1. Prepare Profit and Loss Account, from the following balances of Mr.Kandan for the year ending 31.12.

2017
Office rent Rs.30,000 Salaries Rs.80,000
Printing expenses Rs.2,000 Stationeries Rs.3,000
Tax, Insurance Rs.4,000 Discount allowed Rs.6,000
Advertisement Rs.36,000 Travelling expenses Rs.26,000
Gross Profit Rs.2,50,000 Discount received Rs.4,000

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.12.2017

To office rent 30,000 by Gross Profit b/d 250000
To Printing expenses 2,000 By Disocunt received 4,000
To tax, insurance 4,000    
To Advertisement 36,000    
To Salaries 80,000    
To Stationeries 3,000    
To Discount allowed 6,000    
To Travelling expenses 26,000    
To Net Profit 67,000    
  254000   254000

3. From the following information prepare balance sheet of Mrs.Nasreen Khan as at 31st Dec. 2017
Goodwill Rs.10,000 Sundry debtors Rs.25,000
Capital Rs.90,000 Drawings Rs.15,000
Cash in hand Rs.10,000 Land & Buildings Rs.30,000
Investment Rs.500 Bank Rs.10,000
Net profit Rs.46,900 Creditors Rs.31,500

  BALANCE SHEET AS ON 31.12.2017  

LIABILITIES RS ASSETS RS
capital 90000   goodwill 10000
add:Net Profit 46900   cash in hand 10000
less:drawings 15000 121900 investment 78400
creditors 31500 s.debtors 25000
    land 30000
    bank 10000
total 153400 total 153400

5. The following were extracted from the books of Suraj on 31.12.2018.

Capital 15,000 Sales tax(cr) 50,000
Drawings 2,700 Discounts received 300
Stock, 1-1-2018 11,000 Office expenses 750
Purchases 35,000 Bills Payable 4,500
Sales 62,000 Plant and Machinery 15,000
Return inwards 1,200 Provision for Bad Debts 1,000
Returns outwards 800 Debtors 58,000
Wages 5,740 Creditors 19,800
Salaries 8,200 Cash in hand 700
Electric charges 1,120 Cash at Bank 12,800
Discounts paid 770 Bills Receivable 420
Insurance 3000 Commission received 3000
1. The value of the closing stock on 31.12.2018 was Rs. 13,500
2. Depreciate ant by 10%
3. Write off ₹500 as bad debt and Provision for doubtful debt 5% on debtor
4. Salaries for the month of March amounting to RS.3,000 were unpaid. However salaries included
Rs.2,000 paid in advance
5. Insurance amounting to₹2,000 prepaid
6. Provide for outstanding office expenses ₹8,000
7. Stock used for private purpose ₹6,000
8. Loss of goods by fire ₹2,500(uninsured)
TRADING & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.12.2018
 to opening stock 11,000 by Sales 62,000  
To Purchases 35,000   Less:r.Inwards 1,200 60,800
less: R.Outwards 800   by closing stock 13,500
less: drawings 6,000 28,200 by loss of goods by fire 2500
To wages 5,740    
To gross profit c/d 31,860    
       
total 76,800 total 76,800
To salaries 8,200   By Gross Profit b/d 31,860
(+) outstanding 3,000   By Commission received 3000
(-) prepaid 2,000 9,200 By Discount received 300
To electric charges 1,120    
To Discount paid 770    
To office exps 750      
(+) Outstanding 8,000 8,750    
To Depreciation 1,500    
To Insurance 3,000      
(-) prepaid 2,000 1,000    
To loss of goods by fire 2,500    
To Bad debt 500      
(+) RBD 2875      
(58000-500)x5% 3375      
(-) ORBD 1000 2,375    
To Net Profit 7,945    
total 35160 total 35,160
   
  BALANCE SHEET AS ON 31.12.2018  
LIABILITIES RS ASSETS RS
capital 15,000   Plant 15,000  
less: drawings 2,700   Less: Depreciation 1,500 13,500
add: Net profit 7,945   debtors 58,000  
less:Drawings 6,000 14245 Less: bad debt 500  
sales tax 50000 Less: RBD 2875 54625
bills payable 4500 cash in hand 700
Creditors 19800 cash at bank 12800
o/s salaries 3000 bills receivable 420
o/s office expenses 8000 stock 13500
    prepaid salaries 2000
    prepaid insurance 2000
total 99,545 total 99,545

