenses and 5% commission on sale proceeds and remitted Rs. 5,00,000 to Warudkar and remaining amount to
Nagpurkar. The co – ventures closed their venture and settled their accounts. Prepare Joint venture account,
Warudkar account, M/s Modern Fruit co. Account in the books of Nagpurkar.
16. Arun of Solapur and Dhanaji of Sangli entered into Joint venture to send 100 bales of cotton to Shivaji of
Mumbai to be sold at their equal joint risks. Arun sends 60 bales at Rs. 12,000 each and pays Rs. 18000 for freight
and other charges. Dhanaji sends 40 bales at Rs. 11,000 each and pays Rs. 10,000 for freight and other charges.
Shivaji sold all the bales of cotton at Rs. 15,00,000. He charges Rs. 10,000 as his commission and other expenses
and remits the balance due fully to Dhanaji. Dhanaji settled account of Arun by remitting to him the balance due.
You are required to prepare Joint venture account, Dhanaji account, Shivaji account in the books of Arun.
17. Akash, Sameer and Sidharth entered into a joint venture to buy and sell leather goods sharing profits and
losses equally. Akash purchased and sent to Sidharth for selling 200 belts @ Rs. 90 each and 150 wallets @ Rs. 75
each. He spent Rs. 750 on transport. Sameer purchased 200 pouches @ Rs. 120 each, paid Rs. 1,000 for packing
and transport and sent them to Sidharth. Sidharth sold al the leather goods at the total amount of Rs. 60,000. His
selling expenses amounted to Rs. 1,100. Prepare Joint Venture Account, Sameer Account and Sidharth Account in
the books of Akash presuming that Sidharth paid the amount due to both Sameer and Akash.
18. Methe and Mane decided to undertake the business jointly. They agreed to share the profits and losses in the
ratio of ¾ and ¼ respectively. Methe supplied goods from his own stock for joint venture worth Rs. 4,50,000 and
paid Rs. 15,000 for carriage and freight. Mane supplied goods worth Rs. 3,60,000 and spent Rs. 15,000 for sundry
expenses. Methe drew a bill on Mane for Rs. 60,000 as an advance. Mane sold goods for Rs. 10,50,000. AT the
end of venture the accounts were settled. Give Journal enries in the books of Methe.
19. Vithal of Bombay and Kailash of assai entered into Joint Venture to purchase and sell cycles. They decided
to share profits and losses equally. Vitthal purchased 200 cycles at Rs. 500 each and spent Rs. 2000 for carriage,
Rs. 4000 for insurance and draws a bill for Rs. 20000 on Kailash, which is duly accepted by Kailash. Kailash
purchased 140 cycles at Rs. 600 each and spent Rs. 10 per cycles for carriage and Rs. 2000 for selling expenses.
Vitthal sold 180 cycles at Rs. 750 each. All the remaining cycles of venture were sold by Kailash at Rs. 550 each.
Joint venture was completed and both the parties settled their accounts. You are required to pass journal entries
in the books of Vitthal.
20. Yashpal of Udgir and Balu of Latur entered into Joint Venture to consign 300 machines to Amol of
Amravati to be sold on their joint risk which is in the proportion of 2:3 respectively. Yashpal sent 180 machines at
Rs. 300 each and paid freight Rs. 700 and sundry expenses Rs. 300. Balu sent 120 machines at Rs. 250 each and
paid for insurance Rs. 500 and carriage Rs. 500. Amold sold all the machines at Rs. 400 each. He spent Rs. 4,000
for advertisement and Rs. 1,000 for godown charges. Amol deducted 5% commission on sales and sent Rs.
80,000 to Yashpal and balance to Balu by bank draft. Prepare: Joint venture A/c, Balu’s A/c, Amol’s A/c in the
ledger of Yashpal.
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CH. 5. SINGLE ENTRY SYSTEM {10 MARKS}
Proprietary concerns
1. Rao commenced business on 1st April, 06 with cash of Rs. 20,000. On 1st April Oct, 06; he introduced a further capital
of Rs.5, 000 .During the year he with drew Rs.400 p.m. for personal use. On 31st march, 07 his asset and liabilities were :
Stock in trade 20,000
Debtor 15,000
Furniture 4,000
Cash at bank 3,000
Unpaid expense 1,000
Sundry creditors 8,000
Prepare closing statement of affairs and profit earned by Mr.Rao for the year ended 31/3/07.
2. The following info. Is available from Rajendra’s records:

Particular 1.4.06 31.3.07
Creditor 5,000 8,000
Bank overdraft - 15,000
Bank balance 10,000 -
Plant and machinery 10,000 20,000
Furniture 4,000 4,000
Debtors 30,000 52,000
Stock 34,000 28,000
Ram had withdrawn Rs.5000 for personal expenses and Rs. 4000 for son’s marriage. Out of business funds, he
had also purchased a residential building costing Rs.20000; which is not shown in the above balance. Additions
to Machinery were made on 1/04/06. Dep at 10 %p.a. should be provided on plant and machinery. Find out
Ram’s net profit for the year ended 31st march 07.
3. On 01/04/06; Mr. Bannerjee commenced business with a capital of Rs.25,000.

During the year 2006-07, he with drew for his personal use goods worth Rs.2, 000 and cash Rs.3,000.
He also gave a donation of Rs. 500 to shri Ramakrishna mission. He paid Life Insurance premium of
Rs.1000.During the year, he received a gift of Rs.5000 from his father by cheque which was deposited
in the bank account of the business. On 31/3/07; his position was as under:
Particulars RS
Machinery 20,000
Furniture 2,000
Stock 5,000
Debtors 8,000
Balance at bank 1,500
Prepaid insurance 200
Payable to creditors 3,000
Liabilities for expenses 700
Find out the profit earned by him after providing for depreciation at %10 on plant and Machinery and
furniture and Rs.400 as reserve for Doubtful Debt. Also prepare statement of affair as on 31.03.07
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4. Ash keeps her books on single entry & following information is disclosed.
Particulars 31.3.06 31.3.07
Cash 18,000 27,000
Stock 15,000 18,750
Debtors 30,000 45,000
Sundry creditors 26,250 31,500
Bills payable - 9,000
Loan from ‘y’ - 3,000
Investments - 15,000
Miss Ash transferred Rs. 150 each month during first half year and Rs. 100 each month for the remaining period
from her business to her private banking account by way of drawing, and took away Rs. 350 worth of goods for
private use. She sold her private car for Rs. 3,500 and proceeds were utilised for business. Furniture to be
depreciated by 10% and Reserve for Doubtful debts to be maintained at 5% on debtors. Prepare opening and
closing statement of affairs and also profit and loss statement for the year ending 31/03/07.
5. Mr.Mukesh maintains single entry books of accounts. From the following details, determine profit for the
year and statement of affairs at the end of year:
Rs. 1000 (cost) furniture was sold for Rs. 5,000 on 1st April, 06 ; 10% depreciation is to be charged on furniture .
Mr.Mukesh has drawn Rs. 1000 per month and Rs. 2,000 was invested in 2006.
Stock 40,000 60,000
Debtors 30,000 40,000
Cash 2,000 1,000
Bank 10,000 5,000( O. D )
Creditors 15,000 25,000
Outstanding expenses 5,000 8,000
Furniture(cost) 3,000 2,000
Bank balance on 1st April 06 is as per cash book, but the bank overdraft on 31.03.07 is as per bank statement. Rs.
2,000 cheques drawn in March 07 have not been en cashed with in the year. Provide interest on Drawing @ 10% p.a.
6. Mr. Sharuk keeps his books by single entry method. His financial position on 1.01.04 and 31.12.04 was
as under.
Cash 10,000 16,000
Bank 20,000 36,000
Stock 16,000 24,000
Debtors 24,000 30,000
Creditors 15,000 18,000
Furniture and fitting 18,000 18,000
During the year Mr. Sharuk withdrew Rs. 8,000 for his private purpose and he had used 2,000 worth of
stock also for his private purpose. On 1.10.04 he sold some of his house hold furniture for Rs. 2,000
and paid this amount into his Bank A/c of business.
Prepare a statement of profit & loss for the year ended 31.12.04 and a statement of affairs after taking
into consideration the following:
1. Provide interest on capital @ 5% p.a on opening balance and Interest on drawing ( only on cash
drawings) @10% p.a. (on an average of 6 months)
2. Depreciate plant and machinery @10 %(assuming addition were made on 1.10.04) and furniture at 5%
3. stock on 31.12.04 was overvalued by Rs. 2,000
4. Write off bad debts Rs. 2,000 and provide Reserve for Doubtful debts at 7.5% on debtors
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7. Mohan keeps his books under single entry system. Prepare: Statement of affair as an 31.12.00 &
31.12.01. Statement of profit/loss for the year ending 31.12.01. He gives the following information:
Particulars 31.12.01 31.12.00
Bank balance 4,500 Cr. 1,000 Dr
Stock 12,000 15,000
Debtors 9,300 10,400
Creditors 10,900 14,300
Loose tool 2,700 2,700
Outstanding salary 1,000 1,500
Prepaid insurance 300 200
Add information: 1. He has withdrawn from business Rs 2,500 of which he spent Rs. 2,000 for investing in securities
in the name of the business. 2. Provide depreciation at 20% on loose tools and 7% on furniture.
8. Premjeet a trader keeps his books by the single entry Method. His financial position on 1st April 06 and
31.3.07 were as follows:
Particulars 1.04.06 31.03.07
Cash in hand 1,500 1,600
Bank balance 1,200(Dr.) 1,800(Cr.)
Stock in trade 4,000 4,650
Debtors 3,400 3,800
Creditors 2,400 3,600
During the year, Sri Premjeet had withdrawn Rs. 75 per month for his household use.
From the above information ascertain his profit or loss for the year ended and also give his statement of affairs
as on 31.03.07 after taking into account the following further information:
1. Depreciate plant and machinery by 15% and furniture by 121/2% p.a(assume the addition on 30 th September, 2006)
2. Of the debtors Rs 100 are bad and to be written off.
3. Create a reserve for Discount on Debtors at 2% and a reserve for Doubtful debts at 5%.
4. Allow interest on capital at 5% and charge interest on Drawing at 6% p.a
9. Mr.Gopal maintained his books on single entry. The following statement of affairs had been Prepared as on 31.03.06
Liabilities Amt Asset Amt
Capital account 28,000 Leasehold land 2,075
Sundry creditors 3,170 Plant and Machinery 4,940
Bill payable 2,150 Stock in trade 9,673
Book debts 15,550
Cash in hand 1,082
33,320 33,320
st
On 31.03.07 it was learnt that he had introduced further capital of Rs 1,000 on 1 july, 06 and he drawn Rs 1,580 on various
dates during the year. It was also ascertained that the proprietor had taken Rs. 75 worth of goods for his own use.
Statement prepared on the same date disclosed that book debts were Rs. 14,640,
Creditors were Rs. 2,309 and Bills payable were Rs. 1,775. The stock was valued at Rs. 11,417 and cash in hand amounted
Rs. 917 on the same date.
Prepare: 1. Statement of profit for the year 06-07.
2. Statement of affairs as on 31.03.07 taking in to consideration the following:
5% Reserve to be created on Book debts.
5% Depreciation to be written off on plant and machinery.
Rs. 125 to be written off the lease.
Interest at 5% p.a to be provide on the capital.
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Partnership firm
10. Rose and Jack is partner in a firm sharing profit and losses in the proportion of 3:2.
They keep their books on the single entry system. On 31/03/06 the following statement of affairs was extracted from their
books:
Liabilities Amt Assets Amt
Capital Account: Plant and machinery 30,000
Rose 25,000 Stock 20,000
Jack 20,000 Sundry debtors 35,000
Loan – jack 25,000 Cash at bank 15,000
Sundry creditors 30,000
On 31/03/07 their asset and liabilities were :

Debtors Rs.40,000 , Creditors Rs.25,000 , plant and machinery Rs 50,000 (Addition to plant and machinery was on
01/07/07) stock Rs 30,000 , Bills receivable Rs.5,000 , cash at bank Rs.25,000 , Loan –jack Rs. 25,000.
st
Prepare a profit and loss statement for the year ended 31 march07 and a statement as at that date after taking into
consideration the following:
i. Plant and machinery is to be depreciated by 10% p.a
ii. Stock is to be reduced to Rs.25, 000
iii. A provision for Bad Debts to be raised at 5% on sundry debtors.
iv. Interest on loan is to be allowed at 6% p.a
v. During the period Rose and Jack draw Rs 5,000 and Rs3,00 respectively.
11. X and Y are carrying on business in partnership sharing profit and losses equally.
They were unable to maintain full and complete records. From the following available information, compute the profit of
the firm and prepare a balance sheet:
Particulars 1.04.06 31.03.07
Land and Building (cost) 50,000 50,000
Machinery (cost) 60,000 75,000
Furniture(cost) 20,000 25,000
Stock 12,000 30,000
Debtors 17,000 22,000
Bank 4,900 5,000
Cash 1,100 5,000
Prepaid insurance Premium 5,000 -
Bills Receivable - 8,000
Creditors 60,000 50,000
Bills payable 10,000 -
At the beginning of the year, the capitals of the partner were equal. During the year, X brought in Rs.15, 000 and Y has
withdrawn Rs.5, 000. An insurance policy matured during the year for Rs10, 000. A sum of Rs4, 000 has become bad out of
debtors. Provision has to be made for depreciation @ 10% on land & building, Machinery and furniture.
12. Naresh, Ramesh and Dinesh are partners in a firm sharing profit and losses in the ratio 5 :3 : 2 respectively. They kept
their books on the single entry system. .
st
On 31 march 06; the following statement of affair are extracted from their books:
Creditors 20,000 Plant 45,000
Ramesh –loan A/c 10,000 Land and building 30,000
Capital: Stock 20,000
Naresh 50,000 Debtors 15,000
Ramesh 40,000 Cash 8,000
Capital – Dinesh 2,000
1,20,000 1,20,000
On 31/03/07 the asset and liabilities were as follows.
Plant Rs 50,000 ; land and building Rs 30,000 ; Stock Rs 30,000 , Debtors Rs 25,000 ,
Creditors Rs 25,000 ,Cash Rs 15,000.
st
Prepare a profit and loss statement for the year ended 31 march 07 and a statement of affairs as at date after taking into
consideration the following additional information:
a) plant is to depreciated by 10% p.a(addition was as on 31/09/07)
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b) A Reserve for bad debts is to raised at 2.5%

c) Interest on partners capital is to be allowed at % p.a
d) During 06-07, Naresh and Ramesh withdrew from the business Rs 7,500 and Rs 5,000 respectively.
13. Ajay and Babita are in partnership sharing profit and losses in 2/3 and 1/3 respectively.
The books are kept on the single entry system and their statement of affairs dated 31 st March 06 showed their
position to be as follows:
Statement of affairs of Ajay and Babita as at 31st march 06
Capital Freehold building 6,000
Ajay 10,000 Plant and machinery 2,000
Babita 4,000 Office furniture 500
Creditors 5,000 Stock 4,000
Loan 1,000 Debtors 6,000
Bill payable 500 Bills receivable 1,500
Cash 500
20,500 20,500
On 31st March 07 the books disclosed the following facts:

Debtors Rs 8, 000. Creditors on open account Rs 8,500. Creditors for loan Rs 1,600 and cash Rs 800. The stock
was valued at Rs 4, 200 and bills receivable amounted Rs 1,400. An examination of the cash book showed that
during the year, Ajay had drawn on account of profit Rs 1,500 and Babita Rs 600. Ajay had ,in addition
withdrawn Rs 2,000 from his capital account on 30th September 06.
The partners agree to reduce the existing valuation of the plant and machinery by 5% and the office furniture by
10% by way of depreciation. Charge 5% by way of interest of interest on capital and 2% interest on drawing
Kindly draw:
1. A statement of profit ,dividing the balance between Ajay and Babita
2. A statement of affairs, showing the position as at 31st march 07.
14. The following is the balance sheet of M/s A, B, and C as on 31st march 06:

