Preparation Financial Statement CHAPTER 14 151
Solution,
XYZ Company Ltd.
Balance Sheet
As on 31st December 2013
Capital and liabilities Descriptions Total Rs.
Capital and Reserve
Capital......................................................................................................................................................................................................... 260,000
Reserve and retained profit ........................................................................................................................................................................ 86,000
Medium and long-term loan
Secured loan............................................................................................................................................................................................... 60,000
Unsecured loan........................................................................................................................................................................................... 52,000
Grand total 478,000
Assets
Non-current assets
Fixed assets................................................................................................................................................................................................ 200,000
Investment ................................................................................................................................................................................................. 100,000
Total non-current assets (A) 300,000
Current assets
Inventories .................................................................................................................................................................................................. 140,000
Trade receivable......................................................................................................................................................................................... 60,000
Cash at bank............................................................................................................................................................................................... 20,000
Prepaid expenses ...................................................................................................................................................................................... 32,000
Total current assets (B) 252,000
Less: Current Liabilities
Trade payable............................................................................................................................................................................................. 48,000
Short term loan ........................................................................................................................................................................................... 6,000
Provision ..................................................................................................................................................................................................... 40,000
Total current liabilities and provisions (C) 94,000
Net current assets (B – C = D) 158,000
Unamortized preliminary expenses (E) 20,000
Grand total (A + D + E) 478,000
VQ- 7. ____ Mr. Abhisekh had the following account balances at December 31, 2016
Sundry creditors .............................................................................R...s....1...8..,.0..0..0.....B...e..g..in..n...in..g...I.n..v..e..n..t.o..r..y...........................................................................R..s....3..0..,.0...0..0......................................................
Sundry debtors .....................................................................................2..6...,.0..0..0.....L..a..n..d........................................................................................................4..6..6..,.0...0..0......................................................
Bills payable.........................................................................................1..0...0..,.0..0..0.....P...a..t.e..n..t.s.....................................................................................................1..2..,.0..0...0......................................................
Cash.......................................................................................................3..4...,.0..0..0.....R...e..s..e..r.v..e...f.u..n..d............................................................................................4..0..,.0..0...0......................................................
Capital .................................................................................................2..0...0..,.0..0..0.....S...a..le..s...r.e...v.e..n..u..e.........................................................................................6..0..0..,.0..0...0......................................................
Purchase..............................................................................................2..0...0..,.0..0..0.....P...r.i.n..t.in..g...a...n..d...s.t.a...t.io..n..e..r..y...............................................................................6..,.0..0...0......................................................
Wages ....................................................................................................4..0..,.0..0..0.....S...u..n..d..r.y...e..x..p..e..n..s.e........................................................................................1..4..,.0..0...0......................................................
Equipment..............................................................................................5..0...,.0..0..0.....S...a..la..r..y..e...x.p..e..n..s..e.........................................................................................8..0..,.0..0...0......................................................
Additional information: Closing stock at the end of December Rs.25,000
Required: a. Trading account b. Profit and Loss Account c. Balance Sheet
Solution,
Trading and Profit & Loss Account Cr.
Dr. for the year ended 31st December 2016
Particulars Amount Rs. Particulars Amount Rs.
To Beginning inventory..............................................................................3..0..,.0..0..0......B..y...S...a..le..s...r.e...v.e..n..u..e...............................................................................6..,.0..0..,.0..0...0......................................................
To Purchases..........................................................................................2..,.0..0..,.0..0..0......B..y...C...l.o..s.i.n..g...s..t.o..c..k...................................................................................2..5..,.0..0...0......................................................
To Wages ..................................................................................................4..0..,.0..0..0.............................................................................................
To Gross profit c/d ..................................................................................3..,.5..5..,.0..0..0.............................................................................................
6,25,000 6,25,000
To Printing & stationery ...............................................................................6..,.0..0..0......B..y...G...r.o..s..s...p..r.o..f.i.t..b../.d.............................................................................3..,.5..5..,.0..0...0......................................................
To Sundry expenses..................................................................................1..4..,.0..0..0.............................................................................................
To Salary....................................................................................................8..0..,.0..0..0.............................................................................................
To Net profit c/d ......................................................................................2..,.5..5..,.0..0..0.............................................................................................
3,55,000 3,55,000
Balance Sheet
As on 31st December 2016
Liabilities Amount Rs. Assets Amount Rs.
Capital ...............................................................2,00,000 Land .................................................................................................4..,.6..6..,.0..0...0......................................................
Add : Net profit....................................................2,55,000 4,55,000 Equipment...........................................................................................5..0...,0..0...0......................................................
Reserve fund .............................................................................................4..0..,.0..0..0......P..a..t.e..n..t...................................................................................................1..2..,.0..0...0......................................................
Sundry creditors.........................................................................................1..8..,.0..0..0......C..l.o..s..i.n..g...s..t.o..c..k........................................................................................2..5..,.0..0...0......................................................
Bills payable.............................................................................................1..0..0..,.0..0..0......S..u..n..d..r..y..d..e..b...t.o..r.s.....................................................................................2..6..,.0..0...0......................................................
Cash....................................................................................................3..4..,.0..0...0......................................................
6,13,000 6,13,000
152 Accounting-XI
SHORT ANSWER QUESTIONS
SQ- 1. ____ The following is the trial balance of Sharma Bros for the year ended 31st Chaitra 2073:
Particulars Debit (Rs.) Credit (Rs.)
Cash......................................................................................................................................................................................................1..8..0..,.0..0..0 40,000
Sundry debtors ...................................................................................................................................................................................2..0..0..,.0..0..0 5,000
Equipment.............................................................................................................................................................................................1..1..0..,.0..0..0 100,000
Sundry creditors ............................................................................................................................................................................................ 240,000
Interest payable ..............................................................................................................................................................................................
Bills payable ................................................................................................................................................................................................... 1,100,000
Capital .............................................................................................................................................................................................................
Sales revenue ................................................................................................................................................................................................. 10,000
General expenses ................................................................................................................................................................................8..0..,.0..0..0 1,495,000
Purchases ............................................................................................................................................................................................6..6..0..,.0..0..0
Rent expense .........................................................................................................................................................................................7..0..,.0..0..0
Salary expense ......................................................................................................................................................................................4..0..,.0..0..0
Selling expense .....................................................................................................................................................................................8..0..,.0..0..0
General and Administrative expense ....................................................................................................................................................2..0..,.0..0..0
Interest expense ....................................................................................................................................................................................1..5..,.0..0..0
Interest received .............................................................................................................................................................................................
Miscellaneous loss ...............................................................................................................................................................................4..0..,.0..0..0
Totals 1,495,000
Additional information
i. Ending inventory was valued at Rs 250,000 ii. Outstanding salary Rs. 5,000
b. Balance Sheet
Required: a. Trading and Profit & Loss Account
Solution,
Trading and Profit & Loss Account Cr.
Dr. for the year ended 31st Chaitra 2073
Particulars Amount Rs. Particulars Amount Rs.
To Purchases.......................................................................................6..,.6..0..,.0..0..0.....B...y...S..a..l.e..s...r.e..v..e..n..u..e................................................................................1..1..,.0..0..,.0...0..0......................................................
To Gross profit c/d ...............................................................................6..,.9..0..,.0..0..0.....B...y...C..l.o..s..i.n..g...s..t.o..c..k...................................................................................2..,.5..0..,.0..0...0......................................................
13,50,000 13,50,000
To General expenses .............................................................................8..0..,.0..0..0.....B...y...G...r.o..s..s...p..r.o..f.i.t..b../.d................................................................................6..,.9..0..,.0..0...0......................................................
To Rent expenses ..................................................................................7..0..,.0..0..0.....B...y...I.n..t.e..r.e..s..t..r.e..c..e..i.v..e..d.................................................................................1..0..,.0..0...0......................................................
To Salary.......................................................... 40,000
Add : Outstanding.............................................. 5,000 45,000
To Selling expenses ...............................................................................8..0..,.0..0..0................................................................................................
To General & administrative...................................................................2..0..,.0..0..0................................................................................................
To Interest...............................................................................................1..5..,.0..0..0................................................................................................
To Miscellaneous loss ............................................................................4..0..,.0..0..0................................................................................................
To Net profit c/d ....................................................................................3..5..0..,.0..0..0................................................................................................
7,00,000 7,00,000
Balance Sheet
As on 31st Chaitra 2073
Liabilities Amount Rs. Assets Amount Rs.
Capital .........................................................2,40,000 Equipment ...........................................................................................1..,.1..0..,.0..0...0......................................................
Add: Net profit...............................................3,50,000 590,000 Closing stock.......................................................................................2..,.5..0..,.0..0...0......................................................
Sundry creditors......................................................................................4..0..,.0..0..0.....S...u..n..d..r.y...d..e..b..t.o..r.s......................................................................................2..,.0..0..,.0..0...0......................................................
Interest payable ........................................................................................5..,.0..0..0.....C...a..s..h......................................................................................................1..,.8..0..,.0..0...0......................................................
Bills payable..........................................................................................1..0..0..,.0..0..0................................................................................................
Outstanding salary....................................................................................5..,.0..0..0................................................................................................
7,40,000 7,40,000
SQ- 2. ____ The following is the trial balance of Mr. Ramlal for the year ended 31st Chaitra 2075
Particulars Rs. Particulars Rs.
Opening stock.........................................................................................7..0..,.0..0..0.....C...a..p..i.t.a..l...................................................................................................1..1..0...,0...0..0......................................................
Purchase...............................................................................................3..1..5..,.0..0..0.....S...a..l.e..s......................................................................................................4..5..0...,0...0..0......................................................
Rent, Rate and taxes..............................................................................1..4..,.0..0..0.....C...r.e..d..i.t.o..r.s...................................................................................................3..0..,.0..0...0......................................................
Carriage inward ........................................................................................2..,.5..0..0.....C...o..m...m...i.s..s..io...n...............................................................................................1...,2...0..0......................................................
Salaries ...................................................................................................2..5..,.5..0..0................................................................................................
Sales return ..............................................................................................3..,.0..0..0................................................................................................
Wages.....................................................................................................2..7..,.0..0..0................................................................................................
Plant and machinery...............................................................................8..0..,.0..0..0................................................................................................
Audit fee....................................................................................................9..,.5..0..0................................................................................................
Cash in hand.............................................................................................9..,.0..0..0................................................................................................
Trade debtors ........................................................................................3..5..,.7..0..0................................................................................................
591,200 591,200
Additional information ii. Outstanding salary Rs. 700
iv. Commission earned but not received Rs. 300
i. Closing stock Rs. 764,00
iii. Prepaid wages Rs.1,200
Preparation Financial Statement CHAPTER 14 153
Solution,
Trading and profit and loss A/c Cr.
Dr. For the year ending 31st Chaitra, 2075 Amount Rs.
Particulars Amount Rs. Particulars 447,000
76,400
To opening stock ....................................................................................7..0..,.0..0..0.....B...y...S..a..l.e..s........................................................................4..5..0..,000
To Purchase .........................................................................................3..1..5..,.0..0..0.....L...e..s.s..:..R...e..t.u..r.n......................................................................3..,000 523,400
To wages ............................................................ 27,000 By Closing stock...................................................................... 110,100
Less: Prepaid .........................................................1200 25,800
To Carriage inward ...................................................................................2..,.5..0..0................................................................................................ 1,500
To Gross profit .....................................................................................1..1..0..,.1..0..0................................................................................................
111,600
5234,000
To Rent, rate and taxes 14,000 By Gross profit ........................................................................
To Salaries........................................................... 25500 By Commission .............................................................. 1,200
Add: Outstanding...................................................... 700 26,200 Add: Accrued .................................................................... 300
To Audit fee ........................................................................................ 9,500
To Net profit ........................................................................................ 61,900
111,600
Balance sheet of a Trading Concern
As on 31st Chaitra, 2075
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital ................................................................. 110,000 Plant & machinery......................................................................... 80,000
Add: Net profit ......................................................... 61,900 171,900 Trade design ................................................................................. 35,700
Creditors .................................................................................................3..0..,.0..0..0.....C...a..s..h...i.n...h..a..n..d................................................................................... 9,000
Outstanding salary ......................................................................................7..0..0.....C...l.o..s..i.n..g...s..t.o..c.k................................................................................... 76,400
Accrued commission..................................................................... 300
Prepaid wages .............................................................................. 1200
Total 202,600 Total 202,600
SQ- 3. ____ The following is the trial balance of trading concern for the year ended Chaitra, 2073.
Particulars Rs. Particulars Rs.
Opening stock .......................................................................................1..0..,.0..0..0.....C...a..p..i.t.a..l................................................................................ 40,000
Wages and salary ..................................................................................1..3..,.0..0..0.....B...i.ll.s...p..a..y..a..b..l.e...............................................................................................1..,.0...0..0......................................................
Prepaid insurance ....................................................................................1..,.0..0..0.....C...r.e..d..i.t.o..r.s.....................................................................................................4..,.0...0..0......................................................
Audit fees .................................................................................................2..,.5..0..0.....G...e..n..e..r..a..l.R...e..s..e..r.v..e........................................................................................1..,.0...0..0......................................................
Discount ..................................................................................................1..,.0..0..0.....1..0..%.....l.o..a..n..................................................................................................1..0..,.0..0...0......................................................
Cash at Bank ...........................................................................................6..,.0..0..0.....P...r.o..v..i.s..io..n....f.o..r..d..e..b..t......................................................................................1..,.0...0..0......................................................
General expenses ...................................................................................4..,.0..0..0.....D...i.s..c..o..u..n..t..R..e..c..e..i.v..e..d.....................................................................................1..,.0...0..0......................................................
Purchases ..............................................................................................3..8..,.0..0..0.....S...a..l.e..s................................................................................... 57,000
Building ..................................................................................................1..0..,.0..0..0................................................................................................
Machinery ..............................................................................................1..0..,.0..0..0................................................................................................
Book debt................................................................................................1..1..,.0..0..0................................................................................................
Investment ...............................................................................................5..,.0..0..0................................................................................................
Bills Receivable .......................................................................................3..,.0..0..0................................................................................................
Interest on loan (for 6 month) .....................................................................5..0..0................................................................................................
1,15,000 1,15,000
Additional information
i. General expenses to be paid Rs. 500 ii. Outstanding interest on loan for 6 months
iii. Closing stock was valued at Rs. 26,000 iv. Depreciate machinery by 10%
v. Insurance expired to the extent of Rs. 800
Required: a. Trading Account b. Profit and loss Accounts c. Balance sheet
Solution,
Trading and profit and loss A/c Cr.
Dr. For the year ending 31st Chaitra, 2073
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock ..................................................................................1..0..,.0..0..0.....B...y...S..a..l.e..s...................................................................................................5..7..,.0..0...0......................................................
To Purchase .........................................................................................3..8..,.0..0..0.....B...y...C..l.o..s..i.n..g...s..t.o..c..k......................................................................................2..6..,.0..0...0......................................................
To wages and salary .............................................................................1..3..,.0..0..0................................................................................................
To Gross profit c/d ..................................................................................2..2..,.0..0..0................................................................................................
83,000 83,000
To Audit fees.............................................................................................2..,.5..0..0.....B...y...G...r.o..s..s...p..r.o..f.i.t..b../.d...................................................................................2..2..,.0..0...0......................................................
To Discount .............................................................................................1..,.0..0..0.....B...y...P..r.o..v..i.s..i.o..n...f.o..r..b..a..d...d..e..b..t..........................................................................1..,.0...0..0......................................................
To General expenses ...................................... 4,000 By Discount received ..............................................................................1..,.0...0..0......................................................
Add: Outstanding ................................................ 500 4500
To Insurance expired ..................................................................................8..0..0................................................................................................
To interest on loan................................................ 500
Add: Outstanding interest .................................... 500 1,000
To Depreciation on machinery .................................................................1..,.0..0..0................................................................................................
To Net profit c/d ......................................................................................1..3..,.2..0..0................................................................................................