9. From the following particulars prepare Trading and Profit and Loss Account of Mr R for the year ended 31-
03-2016 and a Balance Sheet as on 31-03-2016.
 Dr. Rs. Cr.Rs.
Buildings 5,00,000 ----
Machineries 2,00,000 ----
Furniture 1,00,000 ----
Cash at Bank 90,000 -----
Cash on Hand 10,000 ----
18% p.a. loan obtained by Mr R on 01-06-2015 on ----
mortgage of his building 3,00,000
R’s Capital ----- 5,20,000
Sundry Debtors/ Sundry Creditors 5,00,000 4,00,000
Stock on 1-4-2015 1,20,000 ------
Purchases / Sales 25,00,000 32,20,000
Sales Returns / Purchases Returns 1,20,000 1,00,000
Rent 60,000 ----
Establishment Expenses 1,80,000 ----
Electricity Charges 15,000 ----
Telephone Charges 10,000 -----
Commission on Sales 30,000 ----
Insurance Premium 10,000 -----
Bad Debts 20,000 ----
Bills Receivables 75,000 -----
45,40,000 45,40,000
You are required to provide for depreciation on building at 5% p.a, on machinery at 25% p.a., on furniture at
10% p.a, Provision for bad and doubtful debts is to be made at 5% on Sundry debtors. Mr R’s Manager is
entitled to a commission of 10% on the net profit after charging his commission. Closing Stock was not taken on
31-03-2016 but only on 07-04-2016. Following transactions had taken place during the period from 01-04-2016
to 7thApril 2016, Sales Rs. 2,50,000, Purchases Rs. 1,50,000, Stock on 7 th April 2016 was Rs. 1,80,000 and the
rate of gross profit on sales was 20%, Insurance Premium mentioned in the trial balance was in respect of
building and machines. Interest on mortgage loan to be provided up to 31-03-2016.
calculation of closing stock
TRADING ACCOUNT FOR THE period 7-4-2016
to opening stock (bal fig) 230,000 by sales 250,000
to purchases 150,000 by closing stock 180,000
to gross profit 50,000    
  430,000   430,000
TRADING & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2016
to opening stock 120,000 by Sales 32,20,000  
To Purchases 25,00,000   Less:r.Inwards 1,20,000 3,100,000
less: R.Outwards 1,00,000 2,400,000 by closing stock 230,000
To gross profit c/d 810,000    
       
total 3,330,000 total 3,330,000
To rent 60,000 By Gross Profit b/d 810,000
To Establishment expneses 180,000    
to Elctricity charges 15,000    
To Telephone charges 10,000    
to commission on sales 30,000    
to insurance premium 10,000    
to bad debts 20,000      
(+)RBD 25,000 45,000    
to depreciation      
buiding 25,000      
machinery 50,000      
furniture 10,000 85,000    
to interest on loan o/s 45,000    
to manager's commission      
(330000x10/110) 30,000    
To Net Profit 300,000    
total 810,000 total 810,000
    
  BALANCE SHEET AS ON 31.03.2016  
LIABILITIES RS ASSETS RS
capital 5,20,000   buildings(5,00,000-25,000) 475,000
Add: net Profit 3,00,000 820,000 machinery(2,00,000-50000) 150,000
18%Mortgage loan 300,000 furniture(1,00,000-10,000) 90,000
creditors 400,000 cash at bank 90,000
manager's commissiom 30,000 cash in hand 10,000
o/s Interest on loan 45,000 debtors 475,000
    stock 230,000
    bills receivable 75000
total 1,595,000 total 1,595,000
10. From the following balances and information, prepare Trading and Profit and Loss Account of Mr X for the
year ended 31st March 2017 and a Balance Sheet as on that date:
Dr. Rs. Cr.Rs.
X’s Capital Account ---- 10,000
Plant and Machinery 3,600 ----
Depreciation on Plant and Machinery 400 ----
Repairs to Plant 520 ---
Wages 5,400 ---
Salaries 2,100 ---
Income Tax of Mr X 100 ---
Cash in Hand and at Bank 400 ---
Land and Building 14,900 ---
Depreciation on Building 500 ---
Purchases 25,000 ---
Purchases Return --- 300
Sales --- 49800
Bank Overdraft --- 760
Accrued Income 300 ---
Salaries Outstanding --- 400
Bills Receivable 3000
Provision for Bad Debts --- 1,000
Bills Payable --- 1,600
Bad Debts 200 ---
Discount on Purchases --- 708
Debtors 7,000 ---
Creditors ---- 6,252
Opening Stock 7,400 ----

70,820 70,820
INFORMATION:
i) Stock on 31st March 2017 was Rs. 6,000.
ii) Write off further Rs. 600 for Bad debts and maintain a provision for Bad Debts at 5% on Debtors
iii) Goods costing Rs. 1000 were sent to customer for Rs. 1,200 on 30 th March 2017 on Sale or return basis.
This was recorded as actual loss
iv) Rs. 240 paid as rent of the office were debited to Landlord Account and were included in the list of
debtors.
v) General Manager is to be given commission at 10% of net profit after charging the commission of the
works manager and his own.
vi) Works Manager is to be given commission at 12% of net profit before charging the commission of General
Manger and his own
TRADING & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2016
 to opening stock 7,400 By sales(49800-1200) 48600
24,70
to purchases (25000-300) 0 by closing stock(6000+1000) 7,000
To Wages 5,400    
18,10
To Gross Profit c/d 0    
       