Sundry creditors 12,600 Cash in hand 1,200
Bills payable 8,4000 Cash at bank 11,400
Capital A/c Sundry debtors 25,200
A 45,000 Stock 20,100
B 30,000 Furniture 6,000
C 15,000 90,000 Plant and machinery 48,000
Current A/c Current A/c - C 1,560
A 1,440
B 1,020 2,460
1,13,460 1,13,460
A, B and C share profit and losses in the ration of 3:2:1 after charging interest on capital at 6% p.a. During 07,
the monthly drawing on the partners were: A-1,200 , B- 900, C-750.
On 31st march 07, the asset and liabilities of the firm were :
Cash in hand Rs. 900; stock Rs 30,600; Plant and machinery Rs 75,000; Bill payable Rs 7,200; sundry debtors Rs
28,800 , Furniture Rs 5,400 , sundry creditors Rs 10,200 and Bank overdraft Rs 18,000.
You are asked to: 1. Ascertain the profit or loss made by the firm as on 31/03/07
2. Show the Balance sheet of the firm 31.03.07
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15. The books of P and S are kept on the single entry system and the profit and losses are shared as to 2/3 and
1/3 respectively. Their capital were also in profit sharing proportion on 31stmarch 07.
The position of affair on 31st march 07 was as a follows:
Creditors Rs 6,250, loan Rs 1,500, Bills payable Rs 750 ,Building Rs7,000, Machinery and plant Rs 1,500, Furniture Rs 500 ,
stock Rs 3,500, sundry Debtors Rs7,000, Bills receivable Rs 550 , cash Rs 450.
At 31st march 08 the following figures were extracted :
Debtors Rs 6,500, Creditors Rs.5,000 , cash Rs 650 , Stock Rs4,350 , Bills Receivable Rs.400, Mortgage Rs2,600 ,
Drawing on account of profit : P- Rs600 , S- Rs200. P also withdraws Rs 1,000 Capital on 1stoct 07.Allow 10% per
annum depreciation both on machinery and furniture and 5% p.a interest on capital . Each partner is entitled to
st
salary of 500 p.a. Show the statement of affairs on 31 march 07 and on31st march 08 and statement of profit earned
during the year .
16. Priya and Supriya are equal partners, who maintain their books under single entry.
Their position as on 1st April 02 are as follows:
Capitals : Plant 1,60,000
Priya 2,00,000 Furniture 10,000
Supriya 1,20,000 Stock 67,600
Creditors 40,000 Debtors 97,300
Bills payable 12,400 Bills receivable 9,200
Cash 540
Bank 27,760
3,72,400 3,72,400
st
On 31 march 03 their statement of affairs was as follows :
Cash Rs.800 , Bank Rs 31,600 , Creditors Rs 42,400 , Stock Rs 73,400 , Debtors Rs 1,32,600, Bills payable Rs 1,200, Bills
receivable Rs 17,600 .
1. Plant and Furniture are to be depreciated by 10%
2. From the debtors Rs 4,600 are considered irrecoverable and R.D.D at 5% is to be created.
3. An amount of Rs1,600 is to be set aside from bills receivable.
4. Priya and supriya have withdrawn Rs20,000 and Rs 16,000 for their personal use.
5. Interest at 5% on the opening balances of partners capital is to be.
st
6. Prepare : statement of affairs as on 31 March 02 and statement of profit and loss for the year ending 31.03.03
17. A and B are partners in a firm sharing profits and losses as A 60% and B 40%.
The statement of affairs as at 31st March 06 was given below :
Creditors 20,000 Plant 40,000
A’s loan account 20,000 Land and building 20,000
Capital : Stock 30,000
A 50,000 Debtors 20,000
B 30,000 80,000 Cash 10,000
1,20,000 1,20,000
The partners keep their books by single Entry system.
On 31st March 2007 ; the position of the business was as follows :
Plant Rs 50,000 , Land and Building Rs 20,000 , Stock Rs 40,000 ,Debtors Rs 25,000;
Creditors Rs 25,000 ; cash Rs 20,000.
You are required to ascertain the amount of the firm’s Profit or loss for the year ended 31st March 07 and a
statement of affairs as on that date after taking into consideration the following
1. Depreciate plant @ 10% p.a including additions.
st
2. On 1 January,2007 ; A increased his loan by Rs 10,000 in order to pay for additional machinery which was installed on
the same day.
3. Interest on loan is to be allowed @6% p.a.
4. During the year A and B drew Rs 12,000 and Rs 9,000 respectively.
5. Provide interest on capital @ 5% p.a and interest on Drawing @10% p.a(on an average for 6M)
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18. A, B, and C were in partnership and towards the end of 2004 most of their books and records were
destroyed in a fire. The balance sheet as on 31st March 2003 was as follows:
Creditors 5,500 Cash 2,400
Capital Debtors 3,600
A 4,500 Stock 6,500
B 3,000 Machinery 1,440
C 1,500 Fixtures and Fittings 600
Current account Advance payment 35
A 145 Current Account
B 100 C 170
14,745 14,745
The partners drawing in 2004 have been proved at A Rs.1,400, B Rs.1,000 and C Rs650.
On 31st March, 2004, cash Rs 3,200 , Debtors Rs 4,025 ; Stock Rs 5,900 Advance payment Rs 25, and creditors Rs
6,040 . Machinery is to be depreciated by 10 % per annum and Fixtures and fittings at 7% 5% interest is to be
allowed on capitals. The partners share profits in proportions of ½, 1/3 and 1/6 respectively. Prepare a
statement showing net profit for the year 2004 and the division of the same between the partners, together
with the balance sheet as on 31st march 2004
39
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CH. 6. FINAL ACCOUNTS OF NPO NOT PROFIT ORGANISATION

1. From the following Receipts and payments account of Western Gymkhana for the year ended 31st March,
2007 and other information, prepare Income and Expenditure account for the year ended on and a Balance
Sheet as at that date.
Receipts Amount Payments Amount

To Balance B/F 1,040 By salaries 1300
T Subscriptions for: By Entertainment Expenses 645
2006 85 By Electric charges 234
2007 4000 By General Expenses 350
2008 103 By Rates and Taxes 120
To Donations 1200 By Investments 3000
To Entertainment Receipts 876 By Stationery and Printing 241
To Interest 81 By Expenses of 2006 600
To Entrance Fees 1000 By Fixed Deposit 1000
By Balance c/f 895
8385 8385
The Gymkhana has 450 members paying an annual subscription of Rs. 10/- each. Rs. 20/- is still in arrears towards
subscription for the year 2006 carry forward Rs. 20/- or rates paid in advance. Provide Rs. 200/- for salaries outstanding.
The Gymkhana owns Land and Building standing in the books of Rs. 15,000/- and Furniture standing at Rs. 1,150, on which
depreciation at 5% and 15% respectively is to be written off. Interest for 3 months at 12% p.a. is accrued on Investments.
st
The Capital Fund as on 1 April, 2006 was Rs. 16,695/- 50% of the Entrance Fees is to be capitalised. Donations are
capitalised.
2. From the following Receipts and Payments Account of a charitable Institution and other additional information supplied
to you, prepare an Income and Expenditure account for the year ended 31st March, 2007.
Receipts and Payments A/c For the year ended 31st March , 2007
To Balance b/d By Charities 8500
Cash in hand 150 By Salaries 2500
Cash in deposit A/c 2500 By Rent and Taxes 1300
Cash in Current A/c 1200 By Printing & Stationery 400
To Donations 4000 By Postage 150
To Subscriptions 2000 By Advertisements 350
To Endowment Fund 16000 By Purchase of Furniture 850
Receipts By Investments 16000
To Legacies 8000 By Advance against contract for extension of 2500
To Interest on Investments 8000 premises
To Interest on Deposits By Balance c/d
To Sale of Old Furniture 200 Cash in hand 1050
50 Cash in Deposit A/c 6000
Cash in Current A/c 2500
42100 42100
Adjustments:
1. Treat 50% of donations and legacies received as income.
2. Outstanding rent for the year Rs. 300.
3. Salaries unpaid fro the year amounted to Rs. 500.
4. Interest on investments due but not received Rs. 500.
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3. The following is the Receipts and Payments Account of Pensioners’ Association for the year ending 31 st
March, 2007.
Receipts & Payments A/c For the year ending 31st March, 2007.
To Balance: 1.4.2006 1500 By Travelling Expenses 2000
To Entrance Fees 375 By Stationery 1500
To Subscriptions: By salaries 3700
2005 – 06 200 By wages 8000
2006 – 07 15000 By repairs 1250
2007 – 08 700 By interest 470
To special subscription for Chairman’s Party 3250 By Balance 31.3.2007 4105
21025 21025
Stationery expenses include Rs. 300 for the year 2006 – 07. Similarly, salary for the month of March 2007 Rs.
700 is yet not paid. Subscription unpaid for the current year is Rs. 300. Special subscription for the Chairman’s
party Rs. 100 is yet outstanding.
From the above information, you are requested to make out an Income and Expenditure Account of the
Association for the year ending 31st March, 2007.
4. Receipts & Payments A/c for the year ended 31st March, 2007.
To Subscriptions 1100 By Salaries 1000
To Bar Receipts 600 By Printing & Stationery 100
To Interest on Securities 150 By Telephone 150
To Cricket Fees 250 By Gardening 120
To Tennis Fees 300 By Cricket 200
To Billiard Fees 250 By Insurance 100
To Life Members’ Fees 2000 By Tennis 300
To Donations 24800 By Billiards 400
To Entrance Fees 3000 By Bar Expenses 1200
To Tournament Fund 1000 Bu Investments 5000
By Land and Building 20000
By Tournament Expenses 1000
By Furniture 1200
By sports Material 1000
By Current A/c Balance 1000
By Cash in hand 680
33450 33450
Additional Information
1. Subscriptions outstanding for the year Rs. 550
2. Subscriptions of Rs. 100 were received in advance.
3. Salaries unpaid fro 2007 amounted to Rs. 200
4. Insurance prepaid Rs. 50
5. Half of the entrance fees received was to be capitalised.
6. Donations and Life members’ fees were to be capitalised.
7. Interest due but not received Rs. 100.
8. Sports Materials were valued at Rs. 800
9. Depreciate furniture by 5% and land and building by 2 ½ %.
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10. From the above information, prepare an Income and Expenditure account for the year ended 31 March, 2007.
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5. From the following information, prepare Income and Expenditure account for the year ended 31st
March, 2008 and a Balance Sheet as on that date.

To Cash in hand (1.4.2007) 1750 By Bank Overdraft 2500
To Subscriptions By Salaries 5300
2006 – 07 150 By Furniture 2000
2007 – 08 14100 By Investments in Securities 4000
2008 – 09 75 By Printing and Stationery 800
To proceeds from Drama 2500 By Cost of Staging drama 1500
To Entrance Fees 800 By Sundry Expenses 1300
To Interest on Securities 500 By Cash at Bank 2500
To sale of Old Furniture 200 By Cash in Hand 175
20075 20075
1. The society has 1500 members, each paying an annual subscription of Rs. 12.
2. Subscriptions of Rs. 100 pertaining to the year 2006 – 07 are still in arrears.
st st
3. Value of Stationery at hand on 31 March, 2007 was Rs. 200 and on 31 March, 2008 was Rs. 150.
4. Entrance fees are to be treated as Capital receipts.
5. Salary of Rs. 700 for the current year is unpaid.
6. Balances as on 31st March, 2007: Investment Rs. 4500, Building Rs. 25000, Furniture Rs. 200.
7. Depreciate building by 2 ½ % and furniture by 5%.
6. Dr. Narendra commenced practice in the month of April 2007. He prepared the following Receipts &
Payments Account for the year ended 31st March, 2008.
Receipts and Payments A/c For the year ended 31st March, 2008
To Cash 10000 By Furniture 1500
To Visits 7000 By Equipment 2500
To Sundry Receipts 400 By Drugs 2000
By Salaries 1000
By Rent 500
By conveyance 700
By Stationery 100
By Lighting 125
By periodicals 100
By Drawings 4375
By Balance c/d 4500
17400 17400
1. Rs 200 were to be received on account of visits.
2. Unpaid Salaries Rs. 200
3. 60% of conveyance is for private purposes.
4. Value of drugs on hand was estimated at Rs. 1,000.
5. Depreciate furniture and equipment by 10%
6. Prepare Income and Expenditure account and balance sheet.
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7. From the following information, prepare Income and Expenditure account for the year ended 31st march,
2008 and a Balance Sheet as on that date.
To Balance b/d 3500 By Salaries
To donations 1500 2006 – 07 250
To Subscriptions: 2007 – 08 2250
2006 – 07 250 By Rent 4300
2007 – 08 3500 By Postage 300
2008 – 09 750 By Printing & Stationery 3000
To Entrance Fees 1000 By Balance c/d 2400
To Interest on Investments 2000
12500 12500
1. Salaries unpaid Rs. 250. Printing unpaid includes Rs. 600.

2. Printing paid includes Rs. 500 pertaining to the previous year.
3. Subscriptions outstanding Rs. 650
4. Balance on 1st April, 2007: Furniture – Rs. 6000, Investments – Rs. 50,000, Buildings – Rs. 20,000.
8. The following is the Receipts and payments account of the Smart club in respect of the year ending 31st
March, 2007:
Receipts and Payments account for the year ended 31st March, 2007
To opening Balance 2050 By Salaries 4160
To Subscriptions: By Printing & Stationery 800
2005 – 06 80 By Rates and Taxes 1200
2006 – 07 4220 By Telephone 200
2007 – 08 160 By Purchase of 4% Govt. Securities at par on 31st 2500
To Sports Meeting 3100 march 2007.
Surplus By sundry Expenses 1850
To Interest on 2000 By Balance at close 900
Investments
11610 11610
In addition to the information contained in the above account, the following additional facts are ascertained.
1. There are 450 members each paying an annual subscription of Rs. 10, Rs. 90 being in arrears for 2006 at the
beginning of 2007.
2. Stock of stationery at 31st March, 2006, was Rs. 100/- and at 31st March, 2007 Rs. 180.
3. At 31st March, 2007 the rates were prepaid up to the following 30th June, the yearly charge being Rs. 1,200/-
A quarter’s charge for telephone Rs. 70/- is outstanding. Sundry expenses outstanding on 31st March, 2006
were Rs. 140/-
4. On 31st March, 2006; the Building stood in the books at Rs. 20,000 and it is required to write of depreciation
at 5% per annum. Investments at 31st March were Rs. 40,000.
You are required to prepare an Income and Expenditure account for the year ended 31 st March, 2007 and
Balance sheet as at that date.
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9. From the following information relating to Thane Cricket Association, prepare the income & Expenditure
account for the year ended 31st March, 2008 and the Balance sheet at that date. The following is the
abstract from the Cash book of the year.
To Members’ subscriptions 1000 By Tournaments Expenses 1800
To Members’ admission Fees 300 By Maintenance charges of ground 1500
To Miscellaneous Receipts 400 By Rates and Insurance 600
To Hire of Ground 1000 By Telephone Charges 150
To subscription Fee for Tournaments 3000 By printing and Stationery 300
To Cash drawn from Bank 6000 By General charges 500
To Donations for instituting a prize. 10000 By Honorarium to Secretary 1300
By Fixed Deposit in Bank 6000
By Investment 9550
By Sports equipment 2000
By payment into Bank 7000
30700 30700
Assets on 1st April, 2007 were: Sports and Equipments Rs. 3000; Cash at bank Rs. 6000; Prepaid Insurance
Rs. 200; Subscription due to the association Rs. 600;
Liabilities on 1s April, 2007 were
Printing and Stationery Rs. 100; Honorarium to Secretary Rs. 100;
You are furnished the following further information.
Donations of Rs. 10,000 should be kept in a separate account. Subscription received for the year 2008 – 09 are
Rs. 1,000/- while subscriptions outstanding on 31st March, 2008 was Rs. 400/-
Investments are of the face value of Rs. 10, 000/ - and were purchased on 1st October. 2007. Interest thereon at
12% per annum has accrued due. Write off 50% of Sports Equipment, Prepaid Insurance amounts to Rs. 250/-
and the Secretary is to be given a bonus of Rs. 500/-.
10. From the following Receipts and payments account of a Credit Club and the subjoined information, prepare Income
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and Expenditure Account for the year ended 31 March, 2007. Receipts and payments A/c
To Balance – Cash 352 By Crockery Purchases 265
To Current A/c With Bank 2738 By Maintenance 682
To Foxed Deposit at 6% 3000 By Match Expenses 1324
To Membership Subscription (Including Rs. 600 for 2006) 4000 By Salaries 1100
To Entrance Fees 275 By conveyance 82
To Donation 501 By Upkeep of Lawn 424
To Interest on Fixed Deposit 90 By Postage Stamps 105
To Tournament Fund 2000 By Purchase of Cricket Goods 972
To Sale of Crockery (Book value Rs. 120) 200 By Sundries
By investments 200
By Tournaments Expenses 570
1880
By Balance :
Cash in Hand 220
Current A/c 2332
By Fixed Deposit 3000
13156 13156
Additional Information:
1. Monthly Salary is Rs. 100.
st st
2. The value of unused postage stamps is as follows: 31 March, 2006 Rs. 75; 31 March, 2007 Rs. 90.
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3. Stocks of Cricket Equipment are as follows: 31 March, 2006 Rs. 321; 31 March, 2007 Rs. 280.
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4. Arrears of Membership Subscriptions: 31 March, 2006 Rs. 660; 31 March, 2007 Rs. 800.
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11. The following is the Receipts and payments Account of Madras Junior Club for the year ended 31st March,
2007.
To Balance at bank of 1.4.2006 1020 By Salaries 4160
To Entrance Fees 1000 By Rent 1860
To subscriptions: By Electricity 1280
2006 250 By Postage and Stationery 330
2007 3050 By Insurance Premium 180
2008 350 By General Expenses 460
To Sale of Investments 7500 By Part Payment on account of 4500
To Loan Taken from Krishnaswamy on 2000 new furniture.
1.10.2006 at 10% interest p.a. By Balance at Bank. 2400
15170 15170
The following information is also available
Particulars 31.3.2006 31.3.2007
Rent Due Rs. 180 Rs. 360
Electricity Rs. 640 Rs. 200
Subscriptions due Rs. 250 Rs. 400
Insurance paid in advance Rs. 50 Rs. 70
The cost of the investments sold was Rs. 5000. The surplus is to be treated as income. Furniture was valued at
Rs. 3000 on 31st March, 2006. On 30th September, 2006; he club purchased additional new furniture at a cost of
Rs. 5,200. Depreciation at the rate of 10% is to be provided on all furniture. The entrance fees are not be
capitalised. Prepare an Income and Expenditure account for the year ended 31st March, 2007.
12. From the following information, prepare Income and Expenditure account for the year ended 31st March,
2006 – 07 150 By Furniture 2000
20100 20100
3. Value of Stationery at hand on 31st March, 2007 was Rs. 100 and on 31st March, 2008 was Rs. 150.
4. 50% of Entrance Fees are to be treated as Capital receipts.
7. Depreciate building by 10 % and furniture by 5%.
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2006 – 07 150 By Furniture 2500
20000 20000