154 Accounting-XI
24,000 24,000
Balance sheet of a Trading Concern
As on 31st Chaitra, 2073
Liabilities Amount Rs. Assets Amount Rs.
Capital ...................................................................40,000 Building .................................................................................................1..0..,.0..0...0......................................................
Add: Profit .............................................................13,200 53,200 Machinery ......................................................10,000
General Reserve .....................................................................................1..,.0..0..0.....L..e...s.s..:..D...e..p..r.e..c..i.a..t.i.o..n..............................................1..,.0..0..0......... 9,000
10% loan ................................................................................................1..0..,.0..0..0.....B...o..o..k...d..e..b..t.s...(.D...e..b..t.o..r.s..)..............................................................................1..1..,.0..0...0......................................................
Creditors ..................................................................................................4..,.0..0..0.....I.n..v..e..s..t.m...e..n..t.................................................................................................5..,.0...0..0......................................................
Bills payable .............................................................................................1..,.0..0..0.....B...i.ll.s...r.e..c..e..i.v..a..b..l.e...........................................................................................3..,.0...0..0......................................................
Outstanding interest ..................................................................................5..0..0.....C...l.o..s..i.n..g...s..t.o..c.k............................................................................................2..6..,.0..0...0......................................................
Outstanding general expenses ..................................................................5..0..0.....C...a..s..h...a..t..b..a..n..k..............................................................................................6..,.0...0..0......................................................
Prepaid insurance (1000 – 800) .................................................................2...0..0......................................................
70,200 70,200
SQ- 4. ____ Given below is the Trial Balance of a Trading Concern for the year ended 31st Ashad 2074:
Particulars Debit Rs. Particulars Credit Rs.
Cash balance .........................................................................................1..0..,.0..0..0.....S...a..l.e..s.....................................................................................................1..,.0..0..,.0..0...0......................................................
Sundry debtors .......................................................................................1..0..,.0..0..0.....S...u..n..d..r.y...c..r.e..d..i.t.o..r.s.......................................................................................1..0..,.0..0...0......................................................
Opening Stock ........................................................................................3..0..,.0..0..0.....A...c..c.o..u..n...t..p..a..y.a..b...le.........................................................................................5..,.0...0..0......................................................
Plant & Machinery ..................................................................................5..0..,.0..0..0.....D...i.s..c.o..u..n...t..o..n...p..u..r.c..h..a..s..e................................................................................2..,.0...0..0......................................................
Land & Building....................................................................................1..,.0..0..,.0..0..0.....P...r.o..v..i.s.i.o..n...f.o..r...d..o..u..b..t.f.u..l..d..e..b..t.s.......................................................................1..,.0...0..0......................................................
Purchase ................................................................................................5..0..,.0..0..0.....C...a..p..i.t.a..l..................................................................................................1..,.8..0..,.0..0...0......................................................
Wages ...................................................................................................1..0..,.0..0..0................................................................................................
Printings ....................................................................................................2..,.0..0..0................................................................................................
Income tax ................................................................................................2..,.0..0..0................................................................................................
Insurance .................................................................................................1..,.0..0..0................................................................................................
Sales return .............................................................................................1..,.0..0..0................................................................................................
Discount on sales ....................................................................................3..,.0..0..0................................................................................................
Salaries ..................................................................................................2..0..,.0..0..0................................................................................................
Rent paid...................................................................................................5..,.0..0..0................................................................................................
Repairs on machinery...............................................................................1..,.0..0..0................................................................................................
Travelling expenses .................................................................................3..,.0..0..0................................................................................................
Total 2,98,000 2,98,000
Additional information:
i. Closing stock Rs.30,000.
ii. Bad debts write off Rs.1,000 and make a provision for doubtful debts @5%.
iii. Earned commission but not received Rs.2,000.
iv. Depreciation plant & machinery @10% p.a.
v. Outstanding wages Rs.2,000.
Required: a. Trading account b. Profit and Loss account c. Balance sheet as at 31 Ashad, 2074
Solution,
Trading and Profit & Loss Account Cr.
Dr. for the year ended 31st Ashad 2074
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock ...................................................................................3..0..,.0..0..0.....B...y...S..a..l.e..s.................................................................1..0..0..,.0..0..0..
To Purchases..........................................................................................5..0..,.0..0..0.....L..e...s.s...:..S...a..le...s..r..e..t.u..r.n..s...................................................1..,.0..0..0.. 99,000
To Wages ..............................................................10,000 By Closing stock.....................................................................................3..0..,.0..0...0......................................................
Add: Outstanding.................................................... 2,000 12,000
To Gross profit c/d ..................................................................................3..7..,.0..0..0................................................................................................
129,000 129,000
To Printing ................................................................................................2..,.0..0..0.....B...y...G...r.o..s..s...p..r.o..f.i.t..b../.d...................................................................................3..7..,.0..0...0......................................................
To Insurance.............................................................................................1..,.0..0..0.....B...y...D..i.s..c..o..u..n..t..o..n...p..u..r.c..h..a..s..e..s.........................................................................2..,.0...0..0......................................................
To Discount on sales................................................................................3..,.0..0..0.....B...y...P..r.o..v..i.s..i.o..n...f.o..r..d..o..u..b..t.f.u..l..d..e..b..t.s..................................................................1..,.0...0..0......................................................
To Salaries..............................................................................................2..0..,.0..0..0.....B...y...A..c..c..r.u..e..d...c..o..m...m...i.s..s..io..n.............................................................................2..,.0...0..0......................................................
To Rent paid .............................................................................................5..,.0..0..0................................................................................................
To Repairs on machinery .........................................................................1..,.0..0..0................................................................................................
To Travelling expenses ............................................................................3..,.0..0..0................................................................................................
To Bad debts ............................................................................................1..,.0..0..0................................................................................................
To Provision for doubtful debts (10,000 – 1,000) × 5% ..............................4..5..0................................................................................................
To Depreciation on plant & machinery (50,000 × 10%)...........................5..,.0..0..0................................................................................................
To Net profit c/d ...........................................................................................5..5..0................................................................................................
42,000 42,000
Balance Sheet
As on 31st Ashad 2074
Liabilities Amount Rs. Assets Amount Rs.
Capital ................................................................180,000 Land & building ....................................................................................1..0..0...,0...0..0......................................................
Add : Net profit............................................................550 Plant & machinery................................................. 50,000
180,550 Less : Depreciation ................................................. 5,000 45,000
Less : Income tax ....................................................2,000 178,550 Accrued commission................................................................................2..,.0...0..0......................................................
Sundry creditors......................................................................................1..0..,.0..0..0.....C...l.o..s..i.n..g...s..t.o..c.k............................................................................................3..0..,.0..0...0......................................................
Account payable .......................................................................................5..,.0..0..0.....S...u..n..d..r.y...d..e..b..t.o..r.s.........................................................1..0..,.0..0..0..
Outstanding wages...................................................................................2..,.0..0..0.....L..e...s.s...:..N...e..w....b..a..d...d..e..b..t.s................................................1..,.0..0..0..
Less : Provision for bad debts ................................... 450 8,550
Preparation Financial Statement CHAPTER 14 155
Cash balance .........................................................................................1..0..,.0..0...0......................................................
1,95,550 1,95,550
SQ- 5. ____ The following is the Trial Balance of a firm for the year ended Ashadh:
Particulars Debit Rs. Particulars Credit Rs.
Building ...............................................................................................3..,.2..4..,.0..0..0.....C...a..p..i.t.a..l..................................................................................................6..,.0..0..,.0..0...0......................................................
Drawing ..................................................................................................7..5..,.0..0..0.....1..2..%.....lo..a...n..................................................................................................5..0..,.0..0...0......................................................
Furniture..................................................................................................3..0..,.0..0..0.....S...a..l.e..s.....................................................................................................6..,.0..0..,.0..0...0......................................................
Plant & machinery ..................................................................................9..0..,.0..0..0.....C...o..m...m...i.s..s..io..n................................................................................................4..,.0...0..0......................................................
Purchases............................................................................................3..,.2..5..,.0..0..0.....C...r.e..d..i.t.o..r.s...................................................................................................7..5..,.0..0...0......................................................
Beginning stock ...................................................................................1..,.7..5..,.0..0..0.....B...i.ll.s...p..a..y..a..b..l.e.............................................................................................6..0..,.0..0...0......................................................
Wages ....................................................................................................5..0..,.0..0..0.....P...r.o..v..i.s.i.o..n...f.o..r...b..a..d...d..e..b..t.s..............................................................................3..,.0...0..0......................................................
Insurance ...............................................................................................1..0..,.0..0..0................................................................................................
Debtors ................................................................................................1..,.5..0..,.0..0..0................................................................................................
Cash in bank ..........................................................................................1..5..,.0..0..0................................................................................................
Bills receivable .......................................................................................6..0..,.0..0..0................................................................................................
Salaries ..................................................................................................7..5..,.0..0..0................................................................................................
Advertisement ........................................................................................1..0..,.0..0..0................................................................................................
Interest paid .............................................................................................3..,.0..0..0................................................................................................
13,92,000 13,92,000
Additional information
i. Closing stock Rs.1,70,000 ii. Bad debts Rs.10,000
iii. Increase the provision for bad debts to Rs.5,000 from Rs.3,000 iv. Wages outstanding Rs.10,000
v. Accrued interest on loan for six months vi. Depreciate furniture and plant&machinery@10% p.a.
vii. Insurance prepaid Rs.3,000. viii. Interest on drawing Rs. 5000.
Required: a. Trading account b. Profit and Loss account c. Balance sheet
Solution,
Trading and Profit & Loss Account Cr.
Dr. for the year ended 31st Ashad
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock .................................................................................1..7..5..,.0..0..0.....B...y...S..a..l.e..s.................................................................................................6..0..0...,0...0..0......................................................
To Purchases........................................................................................3..2..5..,.0..0..0.....B...y...C..l.o..s..i.n..g...s..t.o..c..k....................................................................................1..7..0...,0...0..0......................................................
To Wages ..............................................................50,000
Add : Outstanding............................................... 10,000 60,000
To Gross profit c/d 210,000
770,000 770,000
To Insurance..........................................................10,000 By Gross profit b/d ...............................................................................2..1..0...,0...0..0......................................................
Less: Prepaid insurance........................................ 3,000 7,000 By Commission ........................................................................................4..,.0...0..0......................................................
To Salaries..............................................................................................7..5..,.0..0..0.....B...y...P..r.o..v..i.s..i.o..n...f.o..r..b..a..d...d..e..b..t.s.........................................................................3..,.0...0..0......................................................
To Advertisement ...................................................................................1..0..,.0..0..0.....B...y...I.n..t.e..r.e..s..t..o..n...d..r.a..w...i.n..g...............................................................................5..,.0...0..0......................................................
To Interest paid........................................................3,000
Add: Outstanding interest........................................3,000 6,000
To Bad debts ..........................................................................................1..0..,.0..0..0................................................................................................
To Provision for doubtful debts.................................................................5..,.0..0..0................................................................................................
To Depreciation on furniture.....................................................................3..,.0..0..0........................................................................(30,000 10%)
To Depreciation on plant & machinery (90,000 × 10%)...........................9..,.0..0..0................................................................................................
To Net profit c/d ......................................................................................9..7..,.0..0..0................................................................................................
222,000 222,000
Balance Sheet
As on 31st Ashad
Liabilities Amount Rs. Assets Amount Rs.
Capital ...............................................................600,000 Building .................................................................................................3..2..4...,0...0..0......................................................
Add: Net profit....................................................... 97,000 Furniture.................................................................30,000
697,000 Less : Depreciation................................................. 3,000 27,000
Less: Drawings................................................. 75,000 Plant & machinery..................................................90,000
Less: Interest on drawing .....................................5,000 617,000 Less : Depreciation................................................ 9,000 81,000
12% loan................................................................................................5..0..,.0..0..0......D..e..b..t.o...r.s...................................................................1..5..0..,.0..0..0..
creditors .................................................................................................7..5..,.0..0..0......L..e..s..s..:..B...a..d...d..e..b..t.s.......................................................1..0..,.0..0..0..
Bills payable...........................................................................................6..0..,.0..0..0......L..e..s..s..:..P...r.o..v..i.s..io...n...f.o..r..d..o..u..b..t.f.u..l..d..e..b..t.s.............................5..,.0..0..0.. 135,000
Wages outstanding................................................................................1..0..,.0..0..0......B..i.l.l.s..r..e..c.e...iv..a..b..l.e..........................................................................................6..0..,.0..0...0......................................................
Outstanding interest on loan ..................................................................3..,.0..0..0......C..a..s..h...i.n...b..a..n..k.............................................................................................1..5...,0..0...0......................................................
Closing stock.........................................................................................1..7...0..,0...0..0......................................................
Prepaid insurance.....................................................................................3..,.0...0..0......................................................
815,000 815,000
SQ- 6. ____ Trial Balance of a trader as on 31st Chaitra, last year is given below:
Particulars Debit Rs. Credit Rs.
Opening balance .....................................................................................................................................................................................2..,.0..0..,.000 --
Capital.............................................................................................................................................................................................................. --
Purchases................................................................................................................................................................................................8..,.0..0..,.000 4,00,000
Sales................................................................................................................................................................................................................ -- --
13,00,000
156 Accounting-XI
Sales returns...............................................................................................................................................................................................2..0..,.000 --
Freight on purchase....................................................................................................................................................................................1..5..,.000 --
Creditors .......................................................................................................................................................................................................... -- 50,000
Debtors ....................................................................................................................................................................................................1..,.0..0..,.000 --
Advertising ..................................................................................................................................................................................................1..0..,.000 --
Salary.......................................................................................................................................................................................................1..,.5..0..,.000 --
Wages.........................................................................................................................................................................................................7..0..,.000 --
Furniture...................................................................................................................................................................................................1..,.0..0..,.000 --
House rent ..................................................................................................................................................................................................8..0..,.000 --
Loan ................................................................................................................................................................................................................. -- 2,00,000
Interest on loan...........................................................................................................................................................................................1..0..,.000 --
Bank balance...........................................................................................................................................................................................3..,.9..0..,.000 --
Advance Salary...........................................................................................................................................................................................1..0..,.000 --
Insurance ....................................................................................................................................................................................................2..5..,.000 --
Discount received ............................................................................................................................................................................................ -- 30,000
Total 19,80,000 19,80,000
Additional Information:
i. Closing stock Rs. 3,25,000 ii. Outstanding wages Rs. 20,000
iii. Interest on loan due Rs. 10,000 iv. Depreciate furniture @10%
v. Provision for doubtful debts to be created @ 10% vi. Pre-paid insurance was Rs. 5,000
b. Profit & Loss Account c. Balance Sheet as on 31st Chaitra, Last year.
Required: a. Trading Account
Solution,
Trading and Profit & Loss Account
Dr. for the year ended 31st Chaitra
Cr.
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock ................................................................................2..,.0..0..,.0..0..0.....B...y...S..a..l.e..s..............................................................1..3..,.0..0..,.0..0..0..
To Purchases.......................................................................................8..,.0..0..,.0..0..0.....L..e...s.s..:..R...e..t.u..r.n.............................................................2..0..,.0..0..0.. 12,80,000
To Wages ..............................................................70,000 By Closing stock..................................................................................3..,.2..5..,.0..0...0......................................................
Add : Outstanding................................................ 20,000 90,000
To Freight on purchase ..........................................................................1..5..,.0..0..0................................................................................................
To Gross profit c/d ...............................................................................5..,.0..0..,.0..0..0................................................................................................
16,05,000 16,05,000
To Advertising ........................................................................................1..0..,.0..0..0.....B...y...G...r.o..s..s...p..r.o..f.i.t..b../.d................................................................................5..,.0..0..,.0..0...0......................................................
To Salary ............................................................................................1..,.5..0..,.0..0..0.....B...y...D..i.s..c..o..u..n..t..r.e..c..e..i.v..e..d...............................................................................3..0..,.0..0...0......................................................