55,60 55,60
total 0 total 0
18,10
To Repairs to plant 520 By Gross Profit b/d 0
To salaries 2100   By discount on purchases 708
less:O/S 400 1,700    
To Income tax 100    
to bad debt 200      
(+)bad debt 600      
(+)NRBD 248      
(7000-240-1200-600)x5%      
(+)ORBD 1000 48    
ToRent 240    
To Accrued income 300    
to depreciation      
machinery 400      
building 500 900    
To Work manager commission 1,800    
(15000x12%)      
To G.M Commission 1,200    
(15000-1800=13200X10/110)      
12,00
To Net Profit 0    
18,80 18,80
total 8 total 8
   
  BALANCE SHEET AS ON 31.03.2016  
LIABILITIES RS ASSETS RS
capital 10,000   plant 3,600
22,00
(+)net profit 12,000 0 cash in hand 400
14,90
bank overdraft 760 land 0
bills payable 1,600 bills receivables 3,000
GM commission 1,800 debtors 7000  
WM commission 1,200 (-) bad debt 600  
creditors 6252 (-)goods sent on app 1,200  
    (-)landlord 240
    (-)RBD 248 4712
    stock 7000
33,61 33,61
total 2 total 2

11. Bansali submitted to you the following Trial Balance, which he has not been able to agree. Rewrite the Trial
Balance and Prepare Trading and Profit and Loss Account for the year ended 31-12-2017 and a Balance
Sheet on that date after giving effect to the under mentioned adjustments :- (tulsian-20th prob)
Dr. Rs. CrRs.
Capital ----- 16,000
Opening Stock 17,500 -----
Closing Stock ---- 18,790
Drawings 3305 -----
Returns Inward ----` 550
 Carriage Inward 1240 ----
Deposit with X ------ 1400
Returns Outward 840 -----
Carriage Outward ---- 725
Rent Paid 800 ----
Rent Outstanding 150` ---
Purchases 13000 ----
Sundry Debtors 5000 -----
Sundry Creditors ---- 4000
Furniture 1500 ----
Sales --- 29000
wages 850 ---
Cash 1370 ---
Goodwill 1800 ---
Advertisement 950 ----
48305 70465
ADJUSTMENTS:-
1. Write Off Rs. 600 as Bad debts and make Reserve for Bad Debts on Sundry Debtors at 5%
2. Stock valued at Rs. 2000 was destroyed by fire on 25 th December 2017, but Insurance Company
admittedp a claim for Rs. 1500 only and paid the sum in January 2018.
TRADING & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.12.2017
To opening stock 17,500 by sales(29000-550) 28450
To purchase (13000-840) 12,160 By Stock lost by fire 2,000
To wages 850 By Closing Stock 18,790
To Carriage inward 1,240    
To Gross Profit c/d 17,490    
total 49,240 total 49,240
To Carriage outward 725 By Gross Profit b/d 17,490
To Rent 800 By discount on purchases  
To Advertisement 950    
To Bad debts 600      
(+)RBD 220 820    
To Loss of stock by fire 500    
To Depreciation-furniture 150    
To Net Profit 13,545    
total 17,490 total 17,490
   
  BALANCE SHEET AS ON 31.12.2017  
LIABILITIES RS ASSETS RS
capital   goodwill 1,800
opg bal: 16000   furniture(1500-150) 1,350
(+)net profit 13545   deposit with X 1,400
(-)Drawings 3305 26,240 clsoing stock 18,790
creditors 4,000 debtors 5000  
o/s rent 150 (-)Bad debt 600  
    (-)RBD 220 4,180
    Insurance claim Recoverable 1,500
    cash 1370
       
total 30,390 total 30,390
 12. From the following trial balance of a trader you are required to prepare trading and profit and loss account
for the year ending 31st December, 2017, and a balance sheet as on that date.
Dr. Cr.
Cash in hand 1,000
Stock 3,500
Creditors 3,900
Debtors 19,200
Drawings 5,130
Sales 92,800
Purchases 81,200
Wages 7,200
General expenses 5,170
Furniture 4,000
Goodwill 3,000
Capital 32,700
1,29,4 1,29,400
1) Furniture (book value on January 1, Rs. 400) was sold on 30 th June for Rs. 450 and was passed through the
sales book.
2) Depreciate furniture at 10% p.a
3) Private purchases amounting to Rs.100 were passed through the Purchase Day Book.
4) Sales book was overcast by Rs. 50.
5) Wage outstanding Rs.50, though included in the wages account, was not included in the trial balance.
6) Stock at the end was valued at Rs.4,500. In view of the constant fall in prices, it has been decided to write off
stock by 10%.
TRADING & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.12.2017
To opening stock 3,500 by sales 92300
81,10
To purchase (81200-100) 0 (92800-450-50)  
To wages 7,200 By Closing Stock(4500-10%) 4,050
       