2006 – 07 150 By Furniture 1500
16000 16000
7. Depreciate building by 7 ½ % and furniture by 10%.
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2006 – 07 150 By Furniture 2500
10000 10000
2006 – 07 50 By Furniture 2500
10000 10000
1. The society has 290 members, each paying an annual subscription of Rs. 15.5.
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17. The following is he Receipts and payments account of Charitable Hospital for the year ending 31st March,
2007.
Receipts Amount Rs. Payments Amount Rs.
Opening Balance: Furniture 50
Cash 625 Salaries 11500
Bank 3625 Surgical Instruments 250
Govt. Securities 90000 Diet Expenses 1175
Receipts: Surgical & Dispensary 1750
Subscription 12500 Rent & Rates 500
Interest 4500 Insurance 350
Donations 5750 Office Expenses 600
Sundry Receipts 325 Travelling Expenses paid to 750
Doctors
Sundry Expenses 300
Medicines 750
Closing Balance:
Cash 725
Bank 8625
Govt. Securities 90000
117325 117325
You are asked to prepare the Income & Expenditure Account for the year ended on 31st March, 2007 and the
Balance Sheet as on that date after taking into account the following information.
1. The assets on 1st April, 2006 were as follows:
Furniture Rs. 1,000; Land Rs. 25,000; Building Rs. 75,000; Surgical instruments Rs. 1,750.
2. Write off depreciation at 2 ½ % on Building; 6% on Furniture and 20% on surgical instruments. The Govt.
Securities were of the face value of Rs. 1,00,000 and represents the investments of the Endowment
fund.
3. The subscription received included Rs. 5,000 for the previous years, whereas the outstanding
subscriptions for the current year amounted to Rs. 3,500. Salaries of staff include Rs. 500 for the last
year and salaries Rs. 750 is outstanding for the current year.
4. Interest received included Rs. 1,000 for the year 2005 and Rs. 1,150 are outstanding for the current
year.
18. From the following balance Sheet and Receipts and Payments account of Nanavati Hospital, Bombay,
prepare Income and Expenditure account for the year ending on 31st March, 2007 and the Balance sheet
as on that date.
Balance Sheet as on 1st April, 2006
Salaries Unpaid 2000 Cash 11000
Medicines Bill Unpaid 1500 Securities 150000
Capital Fund 383000 Furniture 4000
Land and Buildings 200000
Equipments 15000
Subscription Due 5000
Interest Accrued 1500
386500 386500
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Receipts and Payment Account

Cash 11000 Furniture purchased on 1-4-2006 1900
To subscription 30000 Salaries including Rs. 2000/- of last year. 2300
Interest (Rs. 1500/- last year) 5000 Equipment purchased on 1-4-06 7500
Donations(Revenue) 4300 Dispensary expenses 4700
Life Membership Fee 10000 Medicines 5500
Taxes 500
Cash 17200
60300 60300
1. Capitalise the amount of life membership fees.
2. Interest earned but not received Rs. 1,000/-
3. Subscription include Rs.1000/- for 2008 and outstanding subscription for 31st march, 2007 is 4,200
4. Unpaid salary for the year 2007 is Rs. 2500/-
5. Provide for depreciation on furniture 10%, Land and Building 5%, Equipments 20%.
6. Prepaid taxes Rs. 100/-
19. The Balance Sheet as at 1st April, 2006 and the Receipts and Payments account for the year ended 31st
March, 2007 of the Young Sports Club, Dadar are as under.
Young Sports Club – Balance Sheet as on 1st April, 2006
Capital Fund 30000 Building 9500
Outstanding Expenses: Furniture 5000
Salaries 400 Entrance Fee receivable 200
Printing 300 700 Subscriptions Fee receivable 800
Income and Expenditure A/c 23300 Sports Material & Equipments 28000
Cash in Hand 4200
Cash at Bank 6300
54000 54000
Young Sports Club, Dadar, Receipts and Payments A/c for the year ending 31st March, 2007
To Opening Balance 4200 By Cricket Tournament Expenditure 16460
Cash in Hand 6300 10500 By Printing & Stationery 860
To Subscriptions 18000 By Salaries & Honorarium 1600
To Entrance Fees 4000 By Repairs to Building 500
To Receipts from Cricket Tournament 14520 By Newspapers and Periodicals 470
To Interest on Bank A/c 300 By Advertising Expenses 300
By Insurance 400
By Investments 15000
By Closing Balance
Cash in Hand 5280
Cash in Bank 6450 11730
47320 47320
You are also given the following additional information.
1. Subscriptions of the amount of Rs. 800 were receivable as on 31st March, 2007
2. Subscriptions Rs. 200 and Entrance Fees Rs. 300 were received in advance.
3. Outstanding Expenses were: Salaries and Honorarium Rs. 100; Insurance Rs. 50; Cricket Tournament
Expenses Rs. 250.
You are required to prepare Income & Expenditure account for the year ending 31st March, 2007 and a Balance
Sheet as on that date.
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20. OMTEX sports club, Presented their Receipts and payments account for the year ended 31st March,
2006 are as follows.
Receipts and Payments account for the year ended 31st March, 2006
To cash opening Balance as on 1-4-2005 5000 By Bank Overdraft as on 1-4- 5000
To Subscriptions: 2005.
2004– 05 400 By Prize Distribution Exp. 2000
2005– 06 31000 By Investments 7000
2006– 07 1900 By Furniture (on 1-4-2005) 10160
To Locker Rent 1000 By Salaries 6200
To Entrance Fees 1400 By Fax Charges 540
To Interest on Investments 1000 By Printing 400
To Donations for Prize Distribution. 5000 By postage 1200
To Sale of Furniture (Cost Price Rs. 160 on 1- 200 By Stationery 700
4-2005) 3100 By Telephone Charges 700
To Legacies. By Municipal Taxes 600
By Rent 25800
By Expenses on Annual get 2000
together
By balance C/d
Cash in hand 300
Cash at bank 10400
50000 50000
In addition to the information contained in the above account, the following additional facts are ascertained.
1. The stock of stationery on 31-3-2005 and 31-3-2006 amounted to Rs. 100 and Rs. 200 respectively.
2. Outstanding Salaries on 31-3-2006 were Rs. 800.
3. Half of entrance Fees and full amount of Legacies are to be capitalized.
4. The Club had 320 members paying an annual subscription of Rs. 100 per member.
5. On 31-3-2005, the assets and liabilities were as follows.
Premises Rs. 50,000
Investments Rs. 12,000
Furniture Rs. 6,000
Prize Distribution Fund Rs. 8,500
Capital Fund Rs. 60,000
6. Depreciation of Premises is to be provided @ 10% p.a. and on Furniture @ 5% p.a. Prepare Income and
Expenditure account for the year ended 31 – 3 – 2006 and a balance sheet as on that date.
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21. From the showing Receipts & Payments account for the year ended 31-3-2006. You are required to
prepare an Income and Expenditure account for the year ended 31st March, 2006 & Balance sheet as on
that date. (16 marks)
Receipts and payments Account for the year ended 31st March, 2006
To Balance b/d 4160 By Salaries 5500
To Subscriptions By Entertainment Expenses 2500
2005 – 06 16000 By Lighting 1080
2006 – 07 412 By General Expenses 1536
To Donation 5000 By Taxes 500
To Receipts From Entertainment 3644 By Investments 12000
To Interest 324 By Expenses of 2004 – 06 2400
To Entrance Fees 4500 By Printing & Stationery 944
By Fixed Deposit 4000
By Balance C/d 3580
34040 34040
Adjustments
1. There are 450 members paying an annual subscription of Rs. 40 each.
2. The salaries outstanding on 31 – 3 – 2006 was Rs. 1000
3. Land and Building stood in the book at Rs. 60,000 and Furniture at Rs. 4,600 on 1st April 2005 write off
depreciation at 2% on land and building and at 10% on furniture. Capital fund as on 1st April 2005 was Rs.
66,360.
4. Interest on Investments @ 5% p.a. has accrued for 3 months.
5. 50% of the entrance fees is to be capitalized.
22. The following is the Receipts and Payments Account of Youngsters Club for the year ending 31st
December, 2001. (16 marks)
To Bal. b/d – Cash 2150 By Salaries 4160
To Subscriptions By Printing & Stationery 800
2000 80 By Rates & Taxes 1200
2001 4220 By Television Charges 200
2002 160 4460 By Investment in Govt. Securities. 2500
To Sport meeting surplus 3250 By Sundry Expenses 1850
To interest on investments 2000 By Balance C/d – Cash. 1150
11860 11860
Adjustments
1. There are 450 members paying an annual subscription of Rs. 10 each. Rs. 90 being in arrears for the year 2000, at the
beginning of the year 2001.
2. Stock of stationery on 31 – 12 – 2000 was Rs. 100 and that of 31 – 12 – 2001 is Rs. 180.
3. On 31 – 12 – 2001 – prepaid rates & taxes are Rs. 300 upto 31 – 3 – 2002. Yearly charges Rs. 1,200. Outstanding
television charges are Rs. 70.
4. On 31 – 12 – 2000 – outstanding sundry expenses are Rs. 140.
5. On 31 – 12 – 2000 book value of building was Rs. 20,000 & it is to be depreciated @ 5% p.a. & Investments were
valued at Rs. 40,000 on the above date.
6. Prepare (1) Balance sheet as on 31 – 12 – 2000. (2) Balance sheet as on 31 – 12 – 2001. (3) Income and Expenditure
account for the year ending 31 – 12 – 2001.
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23. From the following information prepare Income and Expenditure account for the year ended 31 March, 2008 of
Youth Association and a balance sheet as on that date. (16 marks)

To Bal. b/d – 3500 By Salaries
To Subscriptions 2007 250
2006 - 07 250 2008 2250 2500
2007 - 08 3500 By Rent 4300
2008 - 09 750 4500 By Postage 300
To Entrance Fees 1600 By Printing and Stationary 3000
To interest on investments 2900 By Balance C/d 2400
12500 12500
Adjustments
1. Salaries unpaid Rs. 250, printing unpaid includes Rs. 600 for the year.
2. Printing paid includes Rs. 500 pertaining to the previous year.
3. Subscriptions outstanding Rs. 650 for the year.
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4. Balances on 1 April 2007, Furniture – Rs. 6000, Investment – Rs. 50,000, Building - Rs. 2000
5. Provide 5% depreciation on furniture and building.
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24. From the following receipts and payments account for the year ended 31 March, 2006 and additional information
st
of Mumbai Sports Club, Mumbai prepare Income and Expenditure account for the year ended 31 March, 2006 and
a Balance sheet as on that date. (16 marks)

To Opening Cash Balance 8600 By Sports Materials Purchased 10000
To Donations 12000 By Wages 3000
To Subscriptions 15600 By insurance 500
To Locker Rent 1550 By Stationery Expenses 800
To Entrance Fees 1300 By Furniture 2900
To Interest on Investments 600 By Rent 1000
To sale of Old Newspapers 200 By Investments 5000
To Hire of Ground 4000 By Newspapers and Periodicals 800
By playground Expenses 1700
By Interest 700
By Salaries 3200
By Postage 450
By Printings 480
By Repairs of Sports Material 820
By Expenses on Matches 850
By Sundry Expenses 1000
By closing Cash balance 10650
43,850 43,850
Adjustments
1. The assets and liabilities on 1-4-2005 were as follows.
a. Land and buildings Rs. 300000
b. Furniture Rs. 10000
c. Playground Rs. 25000
d. Sports Material Rs. 22000
e. Investments Rs. 8000
f. Capital fund Rs. 373900
2. Subscriptions received include Rs. 300 for 2004 – 05, Rs. 800 for 2006 – 07 whereas subscription s of Rs. 2500 are
outstanding for 2005 – 06.
3. Half of the donations and full amount of entrance fees are to be capitalised.
4. Outstanding salaries amounted to Rs. 650
5. Depreciate Land and Building @ 2.5%, Furniture @ 7.5% and Sports material @ 12.5% on the opening balance.
52
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25. The following is the Receipts and payments Account of Modern Sports Club, Satara, for the year ended on 31
March, 2007.
st
Receipts and Payments Account for the year ended on 31 March, 2007.
To Balance b/d 1490 By Upkeep of Garden 9500
To Subscription 13600 By wages 2360
To Entrance Fees 520 By Salary 7000
To Interest on Investments 840 By Ground rent 210
To Proceeds from Matches 5180 By Printing 930
To Life member fees 5000 By Postage 190
By Bank balance 5000
By Balance c/d 1440
26630 26630
Adjustments:
1. Ledge balances of the club as on 31.3.2006 were
Capital fund Rs. 66,430, Club house and ground Rs. 40,000, Investments Rs. 48,640, furniture Rs. 6,400,
Outstanding subscription Rs. 600.
2. Printing includes Rs. 200, Upkeep of garden includes Rs. 500 and Subscription includes Rs. 400 for the previous year.
3. Entrance fees are to be capitalized.
4. The Rotary club of Satara owed Rs. 210 for the use of club hall.
5. Provide 10% depreciation on furniture.
6. Subscriptions outstanding for the current year were Rs. 1,000.
Prepare _
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Income and Expenditure account for the year ended 31 March, 2007 and Balance Sheet as on that date.
HOME WORK
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26. Dr. Subhash Raje started practice as a medical practitioner on 1 April, 2007. He gives you the Receipts & Payments
Accounts for the year 2007 – 08 and the adjustments to be made. Prepare his Income and Expenditure Account and
Balance sheet for 2007 -08.
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Receipts and payments account for the year ended 31 March, 2008.
To Cash Introduced 107500 By Furniture 50000
To Visits 84000 By Equipment 40000
To Receipts From Dispensary 64000 By Drugs 35000
To Sundry Receipts 12000 By Salary 24000
By Rent 6000
By Conveyances 18000
By Stationery 5600
By Lighting 10000
By Journals 1200
By Drawings 37700
By Balance c/f 40000
267500 267500
Adjustments:
1. Receipts in arrears are: Visits Rs. 11,500 and Dispensary Rs. 9,000.
2. The outstanding salaries are Rs. 1,800 and the outstanding expenses on drugs are also Rs. 3,000.
3. 40% of the amount spent on conveyance was for domestic use.
4. Stock of drugs in hand at the close of the year was worth Rs. 4,200.
5. Depreciate furniture at 5% p.a. and equipments at 10% p.a.
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6. Furniture and equipment purchased on 1 April 2007.
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27. The following is the Receipts and Payments A/c of the Saraswati Vidya Mandir, Latur.
Receipts and Payments Account for 2007 – 08.
To Cash Balance b/f 32,000 By Furniture (31-12-2007) 80000
To Admission Fees 68,000 By Salaries 124000
To Tuition Fees 46,000 By Office Expenses 42000
To Donations 90,000 By Sports Material 18000
To Govt. Grant 1,00.000 By Printing & Stationery 17000
To Life Members’ Fees 62,000 By Fixed Deposit(@10% on 1.10.2008) 100000
To Term Fees 24,000 By Cash Balance c/f 41000
To Examination Fees 30,000
452000 452000
st
1. The assets of the society on 1 April, 2007 were:
Building Rs. 50,000 Furniture Rs. 47,000 Library Rs. 40,000 Laboratory Rs. 48,000
2. The tuition fees receivable from students for 2007 – 08 is Rs. 12,000.
3. Furniture and Building are to be depreciated at 10% p.a. each.
4. The 50% of donations and entire amount of Life Members’ Fees are to be capitalized.
5. Sports material is valued at Rs. 42,000 on 31-03-08.
st
6. The capital fund on 1 April, 2007 was Rs. 2,17,000.
st
Prepare Income and Expenditure Account for the year ended 31 March, 2004 and a Balance sheet as on that date.
28. From the following Receipts and Payments Account of Ajanta Club, Ratnagiri and additional information, prepare an
st
Income and Expenditure Account for the year ended 31 March, 2008 and Balance Sheet as on that date.
st
Receipts and Payments A/c for the year ended 31 March, 08
To Balance b/d By Balance b/d
Cash 30000 Bank 25000
To Receipts from entertainment programme 84000 By Stationery A/c 11500
To Entrance Fees By Furniture A/c 40000
To Interest on Investments 26000 By Investments A/c 60000
To Charity 36000 By Salaries A/c 45000
To Subscriptions 12000 By Expenses of entertainment programme 50000
2006 – 07 By Balance c/d
2007 – 08 12100 Cash Balance
2008 – 09 40300 Bank Balance 8500
11600 12000
252000 252000
Additional Information.
1. Capitalize 50% of the entrance fees.