To House rent.........................................................................................8..0..,.0..0..0................................................................................................
To Interest on loan ............................................... 10,000
Add: Outstanding interest......................................10,000 20,000
To Insurance...........................................................25000
Less : Prepaid insurance....................................... 5,000 20,000
To Depreciation on furniture...................................................................1..0..,.0..0..0......................................................................(100,000 10%)
To Provision for doubtful debts...............................................................1..0..,.0..0..0................................................................................................
To Net profit c/d ...................................................................................2..,.3..0..,.0..0..0................................................................................................
5,30,000 5,30,000
Balance Sheet
As on 31st Chaitra
Liabilities Amount Rs. Assets Amount Rs.
Capital ................................................................400,000 Furniture.............................................................. 100,000
Add: Net profit..................................................... 230,000 630,000 Less : Depreciation ............................................. 10,000 90,000
Creditors .................................................................................................5..0..,.0..0..0.....D...e..b..t.o..r.s...................................................................1..0..0..,.0..0..0..
Loan .................................................................................................2..0..0..,.0..0..0.....L..e...s.s...:..P...r.o..v..i.s.i.o..n...f.o..r...d..o..u..b..t.f.u..l..d..e..b..t.s..........................1..0..,.0..0..0.. 90,000
Wages outstanding.................................................................................2..0..,.0..0..0.....B...a..n..k...b..a..l.a..n..c..e.........................................................................................3..9..0...,0...0..0......................................................
Outstanding interest on loan ..................................................................1..0..,.0..0..0.....C...l.o..s..i.n..g...s..t.o..c.k..........................................................................................3..2..5...,0...0..0......................................................
Prepaid insurance ....................................................................................5..,.0...0..0......................................................
Advance salary ......................................................................................1..0..,.0..0...0......................................................
9,10,000 9,10,000
SQ- 7. ____ Given below is the trial balance of a concern for the last year ended 31st Chaitra:
Particulars Debit Rs. Particulars Credit Rs.
Opening stock ........................................................................................2..5..,.0..0..0.....C...a..p..i.t.a..l..................................................................................................4..,.0..0..,.0..0...0......................................................
Purchases ...........................................................................................4..,.0..0..,.0..0..0.....S...a..l.e..s.....................................................................................................7..,.0..0..,.0..0...0......................................................
Sales return ..........................................................................................3..0..,.0..0..0.....P...u..r.c..h..a..s..e...r.e..t.u..r.n........................................................................................2..0..,.0..0...0......................................................
Wages .................................................................................................1..,.5..0..,.0..0..0.....C...r.e..d..i.t.o..r.s................................................................................................1..,.3..0..,.0..0...0......................................................
Machinery ...........................................................................................1..,.0..0..,.0..0..0.....C...o..m...m...i.s..s..io..n..............................................................................................1..0...,0..0...0......................................................
Debtors ...............................................................................................1..,.0..0..,.0..0..0.....B...a..n..k...lo..a...n..............................................................................................1..,.4..0..,.0..0...0......................................................
Salaries ...................................................................................................4..5..,.0..0..0................................................................................................
Building ...............................................................................................1..,.8..0..,.0..0..0................................................................................................
Cash in hand........................................................................................1..,.5..0..,.0..0..0................................................................................................
Carriage .................................................................................................7..5..,.0..0..0................................................................................................
Custom duty............................................................................................4..5..,.0..0..0................................................................................................
General expenses .................................................................................5..0..,.0..0..0................................................................................................
Depreciation on machinery ....................................................................1..5..,.0..0..0................................................................................................
Advertisement ........................................................................................2..5..,.0..0..0................................................................................................
Preparation Financial Statement CHAPTER 14 157
Discount .................................................................................................1..0..,.0..0..0................................................................................................ 14,00,000
Total 14,00,000 Total
Additional Information:
i. Closing stock Rs. 2,10,000 ii. Wages outstanding Rs. 10,000
iii. Prepaid salaries Rs. 15,000 iv. Commission still receivable Rs. 15,000
v. Create a provision for bad debt @ 5% on debtors vi. Interest on loan @ 10% is due for 6 months.
vii. Provision made for pension fund to employee Rs. 20,000. c. Balance Sheet as 31st Chaitra.
Required: a. Trading account b. Profit &Loss account
Solution,
a. Trading Account
Dr. For the year ended 31st Chaitra
Cr.
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock ...................................................................................2..5..,.0..0..0.....B...y...S..a..l.e..s................................................................7..,.0..0..,.0..0..0..
To Purchase .......................................................4,00,000 Less: Sales return ................................................ 30,000 6,70,000
Less: Purchase return ..........................................20,000 3,80,000 By Closing stock .................................................................................2..,.1..0..,.0..0...0......................................................
To Wages ..........................................................1,50,000
Add: Outstanding .................................................10,000 1,60,000
To Carriage.............................................................................................7..5..,.0..0..0................................................................................................
To Custom duty .....................................................................................4..5..,.0..0..0................................................................................................
To Gross profit c/d ..............................................................................1..,.9..5..,.0..0..0................................................................................................
8,80,000 8,80,000
Profit & Loss Account Cr.
Dr. For the year ended 31st Chaitra
Particulars Amount Rs. Particulars Amount Rs.
To Salaries ............................................................45,000 By Gross profit b/d ..............................................................................1..,.9..5..,.0..0...0......................................................
Less: Prepaid .......................................................15,000 30,000 By Commission .....................................................10,000
To General expenses ...........................................................................5..0..,.0..0..0......A..d..d..:..C...o..m...m...i.s..s..io..n...r..e..c..e..iv..a..b..l.e....................................1..5..,.0..0..0.. 25,000
To Advertisement .................................................................................2..5..,.0..0..0.................................................................................................
To Discount ...........................................................................................1..0..,.0..0..0.................................................................................................
To Provision for bad debts (5% of Rs. 100,000).....................................5..,.0..0..0.................................................................................................
To Interest on loan ..................................................................................7..,.0..0..0.................................................................................................
To Deprecation on machinery ...............................................................1..5..,.0..0..0.................................................................................................
To Pension fund.....................................................................................2..0..,.0..0..0.................................................................................................
To Net profit c/d ...................................................................................5..8..,.0..0..0.................................................................................................
220,000 220,000
Balance Sheet Cr.
Dr. As on 31st Chaitra
Liabilities Amount Rs. Assets Amount Rs.
Capital ................................................................4,00,000 Machinery ...........................................................................................1..,.0..0..,.0..0...0......................................................
Add: Net profit........................................................58,000 4,58,000 Debtors ............................................................. 1,00,000
Creditors ............................................................................................1..,.3..0..,.0..0..0......L..e..s..s.:..P...r.o..v..i.s..io...n...f.o..r..b..a..d...............................................5..,.0..0..0.. 95,000
Bank loan............................................................................................1..,.4..0..,.0..0..0......B..u..i.l.d..i.n..g..................................................................................................1..,.8..0..,.0..0...0......................................................
Outstanding wages ...............................................................................1..0..,.0..0..0......C..a..s..h...i.n...h..a..n..d..........................................................................................1..,.5..0..,.0..0...0......................................................
Outstanding interest on loan ...................................................................7..,.0..0..0......C..l.o..s..i.n..g...s..t.o..c..k.........................................................................................2..,.1..0..,.0..0...0......................................................
Provision for pension fund.....................................................................2..0..,.0..0..0......P..r.e..p..a...id...s..a..l.a..r.i.e..s........................................................................................1..5..,.0..0...0......................................................
Outstanding commission ........................................................................1..5..,.0..0...0......................................................
745,000 7,65,000
Working notes: Outstanding interest on bank loan = 1,40,000 × 10 × 6 = Rs. 7,000.
100 12
SQ- 8. ____ The following is the trail balance of a trading concern on 31st December.
Debit Rs. Credit Rs.
Opening stock ........................................................................................7..0..,.0..0..0.....S...a..l.e..s......................................................................................................1..0..5...,0...0..0......................................................
Purchases ..............................................................................................3..0..,.0..0..0.....R...e..s..e..r.v..e...f.o..r..b..a..d...d..e..b..t.s................................................................................6..,.5...0..0......................................................
Insurance prepaid.....................................................................................2..,.0..0..0.....C...r.e..d..i.t.o..r.s.................................................................................................1..2..0...,0...0..0......................................................
Wages ......................................................................................................3..,.0..0..0.....B...a..n..k...o..v..e..r.d..r.a..f.t.........................................................................................2..0..,.0..0...0......................................................
Salaries .....................................................................................................4..,.0..0..0.....2..0..%.....L..o..a..n.................................................................................................3..0..,.0..0...0......................................................
Commission ..............................................................................................2..,.5..0..0.....C...a..p..i.t.a..l.....................................................................................................5..0..,.0..0...0......................................................
Trade expenses .......................................................................................4..,.5..0..0................................................................................................
Bills receivable......................................................................................1..0..0..,.0..0..0................................................................................................
Accrued income ......................................................................................9..,.0..0..0................................................................................................
Bad debts .................................................................................................3..,.5..0..0................................................................................................
Land and Building ..................................................................................9..5..,.0..0..0................................................................................................
Interest in loan .........................................................................................6..,.0..0..0................................................................................................
Carriage outward .....................................................................................1..,.5..0..0................................................................................................
Carriage inward ..........................................................................................5..0..0................................................................................................
Total 7,55,000 Total 7,55,000
Additional Information:
i. Stock on 31st December was Rs. 35,000.
ii. A fire occurred on 25th December in the store and stock valued Rs. 5,000 was destroyed, insurance company admitted
158 Accounting-XI
only Rs. 2.500.
iii. Outstanding wages Rs. 500.
iv. Bad debts Rs. 1,000.
v. Insurance premium expired to the extent of Rs. 500.
vi. Interest on capital @ 10%.
Required: a. Trading account b. Profit &Loss account c. Balance Sheet
Solution, Trading Account Cr.
Dr. For the year ended 31st December
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock ...................................................................................7..0..,.0..0..0.....B...y...S..a..l.e..s................................................................................................1..,.0..5..,.0..0...0......................................................
To Purchase ...........................................................................................3..0..,.0..0..0.....B...y...C..l.o..s..i.n..g...s..t.o..c..k......................................................................................3..5..,.0..0...0......................................................
To Wages ...............................................................3,000 By Goods destroyed by fire .....................................................................5..,.0...0..0......................................................
Add: Outstanding wages .........................................500 3,500
To Carriage inward .....................................................................................5..0..0................................................................................................
To Gross profit c/d .................................................................................4..1..,.0..0..0................................................................................................
1,45,000 1,45,000
Profit & Loss Account Cr.
Dr. For the year ended 31st December
Particulars Amount Rs. Particulars Amount Rs.
To Insurance expired...................................................................................5..0..0.....B...y...G...r.o..s..s...p..r.o..f.i.t..b../.d...................................................................................4..1..,.0..0...0......................................................
To Salaries ..............................................................................................4..,.0..0..0.....B...y...R..e..s..e..r.v..e...f.o..r...b..a..d...d..e..b..t.s..........................................................................6..,.5...0..0......................................................
To Commission.........................................................................................2..,.5..0..0................................................................................................
To Trade expenses .................................................................................4..,.5..0..0................................................................................................
To Bad debts ..........................................................3,500
Add: New bad debts ...............................................1,000 4,500
To Carriage outward.................................................................................1..,.5..0..0................................................................................................
To Goods lost by fire ................................................................................2..,.5..0..0................................................................................................
To Interest on loan....................................................................................6..,.0..0..0................................................................................................
To Interest on capital................................................................................5..,.0..0..0................................................................................................
To Net profit c/d ......................................................................................1..6..,.5..0..0................................................................................................
47,500 47,500
Balance Sheet
As on 31st December
Liabilities Amount Rs. Assets Amount Rs.
Capital 50,000 Bills receivable .................................................. 1,00,000 99,000
Add: Net profit........................................................16,500 Less: Bad debts ...................................................... 1,000
Add: Interest on capital ...........................................5,000 71,500 Accrued Income .......................................................................................9..,.0...0..0......................................................
20% Loan................................................................................................3..0..,.0..0..0.....L..a...n..d...&...B..u...il.d..i.n..g........................................................................................9..5..,.0..0...0......................................................
Bank overdraft .......................................................................................2..0..,.0..0..0.....C...l.o..s..i.n..g...s..t.o..c.k............................................................................................3..5..,.0..0...0......................................................
Creditors .............................................................................................1..,.2..0..,.0..0..0.....U...n..e..x..p..i.r.e..d...I.n..s..u..r.a..n..c..e..................................................................................1..,.5...0..0......................................................
Outstanding wages ....................................................................................5..0..0.....I.n..s..u..r..a..n..c.e....c.l.a..i.m....r.e..c..e..i.v..a..b..l.e........................................................................2..,.5...0..0......................................................
2,42,000 2,42,000
SQ- 9. ____ The following is the trial balance of a Trading concern for the year ended 31st December 2016
Particulars Debit Rs. Particulars Credit Rs.
Advertisement ..........................................................................................7..,.5..0..0.....S...a..le...s........................................................................................................6..6..,.4..2...0......................................................
Accrued commission .............................................................................1..,.0..0..0.....C...a..p..i.t.a..l.....................................................................................................5..0..,.0..0...0......................................................
Depreciation of Furniture .........................................................................2..,.5..0..0.....P...r.o..v..i.s.i.o..n...f.o..r...d..o..u..b..t.f.u..l..d..e..b..t.s.......................................................................2..,.5...0..0......................................................
Cash at Bank .........................................................................................1..0..,.0..0..0.....1..0..%.....lo..a..n....(.1..-.7..-.2..0..1..6..)................................................................................1..0..,.0..0...0......................................................
Carriage outwards .......................................................................................6..0..0.....D...i.s.c..o..u..n..t..r..e..c..e..iv..e..d..........................................................................................4...0..0......................................................
Bad debts ..................................................................................................1..2..0..0.....S...u..n..d..r.y...c..r.e..d..i.t.o..r.s.........................................................................................9..,.3...0..0......................................................
Rent ......................................................................................................1..5..2..0.....B...il.l.s...p..a..y..a..b..l.e...............................................................................................5..,.0...0..0......................................................
Wages ......................................................................................................4..6..0..0.....O...u..t.s..t.a..n..d..i.n..g...s..a..l.a..r.i.e..s.....................................................................................5...0..0......................................................
Insurance premium .....................................................................................9..0..0.....B...a..d...d..e..b..t.s...r.e..c..o..v..e..r.e..d.....................................................................................2...0..0......................................................
Interest on loan ...........................................................................................4..0..0.....I.n..t.e..r..e..s.t..o..n....in..v..e..s..t.m...e..n..t...............................................................................2..,.0...0..0......................................................
Sundry debtors ......................................................................................2..0..,.0..0..0.....T..r..a..d..i.n..g...c.o...m...m...is..s..i.o..n...................................................................................7..,.0...0..0......................................................
Purchases ..............................................................................................3..0..,.0..0..0................................................................................................
Opening stock ..........................................................................................4..,.5..0..0................................................................................................
Furniture ...............................................................................................1..2..,.0..0..0................................................................................................
Investments ...........................................................................................4..0..,.0..0..0................................................................................................
Bills receivable .........................................................................................6..,.3..7..7................................................................................................
Salaries ..................................................................................................1..0..,.2..2..3................................................................................................
153,320 153,320
Additional Adjustments:
i. Closing stock Rs. 6,000
ii. Goods costing Rs. 1,000 were distributed as free samples while goods costing Rs. 500 were taken by the proprietor for
personal use.
iii. A credit sale of Rs. 2000 was not recorded in the sales book.
Preparation Financial Statement CHAPTER 14 159
iv. Maintain provision for doubtful debts @ 5%.
Required: a. Trading Account b. Profit & loss Accounts c. Balance sheet
Solution,
Trading and Profit and loss Account
Dr. For the year ended 31st December, 2016
Cr.