To Gross Profit c/d 4,550    
96,35
total 0 total 96,350
To general Expenses 5,170 By Gross Profit b/d 4,550
To Depreciation-furniture   By profit on sale of furniture 70
(4000-400=3600x10%=360   (450-(400-20)  
400 x 10% x 6/12 20 380 By net loss 930
total 5,550 total 5,550
  BALANCE SHEET AS ON 31.12.2017  
LIABILITIES RS ASSETS RS
capital   cash 1,000
opg bal: 32700   debtors 19,200
(-) net loss 930   Furniture 3,240
(-)Drawings 5130   (4000-400-360)  
26,54
(-)Drawings 100 0 closing stock 4,050
o/s wages 50 goodwill 3,000
creditors 3900    
30,49
total 0 total 30,490

13. From the following Ledger Balances extracted at the close of trading year ended 31 st March 2017 prepare a
Trading Account, P and L Account and Balance Sheet at that date, after giving effect to the under mentioned
adjustment :
Rs. Rs.
Capital on 1-4-2017 50000 Business premises 55000
 Stock on 1-4-2017 8000 Furniture and Fixtures 2500
Purchases 20000 Bills Receivables 3500
Sales 80000 Bills Payable 2500
Return Inwards 1500 Sundry Debtors 20000
Return Outwards 400 Sundry Creditors 15800
Wages 6900 Packing Machinery 4500
Advertisement 5500 Smith’s Loan (Dr.) @10% on 1-4-2017 5000
Apprenticeship Premium 1200 Investment 12400
Interest on Smith’s Loan 300 Cash in Hand 250
Proprietor’s withdrawals 3000 Cash at Bank 3500
Office Expenses 8050
Adjustments to be made for the current period are:
1) Stock in Hand at 31st March 2017 Rs.7000
2) Apprenticeship Premium is for three years, paid in advance on 1 st April 2017,
3) Interest on Capital to be allowed at 5% for the year.
4) Interest on Drawings to be charged to him as ascertained for the year Rs.80.
5) Rs. 5000 out of the Advertisement Expenses are to be carried forward.
6) Stock valued at Rs. 3000 destroyed by fire on 25-3-2017 but the Insurance Co admitted a claim of Rs. 2000
only and pad it on 25-4-2017.
7) The Manager is entitled to a commission of 10% of the Net Profit calculated after charging such commission.
8) Included in sales is an amount of Rs. 10000 representing goods on “Sales or return” the customer still having
the right to return the goods. The goods were invoiced charging a profit of 20% on sales.
9) The stock includes materials worth Rs. 1000 for which bill had not been received and therefore, not yet
accounted for.

TRADING & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.3.2017
To opening stock 8,000 by sales 68,500
To purchase (20,000-400+1000) 20,600 (80,000-1500-10,000)  
To wages 6,900 By Closing Stock 7,000
    By Loss by fire 3,000
To Gross Profit c/d 43,000    
total 78,500 total 78,500
To Advertisment(5500-5000) 500 By Gross Profit b/d 43,000
To int on smith loan 300   By Apprenticeship prem 1200  
(+)O/s (5000*10%-300) 200 500 (-) recd in advance 800  
To office expenses 8,050 (1200x2/3) 400
To interest on capital 2,500 by interest on drawing 80
(50,000x5%)      
To loss by fire(3000-2000) 1,000    
To managers commission      
(43480-500-500-8050-2500-1000)      
(30930 x 10/110) 2,812    
To net profit 28,118    
total 43,480 total 43,480
   
  BALANCE SHEET AS ON 31.03.2017  
LIABILITIES RS ASSETS RS
capital 50000   b.premises 55,000
(+) net profit 28118   furniture 2,500
(-) drawings 3000   B/R 3,500
(-) int on drawing 80   debtors 10,000
(+)int on capital 2500 77,538 machinery 4,500
b/p 2,500 cash 250
creditors(15800+1000) 16,800 bank 3,500
smith loan 5,000 closing stock 7,000
o/s int on loan 200 claim receivable 2,000
ap.prem recd in advance 800 prepaid advt exp 5,000
manager commission 2812 investment 12,400
 105,65
total 0 total 105,650