2. Outstanding salary is Rs. 8,700 while outstanding interest on investment is Rs. 1500.
3. There are 500 members of the club, each of them is paying an annual subscription of Rs. 100.
4. Opening stock of stationery was Rs. 1,800 and closing stock of stationery is Rs. 1900.
st
5. The assets of the Ajanta club on 1 April 2007 were Building: Rs. 1,50,000. Furniture Rs. 50,000 and Equipment Rs.
st st
30,000. The capital Fund as on 1 April 2007 was Rs. 2,48,900. New Furniture was purchased on 1 October, 2007.
6. Provide depreciation on Building and Furniture @10% and 5% respectively. Equipment valued at Rs. 26,000 at the
end of the accounting year 2007 – 08.
Note: In the absence of any information to the contrary, entrance fees should be treated as revenue receipt.
If any specific instruction is given in the problem, entrance fees should be treated accordingly.
54
TH
st
29. Girgaon Library showed the following position on 1 April, 2007.
st
Balance Sheet as on 1 April, 2007
Rs. Rs.
Capital Fund 267650 Furniture 82500
Outstanding Liability for Expenses 2350 Books 120000
Investments 45000
Cash at Bank 22500
270000 270000
st
Receipts and Payments Account for the year ended 31 March, 2008
To Opening Balance 22500 By Electric Charges 2360
To Entrance Fes 41500 By Postage & Stationery 1250
To subscriptions 50000 By Telephone Charges 6250
To Sale Proceeds of old papers 1275 By Purchase of Books 33000
To Hire of Lecture Hall 21000 By Expenses of 2006 – 07 2350
To interest on investments 3400 By Rent 14400
By Investments 42000
By closing Balance 23300
14765
139675 139675
st
You are asked to prepare an Income and Expenditure A/c of the Library for the year ended 31 March, 2008 and a Balance
Sheet as on that date after making the following adjustments.
1. Subscriptions include Rs. 12500 received in advance and subscriptions of Rs. 27500 in respect of current year are
still receivable.
st
2. Outstanding Liabilities on 31 March, 2008 were Rent Rs. 4,000 and Salaries Rs. 3,000.
3. Books, excluding any additions during the year, are to be depreciated at 10% p.a.
4. 50% of the Entrance Fees are to be capitalized.
30. From the following Balance Sheet and Receipts and Payments Account of Ashwini Hospital, Mumbai, prepare an
Income and Expenditure Account for 2007 – 08 and a Balance Sheet as on 31-03-2008.
Balance Sheet as on 1-04-2007

Salaries unpaid 12000 Cash 41000
Medicines bill unpaid 11500 Securities 150000
Capital fund 446000 Furniture 24000
Land and buildings
200000
Equipment 45000
Subscriptions due 5000
Interest accrued 4500
469500 469500
st
Receipts and payments A/c for the year ended 31 March, 08

To Cash Balance b/f 41000 By Furniture 11900
To Subscriptions 60000 (Purchased on 1-4-07)
To interest 15000 By Salaries 48000
(including Rs. 4500 of last year) (Including Rs. 12000 of last year)
To Donations 14300 By Equipment 7500
(Revenue) (purchased on 1-4-07)
To Life Membership Fees 40000 By Dispensary Expenses 24700
By Medicines 45500
By Taxes 4500
By Cash Balance c/f 28200
170300 170300
Adjustments: Capitalize the entire amount of life membership fees. Interest earned but not received is Rs. 2,000.
Subscriptions for 2007 – 08 are Rs. 4,200. Unpaid salary for the year 2007 – 08 is Rs. 12,500. Provide for depreciation on
furniture at 10%, on land and buildings at 5% and on equipment at20%. Prepaid taxes are Rs. 400.
55
TH
31. The following is the Receipts and Payments Account of the Shree Sports Club, Ahmednagar.
st
Receipts and payments account for the year ended 31 March, 2008.
To balance b/d By Salaries 8500
Cash 7000 By Badminton court (1.4.07) 22000
To subscriptions 20000 By Insurance 3000
To interest on investments 3000 By Furniture (1.4.07) 17000
To Rent 6000 By Sundry Expenses 6000
To Badminton Fees 12000 By Tournament Expenses 8000
To Tournament Fees 19000 By Printing Charges 1500
To Admission Fees 22000 By Newspapers & Magazines 600
To Donations. 45000 By 12% Investments 50000
By Balance c/d
Cash 17400
134000 134000
st
On 31 March, 2007, the club owned a building worth Rs. 1,50,000. The capital fund on the same date was Rs. 1,57,000.
st
Prepare and Income and Expenditure account for the year ended 31 March, 2008 and a Balance sheet as on that date
after considering the following additional information.
1. Subscriptions received for 2008-09 Rs. 1500; subscriptions still due for 2007 – 08: Rs 4,000.
st th
2. Outstanding salaries on 31 March, 2008: Rs. 3000 and Insurance premium is paid for one year ending 30 June,
2008.
3. Depreciation on building, badminton court and furniture @10%, p.a. each.
4. Capitalize 70% of the admission fees.
5. Donations are received for endowment fund.
st
6. Investments purchased on 1 July 2007.
32. From the following Receipts and payments Account of South Indian Cultural Society, Matunga, Mumbai, prepare
st
Income and Expenditure Account for the year ended 31 March 2008 and a Balance Sheet as on that date:
To Opening Cash in Hand 7420 By Opening Bank Overdraft 92700
To Subscriptions By Investments in Securities 53000
2006 – 07 7300 By Purchase of Furniture 41450
2007 – 08 185500 By Salaries 36200
2008 - 09 5000 By Printing & Stationery 1890
To Proceeds from Dramas 70000 By Cost of Staging Dramas 21710
To Interest on Securities 4200 By Closing Balances
To Miscellaneous Income 7500 Cash in hand 55550
3,16,920 3,16,920
1. The society has 1000 members each paying an annual subscription of Rs. 200. Subscriptions of Rs. 9,000 are still in
st
arrears in respect of 2006 – 07. Capital fund as on 1 April, 2007 was 1,22,950.
2. Stock of stationery amounted to Rs. 1,125 on 31-3-2007 and Rs. 2,087 on 31-3-2008.
3. Half the entrance fees are to be capitalized.
4. Salary for the year 2007 – 08 Rs. 1550 is outstanding.
5. Outstanding Sundry Expenses on 31-3-2007 had amounted to Rs. 1320.
6. Sundry expenses paid in 2006-07 included telephone charges Rs. 1125 relating to 2007-08.
7. On 31-3-2007, the society owned premises worth Rs. 124500. Billiard Table worth Rs. 40,000 and investments
worth Rs. 26,500.
8. Both the premises and the Billiards Table at the end of the year are to be depreciated at 10% on the opening
balances.
56
TH
CH: - FINAL ACCOUNTS OF PARTNERSHIP FIRM

1. From the following Trial Balance of M/s Sonia and Sufi, you are required to prepare Trading Profit and
Loss Account for the year ended 31st December, 2004 and the Balance sheet as on that date.
Trial Balance as on 31.12.2004
Particulars Debit (Rs.) Credit (Rs.)
Sonia’S Capital 1, 80, 000
Sufi’S Capital 1, 50, 000
Sonia’s Drawing 14, 450
Sufi’s Drawing 10, 000
Stock on 1 – 1 – 2004 2, 00, 000
Bills Receivable 25, 000
Purchases 2, 75, 000
Sales 4, 00, 000
Bills Payable 60, 000
Return In ward 5, 000
Return Outward 4, 500
Plant and Machinery 1, 00, 000
Loose Tools 25, 000
Patents 25, 000
Sundry Debtors 1, 25, 000
Sundry Creditors 1, 40, 000
Cash at Bank 77, 550
Wages 19, 000 Write Answers. G.P. =
Salaries 17, 500
N.P. =
Rent and Taxes 7, 500
Insurance 3, 000 P.C.A. Balance =
Printing and Stationery 2, 000
3, 500 Tally Amount =
Power and Fuel
9, 34, 500 9, 34, 500
Adjustments:
1. Stock as on 31st December, 1978 Rs. 1, 30,000 and its market value were Rs. 1, 40,000.
2. Write off Rs. 1000 for bad & Provide for Bad and Doubtful debts at 5% on Sundry Debtors.
3. Goods worth Rs. 1000 were distributed as free samples.
4. Prepaid Insurance Rs. 750.
5. Depreciate Plant and Machinery by 10% p.a. and Patent by 15% p.a.
6. Outstanding expenses
 Salaries Rs. 2,500
 Wages Rs. 1,000
 Printing and Stationery Rs. 500.
7. Uninsured goods worth Rs 1200 were lost by fire.
57
TH
2. Misha and Latha are partners sharing profits and losses in the ratio of 2 : 1. From the
following Trial Balance prepare Trading and Profit and loss account for the year ending 31 st
December, 2004.
st
Stock (1 January) 10, 000
Sundry Debtors 28, 000
Bills payable 10, 101
Purchases 40, 000
Wages 8, 500
Returns Outward 2, 500
Write Answers. G.P. =
Salaries 2, 700
Office Expenses 2, 446 N.P. =
Insurance 1, 300
P.C.A. Balance =
Plant & Machinery 30, 000
Sundry Creditors 21, 500 Tally Amount =
Rent 1, 800
Sales 60, 000
Reserve for Doubtful Debts 400
Travelling Expenses 1, 400
Returns Inward 3, 500
Land and Building 44, 800
Bank 6, 655
MiSha’S Capital 60, 000
latha’S Capital 30, 000
1, 84, 501 1, 84, 501
Adjustments:
1. Closing stock was valued at Rs. 26,500.

2. Provide 10% Depreciation on Plant and Machinery.
4. Prepaid Insurance Rs. 300.
5. Maintain Reserve for Doubtful debts at 1% of Sundry debtors.
6. Outstanding rent for the current year Rs. 200.
7. Goods worth Rs. 100 were taken over by Latha for her personal use, but no entry is made in the
books.
58
TH
3. Surya and vijay are in a Partnership firm. The trial Balance of the firm on 31st December, 2004 was as
follows.
Trial Balance as on 31st December, 2004
Capitals:
Surya 15, 000
Vijay 10, 000
Drawings:
Surya 500
Vijay 200
Buildings 20, 000
Plant and Machinery 6, 000
Cash at bank 600
Purchases and Sales 47, 500 75, 500
Returns 1, 500 1, 000
Carriage 350
Opening stock 11, 000
Wages 6, 000
Debtors & Creditors 17, 600 12, 600
Salaries 2, 500
Rent and Insurances 400
Postage and Telegrams 200
Bad Debts 250
Discounts 100 50
Reserve for Bad Debts 750
Outstanding Salaries 100
Trade Expenses 300
1, 15, 000 1, 15, 000
Adjustments:
1. Partners share Profits and Losses in the ratio of their capitals.
2. Write off Rs. 450 for Bad debts & Reserve for Bad and Doubtful Debts is to be maintained at 5% on the
Debtors.
3. Depreciate Building @ 5% and Machinery @ 10% p.a.
4. Goods worth Rs. 1, 000 were destroyed by fire and the insurance company admitted a claim for Rs. 800.
5. Stock as on 31st December, 2004 was valued at Rs. 8, 000.
7. Wages outstanding Rs. 1000.
Prepare Trading and Profit & Loss account for the year ended 31st December, 2004 and a Balance sheet as
on that date.
N.P. =
P.C.A. Balance =
Tally Amount =
59
TH
4. Agarkar and Dravid are in partnership sharing profit and losses in the ratio of 2: 1 from the
following information of Trial balance and adjustments you are required to prepare profit and loss
account, trading account and Balance sheet as on 31 st march 2003.
Prepaid Insurance 400
Insurance 1, 000
R.B.D.D 500
Discount 400
Postage and Telephones 1, 600
Salaries 28, 000
Debtors 33, 000
Creditors 34, 000
Wages 12, 000
Opening Stock 24, 000
Carriage 500
Return Inward 2,800
Purchase and sales 96, 600 1, 50, 800
Bank Overdraft 60, 400
Land and Building 88, 000
Drawings:-
Agarkar 4,000
Dravid 2,000
Capitals:-
Agarkar 30, 000
Dravid 26, 000
3, 06, 300 3, 06, 300
Adjustments:
1. Write off Rs. 1,000 for bad debts and provide for R.B.D.D @ 5% on debtors.
2. Goods worth Rs. 2,000 were distributed as free samples.
3. Closing Stock 31 – 12- 2003 was valued at cost Rs. 28, 000 while its market value is Rs. 30,000/-.
4. Salaries were outstanding Rs. 1,000.
5. Depreciate Land and Building @ 5% p.a. and Plant and Machinery @ 10% p.a.
6. Goods worth Rs. 3,000 were destroyed by fire, but insurance company admitted the claim for Rs.
400 only.
7. Dravid had taken goods worth Rs. 1000 for his own use, but no entry is made in the books.
N.P. =
P.C.A. Balance =
Tally Amount =
60
TH
5. From the following Trial Balance and adjustments you are required to prepare the Trading account,
Profit and loss account and Balance sheet as on 31st December, 2004.
Aishwarya’s Capital 2, 00, 000
Revathi’s Capital 1, 30, 000
Aishwarya’s Drawing 14, 000
Revathi’s Drawing 10, 000
Stock on 1 – 1 – 2004 2, 00, 000
Sales 3, 90, 000
Loose Tools 25, 500
Patents 15, 000
Cash at Bank 78,00 0
Wages 19, 000
Salaries 17, 500
Insurance 3, 000
Power and Fuel 3, 800
9, 34, 800 9, 34, 800
Adjustments
1. Stock on 31st December, 2004 is valued at Rs. 50,000 but is market value is Rs. 45,000.
2. Depreciate plant and machinery @ 5% p.a. Patents by 10%.
3. Write off Rs. 1,000 for bad debts and provide for R.B.D.D @ 5% on debtors.
4. Insurance were prepaid for Rs. 200.
5. Salaries outstanding amounted to Rs. 800. Write Answers. G.P. =
6. Goods worth Rs. 5000 were destroyed by fire. N.P. =
P.C.A. Balance =
Tally Amount =
61
TH
6. From the following Trial Balance and Adjustments of Kumbhar and Maroti you are required to
prepare Trading and Profit and Loss Account for the year ended on 31 st March, 2005 and Balance
Sheet as on that date.
Trial Balance as on 31st March, 2005
Debit Balance Rs. Credit Balance Rs.
Stock (1.4.2004) 35000 Sales 330000
Salary and Wages 4200 Discount 4000
Cash 10000 Creditors 20000
Purchases 225200 Bank Overdraft 10000
Sundry expenses 13600 Interest on Investment 8000
Wages 12000 Capitals:
Bills Receivable 6000 Kumbhar 60000
Travelling Expenses 2000 Maroti 40000
Bad Debts 3000
Factory Expenses 8000
Commission 4000
Investments 20000
Debtors 40000
Tools and Equipments 6000
Furniture 12000
Goodwill 21000
Building 50000
472000 472000
Adjustments
1. Partners share Profits and Losses in the ratio of their capitals.
2. Closing stock is valued at Cost Price Rs. 40,000 and at Market Price Rs. 45,000.
3. Kumbhar has withdrawn goods worth Rs. 1,200 for his own use, but no entry is made in the books.
4. Uninsured goods worth Rs. 12,000 were lost by fire.
5. Rs. 450 is to be written off as bad debts.
6. Unpaid expenses:
Salary and Wages Rs. 800
Rent Rs. 1,200
7. Depreciate building @ 7 ½ % p.a. N.P. =
P.C.A. Balance =
Tally Amount =
62
TH
7. From the following information you are required to prepare the Trading account, profit and loss
account and Balance sheet as on 31st March, 2005.
Sachin’s Capital 1, 00, 000
Ganguly’s capital 2, 30, 000
Sachin’s Drawing 4, 000
Ganguly’s Drawing 1, 000
Stock on 1 – 1 – 2004 2, 20, 000
Sales 2, 00, 000
Bills Payable 1, 60, 000
Loose Tools 24, 000
Patents 25, 000
Wages 19, 000
Salaries 17, 500
Insurance 3, 000
9, 34, 500 9, 34, 500
Adjustment
1. Stock on 31st March, 2004 is valued at Rs. 30,000 but is market value is Rs. 35,000.
2. Depreciate plant and machinery @ 5% p.a. Patents by 20%.
3. Insurance were prepaid for Rs. 200.
4. Salaries outstanding amounted to Rs. 800.
5. Maintain Reserve for Doubtful debts at 10% of Sundry debtors.
6. Goods worth Rs. 5000 were destroyed by fire and the insurance company admitted a claim for Rs.
3000 only.
7. Sachin has withdrawn goods worth Rs. 500 for his own use, but no entry is passed in the books.
N.P. =
P.C.A. Balance =
Tally Amount =
63
TH
8. Abhijit, Pawan and Vikram are partners. The following balanced were extracted from the books of
a partnership firm as on 31st March, 1999.
Trial Balance As On 31st March, 1999