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock .....................................................................................4..,.5..0..0.....B...y...S..a..l.e..s...................................................................6..6..,.4..2..0..
To Purchase .........................................................30,000 Add: Credit sales..................................................... 2,000 68,420
Less: Free samples ................................................1,000 By Closing stock................................................................................ 5,000
29,000
Less: Drawing of Goods ............................................500 28,500
To Wages ................................................................................................4..,.6..0..0................................................................................................
To Gross Profit c/d...................................................................................3..5..8..2..0................................................................................................
73,420 73,420
To Salaries..............................................................................................1..0..,.2..2..3.....B...y...G...r.o..s..s...P..r.o..f.i.t..b../.d...................................................................................3..5..,.8..2...0......................................................
To Interest on loan .....................................................400 By Provision for doubtful debts................................ 2500
Add: Outstanding interest on loan .............................100 500 Less: Bad debts ...................................................... 1200
To Insurance premium ................................................................................9..0..0.........................................................................................1..3..0..0.
To Rent ....................................................................................................1..,.5..2..0.....L..e...s.s..:..N...e..w....p..r.o..v..is..i.o..n...................................................1..,.1..0..0.. 200
To Carriage outwards .................................................................................6..0..0.....B...y...D..i.s..c..o..u..n..t..R...e..c.e...iv..e..d...................................................................................4...0..0......................................................
To Depreciation on furniture ....................................................................2..,.5..0..0.....B...y...B..a..d...d..e..b..t.s...r.e..c..o..v..e..r.e..d................................................................................2...0..0......................................................
To Advertisement ....................................................................................7..,.5..0..0.....B...y...i.n..t.e..r.e..s..t..o..n...i.n..v..e..s.t.m...e..n...t.s.........................................................................2..0...0..0......................................................
To Free samples ......................................................................................1..,.0..0..0.....B...y...T..r.a..d..i.n..g...c..o..m...m...i.s..s..io..n..............................................................................7..,.0...0..0......................................................
To Net Profit............................................................................................2..0..,.8..7..7................................................................................................
45,620 45,620
Balance sheet
at the end of 31st December 2016
Liabilities Amount Rs. Assets Amount Rs.
Capital ...................................................................50,000 Investment .............................................................................................4..0..,.0..0...0......................................................
Add: Net profit........................................................20,877 Furniture ...............................................................................................1..2..,.0..0...0......................................................
70,877 Debtors...........................................................20,000
Less: Drawing ............................................................500 70,377 Add: Credit sales..............................................2,000
10% Loan................................................................................................1..0..,.0..0..0...............................................................................2..2..0..0..0.........
Outstanding Interest on loan .......................................................................1..0..0.....L..e...s.s..:..N...e..w....p..r.o..v..is..i.o..n...f.o..r..d...o.u...b..t.f.u..l.d...e..b..t.s...............1..1..0..0......... 20,900
Creditors ...................................................................................................9..,.3..0..0.....B...i.ll.s...R...e..c..e..iv..a..b..l.e..........................................................................................6..,.3...7..7......................................................
Bills payable .............................................................................................5..,.0..0..0.....A...c..c..r.u..e..d...c..o..m...m...i.s.s..i.o..n..................................................................................1..,.0...0..0......................................................
Outstanding salaries ...................................................................................5..0..0.....C...l.o..s..i.n..g...s..t.o..c.k..............................................................................................5..,.0...0..0......................................................
Bank ......................................................................................................1..0..,.0..0...0......................................................
95,277 95,277
SQ- 10. ___ Shyam Karmacharya’s Trial Balance as on 31st December 2016 is given below:
Purchases..............................................................................................9..8..,.0..0..0.......C..a..p..i.t.a..l.....................................................................................................7..0..,.0..0...0......................................................
Patent Rights ...........................................................................................4..,.0..0..0.......R..e..s..e..r.v..e...F...u..n..d............................................................................................7..,.0...0..0......................................................
Building ................................................................................................1..0..0..,.0..0..0.......A..c..c..o..u..n..t.s...P..a..y..a..b..l.e....................................................................................4..5..,.0..0...0......................................................
Stock 1.1.2016.......................................................................................1..5..,.0..0..0.......B..a..n..k...L..o..a..n................................................................................................1..2..,.0..0...0......................................................
Printing and Stationery ............................................................................1..,.7..5..0.......S..a..l.e..s......................................................................................................1..5..8...,0...0..0......................................................
Sundry debtors .....................................................................................3..5..,.0..0..0.......P..r.o..v..i.s..i.o..n...f.o..r..b..a..d...a..n..d...d..o..u..b..t.f.u...l.d..e..b..t.s............................................................2...5..0......................................................
Wages and Salaries ..............................................................................1..1..,.0..0..0.......P..u..r.c..h..a..s..e...R...e..t.u..r.n..s......................................................................................3..,.0...0..0......................................................
Audit Fees...................................................................................................7..0..0.......I.n..t.e..r.e..s..t..i.n...i.n..v.e..s..t.m...e..n..t...................................................................................5...0..0......................................................
Office Electricity.......................................................................................3..,.5..0..0.................................................................................................
Furniture and Fixtures .............................................................................8..,.0..0..0.................................................................................................
10 % Investments (30.6.2016) ..............................................................1..0..,.0..0..0.................................................................................................
Sundry Expenses .......................................................................................8..0..0.................................................................................................
Carriage Inward .......................................................................................1..,.3..0..0.................................................................................................
Trade Expenses.......................................................................................2..,.7..0..0.................................................................................................
Cash.........................................................................................................4..,.0..0..0.................................................................................................
295,750 295,750
Additional information
i. Ending inventory was valued at Rs 30.000 as on 31.12.2016
ii. Goods costing Rs 4,000 were used by Shyam Karmacharya for his personal use.
iii. Goods worth Rs 1,000 were distributed as samples
iv. Wages outstanding at the end of the year Rs.1,000
v. Depreciation of building @5% and patent @10% written off.
vi. Provision for doubtful debts is taken to be 5%
Required: a. Trading and Profit & Loss Account, b. Balance Sheet
Solution:
Trading and Profit & Loss Account
Dr. for the year ended 31st December 2016
Cr.
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock ...................................................................................1..5..,.0..0..0.....B...y...S..a..l.e..s................................................................................................1..,.5..8..,.0..0...0......................................................
To Purchases.........................................................98,000 By Closing stock.....................................................................................3..0..,.0..0...0......................................................
160 Accounting-XI
Less : Purchases returns.........................................3,000
Less : Drawing of goods..........................................4,000
Less : Free samples ................................................1,000 90,000
To Wages & salaries ............................................11,000
Add : outstanding wages .........................................1,000 12,000
To Carriage inwards .................................................................................1..,.3..0..0................................................................................................
To Gross profit c/d .................................................................................6..9..,.7..0..0................................................................................................
1,88,000 1,88,000
To Printing & stationery ............................................................................1..,.7..5..0.....B...y...G...r.o..s..s...p..r.o..f.i.t..b../.d...................................................................................6..9..,.7..0...0......................................................
To Audit fees................................................................................................7..0..0.....B...y...P..r.o..v..i.s..i.o..n...f.o..r..d..o..u..b..t.f.u..l..d..e..b..t.s.....................................................................2...5..0......................................................
To Office electricity ...................................................................................3..,.5..0..0.....B...y...I.n..t.e..r.e..s..t..o..n...i.n..v..e..s..t.m...e..n..t............................................................................5...0..0......................................................
To Sundry expenses....................................................................................8..0..0................................................................................................
To Trade expenses...................................................................................2..,.7..0..0................................................................................................
To Depreciation of building (100,000 × 5%) ............................................5..,.0..0..0................................................................................................
To Patent written-off (4,000 × 10%)............................................................4..0..0................................................................................................
To Provision/or doubtful debts (35,000 × 5%) .........................................1..,.7..5..0................................................................................................
To Free samples.......................................................................................1..,.0..0..0................................................................................................
To Net profit c/d ......................................................................................5..2..,.8..5..0................................................................................................
70,450 70,450
Balance Sheet
As on 31st December 2016
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital ..................................................................70,000 Patent rights ............................................................4,000
Add : Net profit.......................................................52,850 Less : Patent written-off .............................................400 3,600
1,22,850 Building................................................................100,000
Less: Drawing of goods...........................................4,000 118,850 Less: Depreciation ..................................................5,000 95,000
Reserve fund ............................................................................................7..,.0..0..0.....F...u..r.n..i.t.u..r.e...&...F...i.x.t.u..r..e.....................................................................................8..,.0...0..0......................................................
Bank loan................................................................................................1..2..,.0..0..0.....1..0..%.....I.n..v..e..s.t.m....e..n..t......................................................................................1..0..,.0..0...0......................................................
Account payable .....................................................................................4..5..,.0..0..0.....S...u..n..d..r.y...d..e..b..t.o..r.s...................................................3..5..,.0..0..0........
Wages outstanding...................................................................................1..,.0..0..0.....L..e..s..s..:..P...r.o..v..is..i.o..n...f.o..r..d...o..u..b..t.f.u..l.d...e..b..t.s.......................1..,.7..5..0........ 33,250
Cash .....................................................................................................4..,.0...0..0......................................................
Closing stock..........................................................................................3..0..,.0..0...0......................................................
183,850 183,850
SQ- 11. ___ The unadjusted Trial Balance for Rajesh Kaji Shrestha as on 31st December 2016 is as follows:
Cash...............................................................................................................................................................................................................8..,000 4,800
Accounts Receivable...................................................................................................................................................................................3..6..,000 10,000
Provision for bad debts.................................................................................................................................................................................... 33,000
Office expense ..............................................................................................................................................................................................6..,500 198,500
Prepaid Insurance .........................................................................................................................................................................................8..,000 250,000
Inventory (Opening).....................................................................................................................................................................................9..4..,000 496,300
Fixtures and Equipments.............................................................................................................................................................................5..0..,000
Reserve fund ..................................................................................................................................................................................................
Accounts Payable............................................................................................................................................................................................
Capital..............................................................................................................................................................................................................
Sales ................................................................................................................................................................................................................
Purchases..................................................................................................................................................................................................1..5..6..,800
Rent Expenses ............................................................................................................................................................................................6..0..,000
Salary Expenses..........................................................................................................................................................................................4..0..,000
Advertising Expenses..................................................................................................................................................................................2..8..,000
General Expenses .........................................................................................................................................................................................9..,000
496,300
Adjustments:
i. Estimated un-collectible accounts( bad debts) expense, Rs 1,500
ii. Insurance expenses(expired) for the year Rs 4,000
iii. Inventory as on December 31, 2016, Rs 80,000
iv. Depreciation on Fixture and Equipment @ 5% p.a.
v. Prepaid rent for the following year, Rs 12,000
vi. Salary outstanding Rs 7,500
vii. Goods destroyed by fire Rs.10,000 which is covered by insurance policy fully.
Required: a. Trading account b. Profit and Loss Account c. Balance Sheet
Solution,
Trading and Profit & Loss Account Cr.
Dr. for the year ended 31st December 2016
Particulars Amount Rs. Particulars Amount Rs.
To Opening inventory ............................................................................9..4..,.0..0..0......B..y...S..a..l.e..s.................................................................................................2..,.5..0..,.0..0...0......................................................
To Purchases.......................................................156,800 By Closing stock .....................................................................................8..0..,.0..0...0......................................................
Less : Goods destroyed by fine.............................10,000 1,46,800
Preparation Financial Statement CHAPTER 14 161
To Gross profit c/d .................................................................................8..9..,.2..0..0.................................................................................................
3,30,000 3,30,000
To Office expenses..................................................................................6..,.5..0..0......B..y...G...r.o..s..s...p..r.o..f.i.t..b../.d....................................................................................8..9..,.2..0...0......................................................
To Rent expenses .................................................60,000 By Provision for bad debt .........................................................................4..,.8...0..0......................................................
Less: Prepaid ........................................................12,000 48,000 By Net loss c/d........................................................................................5..3..,.0..0...0......................................................
To Salary................................................................40,000
Add: Outstanding.....................................................7,500 47,500
To Advertising........................................................................................2..8..,.0..0..0.................................................................................................
To General expenses ..............................................................................9..,.0..0..0.................................................................................................
To Bad debts ...........................................................................................1..,.5..0..0.................................................................................................
To Expired insurance...............................................................................4..,.0..0..0.................................................................................................
To Depreciation of fixture & equipments.................................................2..,.5..0..0.................................................................................................
1,47,000 1,47,000
Balance Sheet
As on 31st December 2016
Liabilities Amount Rs. Assets Amount Rs.
Capital ...............................................................1,98,500 Fixture & equipments .....................................50,000
Less: Net loss ........................................................53,000 1,45,500 Less: Depreciation ...........................................2,500 47,500
Reserve fund ..........................................................................................1..0..,.0..0..0.....A...c..c..o..u..n..t..r.e..c..e..i.v.a..b...le............................................3..6..,.0..0..0.........
Accounts payable ...................................................................................3..3..,.0..0..0.....L..e...s.s..:..B...a..d...d..e..b..t.s..................................................1..,.5..0..0......... 34,500
Salary outstanding....................................................................................7..,.5..0..0.....C...a..s..h...........................................................................................................8..,.0...0..0......................................................
Prepaid insurance (8,000 – 4,000) ..........................................................4..,.0...0..0......................................................
Closing stock..........................................................................................8..0..,.0..0...0......................................................
Insurance company................................................................................1..0..,.0..0...0......................................................
Prepaid rent............................................................................................1..2..,.0..0...0......................................................
196,000 196,000
SQ- 12. ___ The Trial Balance of M/s Suda Traders as on 31st Ashadh 2073is given below:
Trial Balance as on 31st Ashadh 2073
Particulars Debit (Rs.) Credit (Rs.)
10,000
Opening Stock .......................................................................................................................................................................................1..0..0..,.0..0.0 6000
Furniture and Fixtures .............................................................................................................................................................................5..0..,.0..0. 0 400,000
Commission ..................................................................................................................................................................................................... 15,000
Reserve for bad and doubtful debts ................................................................................................................................................................
Sundry debtors and creditors ...............................................................................................................................................................6..5..0..,.0..0.0 1,300,000
Return Inward and Outward ....................................................................................................................................................................1..0..,.0..0. 0 40,000
Purchases and Sales.............................................................................................................................................................................7..0..0..,.0..0.0
Bill Receivable and Payables..................................................................................................................................................................5..0..,.0..0. 0 350,000
Salaries and Wages ..............................................................................................................................................................................1..4..0..,.0..0.0 2,121,000
Carriage Inward ..........................................................................................................................................................................................5..0..0. 0
Carriage Outward ....................................................................................................................................................................................1..0..,.0..0. 0
Insurance expense ..................................................................................................................................................................................6..0..,.0..0. 0
Capital..............................................................................................................................................................................................................
Drawings..................................................................................................................................................................................................6..5..,.0..0. 0
Cash at Bank ...........................................................................................................................................................................................2..0..,.0..0.0
Land and Building..................................................................................................................................................................................2..6..1..,.0..0.0
2,121,000
Adjustments:
i. Closing Stock amounted to Rs. 120,000
ii. Provide for depreciation on Furniture and Fixtures @ 10 % p.a.
iii. Write off further bad debts Rs. 5,000 and create a provision for bad and doubtful debts @ 10 % on sundry debtors.
iv. Accrued Commission is Rs 2,000
v. Goods worth Rs. 10,000 were destroyed by fire which was covered by insurance policy.
Required: a. Trading Account b. Profit and Loss Account c. Balance Sheet
Solution,
Trading and Profit & Loss Account Cr.
Dr. for the year ended 31st Ashadh 2073
Particulars Amount Rs. Particulars Amount Rs.
To Opening stock .................................................................................1..0..0..,.0..0..0.....B...y...s..a..le..s...............................................................1..3..,.0..0..,.0..0..0..
To Purchases.......................................................700,000 Less : Returns....................................................... 10,000 12,90,000
Less: Returns.........................................................15,000 By Closing stock...................................................................................1..2..0...,0...0..0......................................................