Purchases 165000 Capital Accounts:
Debtors 6000 Abhijit 24000
Stock (1st April, 1998) 25000 Vikram 12000
Wages 20000 Pawan 30000
Salaries 8000 Current Accounts:
Furniture 8000 Vikram 2000
Building 45200 Pawan 3000
Insurance 3500 Sales 250000
Loan at 5% to Vijay (1st Dec. 98) 4000 Reserved for Doubtful Debts 7800
Rent and Taxes 2000 Interest on Investment 720
Investment 10000 Creditors 25000
Cash in Hand 8820 Bills Payable 14000
Bills Receivable 10000 Return Outwards 3000
Current Account : Abhijit 2000
371520 371520
Adjustment
1. Closing stock Rs. 13,000.
2. Partners are allowed a salary at Rs. 3000 p.a.
3. Rs. 1200 paid during the year as building repairs wrongly debited to building account.
4. Depreciate furniture at 12% p.a. and Building at 10% p.a.
5. Rs. 1000 due from customer is not recoverable and create R.D.D. at 5% on debtors.
6. Goods of Rs. 12,000 were destroyed by fire. The insurance company admitted a claim for Rs. 7,410.
7. Prepare Final Accounts for the year ending 31st March, 1999.
N.P. =
P.C.A. Balance =
Tally Amount =
64
TH
9. Mr. Kale and Mr. Gore were partners sharing profits and losses equally. The Trial Balance of their
firm was as under: Prepare Trading and Profit and Loss Account for the year ended on 31 st March,
2004 and Balance Sheet as on that date:
Trial Balance as on 31st March, 2004.
Opening Stock 30000 Capitals:
Wages 9500 Mr. Kale 30000
Purchases 52500 Mr. Gore 60000
Investments 10000 Current Accounts:
Postage 1000 Mr. Kale 2100
Printing & Stationery 2500 Mr. Gore 1400
Carriage Outwards 1300 Bills Payable 7500
Insurance 3200 10% Bank Loan(Taken on 1.10.2003) 10000
Debtors 35000 Bank Overdraft 6500
Furniture 5500 Creditors 25000
Bad Debts 1200 Sales 70500
Carriage Inwards 1800 R.D.D. 3000
Cash in Hand 5400 Returns Outward 500
Machinery (Purchased on 1.7.03) 32000
Salaries (For 10 months) 15000
Sundry Expenses 2100
Bills receivable 8500
216500 216500
Adjustment
2. Printing and Stationery included Rs. 500 paid for purchase of postal stamps.
3. Depreciate Furniture and Machinery at 10% p.a.
4. 5% interest is to be allowed on capital.
5. Of the debtors Rs. 500 were bad and should be written off, and R.D.D. should be maintained at 5%.
6. Goods of Rs. 7,500 were purchased on 30th March, 2004 and included in the closing stock but
those purchases were not recorded in the books of accounts.
7. Bills receivable include a dishonoured bill of Rs. 500.
N.P. =
P.C.A. Balance =
Tally Amount =
65
TH
10. From the following Trial Balance of Ramesh and Reshma and given adjustments, prepare final
accounts for the year ending 31st March, 2007. Ramesh and Reshma share profits and losses in the
ratio of 2:1.
Land & Buildings 250000 Capital A/c.
Plant & Machinery 150000 Ramesh 270000
Salaries 45000 Reshma 200000
Productive Wages 35000 Current A/c
Delivery Van 80000 Ramesh 13000
Office Expenses 26000 Reshma 17000
Purchases 125000 Sales 290000
Returns 2500 Returns 4000
Bad debts 1000 Reserve For Bad debts 6000
Sundry Debtors 24000 Sundry Creditors 64000
Rent (for 10 months) 12000 Bills Payable 40000
12% Investments 18000 Bank Overdraft 10% p.a. 20000
Stock 26000 (Taken on 1st Jan 07)
Insurance 3600 Interest on Investments 1700
Unproductive Wages 1000
Advertising 4000 Write Answers. G.P. =
Furniture & Fixtures 38000
N.P. =
Printing & Stationery 4600
Power & fuel 10000 P.C.A. Balance =
Patent 15000
Cash at Bank 18000 Tally Amount =
Cash in Hand 27000
925700 925700
Adjustment
1. The stock of goods on 31st March, 2007 was valued at Rs. 66,000 at cost while its market price was
Rs. 70,000.
2. Write off Rs. 2,000 as further bad debts and maintain 5% R.D.D. on debtors and maintain 3%
Reserve for discount on debtors and 2% Reserve for discount on Creditors.
3. Depreciate Plant and Machinery by 10%; Delivery Van by 15%; Patent by 20%. Furniture costing Rs.
8,000 sold for Rs. 5000 was wrongly included in sales and remaining furniture & fixtures are valued
at Rs. 22,000. [less Rs. 8,000 from furniture, less Rs. 5,000 from sales and record loss on sale of furniture worth Rs.
3,000 in P&L A/c Dr. Side & Depreciation on furniture is Rs. 8,000]
4. Outstanding expenses: Productive Wages Rs. 5400; Salaries Rs. 4500; Insurance premium is paid
for the year ended 31st December, 2007.
5. Goods worth Rs. 6,500 were distributed as free samples for which no record has been made.
6. Bills Payable includes a dishonoured bill of Rs. 12,000.
7. Sale of goods of Rs. 10,000 was wrongly considered as sale of machinery.
66
TH
11. Following is the Trial Balance of Kalavati and Lilavati as on 31st March, 2005 who share Profits and
Loses to the ratio of 3:2. Interest on capital was allowed at 5% p.a.
Opening Stock 10000 Return Outward 1250
Sundry Debtors 14100 Sundry Creditors 15800
Wages 4250 R.B.D.D. A/c. 200
Salaries 1350 Capital A/c.
Office expenses 1223 Kalavati 35000
Discount 650 Lilavati 10000
Rent, Rates & Taxes 900 Loan at 9% 2000
Plant & Machinery 15000 (Taken on 1.10.2004)
Return Inward 1750
Land & Building 20000
Cash at Bank 7327
Current A/c :
Kalavati 2100
Lilavati 600
99250 99250
Additional Information
2. Unpaid wages Rs. 750.
3. Outstanding salary Rs. 657.
4. Provide depreciation on Plant & Machinery at 10% p.a. and on land & building at 5% p.a.
5. Write of Rs. 100 as bad debts and provide R.B.D.D. at 5% on debtors.
6. Rent, Rates and Taxes prepaid Rs. 100.
7. Prepare Trading A/c and Profit & Loss A/c for the year ending 31 st March, 2005 and a balance sheet
as on that date.
N.P. =
P.C.A. Balance =
Tally Amount =
67
TH
12. Given below is the Trial Balance of M/s Radha and Krishna on 31 st March, 2004. Partners share
profit & losses in the ratio of 3:2 respectively. From the following trial balance and additional
information, prepare a Trading & Profit & Loss account for the year ended 31 st March, 2004 and a
Balance sheet as on that date.
Particulars(Debit) Amount Particulars(Credit) Amount
Partner's Current A/c Partners Capital Account
Radha 16000 Radha 80000
Partner's Drawings Krishna 50000
Radha 15000 Partners Current Account
Krishna 10000 Krishna 10000
Returns 2500 Returns 3500
Debtors 65000 Creditors 10000
Furniture 50000 RDD 2000
Premises 160000 Provident fund 65000
Bad debts 7500 Interest on P.F. Investment 6000
Discount 5000 Outstanding Salaries & Wages 6500
Provident Fund Contribution 15000 General Reserve 45003
Provident Fund Investment 60000
Salaries & Wages 15003
Opening Stock 80000
Cash in hand 18000
Royalties 4000
643003 643003
Adjustments:
1. The closing stock was valued at marked price Rs. 90,000 which is 20% above cost.
2. Write off bad debts Rs. 1500 and make a provision for doubtful debts @5% on debtors.
3. Provide 2% Reserve for discount on debtors and creditors.
4. Depreciate Furniture @ 15% and Premises @ 20%.
5. Interest on capital is allowed @ 105 p.a. and interest on drawings be charged @ 15% p.a.
6. Radha is entitled to receive rent for her premises at Rs. 300 p.m. where business is carried out and
Krishna is to be given 5% commission on ‘Gross Profit’.
N.P. =
P.C.A. Balance =
Tally Amount =
68
TH
13. X, Y & Z are partners in a firm of following terms.

a. Y and Z to get salaries of Rs. 10,000 and Rs. 5,000 respectively for the year.
b. Interest on Capital and on drawings is to be calculated at 10% p.a.
c. They share profits and losses as X – 50%, Y – 30%, Z – 20%.
The Trial Balance of the firm as on 31st March 1996 was as follows.

Furniture 22,000 Capital A/c
Premises 60,000 X 80,000
Plant & Machinery 70,000 Y 50,000
Purchases 2,80,000 Z 30,000
Opening Stock 42,000 Current A/c
Works Manager’s Salary 64,000 X 6,000
Office Expenses 45,200 Y 12,000
Rent & Insurance 10,500 Z 18,000
Legal Fees 3,500 Sales 4,65,000
Debtors 20,600 Creditors 37,500
Balance at bank 43,700
Drawings:
X 17,000
Y 11,000
Z 9,000
6,98,500 6,98,500
Your are informed that:
1. Stock on 31st march, 1996 is valued at Rs. 36,000

2. Outstanding expenses are Works Manager’s salary Rs. 6,000, Rent Rs. 1,000
3. Prepaid insurance Rs. 500
4. Machinery of Rs. 2,000 is included in Purchases.
5. Depreciate all fixed assets at 10%
6. Provide for commission receivable Rs. 2,000
7. On 31st March 1996 goods worth Rs. 5,000 were destroyed by fire and insurance co. Admitted
claim for Rs. 2,000.
8. Goods distributed as free samples Rs. 1,000 were not recorded.
N.P. =
P.C.A. Balance =
Tally Amount =
69
TH
14. Following is the Trial Balance of Vinod and Vikas sharing profits and losses equally. Prepare a Trading and
Profit & Loss account for the year ending 31st March, 1996 and a Balance Sheet as on that date after
considering the adjustment given below.

Stock (1-4-1995) 44000 Capital A/c
Purchases 170000 Vinod 80000
Returns Inwards 10000 Vikas 80000
Carriage 4000 Sales 320000
Motive Power 6000 Creditors 40000
Wages 56000 Commission 4000
Trade Expenses 4000 Bank Loan 32000
Sundry Debtors 72000
Salaries 38000
Insurance 2400
Postage 3600
Commission 5000
Plant & Machinery 60000
Furniture 16000
Advertising 8000
Office Rent (10 months) 10000
Drawings
Vinod 14000
Vikas 6000
Building 24000
Cash in Hand 3000
556000 556000
Adjustments
1. Stock on 31.3.1996 was valued at cost price Rs. 80,000 and market price Rs. 72,000.
2. Depreciate Plant & Machinery and Building at 20% and 10% respectively.
3. Insurance has been paid for one year ending 31.6.1996.
4. Goods withdrawn by Vinod amounting to Rs. 10,000 during the year were not recorded in the books.
5. Bad debts were Rs. 2000 and an R.D.D. is to be created at 5% on debtors.
6. Goods of Rs. 6000 were purchased on 30.3.1996 and also included in the closing stock, but the purchase
was not recorded in the books of account.
N.P. =
P.C.A. Balance =
Tally Amount =
70
TH
15. From the following Trial Balance of Somnath and Ambadas being equal partners, you are required to
prepare Trading and Profit & Loss A/c for the year ended 31st March, 1996 and Balance Sheet as on that
date after taking into consideration the additional information.

Opening Stock 60000 Capital A/c
Drawings: Somnath 22000
Somnath 1000 Ambadas 18000
Ambadas 1500 Reserve Fund 21600
Insurance 600 Sales 130000
Salaries and Wages 4500 Bills Payable 1000
Carriage 2500 Creditors 16000
Purchase 65000 Reserve for Bad and Doubtful Debts 800
Bills Receivable 600 Returns 500
Rent 3500
Debtors 18000
Returns 1000
Machinery 12000
Travelling Expenses 3000
Cash at Bank 1000
Building 30000
Office Expenses 2700
Advertisement (for 3 years) 3000
209900 209900
Adjustments:
1. Closing stock: cost Rs. 25,000 and market price Rs. 30,000.
2. Allow interest on capital at 10% p.a.
3. Prepaid insurance Rs. 50. N.P. =
4. Provide for R.B.D.D. at 5% on debtors. P.C.A. Balance =
5. Uninsured goods costing Rs. 3000 were destroyed by fire.
Tally Amount =
6. Outstanding expenses: Salaries Rs. 1000; Rent Rs. 500.
7. Provide depreciation on Machinery at 20%; Building 2 ½ %.
71
TH
16. Pradeep and Prashant are partners sharing profits and losses in equal ratio. From the following Trial Balance
you are required to prepare Trading and Profit & Loss account for the year ended 31st March, 1998 and
Balance Sheet as on that date after taking into consideration the additional information.

Land and Building 44500 Capitals
st
Plant(Addition on 1 Jan. 98, Rs. 3,000) 9750 Pradeep 60000
Drawings Prashant 40000
Pradeep 3000 Sales 57000
Prashant 2000 Suppliers Account 9500
Opening Stock 26000 Reserve for Doubtful Debts 500
Wages 5000 Outstanding Expenses 500
Purchases 34500
Carriage 700
Office Expenses 2270
Rent, Rates and Taxes 1750
Insurance 480
Motor van 20000
Salaries 1750
Bad debts 950
Customers Account 14600
Cash at Bank 250
167500 167500
1. Closing stock on 31st March, 1998 was at cost Rs. 40,000 and Market price Rs. 50,000.
2. Provide 10% p.a. interest on Capital.
3. Charge interest on drawings: Pradeep Rs. 100 and Prashant Rs. 150.
4. Depreciate plant at 10% p.a.
5. Prashant’s withdrawal of goods worth Rs. 1,000 for personal use but not recorded in the books.
N.P. =
P.C.A. Balance =
Tally Amount =
72
TH
17. Given below is the Trial Balance of Sagar and Sindhu who are partners sharing profits and losses in equal
ratio. You are required to prepare a Trading and Profits and Losses in equal ratio. You are required to
prepare a Trading and Profit & Loss A/c for the year ended 31st March, 2006 and a balance sheet as on that
date after taking into account the given adjustments.
Purchases 98000 Capitals
Patent Rights 4000 Sagar 30000
Buildings 100000 Sindhu 40000
Opening sock 15000 Provident Fund 17000
Printing & Stationery 1750 Creditors 45000
Sundry Debtors 35000 Bank Loan 42000
Wages & Salaries 11000 Sales 163250
Partner’s Drawings Reserve for Doubtful 6250
Sagar 4500 Debts
Sindhu 6500 Purchases Returns 3500
Audit Fees 700 General Reserve 10000
Sundry Expenses 3500 Commission 9000
Furniture & Fixtures 8000 Bills Payable 10000
10% Investments (Purchased on 1st Oct. 10000
2005)
Conveyance Expenses 2000
Cash 4000 Write Answers. G.P. =
Provident Fund contribution 800
N.P. =
Carriage Inwards 1300
Trade Expenses 2700 P.C.A. Balance =
Goodwill 20000
Machinery 20000 Tally Amount =
Shop Fittings 18000
Bad Debts 250
Bills Receivable 9000
376000 376000
Adjustments
1. The closing stock at the end of the year was valued at market price Rs. 1,44,000 which is 205 above cost.
2. Commission includes Rs. 1,400 received in advance.
3. Goods worth Rs. 15,000 were sold on 30th March 2006, but not yet recorded in the books of accounts.
4. 1/6th shop fittings and 20% of goodwill were to be written of. The provision for Bad debts was to be
maintained @ 5% on debtors.
5. Provide interest on Partners’ capital @ 10% p.a. and charge interest on drawings @ 12% p.a.
6. Sagar is allowed a commission @ 2% on Gross profit.
7. Machinery and Buildings were to be depreciated at 15% and 205 respectively. Patent Rights and
Furniture and Fixtures were valued at Rs. 2,000 and Rs. 5,000 respectively.
8. Bills Receivable include a dishonoured bill for Rs. 2500. An amount of Rs. 2,000 spent on repairs on
machinery was wrongly included in machinery account.
73
TH
18. Asha and Nir0sha are the partners sharing profits and losses equally. You are required to prepare the
Trading and profit and loss account for the year ended 31st December, 1997 and a Balance sheet as at that
date after making the necessary adjustments.
Debit Balance Amount Credit Balance Amount
Buildings 70,000 Asha’s Capital 80,000
Plant and Machinery 60,000 Nirosha’s Capital 1,00,000
Furniture 16,000 Discount Received 1,800
Sundry Debtors 28,800 Loan From Vijay 30,500
Return Inwards 6,000 Sales 1,20,000
Discount 2,600 Sundry Creditors 30,000
Printing and Stationery 1,500 Reserve for Bad Debts 2,000
Insurance Charges 1,600 Return Outward 3,700
Bad debts 1,400
Salaries 19,300
Purchases 98,000 Write Answers. G.P. =
Cash at Bank 25,800
Stock ( on 1.1.97) 20,000 N.P. =
Carriage Inwards 2,500
P.C.A. Balance =
Legal Charges 500
Asha’s Drawings 8,000 Tally Amount =
Nirosha’s Drawings 6,000
3,68,000 3,68,000
Adjustments:
1. The stock on 31.12.97 was of the value of Rs. 44,000 which is less than its market value by 2,000.
2. On 24th December, 1997 stock of the value of Rs. 6,000 was stolen Insurance company admitted the claim
for Rs. 4,000 only and paid the amount on 7th Jan 1998.
3. Goods worth Rs. 4,000 were received on 31st December, 1997 and were included in the closing stock, but
purchase invoice was omitted to be entered in the books.
4. The partnership firm distributed goods worth Rs. 1,500 as free samples and Asha withdrew goods worth Rs.
3,000 for personal use, but no record was made of the same in the books.
5. Of the sundry Debtors Rs. 800 were bad debts and should be written off.
6. Make reserve for discount at 5% on debtors and creditors.
7. Depreciation Plant and Machinery by 10% and Furniture by 5%.
74
TH
19. Following is the Trial balance of a firm as on 31st December, 1997