Less: Goods destroyed by fine..............................10,000 675,000
To Carriage inwards .................................................................................5..,.0..0..0................................................................................................
To Gross profit c/d ................................................................................6..3..0..,.0..0..0................................................................................................
14,10,000 14,10,000
To Salaries & wages.............................................................................1..4..0..,.0..0..0.....B...y...G...r.o..s..s...p..r.o..f.i.t..b../.d.................................................................................6..3..0...,0...0..0......................................................
To Carriage outwards.............................................................................1..0..,.0..0..0.....B...y...C..o..m...m....is..s..i.o..n........................................................1..0..,.0..0..0..
To Insurance expenses ..........................................................................6..0..,.0..0..0.....A...d..d...:..A..c..c..r.u..e..d...c..o..m...m...i.s..s..i.o..n........................................2..,.0..0..0.. 12,000
To Depreciation on furniture & fixture ......................................................5..,.0..0..0.....B...y...R..e..s..e..r.v..e....f.o..r...b..a..d...&...d..o..u..b..t.f.u..l..d..e..b..t.s........................................................6..,.0...0..0......................................................
To Bad debts ............................................................................................5..,.0..0..0................................................................................................
162 Accounting-XI
To Pro. bad & doubtful debts (650,000 –5000) 10% .............................6..4..,.5..0..0................................................................................................ 648,000
To Net profit c/d ....................................................................................3..6..3..,.5..0..0................................................................................................
648,000
M/s Suda Traders
Balance Sheet
As on 31st Ashad 2073
Liabilities Amount Rs. Assets Amount Rs.
Capital ................................................................350,000 Land & building ....................................................................................2..6..1...,0...0..0......................................................
Add : Net profit.....................................................363,500 Furniture & fixture............................................. 50,000
Less : Drawing.......................................................65,000 648,500 Less : Depreciation ............................................ 5,000 45,000
Sundry creditors....................................................................................4..0..0..,.0..0..0.....S...u..n..d..r.y...d..e..b..t.o..r..s.................................................6..5..0..,.0..0..0.......
Bills payable............................................................................................4..0..,.0..0..0.....L..e...s.s...:..B...a..d...d..e..b..t.s...................................................5..,.0..0..0.......
Less : Provision for bills & doubtful debts....... 64,500 580,500
Bills receivable .......................................................................................5..0..,.0..0...0......................................................
Cash at bank ..........................................................................................2..0..,.0..0...0......................................................
Closing stock........................................................................................1..2..0...,0...0..0......................................................
Accrued commission................................................................................2..,.0...0..0......................................................
Insurance company................................................................................1..0..,.0..0...0......................................................
10,88,500 10,88,500
SQ- 13. ___ The Trail Balance for Mr. Bahadur as on 32nd Ashadh 2062 is as follows:
Particulars Debit Rs. Credit Rs.
20,000
Capital.............................................................................................................................................................................................................. 28,500
1,500
Sales................................................................................................................................................................................................................ 500
200
Reserve fund ................................................................................................................................................................................................... 1,000
Provision for bad and doubtful debt ................................................................................................................................................................ 2,800
1,200
Discount received............................................................................................................................................................................................ 55,700
Plant & machinery .........................................................................................................................................................................................1..0,000
Accumulated depreciation on plant.................................................................................................................................................................
Stock (2061- 4 -1)............................................................................................................................................................................................4,200
Purchases .....................................................................................................................................................................................................2..0,000
Advance rent paid............................................................................................................................................................................................1,800
Account receivable ..........................................................................................................................................................................................2,200
Insurance .........................................................................................................................................................................................................2,000
Office expenses...............................................................................................................................................................................................5,000
Carriage ..........................................................................................................................................................................................................2,500
Debtors ............................................................................................................................................................................................................6,000
Salary due........................................................................................................................................................................................................
Creditors ..........................................................................................................................................................................................................
Cash & bank balance ......................................................................................................................................................................................2,000
55,700
The following information is available for adjustments:
i. Rent expenses for the year Rs.1200.
ii. Prepaid insurance for the next year Rs.800.
iii. Stock of Rs.5,000 was lost by theft but goods were not insured.
iv. Depreciate plant & machinery @ 10% p.a. on straight line method
v. Goods costing Rs. 1,000 was taken by proprietor for his personal use.
Required: a. Trading Account b. Profit and Loss Account c. Balance Sheet
Solution,
a. and b. Trading and Profit & Loss Account of Mr. Bahadur
Dr. for the year ended 32nd Ashadh, 2062 Cr.
Particulars Amount Particulars Amount
To Opening stock .....................................................................................4..,.2..0..0.....B...y...S..a..l.e..s...................................................................................................2..8..,.5..0...0......................................................
To Purchase account............................................ 20,000
Less: Goods lost by theft........................................ 5,000
Less: Goods withdrawn .......................................... 1,000 14,000
To Carriage...............................................................................................2..,.5..0..0................................................................................................
To Gross profit c/d ....................................................................................7..,.8..0..0................................................................................................
28,500 28,500
To Rent expired ........................................................................................1..,.2..0..0.....B...y...G...r.o..s..s..p...r.o..f.i.t..b../.d.....................................................................................7..,.8...0..0......................................................
To Insurance........................................................... 2,000 By Provision for doubtful debt.....................................................................5...0..0......................................................
Less: Prepaid............................................................. 800 1,200 By Discount received ..................................................................................2...0..0......................................................
To Goods lost by theft ..............................................................................5..,.0..0..0.....B...y...N..e..t..l.o..s..s...c../.d...........................................................................................4..,.9...0..0......................................................
To Depreciation on plant ..........................................................................1..,.0..0..0................................................................................................
To Office expenses...................................................................................5..,.0..0..0................................................................................................
Preparation Financial Statement CHAPTER 14 163
Total 13,400 Total 13,400
164 Accounting-XI
c. Balance Sheet of Mr. Bahadur
as on 32nd Ashadh, 2062
Liabilities and Capital Amount Assets Amount
Capital account..................................................... 20,000 Advance rent paid ...................................................1,800
Less: Goods withdrawn .......................................... 1,000 Less: Rent expired ..................................................1,200 600
Less: Net loss ......................................................... 4,900 14,100 Prepaid insurance .......................................................................................8...0..0......................................................
Accumulated depreciation on plant ........................ 1,000 Plant & machinery..................................................................................1..0..,.0..0...0......................................................
Add: Depreciation for the year................................ 1,000 2,000 Account receivable...................................................................................2..,.2...0..0......................................................
Reserve fund ............................................................................................1..,.5..0..0.....D...e..b..t.o..r.s.......................................................................................................6..,.0...0..0......................................................
Salary due.................................................................................................2..,.8..0..0.....C...a..s..h...&...b..a...n..k..b..a...la..n..c..e.................................................................................2..,.0...0..0......................................................
Creditors ...................................................................................................1..,.2..0..0................................................................................................
Total 21,600 Total 21,600
Final Account of Partnership Company
SQ-14.____ Rohan and Roshan are partners in ‘Shan Traders’ sharing profits and losses in the ratio of 2:1. From the following
Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2011 and
Balance Sheet as on that date.
Trial Balance as on 31st March, 2011
Particulars Debit Rs. Particulars Credit Rs.
Opening stock.........................................................................................3..2..,.0..0..0.....S...a..l.e..s.....................................................................................................1..,.9..3..,.5..0...0......................................................
Purchases...............................................................................................6..4..,.0..0..0.....S...u..n..d..r.y...C...r.e..d..i.t.o..r.s......................................................................................1..5..,.0..0...0......................................................
Plant and Machinery...............................................................................3..0..,.0..0..0.....U...n..p..a..i.d...w...a..g..e..s............................................................................................1..,.5...0..0......................................................
Furniture..................................................................................................1..8..,.5..0..0.....R...e..t.u..r.n...o..u...t.w..a..r.d...........................................................................................2..,.5...0..0......................................................
Carriage ....................................................................................................1..,.5..0..0.....C...a..p..i.t.a..l..A../.c...-.........R...o..h..a..n...........................................................................9..0..,.0..0...0......................................................
Wages and Salaries ...............................................................................3..5..,.0..0..0.................................R...o..s..h..a..n.........................................................................5..0..,.0..0...0......................................................
Bills Receivable ........................................................................................5..,.0..0..0................................................................................................
Sundry Debtors.......................................................................................3..2..,.0..0..0................................................................................................
Conveyance..............................................................................................4..,.0..0..0................................................................................................
Rent, Rates and Taxes.............................................................................2..,.0..0..0................................................................................................
Return Inward ...........................................................................................3..,.5..0..0................................................................................................
Cash in hand...........................................................................................1..4..,.7..5..0................................................................................................
Land and Building...................................................................................8..3..,.5..0..0................................................................................................
Bad debts..................................................................................................1..,.7..5..0................................................................................................
Patents ...................................................................................................2..5..,.0..0..0................................................................................................
3,52,500 3,52,500
Adjustments:
i. Closing stock: Cost price Rs. 25,000 and market price Rs. 30,000.
ii. An amount of Rs. 3,500 spent for repairs to Building is debited to Building account.
iii. Depreciate Plant and Machinery and Building at 5% p.a.
iv. Goods of Rs. 750 taken by Roshan for this personal use.
v. Included in wages advances given to workers Rs. 3,000.
vi. Provide Rs. 1,500 for bad and doubtful debts on Debtors.
Solution:
In the books of M/s Rohan and Roshan
Dr. Trading & Profit and Loss A/c for the year ended 31st March, 2011 Cr.
Particulars Amount Rs. Particulars Amount Rs.
To Opening Stock...................................................................................3..2..,.0..0..0.....B...y...S..a..l.e..s.......................................................................1..,.9..3..,.5..0..0................................................................................
To Purchases................................................................6..4...,.0..0..0..............................L..e...s.s...:..R...e..t.u..r.n...i.n..w...a..r.d.........................................................3..,.5..0..0.............1..,.9..0..,.0..0...0......................................................
Less: Return outward ......................................................2..,.5..0..0................6..1..,.5..0..0.....B...y...G...o..o..d..s...t.a..k.e..n....b..y..R...o..s..h..a..n...f.o..r..p..e..r..s.o...n..a..l.u..s..e...............................................7...5..0......................................................
To Carriage...............................................................................................1..,.5..0..0.....B...y...C..l.o..s..i.n..g...S..t.o..c..k......................................................................................2..5..,.0..0...0......................................................
To Wages & Salaries....................................................3..5...,.0..0..0.........................................................................................................................
Less: Advance .................................................................3..,.0..0..0................3..2..,.0..0..0................................................................................................
To Gross Profit c/d..................................................................................8..8..,.7..5..0................................................................................................
2,15,750 2,15,750
To Depreciation By Gross Profit b/d.................................................................................8..8..,.7..5...0......................................................
Plant & Machinery...............................................1..,.5..0..0.........................................................................................................................
Land & Building...................................................4..,.0..0..0..................5..,.5..0..0................................................................................................
To Rent, Rates and taxes.........................................................................2..,.0..0..0................................................................................................
To Repairs ................................................................................................3..,.5..0..0................................................................................................
To New RDD.............................................................................................1..,.5..0..0................................................................................................
To Conveyance.........................................................................................4..,.0..0..0................................................................................................
To Bad debts ............................................................................................1..,.7..5..0................................................................................................
To Net Profit c/d
Rohan ..............................................................4..7...,.0..0..0.........................................................................................................................
Roshan.............................................................2...3..,.5..0..0................7..0..,.5..0..0................................................................................................
88,750 88,750
Preparation Financial Statement CHAPTER 14 165
Balance Sheet as on
31st March, 2011
Liabilities Amount Rs. Assets Amount Rs.
Capital Accounts...................................................................................................L..a...n..d...&...B..u...il.d..i.n..g...............................................................8..3..,.5..0..0................................................................................
Rohan ..........................................................................9..0..,.0..0..0..............................L..e...s.s..:..R...e..p..a..i.r.s...w..r.o..n..g..l.y...d..e..b..i.t.e..d..........................................3..,.5..0..0................................................................................
Less: Drawings ........................................................................-.............................L..e...s.s..:..D...e..p..r.e..c..i.a..t.io..n.............................................................4..,.0..0..0................7..6..,.0..0...0......................................................
Add: Net Profit................................................................4..7..,.0..0..0.............1..,.3..7..,.0..0..0.....P...l.a..n..t..&...M...a..c..h..i.n..e..r.y...........................................................3..0..,.0..0..0................................................................................
Roshan ..........................................................................5..0..,.0..0..0..............................L..e...s.s..:..D...e..p..r.e..c..i.a..t.io..n.............................................................1..,.5..0..0................2..8..,.5..0...0......................................................
Less: Goods taken for personal use...................................7..5..0..............................P...a..t.e..n..t.s................................................................................ 25,000
Add: Net Profit................................................................2..3..,.5..0..0................7..2..,.7..5..0.....F...u..r.n..i.t.u..r.e...................................................................................................1..8..,.5..0...0......................................................
Sundry Creditors.....................................................................................1..5..,.0..0..0.....S...u..n..d..r.y...D...e..b..t.o..r.s...............................................................3..2..,.0..0..0................................................................................
Unpaid wages ...........................................................................................1..,.5..0..0.....L..e...s.s..:..N...e..w....R..D...D.................................................................1..,.5..0..0................3..0..,.5..0...0......................................................
Closing Stock .........................................................................................2..5..,.0..0...0......................................................
Bills Receivable ........................................................................................5..,.0...0..0......................................................
Advance to workers..................................................................................3..,.0...0..0......................................................
Cash in hand ..........................................................................................1..4..,.7..5...0......................................................
2,26,250 2,26,250
SQ-15 ____ Given below is the Trial Balance of M/s Roma and Mona partnership firm. Prepare Trading and Profit and Loss
Account for the year ended 31st March, 2012 and Balance Sheet as on that date.
Trial Balance as on 31st March, 2012
Debit Balances Amount Rs. Credit Balances Amount Rs.
Stock on 1st April, 2011..........................................................................5..2..,.0..0..0.....P...r.o..v..i.d..e..n..t..f.u..n..d..........................................................................................5..0..,.0..0...0......................................................
Sundry Debtors.......................................................................................8..4..,.0..0..0.....I.n..t.e..r..e..s.t..o..n...P...F....I.n..v..e..s.t.m...e..n..t.........................................................................2..,.8...0..0......................................................
Bad debts..................................................................................................3..,.0..0..0.....S...u..n..d..r.y...C...r.e..d..i.t.o..r.s......................................................................................8..4..,.0..0...0......................................................
Premises .................................................................................................7..8..,.0..0..0.....R...e..n..t..R..e...c.e..i.v..e..d............................................................................................9..,.6...0..0......................................................
Salaries ...................................................................................................2..8..,.0..0..0.....R...e..s..e..r.v..e...f.o..r..D..o...u..b..t.f.u..l.D...e..b..t.s........................................................................2..,.0...0..0......................................................
Motor Vehicle ..........................................................................................5..0..,.0..0..0.....D...i.s..c.o...u..n..t..r.e..c..e..iv..e..d.......................................................................................3..,.6...0..0......................................................
Purchases ............................................................................................1..,.7..6..,.0..0..0.....S...a..l.e..s.....................................................................................................3..,.2..0..,.0..0...0......................................................
Provident Fund Investment.....................................................................5..0..,.0..0..0.....C...a..p..i.t.a..l..A../.c.........R...o..m...a...............................................................................5..0..,.0..0...0......................................................
Provident Fund contribution......................................................................5..,.5..0..0..............................M...o..n..a................................................................................5..0..,.0..0...0......................................................
Wages ...................................................................................................2..2..,.0..0..0................................................................................................
Rent (for 10 months)...............................................................................1..6..,.0..0..0................................................................................................
Office Expenses........................................................................................5..,.0..0..0................................................................................................
Discount allowed.......................................................................................2..,.5..0..0................................................................................................