Trial Balance as at 31st December, 1997
Bank 2,000 A’s Capital 25,000
Bills Receivable 8,000 B’s Capital 15,000
Sundry Debtors 23,000 Bills Payable 7,500
Stock on 31.12.96 31,000 Sundry Creditors 33,300
Purchases(net) 1,80,000 Reserve for bad debts 600
Petty cash A/c 4,000 Sales 2,90,000
Wages 38,300
Salaries 20,800
Rent (for 10 months) 1,000
Electricity Charges 2,180
Drawings – A 6,000
Drawings – B 4,000
Buildings 34,000
Furniture 4,000
Carriage Inwards 2,000
Donations 1,000
Carriage Outwards 3,500
Miscellaneous Expenses 1,500
Printing and Stationery 2,300
Postage and Telegram 1,430
Fuel and power 1,390
3,71,400 3,71,400
Adjustments:
1. Wages include Rs. 3,300 paid for the construction of a part of the building.
2. Provide for outstanding rent
3. Depreciation is to be provided on furniture@ 10% and Building @ 5%
4. Bills Receivable and Bills Payable include dishonoured bills for Rs. 2,000 and Rs. 1,500 respectively.
5. Bad debts to be written off Rs. 500. Provide reserve for doubtful debts @ 5% on debtors.
6. Petty cash A/c shows the amounts transferred from cash book. Actual petty cash expenses are Rs. 3,100.
You are required to prepare Trading and profit and loss account for the year ended 31st December 1997 and a
balance sheet as on that date.
N.P. =
P.C.A. Balance =
Tally Amount =
75
TH
20. From the following Trial Balance of M/s Kale and Gore your are required to prepare Trading and Profit and
Loss account for the year ended 31st December, 1997 and the Balance sheet as on that date after taking into
account the necessary adjustments. Trial Balance as on 31st December, 1997
Kale’s Capital 1, 80, 000
Gore’s capital 1, 50, 000
Kale’s Drawing 14, 450
Gore’s Drawing 10, 000
Stock on 1 – 1 – 2004 2, 00, 000
Sales 4, 00, 000
Loose Tools 25, 000
Patents 25, 000
Sundry Debtors 55, 000
Sundry Creditors 40, 000
Wages 19, 000
Salaries 17, 500
Insurance 3, 000
8, 34, 500 8, 34, 500
Adjustments:
1. Depreciate Plant and Machinery by 5% and Patents by 15%.
2. Provide for Bad and Doubtful debts @ 5% on Sundry debtors.
3. Prepaid Insurance Rs. 750
4. Outstanding expenses
a. Salaries Rs. 2,500 b. Wages Rs. 1,000 c. Printing and Stationery Rs. 500.
st
5. Stock as at 31 December 1997 Rs. 1,30,000.
6. Kale and Gore have taken goods worth Rs. 2,000 and Rs. 3,000 respectively for their personal use. No entry
has been passed in the books.
7. Sales include Rs. 5,000 for goods sent on sale or return basis at 25% profit on cost.
N.P. =
P.C.A. Balance =
Tally Amount =
76
TH
21. Keshav & Devidas are partners and the Trial Balance and the necessary adjustments of their firm are given
below. Trial Balance as at 31st March 1998
Purchases 1,25,225 Capital
Sales return 4,250 Keshav 27,000
Debtors 50,200 Devidas 35,000
Opening Stock 28,788 Sales 2,05,000
Wages 20,167 Purchase Returns 3,230
Salaries 13,677 Commission 245
Furniture( Balance as on 1.4.98) Creditors 21,073
Rs. 6750 Dividend in Investments 825
Add: Purchases Reserve for Doubtful debts 500
On 31.2.98 Rs. 700 7,450 Devidas Loan 10,000
Machines 7,500
Bad Debts 315
st
Advt. (for 3years w.e.f. 1 Oct. 97) 3000
Investments 9,500
Insurance 320
Drawings
Keshav 3,000
Devidas 1,500
Cash and Bank Balances 27,981
3,02,873 3,02,873
Adjustments:
1. Closing Stock Rs. 15,000

2. Depreciation on Machines @ 5% and on furniture @ 10% p.a.
3. Deduct Rs. 200 for bad debts and provide 2% R.D.D
4. Interest on capital (Opening Balance) at 5% p.a. but on drawings at 10% p.a.
5. Keshav is to get 1% commission on Gross profit and Devidas is to be paid at Rs. 2,000 p.a. as a salary.
6. Goods of Rs. 3,000 sold on sale or return basis. Goods are sold at 25% profit on sale. Customer has not yet
taken any decision.
7. After considering the adjustment, prepare the Trading, Profit and Loss A/c for the year ending 31st March
1998 and a Balance sheet on that date.
N.P. =
P.C.A. Balance =
Tally Amount =
77
TH
22. Pankaj and Bindas are partners sharing profits in the ratio of their capital. Their Trial Balance as on
31.03.1997 is as under.
Trial Balance as on 31.3.1997 is as under
Land and Building 1,00,000 Pankaj’s Capital 30,000
Plant and Machinery 30,000 Bindas’s Capital 50,000
Purchases 1,20,000 Bills Payable 6,000
Wages 3,500 Creditors 12,000
Opening Stock 10,000 Outstanding commission 500
Carriage Outward 400 10% Loan (taken on 1.7.96) 10,000
Sundry Debtors 25,000 Sales 2,00,000
Interest on Loan 250 Discount 1,100
Prepaid taxes 200 Commission 4,000
Salary 4,500 Reserve for bad debts 3,000
Commission 700 General Reserve 1,000
Loss by fire 2,000
Travelling Expenses 3.400
Electricity 650
Pankaj’s Drawings 2,000
Bindas’s Drawings 3,000
Cash on hand 10,000
Sales Returns 2,000
3,17,600 3,17,600
Prepare Trading and Profit and loss A/c for the year ended 31st March 1997 and the Balance sheet as on that
date after taking into account the following adjustments.
1. Closing stock cost price Rs. 20,000 and Market price is less than the cost price by 5000.
2. Goods distributed as free samples Rs. 1,000.
3. Purchase returns of Rs. 2,000 on 30th March, 1997 have not been recorded in the books.
4. Wages included Rs. 1,000 paid for installation of Plant and Machinery.
5. Bills payable include a dishonoured bill of Rs. 1,000
6. Depreciate Machinery by 10% and Land & Building by 5%
7. Reserve for Bad debts is to be maintained at 5% on Debtors.
8. Sales include, sale of Rs. 6,000 on approval basis. The cost of such goods is Rs. 5,000
N.P. =
P.C.A. Balance =
Tally Amount =
78
TH
23. Dalal & Raja are partners sharing profit and losses equally. From the following Trial Balance of the firm,
prepare Trading a/c Profit and Loss A/c and Balance sheet for the year ending 31.12.1997.
Debit Rs. Credit Rs.
Stock 20,000 Capital Accounts:
Purchases 1,30,200 Dalal 15,000
Sales Return 500 Raja 15,000
Debtors 20,000 Current Accounts
Wages 6,000 Dalal 2,000
Royalties 1,000 Raja 2,000
Furniture 5,000 Sales 1,70,500
Machinery 30,000 Purchase Return 3,200
Advertisement for 4 years 4,000 Commission 300
Salary 3,000 Provident Fund 2,000
Provident fund contribution 500 Interest on Provident fund 200
Provident fund investment 2,000 investments.
Insurance 500 Reserve for Doubtful debts 500
Cash 3,000 Creditors 20,000
Drawings :
Dalal 3,500
Raja 1,500
2,30,700 2,30,700
Adjustments.
1. Closing stock: Cost price Rs. 25,000. Market Price Rs. 30,000/-
2. Dalal has taken goods worth Rs. 500 for his personal use.
3. Goods amounting Rs. 3,000 were sold and dispatched on 27.12.1997 but no entry was made in the sales
book.
4. Prepaid insurance Rs. 100.
5. Depreciation Furniture by 15%, Machinery by 20%
6. Write off bad debts Rs. 400/- and provide for reserve for doubtful debts at 3% on debtors.
N.P. =
P.C.A. Balance =
Tally Amount =
79
TH
24. Hira and Manik are partners in a firm sharing profits and losses in the ratio of their opening capitals. Below
given is their Trial Balance as on 31st March 1998.
Trial Balance as at 31st March 1998
Plant and Machinery 50,000 Sales 2,40,000
Opening Stock 30,000 Discount 2,000
Purchases 80,000 Sundry Creditors 20,000
Freehold Land & Building 85,000 Bills Payable 10,750
Carriage inwards 1,700 Hira’s Loan A/c 50,000
Carriage outwards 2,500 Capital A/c
Wages 16,000 Hira 50,000
Sundry Debtors 50,000 Manik 25,000
Salaries 12,000
Furniture 18,000
Trade Expenses 6,000
Return Inwards 950
Advt. Suspense A/c 12,500
Discount 900
Partner’s Drawings:
Hira 3,000
Manik 2,000
Bills Receivable 20,000
Insurance 1,200
Bad debts 1,000
Cash at Bank 5,000
3,97,750 3,97,750
You are required to prepare the Trading and Profit and Loss account of the firm for the year ended 31st March
1998 and the Balance sheet as at that date after taking into consideration the following adjustments.
1. Closing stock Rs. 45,000
2. Depreciate Plant @10% p.a. and Furniture @20%p.a.
3. Appreciate Freehold Land & Building to Rs. 90,000
4. Bad debts reserve to be written off against 2 ½ % on sundry debtors.
5. Advertisement Suspense A/c is to be written off against revenue over five years.
6. Partner’s Drawings are to bear interest @10% p.a. amounts were withdrawn evenly throughout the year.
7. Annual charge for insurance is Rs. 1,000 the balance represents amount paid in advance
8. Hira gave loan @ 10% to the firm on 30th September, 1997.
9. Manik was to be allowed a partnership salary of Rs. 250/- p.m.
N.P. =
P.C.A. Balance =
Tally Amount =
80
TH
25. Sridevi & Jayaprada were partners sharing profits and losses in ratio 3/5 & 2/5. Interest on Capital was
allowed @ 5% p.a. but interests on drawings were ignored. The following balances of accounts were given
on 30.9.1997.
Opening Stock 20,000 Return Outward 2,500
Sundry Debtors 28,200 Sundry Creditors 31,600
Purchases 40,000 Sales 70,000
Wages 8,500 Reserve for Bad Debts 400
Salaries 2,700 Capital Account:
Office Expenses 2,446 Sridevi 70,000
Conveyance 1,300 Jayaprada 20,000
Insurance 1,800 Loan @ 10% p.a. (Taken on 4,000
Plant & Machinery 30,000 1.4.97)
Return Inward 3,500
Land & Building 40,000
Cash at Bank 2,654
Drawings :
Sridevi 4,200
Jayaprada 1,200
1,98,500 1,98,500
You are given the following additional information.

1. Closing stock was valued at Rs. 52,000/-
2. Wages unpaid was Rs. 2,000/- & outstanding salaries were Rs. 1,600/-
3. Bills Receivable includes a dishonoured bill of Rs. 2,000
4. Write off Rs. 200/- as further bad debts and provide 6% reserve for bad debts on Sundry debtors.
5. Depreciation Plant & Machinery @ 10% and Land & Building @ 5%
6. Goods distributed as free samples amounted to Rs. 2,000 were not recorded.
7. Sridevi was entitled to a salary @ Rs. 500 p.m. and Jayaprada was entitled to a commission of 5% on Gross
profit.
8. Carriage inward included Rs. 1, 000 paid for transport charges and octroi on new machinery purchases on 1-
10 – 1996.
N.P. =
P.C.A. Balance =
Tally Amount =
81
TH
26. Prepare Trading and Profit & Loss account for the year ended 31st December, 1996 and Balance sheet as on
that date from the following Trial Balance of Kaveri and Narmada
Kaveri’s Drawings 4,000 Kaveri Capital 12,000
Narmada’s Drawings 4,000 Narmada’s Capital 20,000
Land & Building 21,000 Bills Payable 6,790
Plant & Machinery 12,600 Creditors 14,600
Stock(1.1.1996) 8,000 Purchase Returns 500
Purchases 12,000 Sales 43,000
Wages 5,000
Carriage Outward 500
Carriage Inward 400
Coal 1,260
Salary 7,500
Rent, Rates & Taxes 560
Discount Allowed 300
Cash & Bank Balance 5,080
Sundry Debtors 9,000
Printing & Stationery 460
Bad Debts 240
Advertisement 1,750
Sales Return 400
Furniture 1,240
96,890 96,890
Adjustments:
1. Closing Stock is valued at Rs. 10,000/- at cost whose market value was Rs. 15,000/-
2. Depreciation Land & Building and Plant & Machinery by 10% & Furniture by 5%.
3. Provision for doubtful debts should be maintained at 5% on sundry debtors.
4. Kaveri has withdrawn goods for his personal use Rs. 500 for which no entry is passed.
5. Fire occurred in the Godown and goods worth Rs. 5, 000 were destroyed, but Insurance Company admitted
Claim for Rs. 3, 500.
6. Salary outstanding Rs. 1,500.
7. Wages outstanding Rs. 1,000 and
8. Rates prepaid Rs. 60. Write Answers. G.P. =
N.P. =
P.C.A. Balance =
Tally Amount =
82
TH
27. Umesh and Mani are partners sharing profits and losses in equal ratio. From the following Trial Balance you
are required to prepare Trading and profit and Loss Account for the year ended 31st December, 2005 and
Balance sheet as on that date after taking into consideration the additional information.
Land and Building 44, 500 Capitals
Plant (addition on 1st October, Umesh 60, 000
2005 Rs. 3,000) 9, 750 Mani 40, 000
Drawings: Sales 57, 000
Umesh 3, 000 Sundry Creditors 9, 500
Mani 2, 000 Reserve for Doubtful Debts 500
Opening Stock 26, 000 Outstanding Expenses 500
Wages 5, 000
Purchases 34, 500
Carriage inwards 700
Office expenses 2, 270
Rent, Rates and Takes 1, 750
Insurance 480
Motor Van ( addition on 1st June
Rs. 10, 000) 20, 000
Salaries 1, 750
Bad debts 950
Debtors 14, 600
Cash at Bank 250
1, 67, 500 1, 67, 500
1. Closing stock on 31st December, 2005 was at cist Rs, 40, 000/- and Market price Rs. 50,000/-
2. Depreciate Plant at 10% p.a. and Land and Building @ 20% p.a.
3. Mani withdrawal of goods worth Rs. 1, 000 for personal use but not recorded in the books.
4. Depreciate Motor van by 10% p.a.
5. The goods for Rs. 5, 600 purchases and received on 25th December, 2002 were not recorded in the purchase
book.
6. Goods worth Rs. 3, 000 were destroyed by fire but insurance company admitted claim for the full amount.
7. Insurance is paid for the year ended 31st March 2005.
N.P. =
P.C.A. Balance =
Tally Amount =
83
TH
28. From the following Trial Balance by Kuruvi Traders, you are required to Prepare Trading and profit and Loss
Account for the year ended 31st March, 2005 and the Balance sheet as on that date.
Trial Balance as on 31st March 2005
Machinery 12, 000 Discount 400
Wages 4, 000 Sales 60, 000
Purchases 41, 000 Unpaid Salaries 200
Stock ( 1- 4 - 2004 ) 7, 000 Capital: Maridas 30, 000
Carriage inwards 400 Perinbaraj 15, 000
Office Expenses 2, 600 Creditors 6, 900
Leasehold property 10, 000 Bills Payable 4, 300
Furniture 2, 000 Return Outwards 500
Insurance 2, 000
Bad debts 250
Discount 350
Rent ( 10 month) 1, 000
Drawing: Maridas 4, 000
Perinbaraj 6, 000
Packing expenses 200
Cash at Bank 5, 700
Salaries 4, 000
Bills receivable 6, 000
Sundry debtors 5, 300
Cash in hand 3, 500
1, 17, 300 1, 17, 300
Adjustments:
1. Maridas and Perinbaraj share profits and losses in the ratio 3: 2.
2. On 31st March 2005 Stock was valued at Rs. 11, 000/-
3. Rent is payable for two months.
4. On 29th March, 2005 goods were sold to a customer on credit for Rs. 2, 000 no entry has been passed in the
books for sale.
5. Machinery to be depreciated at 10% p.a.
6. R.D.D is to be created at 5% on sundry debtors.
N.P. =
P.C.A. Balance =
Tally Amount =
84
TH
29. From the following Trial Balance of Shyam and Sundar, You are required to prepare a Trading and Profit and
Loss account for the year ended 31st December, 2002 and Balance sheet as on that date after taking into
consideration the additional information. They share profits and losses in their capital ratio.
Particulars Amounts Particulars Amounts
Drawings: Capital Accounts:
Shyam 2, 000 Shyam 40, 000
Sundar 1, 000 Sundar 60, 000
Opening Stock 12, 000 Creditors 30, 000
Purchases 80, 000 Sales 1, 40, 000
Office Salaries 6, 000 R.D.D 1, 000
Royalties 2, 000 Return Outwards 2, 400
Trade Expenses 1, 400 Bills Payable 6, 000
Advertisement 5, 200 Reserve Fund 4, 000
Wages and Salaries 10, 400
Cash in Hand 8, 000
Debtors 50, 000
Bad Debts 400
Investments 16, 000
Motor Van 30, 000
Furniture 10, 000
Office Rent 3, 400
Freehold Property 16, 000
Discount 1, 600
2, 83, 400 2, 83, 400
Adjustments:
1. Closing stock was valued at Rs. 17, 600
2. Audit Fee for the year was outstanding Rs. 2, 400
3. Create R.D.D at 5% on Debtors.
4. The goods for Rs. 5, 600 purchased and received on 25th December, 2002 were not recorded in the purchase
book.
5. Depreciate freehold property at 10% and Motor Van at 25%
N.P. =
P.C.A. Balance =
Tally Amount =
85
TH
30. Ram and Sham are partners sharing Profits & Losses in the ratio of 2:3. Their trial balance as on 31 st
March, 2005 is given below. You are required to prepare Trading A/c and Profit & Loss A/c For the year
ending 31st March, 2005 and a Balance sheet as on that date after taking into account the given
adjustments.
Particulars Amounts Particulars Amounts
Purchases 98, 000 Capitals:
Patent rights 4, 000 Ram 30000
Buildings 1, 00, 000 Sham 40000
Stock(1-4-2004) 15, 000 Provident Fund 7000
Printing & Stationery 1, 750 Creditors 45000
Sundry Debtors 35, 000 Bank Loan 12000
Wages & Salaries 11, 000 Sales 158000
Audit Fees 700 Reserve for doubtful debts 250
Sundry Expenses 3, 500 Purchase Returns. 3500
Furniture 8, 000
10% investment (purchased on 1-
10-2004) 10, 000
Cash 4, 000
Provident fund contribution 800
Carriage inward 1, 300
General expenses 2, 700
295750 295750
Adjustments
1. Closing stock is valued at cost Rs. 15, 000 while its market price Rs. 18, 000.
2. On 31st December 2004 the stock of stationery was Rs. 500.
3. Reserve for bad and doubtful debts at 5% on debtors.
4. Depreciate building at 5% and Patents at 10%
5. Interest on capital is to be allowed @5%.
6. Goods worth Rs. 10, 000 were destroyed by fire. The insurance company admitted a claim for Rs. 8, 000/-.
N.P. =
P.C.A. Balance =
Tally Amount =
86
TH
CH. 7. OBJECTIVES [20 MARKS]