5,72,000 5,72,000
Adjustments:
i. Stock on 31st March, 2012 was valued at Rs. 80,000.
ii. Goods of Rs 6,000 were sold and dispatched on 27th March, 2012, but no entry was made in the books of accounts.
iii. Write off Bad debts of Rs. 4,000 and provide for R.D.D. at 5% on sundry debtors.
iv. Provide reserve for discount on debtors at 2% and on creditors at 3%.
v. Outstanding wages Rs. 4,000 and outstanding salaries Rs 3,066.
vi. Depreciate Motor Vehicle at 5% p.a.
Solution:
In the books of M/s Roma and Mona
Dr. Trading & Profit and Loss A/c for the year ended 31st March, 2012 Cr.
Particulars Amount Rs. Particulars Amount Rs.
To Opening Stock ...................................................................................5..2..,.0..0..0.....B...y...S..a..l.e..s.......................................................................3..,.2..0..,.0..0..0................................................................................
To Purchases .......................................................................................1..,.7..6..,.0..0..0.....A...d..d..:..U...n..r.e..c..o..r.d..e..d...S..a..l.e..s.....................................................6..,.0..0..0..............3..2..6...,0...0..0......................................................
To Wages ......................................................................2..2...,.0..0..0..............................B...y...C..l.o..s..i.n..g...S..t.o..c..k......................................................................................8..0...,0..0...0......................................................
Add: Outstanding wages..................................................4..,.0..0..0................2..6..,.0..0..0................................................................................................
To Gross Profit c/d................................................................................1..,.5..2..,.0..0..0................................................................................................
4,06,000 4,06,000
To Salary .......................................................................2..8...,.0..0..0..............................B...y...G...r.o..s.s...P...r.o..f.i.t..b../.d................................................................................1..,.5..2..,.0..0...0......................................................
Add: Outstanding Salary..................................................3..,.0..6..6................3..1..,.0..6..6.....B...y...R..e..n..t..r.e..c..e..i.v..e..d........................................................................................9..,.6...0..0......................................................
To Old Bad debts .............................................................3..,.0..0..0..............................B...y...D..i.s..c..o..u..n..t..r.e..c..e..i.v.e..d..................................................................................3..,.6...0..0......................................................
Add: New RDD ................................................................4..,.3..0..0..............................B...y...R..e..s..e..r.v..e...f.o..r..d..i.s..c..o..u..n..t..o..n...c..r.e..d..i.t.o..r.s.........................................................2..,.5...2..0......................................................
Less: Old RDD................................................................2...,.0..0..0..................9..,.3..0..0................................................................................................
To Reserve for discount on debtors ..........................................................1..,.6..3..4................................................................................................
To Depreciation .........................................................................................2..,.5..0..0................................................................................................
To Provident Fund contribution .................................................................5..,.5..0..0................................................................................................
To Rent 16,000
Add: Outstanding rent for 2 months................................3...,.2..0..0................1..9..,.2..0..0................................................................................................
To Office expenses....................................................................................5..,.0..0..0................................................................................................
To discount allowed...................................................................................2..,.5..0..0................................................................................................
Dr. Trading & Profit and Loss A/c for the year ended 31st March, 2012 Cr.
Amount Rs.
To Net Profit c/d Particulars Amount Rs. Particulars
1,67,720
Roma ...............................................................4..5...,.5..1..0.........................................................................................................................
Mona ................................................................4..5...,.5..1..0................9..1..,.0..2..0................................................................................................
1,67,720
166 Accounting-XI
Balance Sheet as on 31st March, 2011
Liabilities Amount Rs. Assets Amount Rs.
Capital Accounts Premises ................................................................................................7..8..,.0..0...0......................................................
Roma ................................................................5..0..,.0..0..0..............................M....o..t.o..r..V..e..h..i.c..l.e..................................................................5..0..,.0..0..0................................................................................
Add: Net Profit ...........................................................4..5..,.5..1..0................9..5..,.5..1..0.....L..e...s.s..:..D...e..p..r.e..c..i.a..t.i.o..n............................................................2..,.5..0..0................4..7..,.5..0...0......................................................
Mona ................................................................5...0..,.0..0..0.........................................................................................................................
Add: Net Profit ...........................................................4..5..,.5..1..0................9..5..,.5..1..0.....P...r.o..v..i.d..e..n..t..F..u..n..d...I.n..v..e..s..t.m...e..n..t.....................................................................5..0..,.0..0...0......................................................
Provident Fund .......................................................................................5..0..,.0..0..0.....S...u..n..d..r.y...D...e..b..t.o..r.s...............................................................8..4..,.0..0..0................................................................................
Interest on PF Investment ........................................................................2..,.8..0..0.....A...d..d..:..U...n..r.e..c..o..r.d..e..d...S...a..le..s.....................................................6..,.0..0..0................................................................................
Sundry Creditors............................................................8..4..,.0..0..0..............................L..e...s.s..:..N...e..w....B..a..d...d..e..b..t.s........................................................4..,.0..0..0................................................................................
Less: Reserve for discount on creditors 2,520 81,480 Less: New RDD...............................................................4..,.3..0..0................................................................................
Outstanding Expenses Wages......................................................4..,.0..0..0.....L..e...s.s..:..R...e..s..e..r.v..e...f.o..r..d..i.s..c..o..u..n..t..o..n...d..e..b..t.o..r.s.............................1..,.6..3..4................8..0..,.0..6...6......................................................
Salary.......................................................3..,.0..6..6.....C...l.o..s..i.n..g...S..t.o..c..k...........................................................................................8..0..,.0..0...0......................................................
Rent .........................................................3..,.2..0..0................................................................................................
3,35,566 3,35,566
SQ-16_____ From the following Trial Balance of M/s. Kale and Gore, you are required to prepare Trading and Profit and Loss
Account for the year ended 31st March, 2013 and Balance Sheet on that date. They share profits and losses in their capital ratio.
Trial Balance as on 31st March, 2013
Debit Balances Amount Rs. Credit Balances Amount Rs.
Opening stock.........................................................................................2..8..,.0..0..0.....C...a..p..i.t.a..l..A../.c..-.........K..a..l.e................................................................................8..0..,.0..0...0......................................................
Purchases ............................................................................................1..,.1..6..,.4..0..0................................G...o..r.e...............................................................................4..0..,.0..0...0......................................................
Trade Expenses ........................................................................................2..,.4..0..0.....S...u..n..d..r.y...C...r.e..d..i.t.o..r.s......................................................................................5..4..,.0..0...0......................................................
Royalties ...................................................................................................6..,.2..0..0.....S...a..l.e..s.....................................................................................................2..,.1..2..,.0..0...0......................................................
Wages and Salaries................................................................................1..4..,.8..0..0.....R...e..s..e..r.v..e...f.o..r..D...o..u..b..t.f.u..l.D...e..b..t.s........................................................................1..,.8...0..0......................................................
Advertisement ...........................................................................................8..,.2..0..0.....B...i.ll.s...p..a..y..a..b..l.e.............................................................................................3..6...,0..0...0......................................................
Salaries ...................................................................................................1..1..,.0..0..0................................................................................................
Plant and Machinery...............................................................................4..4..,.0..0..0................................................................................................
Freehold Property ...................................................................................3..6..,.0..0..0................................................................................................
Office Rent ................................................................................................4..,.0..0..0................................................................................................
Motor Van................................................................................................6..3..,.0..0..0................................................................................................
Bills Receivable.......................................................................................1..6..,.0..0..0................................................................................................
Sundry Debtors.......................................................................................6..0..,.0..0..0................................................................................................
Cash in hand...........................................................................................1..0..,.0..0..0................................................................................................
Bad debts..................................................................................................1..,.0..0..0................................................................................................
General expenses.....................................................................................2..,.8..0..0................................................................................................
4,23,800 4,23,800
Adjustments:
i. Closing stock was valued at cost Rs. 76,000 while its market price was Rs. 80,000.
ii. Uninsured goods worth Rs. 10,000 were stolen.
iii. Goods worth Rs. 10,000 were sold and delivered on 31st March, 2013, but no entry is passed sales book.
iv. Depreciate Plant and Machinery at 10% and Motor van at 15% p.a.
v. Bills Receivable includes a dishonoured bill of Rs. 4,000.
vi. Create a reserve for doubtful debts at 5% on Debtors.
Solution:
In the books of M/s Kale and Gore
Dr. Trading & Profit and Loss A/c for the year ended 31st March, 2013 Cr.
Particulars Amount Rs. Particulars Amount Rs.
To Opening Stock...................................................................................2..8..,.0..0..0.....B...y...S..a..l.e..s.......................................................................2..,.1..2..,.0..0..0................................................................................
To Purchases.......................................................................................1..,.1..6..,.4..0..0.....A...d..d..:..U...n..r.e..c..o..r.d..e..d...s..a..l.e..s...................................................1..0..,.0..0..0.............2..,.2..2..,.0..0...0......................................................
To Trade expenses...................................................................................2..,.4..0..0.....B...y...U..n..i.n..s..u..r.e..d...g..o..o...d..s................................................................................................................................................
To Wages and salaries...........................................................................1..4..,.8..0..0.....S...t.o..l.e..n.......................................................................................................1..0..,.0..0...0......................................................
To Royalties..............................................................................................6..,.2..0..0.....B...y...C..l.o..s..i.n..g...S..t.o..c..k......................................................................................7..6..,.0..0...0......................................................
To Gross Profit c/d...............................................................................1..,.4..0..,.2..0..0................................................................................................
3,08,000 3,08,000
To Salaries..............................................................................................1..1..,.0..0..0.....B...y...G...r.o..s..s...P..r.o..f.i.t..b../.d................................................................................1..,.4..0..,.2..0...0......................................................
To Advertisement .....................................................................................8..,.2..0..0................................................................................................
To Depreciation ...............................................................................................................................................................................................
Plant & Machinery ...........................................................4..,.4..0..0.........................................................................................................................
Motor Van ........................................................................9..,.4..5..0................1..3..,.8..5..0................................................................................................
To Office Rent...........................................................................................4..,.0..0..0................................................................................................
To Bad debts ...................................................................1..,.0..0..0.........................................................................................................................
Add: New RDD ................................................................3..,.7..0..0.........................................................................................................................
Less: Old RDD.................................................................1..,.8..0..0..................2..,.9..0..0................................................................................................
To General expenses ...............................................................................2..,.8..0..0................................................................................................
To Uninsured goods stolen ....................................................................1..0..,.0..0..0................................................................................................
To Net Profit c/d
Kale ...................................................................5..8..,.3..0..0.........................................................................................................................
Gore ..................................................................2..9..,.1..5..0................8..7..,.4..5..0................................................................................................
1,40,200 1,40,200
Preparation Financial Statement CHAPTER 14 167
Balance Sheet as on 31st March, 2013
Liabilities Amount Rs. Assets Amount Rs.
Capital Accounts Plant & Machinery.........................................................4..4..,.0..0..0................................................................................
Kale ...................................................................8..0..,.0..0..0..............................L..e...s.s..:..D...e..p..r.e..c..i.a..t.i.o..n............................................................4..,.4..0..0................3..9..,.6..0...0......................................................
Add: Net Profit ...........................................................5..8..,.3..0..0.............1..,.3..8..,.3..0..0.....F...r.e..e..h..o..l.d...P..r..o..p..e..r.t.y....................................................................................3..6..,.0..0...0......................................................
Gore ..................................................................4..0..,.0..0..0..............................M....o..t.o..r..V..a..n........................................................................6..3..,.0..0..0................................................................................
Add: Net Profit ...........................................................2..9..,.1..5..0................6..9..,.1..5..0.....L..e...s.s..:..D...e..p..r.e..c..i.a..t.i.o..n............................................................9..,.4..5..0................5..3..,.5..5...0......................................................
Sundry Creditors.....................................................................................5..4..,.0..0..0.....B...i.ll.s...R...e..c..e..iv..a..b..l.e...............................................................1..6..,.0..0..0................................................................................
Bills Payable ...........................................................................................3..6..,.0..0..0.....L..e...s.s..:..D...i.s.h...o..n..o..u..r.e..d............................................................4..,.0..0..0................1..2..,.0..0...0......................................................
Sundry Debtors .............................................................6..0..,.0..0..0................................................................................
Add: Unrecorded Sales.................................................1..0..,.0..0..0................................................................................
Add: Bill receivable dishonoured ....................................4..,.0..0..0................................................................................
Less: New RDD...............................................................3..,.7..0..0................7..0..,.3..0...0......................................................
Closing Stock .........................................................................................7..6..,.0..0...0......................................................
Cash in hand ..........................................................................................1..0..,.0..0...0......................................................
2,97,450 2,97,450
Final Account of a Service Company
SQ-17 . ___ Your are given the following trial balance of a service concern as on Chaitra 31, 2074.
Particular Debit Rs. Credit Rs.
Service revenue............................................................................................................................................................................................... 500,000
Cost of services .........................................................................................................................................................................................1..9..5..,000 15,000
Salaries ......................................................................................................................................................................................................1..8..0..,000 20,000
Discount received ........................................................................................................................................................................................... 400,000
Salaries payable ..............................................................................................................................................................................................
Prepaid Insurance .......................................................................................................................................................................................1..8..,000 936,000
Supplies expenses .......................................................................................................................................................................................6..,000
Capital..............................................................................................................................................................................................................
Rent expenses.............................................................................................................................................................................................2..4..,000
Utility expenses............................................................................................................................................................................................1..2..,000
Debtors ........................................................................................................................................................................................................3..0..,000
Provision for doubt full debts.........................................................................................................................................................................1..,000
Cash at bank (as per cash book) ..............................................................................................................................................................2..0..0..,000
Sundry Assets............................................................................................................................................................................................2..7..1..,000
Total 936,000
Additional Information
i. Insurance policy is taken on Kartik 1, 2074 for 1 year. ii. Due cost of service Rs. 5000.
iii. Provision for doubt full debts no longer requires because all debtors are good.
iv. Provide interest on capital @ 10%.
v. Interest received on bank balance Rs. 12,500 is to be adjusted in bank balance.
vi. Paid Rs. 5,000 but not recorded relating to newspaper advertisement bill.
vii. Transfer out of profit to the reserve funds Rs. 6,000.
Required: a. Trading account b. Profit and Loss account c. Balance sheet
Solution:
a. and b. Trading and Profit and Loss account
Particulars Amount Rs. Particulars Amount Rs.
To Cost of services..............................................195,000 By Service revenues ............................................................................5..0..0...,0...0..0......................................................
Add: Due..................................................................5,000 200,000
To Gross profit c/d ................................................................................3..0..0..,.0..0..0................................................................................................
500,000 500,000
To Salaries............................................................................................1..8..0..,.0..0..0.....B...y...G..r..o..s.s...p..r..o..f.it..b../.d..................................................................................3..0..0...,0...0..0......................................................
To Insurance expenses ...........................................................................9..0..0..0..0.....B...y...D..i.s..c..o..u..n..t..r.e..c..e..i.v..e..d...............................................................................1..5..,.0..0...0......................................................
To Supplies expenses ...............................................................................6..0..0..0.....B...y...O..l.d...p..r.o...v.i.s..i.o..n...f.o..r..d..o..u..b..t.f.u..l..d..e..b..t.s...(.W....r.i.t.t.e..n...b..a..c..k..)............ 1,000
To Rent expenses ..................................................................................2..4..,.0..0..0.....B...y...I.n..t.e..r.e..s..t..e..a..r.n..e..d...o..n...b..a..n..k...b..a..l.a..n..c..e........................................................1..2..,.5..0...0......................................................
To Utility expenses .................................................................................1..2..,.0..0..0................................................................................................
To Interest on capital..............................................................................4..0..,.0..0..0................................................................................................
To Advertisement expenses.....................................................................5..,.0..0..0................................................................................................
To Reserve fund transfer .........................................................................6..,.0..0..0................................................................................................
To Net Profit c/d......................................................................................4..6..,.5..0..0................................................................................................