SET I
Q1. Answer Any four of the following. (20 marks)
A. Answer the following. (5)
1. What is Balance Sheet?
2. Who is co – venture?
3. What is Super Profit?
4. What is Endorsement of Bill?
5. What is Good will of the firm.
B. Write word/term/phrase which can substitute each of the followings: (5)
1. Reputation of a firm expressed in terms of money.
2. Payment of expenses before they have become due.
3. Payment of bill of exchange before its due date at rebate.
4. The person on whom the bill of exchange is drawn.
5. The account that is credited when depreciation is charged.
C. Match the pairs. (5)
A B
1. Depreciation 1. Temporary Partners
2. Dishonour of bill 2. Intangible Asset
3. Joint Venture 3. Wear and tear
4. Goodwill 4. Notary public
5. Co – Venturers 5. Temporary partnership
6. Tangible Asset
D. Select the most appropriate alternative from those given below: (5)
1. Debit Balance in Profit and Loss Account shows _______________
a. Net profit b. Gross profit c.Net loss d. Gross loss
2. A bill of exchange must be accepted by _______________
a. A drawer b. A payee c. An endorsee d. A drawee
3. At the end of the financial year balance of Depreciation account is transferred to _______
a. Depreciation account
b. Asset account
c. Trading account
d. Profit and loss account.
4. In the absence of partnership deed the partners share the profit and loss of the firm ____
a. In the ratio of capital
b. Equally
c. As per rights in management
d. On the basis of experience.
5. ____________ has to ultimately bear the noting charges.
a. Drawer
b. Drawee
c. Endorser
d. Bank
E. State True / False with reasons. (Any Two) (5)
1. Under fixed capital method for each partner two accounts are maintained.
2. Under fixed instalment method depreciation is charged on the diminishing value of the asset.
3. Interest on partner’s drawings is debited to Profit and loss appropriation account.
F. Prepare a bill of exchange from the following information:
Drawer: Vilas Patil, 21. M.G. Road, Pune
Drawee: Vikas Pawar, 31. S.V. Road, Nasik.
Payee: Viraj Potade, 41, A.B. Road, Sholapur,
Period: 2 months
Amount: Rs. 7,500/-
Date of Bill: 1st January, 2007.
Date of acceptance: 3rd January, 2007.
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SET II
Q1. Answer any four of the following. (20 marks)
1. Under single entry system if the assets is undervalued, how it is treated in the statement of profit / loss?
2. What is the minimum, and maximum number of partners allowed by the Indian Partnership Act, 1932?
3. What is meant by dishonouring of a bill?
4. What do you mean by revenue receipts?
5. Which Account is credited when depreciation is charged?
B. Write word/term/phrase which can substitute each of the followings: (5)
1. A bill before acceptance.
2. Amount by which book value of fixed assets exceeds its selling price.
3. Expenses due but not paid.
4. Partners of joint venture business.
5. Normal Rate of Return x Capital employed.
C. Match the pairs. (5)
A B
1. Interest on partners loan 1. Deficit
2. Excess of income over expenditure 2. Before adding three grace days
3. Legal due date 3. Not Exceeding 6%
4. Printing and Stationery 4. After adding three grace days.
5. Goods sold by consignee 5. Surplus
6. Trading Account
7. Debited to Consignee’s Account.
8. Profit / loss account.
D. Select the most appropriate alternative from those given below: (5)
1. The Indian Partnership Act came into force in ____________________.
a. 1942
b. 1932
c. 1953
d. 1956
2. Excess of assets over liabilities is termed as ___________________.
a. Endowment Fund
b. Capital Fund
c. Special Fund
d. None of these
3. Fixed Instalment method of depreciation is also called as _______________
a. Straight Line Method.
b. Reducing Balance Method.
c. Written down value method.
d. Depreciation Fund Method.
4. Drawing a fresh bill in cancellation of old bill is called as _________________.
a. Retirement of Bill.
b. Discounting of bill.
c. Endorsement of Bill.
d. Renewal of bill.
5. When the co – ventures incur the joint venture expenses from his pocket _________ A/c is credited.
a. Joint Venture A/c
b. Joint Bank A/c
c. Co – venture’s A/c
d. Consignees A/c
E. State True / False with reasons. (Any Two) (5)
1. The liability of a partner is limited to his capital contribution.
2. In the Absence of partnership deed partners share the profit and loss equally.
3. A bill of exchange is discounted on due date.
F. Prepare a bill of exchange from the following information:
Drawer: Vilas Patil, 44, M.G. Road, Nanded. Amount: Rs. 2,800/-
Drawee: Pankaj Pawar, 70 Bhavani Galli Solapur. Date of Acceptance: 28th March, 2002.
Payee: Paresh Patkar, Rampur. Accepted: 29th March, 2002.
Period: 40 days.
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SET III
Q1. Answer Any four of the following. (20 marks)
1. Which types of expenses are debited to Trading Account?
2. What are ‘Not for Profit’ Concerns?
3. How are drawings treated in preparing statement of Profit or Loss?
4. Who is an endorsee?
5. What is depreciation?
B. Write the word/term/phrase which can substitute each of the following statements?
1. Expenses paid in advance for the period which has not expired.
2. Fees paid to the Notary Public for noting of a bill.
3. Fees received for the entire life in lump sum on one occasion only from the members.
4. The relationship between persons who have agreed to share profit or loss in Joint Venture business.
5. A statement prepared to find out the closing capital at the end of the year.
C. Match the following pairs.
A Group B Group
1. Not for profit concerns. a. Capital account of partner
2. Fixed Capital method. b. Current account of partner
3. Unexpired expenses. c. Joint venture
4. Temporary partnership d. Asset
5. Pure single entry system. e. Liability
f. Only Personal account
g. Profit and Loss account.
h. Income and expenditure account.
D. Select the correct choice and complete the statement.
1. The Indian Partnership Act is in force since ____________
a. 1932 b. 1942 c. 1952 d. 2002
2. Normally, Receipts and payments account shows ____________ balance.
a. Debit b. Credit c. Nil d. Overdraft
3. Excess of opening capital over the closing capital is considered as
a. Income b. Profit c. Gain d. Loss
4. Making payment of the bill before the due date is known as ____________ of a bill.
a. Retirement b. Honouring c. Dishonouring d. Renewal
5. If two or more persons come together to carry on a business activity for a short period, it is known as ____________
a. Joint venture b. Consignment c. Partnership firm. d. Co – operative society.
E. State True or False with reasons.
1. The Receipts and payments account record receipts and payments of revenue nature only.
2. Scrap value of asset reduces the amount of annual depreciation.
F. Prepare bill of exchange from the following details.
1. Drawer : Vilas Patil, 44, M.G. Road, Nanded.
2. Drawee : Pankaj Pawar, 70, Bhavani Galli, Solapur.
3. Payee : Ramachandra Rampure, Rampur.
4. Period : 60 days.
5. Date of Bill : 28th January, 2005
6. Date of Acce. : 29th January, 2005
7. Amt. of Bill : Rs. 2,800.
SET IV
Q1. Attempt any four of the following.
A. Answer in one sentence each.
1. What is dishonour of bill?
2. What is the fixed instalment method of depreciation?
3. What does a credit balance on the Joint Venture Account show?
4. What is an average profit?
5. What do you mean by statement of Affairs?
B. Write the word/term/phrase which can substitute each of the following statement:
1. A partnership for specific purpose and for temporary period.
2. List of debit and credit balances of the ledger accounts.
3. A person who accepts the bill.
4. Written agreement among the partners.
5. The balance which cannot be recovered from the debtors.
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C. Match the following pairs.

Group A Group B
1. Co - Venturer a. Limited liability
2. Rebate b. Surplus
3. Credit balance of Income & c. Temporary partner
Expenditure Account d. Retirement of a bill
4. Dormant Partner e. Deficit
5. Trading Account f. Does not take active part in the business
g. Account showing the net profit / net loss
h. Power and Fuel / Gross profit.
D. Select the most appropriate alternative from hose given below each statement.
1. The interest on capital of a partner is _______ to profit & loss account.
a. Credited
b. Added
c. Debited
d. Divided
2. If fixed capital method is adopted, Net profit is transferred to _______ account of the partner.
a. Current
b. Capital
c. Balance sheet
d. Trading
3. Not for profit organisation prepares _________ to find out its financial position.
a. Balance sheet
b. Receipts & payments accounts.
c. Trading account
d. Income & Expenditure account.
4. Wages paid for Installation of Machinery should be debited to the ____________ account.
a. Installation
b. Wages
c. Salaries
d. Machinery.
5. There are ___________Parties to a bill of exchange.
a. Four
b. Three
c. Two
d. One.
E. State with reason whether the following statements are true of false.
1. Partnership is a non – trading concern.
2. A bill of exchange is a negotiable instruments.
F. On 10-Feb-1999, Thomas Kuruvilla, Mira Road, Draws a 3 months bill for Rs. 9000 on Poonam Ghadi, B.M.C. Road, Mahim.
Poonam Ghadi, accepts the bill on 15th March, 1999. Draft a bill of exchange.
SET V
Q1. Attempt any four of the following. (20 marks)
A. Answer in one sentence each. (5 marks)
1. What is depreciation?
2. What do you mean by qualified acceptance?
3. Why is Joint Venture Account opened?
4. What do you mean by capital fund?
5. What is carriage inward?
Ans. 1. Gradual continuous and permanent reduction in the value of fixed assets on account of usage, wear and tear or passage of time is
called as depreciation. 2. Qualified acceptance means acceptance of a bill of exchange by the drawee with addition of certain phrases that
change the effect of the bill as to time, place, amount. 3. Joint venture Account is opened to record the joint venture transactions so as to
find out joint venture profit / loss. 4. The excess of assets over liabilities of a non profit organisation is called as capital fund. 5. Carriage
Inward is expenditure incurred on purchase of goods that is debited to Trading Account.
B. Write the word/term/phrase which can substitute each of the following statement: (5 marks)
1. The account that serves the purpose of P&L A/c for non trading organisation.
2. The system of book keeping under which only one aspect of the transactions is recorded.
3. The person on whom the bill of exchange is drawn.
4. The account that is credited when depreciation is charged.
5. The present value of tangible trading assets less all the liabilities, which is required for valuation of goodwill.
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C. Match the following pairs. (5 marks)

Group A Group B
1. RAM i. Intangible Asset
2. Co – Ventures j. Records all cash transactions
3. Goodwill k. Trading A/c can’t be prepared
4. Receipts & Payment A/c l. Current asset
5. Single Entry System of Book – m. Temporary memory
Keeping. n. Uniformity maintaining accounts.
o. Temporary partners
p. Nominal A/c
D. Select the most appropriate alternative from hose given below each statement. (5 marks)
1. Persons entering into a joint venture are called _______________
a. Partners
b. Co – partners
c. Co – venturers
d. Consignees
2. The _________ has to ultimately bear the noting charges.
a. Drawer
b. Endorser
c. Bank
d. drawee
3. The component of CPU that controls the various input output devices is ___________
a. Memory unit,
b. Control unit,
c. arithmetic logical unit
d. Key board
4. Loss on sale of asset is debited to _______________
a. Assets A/c
b. P&L A/c
c. Depreciation A/c
d. Trading A/c
5. In the absence of partnership deed the partners share profit & loss of the firm ___________
a. In the ratio of capital
b. Equally
c. As per rights in management
d. On the basis of experience
E. State with reason whether the following statements are true of false. (5 marks)
1. Income & Expenditure account does not have any opening balance.
Ans. True: - Income & Expenditure A/c of Non – Trading Organisation is a nominal account prepared from Receipts and payment A/c and
additional information. It is like a profit & loss A/c. where there can be closing balance but there is no opening balance.
2. Under fixed Capital method for each partner two accounts are maintained.
Ans. True: Under fixed capital method, the amount of partners capital in the trial balance & that in the balance sheet is same and fixed. The
appropriations as per the partnership deed are accounted through the current account of the partners. Thus there are two accounts i.e.
Capital account and Current account.
3. Under fixed instalment method depreciation is charges on the diminishing value of the asset.
Ans. False: Under fixed instalment method, a fixed percentage of the original cost of the asset is charged as depreciation for each year
during the life of the asset. Diminishing value of the asset is considered under diminishing balance method of depreciation.
F. Drawer: Abhijit Patil, Vikram nagar, Patna. (5 marks)
Drawee – Tejas Kapare, Kothrud, Pune.
Payee – Amey Patki, Nagpur.
Amount - Rs. 7500
Period, 60 days
Term – After sight
Date of Bill Drawn – 1st June 2006
Date of Acceptance – 11th June 2006
Accepted bill for Rs. 7000 only.
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SET VI