Total 328500 328500
c. ...... a Service Concern
Balance Sheet
as on Chaitra 31, 2074
Capital 400,000 Liabilities Amount Rs. Assets Amount Rs.
Sundry assets ......................................................................................2..7..1...,0...0..0......................................................
Add: Interest on capital .....................................40,000 Prepaid insurance ................................... 18,000
Net profit ..................................................46,500 486500 Less: Expired ....................................................... 9,000 9,000
Reserve fund ...........................................................................................6..,.0..0..0.....D...e..b..t.o..r.s.....................................................................................................3..0..,.0..0...0......................................................
Salaries payable ....................................................................................2..0..,.0..0..0.....C...a..s..h...a..t..b..a..n..k..........................................................2..0..0..,.0..0..0..
Service cost payable ................................................................................5..,.0..0..0.....A...d..d..:..I.n..t.e..r.e..s..t..o..n...b..a..n..k...b..a..l.a..n..c..e.................................1..2..,.5..0..0..
212,500
Less: Advertisement paid...................................... 5500 207,500
517,500 517,500
168 Accounting-XI
SQ-18.____ You are given the following trial balance of Yogikurta Beauty Parlour for the ending 31st Chaitra 2076.
Particular Debit Rs. Credit Rs.
Municipality tax and renewal .........................................................................................................................................................................2..,200 265,400
Supplies (Direct) ..........................................................................................................................................................................................3..5..,890 12,800
Salaries ........................................................................................................................................................................................................2..4..,000 25,000
Parlour Rent.................................................................................................................................................................................................3..3..,000 225,000
Miscellaneous expenses ............................................................................................................................................................................1..2..,000 528200
Electricity expenses.....................................................................................................................................................................................1..4..,000
Parlour equipments .....................................................................................................................................................................................7..0..,000
Account receivables ....................................................................................................................................................................................2..0..,000
Furniture.......................................................................................................................................................................................................8..0..,000
Cash at bank...............................................................................................................................................................................................2..3..7. 110
Service revenues.............................................................................................................................................................................................
Interest earned from bank ...............................................................................................................................................................................
Creditors ..........................................................................................................................................................................................................
Capital..............................................................................................................................................................................................................
Total 528200
Additional Information
i. 3 th part of the paid salaries related with cost of services.
4
ii. Supplies on hand at December 31, 2076 amounted to Rs. 12,360.
iii. Depreciate parlour equipments by straight line method of depreciation original cost of the parlour equipment Rs.
100,000 and estimated life was 10 years at the time of purchase.
iv. Electricity bill of Rs. 1,500 received for the month of Chaitra.
v. Billed to Customers Rs. 2000 at the end of Chaitra 31, yet to be recorded.
vi. Depreciate furniture by Rs. 1,500.
Required: a. Trading account b. Profit and loss account c. Balance sheet
Solution:
Yogikurti Beauty Parlour
Trading account and profit and loss account
Dr. for the year ended Chaitra 31, 276 Cr.
Particulars Amount Rs. Particulars Amount Rs.
To Supplies (Direct)...............................................................................3..5..8..9..2..0.....B...y...S..e..r.v..i.c..e...r.e..v..e..n..u..e.................................................2..6..5..4..0..0..
To Cost of service (3/4th salary) .............................................................1..8..,.0..0..0.....A...d..d..:..A..c..c..r.u..e..d...............................................................2..0...0..0. 267400
To Gross profit c/d .................................................................................2..2..5..8..7..0.....B...y...C..l.o..s..i.n..g...s..t.o..c..k...o..f..s.u..p..p...li.e..s............................................... 12360
Total 279760 Total 279760
To Municipality taxes and renewal ...........................................................2..,.2..0..0.....B...y...G...r.o..s..s...p..r.o..f.i.t..b../.d.................................................................................2..2..5...,8...7..0......................................................
To Salaries (1/4th) ......................................................................................6..0..0..0.....B...y...I.n..t.e..r.e..s..t..e..a..r.n..e..d...f.r..o..m....b..a..n..k...................................................................1..2..8..0...0......................................................
To Parlour rent ......................................................33,000
Add: Due..................................................................3,000 36,000
To Miscellaneous expenses ..................................................................1..2..,.0..0..0................................................................................................
To Electricity expenses .........................................14,000
Add: Due...................................................................1500 15,500
To Depreciation:
On Parlour equipment .............................10,000
On furniture...............................................15,000 25,000
To Net profit c/d ............................................................... 141970
Total 238670 Total 238670
Working note:
100‚000
Yearly depreciation on parlour equipment = 10 years = Rs. 10,000
( )Original cost – Scrap value
Under SLM = Estimated life in year
c. YogiKurta Beauty Parlour
Balance sheet
As on Chaitra 31, 2076
Capital 225,000 Liabilities Amount Rs. Assets Amount Rs.
Parlour equipment ................................................ 70,000
Add: Net profit.......................................................141970 366970 Less: Depreciation ................................................ 10,000 60,000
Creditors .................................................................................................2..5..,.0..0..0.....F..u...r.n..i.t.u..r.e...................................................................8..0..,.0..0..0..
Electricity expenses due ..........................................................................1..,.5..0..0.....L..e..s..s..:..D...e..p..r.e..c..i.a..t.io...n...................................................1..5..,.0..0..0.. 65,000
Rent expenses due ..................................................................................3..,.0..0..0.....A...c.c..o..u..n..t..r..e..c..e..iv..a..b..l.e...................................................2..0..,.0..0..0..
Add: Due.................................................................. 2,000 22,000
Cash at bank ........................................................................................2..3..7...,1...1..0......................................................
Closing stock of supplies.........................................................................1..2..3..6...0......................................................
396470 396470
Preparation Financial Statement CHAPTER 14 169
SQ-19.____ You are given the following ledger balance of Mani Coaching Centre, Butwal for the year ending Chaitra 31, 2075.
Particular Debit Rs. Credit Rs.
300,000
Capital.............................................................................................................................................................................................................. 200,000
52,000
Loan from bank @ 8%..................................................................................................................................................................................... 1300,000
Creditors ......................................................................................................................................................................................................... 1852,000
Coaching fees..................................................................................................................................................................................................
Coaching supplies (Direct) ........................................................................................................................................................................1..5..0..,000
Coaching wages ........................................................................................................................................................................................6..0..0..,000
Rent .............................................................................................................................................................................................................6..0..,000
Electricity and telephone .............................................................................................................................................................................4..5..,000
8% Investment.............................................................................................................................................................................................8..0..,000
Furnitures...................................................................................................................................................................................................3..0..0..,000
Projector and computers ...........................................................................................................................................................................4..0..0..,000
Office salaries..............................................................................................................................................................................................6..0..,000
Other expenses ...........................................................................................................................................................................................2..5..,000
Interest paid on bank loan .............................................................................................................................................................................8..,000
Cash at bank..............................................................................................................................................................................................1..2..4..,000
Total 1852,000
Additional information
i. Coaching wages payable at the end of Chaitra 31 Rs. 15,000.
ii. Coaching supplies used during the year Rs. 125,000.
iii. On Chaitra 31, 2075 supplies bill of Rs. 3,000 received but omitted to record and pay.
iv. Interest on bank loan is due for 6 months.
v. Depreciate furniture, projector and computers @ 25% p.a. and 20% p.a. respectively.
vi. Coaching fees billed to the students to be recorded and receivable amounted to Rs. 70,000
vii. Interest on investment is accrued.
Required: a. Trading account b. Profit and Loss account c. Balance sheet
Solution:
a. Mani Coaching Centre, Butwal
Trading account and Profit and Loss account
for the year ended 31st Chaitra, 2075
Particulars Amount Rs. Particulars Amount Rs.
To Coaching supplies (Direct).............................150,000 By Coaching fees ............................................. 1300,000
Add: Due...............................................................3000 153,000 Add: Accrued .................................................... 70,000 1370,000
To Coaching wages ............................................600,000 By Closing stock of coaching supplies...................................................2..8..,.0..0...0......................................................
Add: Outstanding...............................................15,000 615,000
To Gross profit c/d ...............................................................................6..3..0..,.0..0..0................................................................................................
1398000 1398000
To Rent .......................................................................................... 60,000 By Gross profit b/d ..............................................................................6..3..0...,0...0..0......................................................
To Electricity and telephone.......................................................... 45,000 By Accrued interest on investment .........................................................6..,.4...0..0......................................................
To Other expenses 2,500
To Interest paid........................................................8,000
Add: Due..............................................................8,000 16,000
To Depreciation on
Furniture....................................................75,000 155,000
Projector and computer ............................80,000
To Net profit ..........................................................................................2..7..5..4..0..0................................................................................................
Total 636400 636400
c. Mani Coaching Centre, Butwal
Balance Sheet
As on Chaitra 32, 2075
Liabilities Amount Rs. Assets Amount Rs.
Capital 300,000 Furniture .............................................................. 300,000
Add: Net profit ..................................................275400 575,400 Less: Depreciation ............................................. 75,000 225,000
Loan from bank 8% .......................................................... 200,000 Projector and computer ...................................... 400,000
Creditors ................................................................52,000 Less: Depreciation ............................................. 80,000 320,000
Add: Supplies due ....................................................3000 55,000 8% Investment .......................................................................................8..0..,.0..0...0......................................................
Interest due on bank loan.........................................................................8..,.0..0..0.....C...a..s..h...a..t..b..a..n..k..........................................................................................1..2..4...,0...0..0......................................................
Coaching wages payable ............................................................. 15,000 Coaching supplies closing stock............................................................2..8..,.0..0...0......................................................
Account receivable.................................................................................7..0..,.0..0...0......................................................
Accrued interest on investment ................................................................6..4...0..0......................................................
Total 853400 Total 853400
170 Accounting-XI
LONG ANSWER QUESTIONS
LQ-1. _____ The following is the trail balance of a trader as on 31st Chaitra, 2062.
Particulars Debit Rs. Credit Rs.
6,60,000
Purchases...................................................................................................................................................................................................5..,.5..0,000 4,00,000
Sales................................................................................................................................................................................................................ 10,000
Capital.............................................................................................................................................................................................................. 80,000
Opening stock.............................................................................................................................................................................................3..,.2..0,000 30,000
Purchase return............................................................................................................................................................................................... 10,000
Carriage inward ...............................................................................................................................................................................................6,000
Carriage outward.............................................................................................................................................................................................8,000 11,90,000
Sales return ...................................................................................................................................................................................................1..2,000
10% Bank loan ................................................................................................................................................................................................
Prepaid insurance............................................................................................................................................................................................5,000
Creditors ..........................................................................................................................................................................................................
Debtors ..........................................................................................................................................................................................................4..8,000
Discount...........................................................................................................................................................................................................4,000
Advertisement..................................................................................................................................................................................................5,000
Bills payable ....................................................................................................................................................................................................
Salaries..........................................................................................................................................................................................................5..5,000
Interest.............................................................................................................................................................................................................4,000
Bills Receivable ...............................................................................................................................................................................................8,000
General expenses ...........................................................................................................................................................................................5,000
Wages............................................................................................................................................................................................................9..5,000
Cash and bank ..............................................................................................................................................................................................2..5,000
Furniture ........................................................................................................................................................................................................2..0,000
Rent ...............................................................................................................................................................................................................2..0,000
Total 11,90,000
Additional information:
i. Closing stock Rs.6,00,000 ii. Furniture 10% depreciation is to be charged
iii. Bad debt Rs.3,000 and provision for bad debt created @ 5% iv. Prepaid insurance has been expired to the extent of Rs.3,000.
v. Salaries prepaid Rs.5,000 vi. Goods loss by theft Rs.10,000
vii. Wages outstanding Rs.5,000 viii.Interest on loan for 6 months is to be paid.
Required: a. Income statement b. Balance sheet
Solution,
Income statement
For the year ended 31st March, 2014
Net Sales Particular Amount Rs. Amount Rs.
648,000
Sales .............................................................................................................................................................................................6..6..0..,000
Less: Sales return.....................................................................................................................................................................................1..2..,000 356,000
292,000
Cost of Goods Sold
Opening stock.................................................................................................................................................. 320,000 120,250
Purchases ........................................................................................................................................... 550,000 171750
Less: Return ...................................................................................................................................................10,000 540,000
Carriage inward ............................................................................................................................................... 6,000 -
Wages...................................................................................................................................................95,000 171750
Add: Outstanding.............................................................................................................................................5,000 100,000
966,000
Less: Closing stock ................................................................................................................................................................................6..0..0..,000
Goods lost by theft..........................................................................................................................................................................1..0..,000
Gross Profit
Operating Expenses
Carriage outward ..............................................................................................................................................................................8..,000
Discount ............................................................................................................................................................................................4..,000
Advertisement...................................................................................................................................................................................5..,000
Salaries ............................................................................................................................................. 55,000
Less: Prepaid................................................................................................................................................ 5,000 50,000
Interest................................................................................................................................................ 4,000
Add: Outstanding......................................................................................................................................... 4,000 8,000
General expenses.............................................................................................................................................................................5..,000
Rent.................................................................................................................................................................................................2..0..,000
Insurance expired .............................................................................................................................................................................3..,000
Bad debts..........................................................................................................................................................................................3..,000
Provision for bad debts.....................................................................................................................................................................2..,250
Depreciation on furniture ..................................................................................................................................................................2..,000
Goods lost by fire............................................................................................................................................................................1..0..,000
Net profit before other income
Add: Other income ......................................................................................................................................................................................
Net Profit
Preparation Financial Statement CHAPTER 14 171
Balance Sheet of X
as at 21st March, 2014
Particular Amount Rs. Amount Rs.
A. Fixed Assets 18,000
Furniture........................................................................................................................................................... 20,000
Less: Depreciation..................................................................................................................................................... 2,000 682,750
B. Investment 700,750
C. Current assets 571,750
Debtors .................................................................................................................................................48,000 80,000
Less: Bad debts................................................................................................................................................3,000 42,750 49,000
Less: Provision for bad debt.............................................................................................................................2,250 8,000 700,750
Bills receivable.................................................................................................................................................
Prepaid insurance...................................................................................................................................5,000
Less: Expired....................................................................................................................................................3,000 2,000
Prepaid salary.................................................................................................................................................. 5,000
Closing stock ................................................................................................................................................... 600,000
Cash and bank................................................................................................................................................. 25,000
Total Assets
Capital and liabilities
Owner's equity
Capital ..........................................................................................................................................................................................4..0..0..,000
Add: Net profit .......................................................................................................................................................................................1..7..1..,750
Long-term debt
10% bank loan ...................................................................................................................................................................................
Current liabilities
Interest outstanding ....................................................................................................................................................................... 4,000
Creditors ........................................................................................................................................................................................ 30,000
Bills payable................................................................................................................................................................................... 10,000
Wages outstanding........................................................................................................................................................................ 5,000
Total capital and liabilities
LQ-2. _____ The following is the Trial Balance of a trading concern for the year ended on 31 Ashadh 31,2063:
Debit balances Rs. Credit balances Rs
Plant and Machinery ..............................................................................9..6..,.0..0..0.....S...a..l.e..s.....................................................................................................2..,.7..5..,.0..0...0......................................................
Cash .......................................................................................................1..0..,.6..0..0.....D...i.s..c.o...u..n..t..o..n...p..u..r.c..h..a..s..e................................................................................1..,.2...0..0......................................................
Sundry Debtors....................................................................................1..,.1..0..,.5..0..0.....P...r.o..v..i.s..io..n...f.o...r..B..a..d...d..e..b..t.s..............................................................................1..,.5...0..0......................................................
Stock .......................................................................................................2..8..,.8..0..0.....C...a..p..i.t.a..l..................................................................................................1..,.1..5..,.0..0...0......................................................
Wages.......................................................................................................9..,.6..0..0.....S...u..n..d..r.y...c..r.e..d..i.t.o..r.s.........................................................................................7..,.0...0..0......................................................