1. What do you mean by scrap value?
2. What are noting charges?
3. What is the relationship between coventurers?
4. What is partnership deed?
5. State the formula for calculating Normal Profit?
Ans. 1.Market value of the asset after its use or when it becomes obsolete is known as scrap value. 2. The fees charged by the notary
public for noting and protesting the dishonoured bill are termed as noting charges. 3. The relation between coventurers is that of
partners. 4. Partnership deed is a written document in which terms of agreement are given in writing. 5. Formula for calculating
normal profit = Capital employed x Normal rate of return.
1. Goods returned to the supplier.
2. It is a stick or lever used to change the position of the cursor on a screen.
3. A bill in which the period of the bill is counted from the date of the bill accepted.
4. The receipts that are an unusual nature not arising through named activities of the business.
5. A fixed asset which is not essential for conduct of business.
A. Match the following pairs. (5 marks)
Group A Group B
1. Partner’s Salary a. Balance sheet asset side.
2. Subscription received in advance for the b. Current asset.
current year. c. Deducted from gross profit.
3. Dishonour of bill. d. Credited to joint venture account.
4. Cash in hand. e. Credited to coventurers A/c
5. Unsold goods taken over by co – ventures f. Noting Charges.
g. Closing balance sheet liability side.
h. Fixed assets.
B. Select the most appropriate alternative from hose given below each statement. (5 marks)
1. Partner’s drawings are transferred to his __________ a/c under fixed capital method.
a. Capital A/c
b. Current A/c
c. Trading A/c
d. Profit and loss A/c
2. Sale of old materials must be shown on credit side of ____________
a. Cash book
b. Income and expenditure account
c. Balance sheet
d. Receipt and Payments account
3. Cost of asset = _____________
a. Purchase price + scrap value
b. Purchase price + depreciation
c. Purchase price + incidental cost
d. None of the above
4. A person in whose favour the bill is endorsed is called ___________
a. Endorsee
b. Endorser
c. Drawer
d. None of the above
5. Expenses incurred by coventurers is debited to ___________
a. None of the below
b. Consignee’s account
c. Co venturers account
d. Joint venture account.
C. State with reason whether the following statements are true of false. (5 marks)
1. Balance sheet is a statement and not an account.
Ans. True: - Balance sheet takes into consideration balance of real and personal accounts which are to be carried forward. Nominal
accounts are closed by transferring their balances either to trading account or profit & loss account. So balance sheet is a statement
prepared on the last date of accounting year and not an account. It is prepared to know the financial position of the concern.
2. Partnership firm enjoys business continuity.
Ans. False: - Partnership firm is a personal organisation. Hence it stands dissolved in case of insolvency, insanity or death of any partner.
Hence partnership firm does not enjoy business continuity.
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3. When the bill is sent to bank for collection, bank A/c is credited.
Ans. False: - When bill is sent to bank for collection, bills receivable account is credited. Bills receivable account being a real account the
rule applicable is credit what goes out. Hence when bill is sent to bank for collection, bank account is not credited.
F. Drawer: Shekhar Desai, Spastic Road, Mahad. (5 marks)
Drawee – Sharad Verma, Narayan Peth, Pune.
Payee – Mukund Pande, Panvel.
Amount - Rs. 5775/-
Period - 50 days
Date of Bill Drawn – 15th March, 1995
Date of Acceptance – 19th March, 1995 (Accepted for only Rs. 5700)
SET VII
1. Why Partnership Deed in necessary?
2. What is Capital Receipt?
3. What is Single Entry System of Book – Keeping?
4. Who is drawer?
5. What is qualified acceptance?
1. Debit balance of trading account.
2. Written terms of agreement between the partners.
3. Summary of actual cash receipts and cash payments.
4. A system in which accounts are prepared from incomplete records.
5. An account opened by coventure in the bank for recording cash transactions.
Group A Group B
1. Goodwill a. Book Debts
2. Discount to customers b. Sundry Creditors
3. Statement of Affairs c. Tangible Asset
4. Income and Expenditure account d. Intangible Asset
5. Fixed Instalment Method. e. Single Entry System
f. Double Entry System
g. Original Cost
h. Not for Profit concerns
1. Reserve for discount on ______________ has a debit balance.
a. Debtors
b. Creditors
c. Bills Receivable
d. Loan advanced.
2. Income and Expenditure Account is a _______________
a. Personal account
b. Real account
c. Nominal account
d. Asset account
3. Under ____________ single entry system, no records are kept separately for impersonal accounts.
a. Quasi
b. Pure
c. Simple
d. Modern
4. There are ___________ parties to a bill of exchange.
a. Two
b. Three
c. Four
d. Five
5. Persons who enter into Joint Venture are called ___________
a. Co – ventures
b. Partners
c. Shareholders
d. Loan holders
1. Goodwill is a tangible asset of the business.
2. Under fixed capital method, current accounts of partners must be opened.
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F. Drawer: Vikas Jagtap, Guruwar Peth, Satara. (5 marks)

Drawee – Dadasaheb Kavthekar, Ramnagar, Chapal.
Amount - Rs. 5555/-
Period - 60 days
Date of Bill Drawn – 1st February, 2008
Date of Acceptance – 3rd February, 2008
SET VIII
1. Which types of expenses are debited to trading account?
2. What is Reserve Fund?
3. Who is an endorser?
4. What is non – profit organisation?
5. Why is Joint Bank Account opened?
1. A statement showing financial position of the business.
2. Making the payment of bill before its due date.
3. Summary of actual cash receipts and cash payments.
4. The relationship between persons who have agreed to share profit or loss in Joint Venture Business.
5. A Partner who only lends his name to the firm.
Group A Group B
1. Not for profit concerns a. Capital A/c. of partner.
2. Fixed capital method. b. Current A./c of Partner.
3. Unexpired expenses c. Joint venture
4. Temporary Partnership d. Asset
5. Pure Single Entry System e. Liability
f. Only personal A/cs.
g. Profit & Loss A/c.
h. Income and Expenditure A/c.
1. Reserve for discount on ______________ has a debit balance.
a. Debtors
b. Creditors
c. Bills Receivable
d. Loan advanced.
2. Income Statements and Balance Sheet are prepared in a systematic and scientific manner under ________________
a. Double Entry System.
b. Single Entry System
c. Partial Entry System.
d. Indian System.
3. Before accepting a bill, it is called a _________
a. Note
b. Draft
c. Hundi
d. Request.
4. Valuation of goodwill depends upon ________ capacity of business.
a. Normal
b. Repaying
c. Earning
d. Capital
5. If two or more persons come together to carry on a business activity for a short period, it is known as ___________
a. Joint venture
b. Consignment
c. Partnership
d. Stock exchange
1. Scrap value of asset reduces the amount of annual depreciation.
2. When the amount of the bill is paid on the due date, it is said to be retired.
Drawer - Shekhar Desai, Shastri Road, Mahad. (5 marks)
Drawee – Sharad Verma, Narayan Peth, Pune.
Amount - Rs. 3500/-
Period - 3 months.
Payee - Mukund Pande, Panvel
Date of Bill Drawn – 21st June, 2007
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SET IX

1. What is Balance Sheet?
2. What is Single Entry System?
3. What do you mean by Fixed Instalment Method?
4. What is Good will?
5. When Joint Bank A/c is opened?
1. A Partner who lends only his name to the firm.
2. Concerns established for providing services.
3. Profit earned over and above normal profit.
4. A temporary partnership without firm name.
5. A person who endorses the bill.
Group A Group B
1. Unpaid expenses a. Electronic device
2. Single Entry System b. Partnership firm
3. Computer c. Drawee
4. Co – Venturer d. Asset side
5. Maker of a bill e. Unscientific
f. Liability side
g. Drawer
h. Joint venture
1. Subscription received in advance during the accounting year is ____________
a. an income
b. an expense
c. an asset
d. a liability
2. Depreciation is charged only on the ____________
a. Current asset
b. Intangible assets
c. Immovable assets
d. Fixed assets
3. Brain of computer is _____________
a. Micro processor (march 2008)
b. RAM
c. DRAM
d. DOS
4. Unsold stock of Joint Venture taken over by Co – venturer is credited to ___________
a. Co – venturers’ A/c
b. Joint Venture A/c
c. Joint Bank A/c
d. Stock A/c
5. A one month’s bill drawn on 31st January, 2007 will be matured on ___________
a. 3rd March, 2007
b. 28th February, 2007
c. 29th February, 2007
d. 2nd March, 2007
1. Receipts and Payments A/c is a Nominal A/c
2. Drawee has no right to discount the bill with Bank.

Shri Amar Patil, Guruwar Peth, Karad, draws a Two months’ bill on Mehul Maniyar, Mul, payable to Yogesh Ghatkar, CIDCO,
Aurangabad, on 31st December, 2007 for Rs. 9,500.
Shri Mehul Maniyar accepted it on 2nd January, 2008.
SET X
(March 2009 Paper)
1. What is Statement of Profit or Loss?
2. What is Reducing Balance method?
3. What is the Method of Valuation of Goodwill?
4. What do you mean by Debit balance of Joint venture account?
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1. The balance which cannot be recovered from the debtors.
2. An accounting system where rules of debit and credit are not followed.
3. Money value of business reputation.
4. A person entered into a joint venture.
5. The Gifts received from legal representative as per the will of a deceased person.
Group A Group B
1. Opening Stock a. Amount of depreciation remains constant.
2. Fixed instalment method b. Trading account
3. Software c. Revenue income
4. Joint Bank Account d. Capital income
5. Subscription e. Balance sheet
f. Converting symbolic language
g. Separate set of books
h. Utility programme
1. Interest on the capital of partner is debited to _______________
a. Trading account
b. Profit and loss account
c. Partner’s capital account
d. Partner’s current account
2. Computer is a / an ______________
a. Mechanical device
b. Automation device
c. Electronic device
d. Electric device
3. Joint venture is a ________________

a. Trading concern
b. Non – trading concern
c. Religious concern
d. Public concern
4. A donation received for a specific purpose is a _______________

a. Capital receipt
b. Revenue receipt
c. Liability
d. Asset
5. A bill drawn and accepted on 12th June 2007 for two months will be due for payment on ___________
a. 12th August, 2007
b. 15th August, 2007
c. 16th August, 2007
d. 14th August, 2007
1. Non – commercial concerns with ‘no profit’ base prepare income and expenditure account in place of profit and loss account.
2. Noting charges are bone by Drawer.
F. Prepare bill of exchange from the following details. (5 marks)
1. Drawer : Mrs. Archana Patil, Vikram Nagar, Patan.

2. Drawee : Mrs. Nalini Maniyar, Jalaram Krupa, Mulund.
3. Payee : Mrs. Sugandhi Ghatkar, Mangal Yog, CIDCO, Aurangabad.
4. Amount : Rs. 17,575.
5. Period : 60 days.
6. Date of Bill : 28th December, 2007.
7. Accepted on : 2nd January, 2008.
8. Accepted for : 90 days.
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OMTEX WISHING YOU ALL THE VERY SUCCESS IN YOUR FORTH COMING BOARD EXAMINATON BISM ILLAH
Important points to remember
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Format of Trading Account

Dr Cr
Particulars Amount Particulars Amount
(Rs.) (Rs.)
To Opening Stock Xxx By Sales Xxx
To Purchases Xxx (-) Returns Xxx
(-) Returns Xxx By Goods loss by fire Xxx
To wages/ Wages & Salaries Xxx By Goods lost by theft Xxx
To Productive wages Xxx By Goods Withdrawn by Xxx
To Octroi Duty Xxx partner Xxx
To Royalties/Royalties on Xxx By Goods distributed as free Xxx
purchase Xxx samples
To carriage inward Xxx By Closing Stock
To cleaning Charges Xxx
To Factory Expenses Xxx
To Motive Power Xxx
To lighting & heating Xxx
To Power & Fuels Xxx
To factory insurance Xxx
To custom duty Xxx
To Factory electricity Xxx
To Factory Manager expenses Xxx
To Factory Rent Xxx
To Factory Repairs Xxx
To wages & Salaries Xxx
To carriage Xxx
To carriage on purchases Xxx
To freight Charges Xxx
To excise duty Xxx
To Import duty Xxx
To dock Charges Xxx
To Cartage charges Xxx
To Manufacturing expenses Xxx
To Gas, Fuel Xxx
To coal & Coke
Xxx Xxx
To Gross Profit c/d Xxx By Gross loss c/d Xxx
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Format of profit & loss Account
Dr Cr
Particulars Amount(Rs.) Particulars Amount
(Rs.)
To Gross loss b/d Xxx By Gross Profit Xxx
To salaries Xxx b/d Xxx
To carriage outward Xxx By income Xxx
To sundry expenses Xxx received Xxx
To printing & Stationery Xxx By commission Xxx
To electricity charges Xxx By interest Xxx
To miscellaneous expenses Xxx By discount Xxx
To advertisement Xxx By premium Xxx
To office expenses Xxx By Rent Xxx
To office rent Xxx By Sundry Xxx
To office insurance Xxx receivable Xxx
To Royalty on sales Xxx By appreciation
To salary & Wages Xxx By Profit on sales
To Commission Xxx of Assets
To Interest Xxx By Sale of scrap
To Discount Xxx
To Bad Debts Xxx
(+) F.B.D. Xxx
(+) N.R.D.D. Xxx
(-) O.R.D.D. Xxx
To entertainment expenses Xxx
To Telephone Charges Xxx
To Rent & Rates Xxx
To Sales Tax. Xxx
To Postage & Telegram Xxx
To Office Manager Salary Xxx
To Unproductive Wages Xxx
To freight on sales Xxx
To legal fees Xxx
To Delivery van expenses xxx
To conveyance Expenses xxx
To Petty Cash expenses xxx
To Administrative expenses xxx
To Refreshment Expenses xxx
To loss on sale of asset xxx
To publicity expenses xxx
To loading charges xxx
To depreciation xxx
To loss on sale of assets xxx
To net profit c/d Xxx Xxx
Xxx Xxx
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Format of Balance Sheet
Dr Cr
(Rs.) (Rs.)
Capital A/c Xxx Good will Xxx
A Xxx Land & Buildings Xxx
B Xxx Free hold Premises Xxx
Current A/c Xxx Machinery Xxx
A Xxx Furniture Xxx
B Xxx Lease Hold Premises Xxx
Reserves Xxx Office Equipments Xxx
General Reserves Xxx Sundry Debtors Xxx
Fund Xxx Cash in hand Xxx
Reserve Fund Xxx Cash at Bank Xxx
Loan Xxx Bill Receivable Xxx
Loan from partners Xxx Live stock Xxx
Bank Loan Xxx Shares & securities Xxx
Bank overdraft Xxx Prepaid expenses Xxx
Sundry Creditors Xxx Loan Given Xxx
Bills Payable xxx Computer Xxx
Outstanding expenses xxx Copy right Xxx
Income received in advance xxx Patients Xxx
Trade Mark Xxx
Brand Name Xxx
Loose Tools Xxx
Fittings Xxx
Fixed assets Xxx
Current Assets Xxx
Vehicles Xxx
Income receivable Xxx
Closing Stock Xxx
Insurance claim Xxx
receivable Xxx
Patents & Patterns Xxx
Premises
Xxx Xxx
100

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H.S.

C OMTEX CLASSES 6 YEAR

STANDARD: -S.Y.J.C (Second year junior college)

CLASSES :- OMTEX CLASSES

“You don’t know what you can do until you try”

CH: - 1. B VALUATION OF GOODWILL

1st Year 4,800(p)

HOME WORK SECTION

IMPORTANT POINTS TO REMEMBER

CH. 1.B. COMPUTER AWARENESS

Answer the following questions

2. Explain about the components of computer hardware?

3. Write a short note on – second generation computers.

4. Write short notes on ‘Third Generation Computers’ (1965 – 71)

5. Write short note on “Fourth Generation of Computers” (1971 – 85)

6. Write short notes on – First generation Computers.

7. Write short notes on Central Procession Unit.

8. EXPLAIN THE IMPORTANCE OF COMPUTER IN MODERN AGE.

9. EXPLAIN THE ROLE OF COMPUTER IN ACCOUNTING.

CH. 2. BILLS OF EXCHANGE

BILLS OF EXCHANGE: - “A Bills of Exchange is a Negotiable (exchangeable) Instrument, containing an unconditional

ESSENTIAL FEATURES OF BILL OF EXCHANGE

THERE ARE THREE PARTIES IN THE BILL OF EXCHANGE.

1. DRAFT: - Before the acceptance of the bill, it is known as draft.

5. TYPES OF BILL: - There are two types of Bill

9. PROTESTING: - It is also a fee charged by the government in case of foreign bill.

Pro Forma of a bill of exchange

3. Drawer : Manish, 35, Lakhani Apartment, Ulhasnagar

4. Drawer : Madhavan nayar, Gandhi Chauk, Dhamangaon

5. Drawee : Sanath Jayasurya, Nehur Road, Solapur.

6. Drawer : Jayewardene, 44, M.G. Road, Nanded.

7. Drawer : Peterson, Main Road, Jalgaon.

8. Drawer : Shekhar Desai, Shastri Road, Mahad.

9. Drawer : Vijay Bhat, Main Road, Nagpur.

10. Drawer : Namdev Tukaram, Paithan.

12. Drawer : Shri Ravindra Patil, Housing Society, Ambajogai

13. Drawer : Abhijit Patil, Vikram nagar, Patna.

30. Journalise the following transactions in the books of Rahul.

CH. 4. JOINT VENTURE ACCOUNTS [12 MARKS]

Method I When Separate set of Books is maintained.

Method II: When no Separate set of Books is maintained.

CH. 5. SINGLE ENTRY SYSTEM {10 MARKS}

2. The following info. Is available from Rajendra’s records:

3. On 01/04/06; Mr. Bannerjee commenced business with a capital of Rs.25,000.

On 31/03/07 their asset and liabilities were :

b) A Reserve for bad debts is to raised at 2.5%

On 31st March 07 the books disclosed the following facts:

Liabilities Amt Asset Amt

CH. 6. FINAL ACCOUNTS OF NPO NOT PROFIT ORGANISATION

Receipts Amount Payments Amount

Receipts Amount Payments Amount

1. Salaries unpaid Rs. 250. Printing unpaid includes Rs. 600.

Receipts Amount Payments Amount

Receipts and Payment Account

Receipts Amount Payments Amount

Receipts Amount Payments Amount

1. Capitalize 50% of the entrance fees.

Liabilities Amount Assets Amount

Receipts Amount Payments Amount

CH: - FINAL ACCOUNTS OF PARTNERSHIP FIRM

1. Closing stock was valued at Rs. 26,500.

Write Answers. G.P. =