Customs Duty ...........................................................................................1..,.5..0..0.....B...i.ll.s...P..a...y.a..b..l.e...............................................................................................3...,5...0..0......................................................
Purchases............................................................................................1..,.3..6..,.0..0..0.....O...v..e..r.d..r..a..f.t...................................................................................................1..,.2...0..0......................................................
Returns inward.............................................................................................3..0..0................................................................................................
Income tax ...................................................................................................1..6..0................................................................................................
Insurance ...................................................................................................1..5..0..0................................................................................................
Discount on sales .....................................................................................1..,.5..0..0................................................................................................
Repair to plant .............................................................................................4..8..0................................................................................................
traveling expenses....................................................................................1..,.5..0..0................................................................................................
rent paid.......................................................................................................6..0..0................................................................................................
Interest on overdraft ......................................................................................6..0................................................................................................
Drawings...................................................................................................1..,.5..0..0................................................................................................
Advances ..................................................................................................3..,.8..0..0................................................................................................
4,04,400 4,04,400
Additional Information:
i. Closing stock Rs. 20,500 ii. Wages outstanding Rs. 900
iii. Rent is payable @ Rs. 60 per month and outstanding for 2 months
iv. Write off bad debts Rs. 500 and make provision for bad and doubtful debts at 5%
v. Commission earned but not received Rs. 1,000 vii. Prepaid insurance amounted to Rs. 500
viii. Depreciate Plant and machinery at 10%
Required: a. Income statement b. Balance sheet
Solution,
Income Statement Cr.
Dr. For the year ended 31st Chaitra 2063 Amount Rs.
Particular Amount Rs. 274,700
Sales .............................................................................................................................................................................................2..7..5..,000
Less: Return inward ..................................................................................................................................................................................... 300 156,300
Cost of Goods Sold 118,400
Opening stock.................................................................................................................................................................................2..8..,800
Purchases .....................................................................................................................................................................................1..3..6..,000
Wages................................................................................................................................................. 9,600
Add: Outstanding wages................................................................................................................................ 900 10,500
Custom duty......................................................................................................................................................................................1..,500
176,800
Less: Closing stock ................................................................................................................................................................................. 20,500
Gross Profit
172 Accounting-XI
Operating Expenses
Insurance ............................................................................................................................................ 1,500
Less: Prepaid insurance..................................................................................................................................... 500 1,000
Repair to plant .................................................................................................................................................................................... 480
Traveling expenses...........................................................................................................................................................................1..,500
Rent paid................................................................................................................................................ 600
Add: Outstanding rent (60x2) ........................................................................................................................ 120 720
Interest on overdraft ........................................................................................................................................................................... 60
Discount on sales .............................................................................................................................................................................1..,500
Depreciation on plant and machinery (10% of 96000).....................................................................................................................9..,600
New bad debts....................................................................................................................................... 500
Add: New prov. for bad debts(5% of (1,10,500-500)) ............................................................................... 5,500 6,000 20,860
Net profit before other income 97,540
Add: Other income ...................................................................................................................................................................................... 3,700
Provision for bad debts.....................................................................................................................................................................1..,500 101,240
Commission ......................................................................................................................................................................................1..,000 Amount Rs.
Discount received ..............................................................................................................................................................................1. 200 86,400
Net profit
140,900
Balance Sheet 227,300
as on 31st Chaitra 2063
214,580
Particular Amount Rs.
12720
A. Fixed Assets 2,27,300
Less: Plant and Machinery.......................................................................................................................................................................9..6..,000
B. Depreciation......................................................................................................................................................................................9..,600
C.
Investment
Less: Current assets
Less: Cash................................................................................................................................................................................................1..0..,600
Sundry debtors ............................................................................................................................... 110,500
New bad debts....................................................................................................................................... 500
Provision ............................................................................................................................................. 5,500 104,500
Closing stock ..................................................................................................................................................................................2..0..,500
Prepaid insurance............................................................................................................................................................................... 500
Advances ..........................................................................................................................................................................................3..,800
Commission receivable ....................................................................................................................................................................1..,000
Total Assets
Capital and liabilities
Owner's equity
Capital...........................................................................................................................................................................................1..1..5..,000
Add: Net profit .......................................................................................................................................................................................1..0..1..,240
Less: Drawing.............................................................................................................................................................................................1..,500
Less: Income tax .......................................................................................................................................................................................... 160
Current Liabilities
Sundry creditors................................................................................................................................................................................7..,000
Bills payable......................................................................................................................................................................................3..,500
Overdraft ...........................................................................................................................................................................................1..,200
Outstanding wages............................................................................................................................................................................. 900
Outstanding rent ................................................................................................................................................................................. 120
Total capital and liabilities
LQ-3. _____ The following is the Trial Balance of a trader as on 31 Ashadh 2063:
Debit Balance Rs. Credit Balance Rs.
Furniture and fittings.................................................................................7..,.0..0..0.....C...a..p..i.t.a..l..................................................................................................6..,.0..0..,.0..0...0......................................................
Bills receivable........................................................................................1..0..,.0..0..0.....C...o..m...m...i.s..s..io..n....r.e..c..e..iv..e..d.................................................................................9..,.0...0..0......................................................
Sundry debtors .......................................................................................7..8..,.0..0..0.....S...a..l.e..s.....................................................................................................1..,.5..5..,.0..0...0......................................................
Cash in hand.............................................................................................5..,.0..0..0.....R...e..t.u..r.n...o..u..t.w...a..r.d..s.........................................................................................2..,.0...0..0......................................................
Interest paid ..............................................................................................3..,.0..0..0.....B...a..n..k...o..v..e..r.d..r.a..f.t.........................................................................................1..0..,.0..0...0......................................................
Wages.....................................................................................................2..7..,.0..0..0.....C...r.e..d..i.t.o..r.s...................................................................................................2..5..,.0..0...0......................................................
Goodwill ..................................................................................................2..5..,.0..0..0................................................................................................
Carriage outward ......................................................................................1..,.0..0..0................................................................................................
Salaries ...................................................................................................2..5..,.0..0..0................................................................................................
Insurance paid ..........................................................................................1..,.0..0..0................................................................................................
Opening stock.........................................................................................3..8..,.0..0..0................................................................................................
Audit fees..................................................................................................1..,.0..0..0................................................................................................
Law charges .............................................................................................2..,.0..0..0................................................................................................
Machinery ............................................................................................2..,.0..0..,.0..0..0................................................................................................
Drawings.................................................................................................1..3..,.0..0..0................................................................................................
Purchases...............................................................................................6..2..,.0..0..0................................................................................................
Repairs......................................................................................................3..,.0..0..0................................................................................................
Buildings and Land ..............................................................................3..,.0..0..,.0..0..0................................................................................................
8,01,000 8,01,000
Preparation Financial Statement CHAPTER 14 173
Additional Information ii. Depreciate: Furniture 15%, Machinery 10%
iv. Goodwill written off Rs.5,000
i. Closing stock Rs.80,000 vi. Outstanding Salary Rs.1,000
iii. Appreciation Building 5% viii. Advance commission received Rs.1,000
v. Provide 5% for doubtful debts b. Balance sheet
vii. Expired Insurance of Rs.800
Required: a. Income statement
Solution,
a. Income Statement
for the year ended 31st Ashadh, 2063
Particular Amount Rs. Amount Rs.
155,000
Sales ............................................................................................................................................................................................................
Cost of Goods Sold 45,000
110,000
Opening stock.................................................................................................................................................................................3..8..,000
Purchase........................................................................................................................................... 62,000 66750
Less: Return outwards..................................................................................................................................... 2,000 60,000 43,250
To Wages ....................................................................................................................................................................................................2..7..,000 23,000
66,250
125,000
Less: Closing stock ......................................................................................................................................................................... 80,000
Gross Profit
Less: Operating Expenses
Depreciation on furniture and ...........................................................................................................................................................1..,050
Depreciation on machinery.............................................................................................................................................................2..0..,000
Goodwill written off ...........................................................................................................................................................................5..,000
New provision for doubtful debt........................................................................................................................................................3..,900
Salaries ............................................................................................................................................. 25,000
Add: Outstanding......................................................................................................................................... 1,000 26,000
Insurance paid .................................................................................................................................... 1,000
Less: Prepaid................................................................................................................................................... 200 800
Interest paid ......................................................................................................................................................................................3..,000
Carriage outward ..............................................................................................................................................................................1..,000
Audit fees..........................................................................................................................................................................................1..,000
Law charges .....................................................................................................................................................................................2..,000
Repairs..............................................................................................................................................................................................3..,000
Operating Profit
Add: Other income ......................................................................................................................................................................................
Appreciation on building .................................................................................................................................................................1..5..,000
Commission received ......................................................................................................................... 9,000
Less: Advance .............................................................................................................................................. 1,000 8,000
Net profit
Balance Sheet of a Trader
as on 31st Ashadh, 2063
Particular Amount Rs. Amount Rs.
A. Fixed Assets 5,950 520,950
Furniture and fittings........................................................................................................................... 7,000 180,000
89,300
Less: Depreciation (15%)............................................................................................................................. 1,050 690,250
Machinery ....................................................................................................................................... 200,000 653,250
37,000
Less: Depreciation (10%)........................................................................................................................... 20,000 690,250
Buildings and land .......................................................................................................................... 300,000
Add: Appreciation (5%) ............................................................................................................................. 15,000 315,000
Goodwill ......................................................................................................................................................... 25,000
Less: Written off............................................................................................................................................... 5,000 20,000
Current Assets 74,100
Sundry debtors ................................................................................................................................. 78,000
Less: Provision for doubtful debt.................................................................................................................. 3,900
Prepaid insurance............................................................................................................................................................................... 200
Bills receivable................................................................................................................................................................................1..0..,000
Cash in hand.....................................................................................................................................................................................5..,000
Total assets
Capital and liabilities
Owner's equity
Capital...........................................................................................................................................................................................6..0..0..,000
Less: Drawing...........................................................................................................................................................................................1..3..,000
Add: Net profit .........................................................................................................................................................................................6..6..,250
Current Liabilities
Outstanding salary............................................................................................................................................................................1..,000
Advance commission........................................................................................................................................................................1..,000
Bank overdraft ................................................................................................................................................................................1..0..,000
Creditors .........................................................................................................................................................................................2..5..,000
Total capital and liabilities
174 Accounting-XI
LQ-4. _____ Give below is the Trial Balance of a Trade as on 30 Chaitra 2063
Particulars Debit Rs. Credit Rs.
Capital.............................................................................................................................................................................................................. 3,00,000
Purchase.....................................................................................................................................................................................................4..,.0..0,000 10,000
Opening stock.............................................................................................................................................................................................3..,.5..0,000 6,90,000
Purchase return............................................................................................................................................................................................... 30,000
Sales................................................................................................................................................................................................................ 80,000
Sales return ...................................................................................................................................................................................................1..0,000
Carriage outward...........................................................................................................................................................................................1..0,000 11,10,000
Debtors ..........................................................................................................................................................................................................4..2,000
Creditors ..........................................................................................................................................................................................................
Advertisement expenses paid .........................................................................................................................................................................4,000
Discount...........................................................................................................................................................................................................2,000
Insurance expenses ......................................................................................................................................................................................1..0,000
Salaries paid..................................................................................................................................................................................................6..5,000
10% bank loan.................................................................................................................................................................................................
Interest in bank paid ........................................................................................................................................................................................4,000
General expenses .........................................................................................................................................................................................2..0,000
Wages............................................................................................................................................................................................................4..0,000
Carriage inward ..............................................................................................................................................................................................8,000
Furniture ........................................................................................................................................................................................................5..0,000
Rent paid .......................................................................................................................................................................................................4..0,000
Bank and cash balance.................................................................................................................................................................................5..5,000
Total 11,10,000
Additional information:
i. Closing stock Rs.3,75,000 ii. Bad debts Rs.2,000
iii. Provide reserve for bad debts 5% of debtors iv. Advance for salaries Rs.5,000
v. Outstanding wages Rs.2,000 vi. Bank loan was taken at the beginning of the year
vii. Depreciation furniture at 5% p.a.
Required: a. Income statement b. Balance sheet
Solution,
a. Income Statement
for the year ended 31st Ashadh, 2063
Particular Amount Rs. Amount Rs.
Sales .............................................................................................................................................................................................6..9..0..,000 680,000
Less: Return .............................................................................................................................................................................................1..0..,000 415,000
Cost of Goods Sold 265,000
Opening stock...............................................................................................................................................................................3..5..0..,000
Purchase........................................................................................................................................ 4,00,000 160500
Less: Return ............................................................................................................................................... 10,000 390,000 104,500
Wages............................................................................................................................................... 40,000
Add: Outstanding......................................................................................................................................... 2,000 42,000
Carriage inward ................................................................................................................................................................................8..,000
790,000
Less: Closing stock ................................................................................................................................................... 375,000
Gross Profit
Less: Operating Expenses
Carriage outward ............................................................................................................................................................................1..0..,000
Advertisement expenses ..................................................................................................................................................................4..,000
Discount ............................................................................................................................................................................................2..,000
Insurance expenses .......................................................................................................................................................................1..0..,000
Salaries ............................................................................................................................................. 65,000
Less: Prepaid................................................................................................................................................ 5,000 60,000
Interest on loan ................................................................................................................................... 4,000
Add: Outstanding......................................................................................................................................... 4,000 8,000
General expenses...........................................................................................................................................................................2..0..,000
Rent.................................................................................................................................................................................................4..0..,000
Depreciation on furniture ..................................................................................................................................................................2..,500
Bad debts..........................................................................................................................................................................................2..,000
Reserve for bad debt ........................................................................................................................................................................2..,000
Net profit
Balance Sheet
As on 30th Chaitra 2063
A. Fixed Assets Particular Amount Rs. Amount Rs.
47,500
Furniture..........................................................................................................................................................................................5..0..,000
Less: Depreciation......................................................................................................................................................................................2..,500 473,000
Current Assets 520,500
Debtors ............................................................................................................................................. 42,000
Less: Bad debts............................................................................................................................................ 2,000
Provision for bad debts..............................................................................................................................................................2,03080,000
Cash and bank balance..................................................................................................................................................................5..5..,000
Prepaid salaries................................................................................................................................................................................5..,000
Closing stock ................................................................................................................................................................................3..7..5..,000
Total assets
Preparation Financial Statement CHAPTER 14 175
Capital and liabilities 404,500
Owner's equity 80,000
Capital...........................................................................................................................................................................................3..0..0..,000 36,000
Add: Net profit .......................................................................................................................................................................................1..0..4..,500 520,500
Long-term debt
10% Bank loan...........................................................................................................................................................................
Current Liabilities
Creditors .........................................................................................................................................................................................3..0..,000
Outstanding interest ..................................................................................................................................................................4,0040,000
Outstanding wages...........................................................................................................................................................................2..,000
Total capital and liabilities
LQ-5. _____ The following is the Trial Balance of a Hemant as on 31 Chaitra 2074:
Debit Balance Debit Rs. Credit Balance Credit Rs.
Drawings.................................................................................................4..5..,.0..0..0.....C...a..p..i.t.a..l................................................................................ 240,000
Purchases.............................................................................................2..0..0..,.0..0..0.....S...a..l.e..s......................................................................................................3..3..6...,5...0..0......................................................
Returns Inwards......................................................................................1..5..,.0..0..0.....D...i.s..c..o..u..n..t..................................................................................................1..9..,.0..0...0......................................................
Opening Stock .......................................................................................2..0..,.0..0..0.....S...u..n..d..r.y...c..r.e..d..i.t.o..r.s.....................................................................................1..0..0...,0...0..0......................................................
Salary......................................................................................................4..2..,.0..0..0.....B...i.ll.s...p..a..y..a..b..l.e.............................................................................................2..5...,0..0...0......................................................
Wages.....................................................................................................1..2..,.0..0..0................................................................................................
Rent ........................................................................................................3..5..,.0..0..0................................................................................................
Bad debts..................................................................................................4..,.0..0..0................................................................................................
Discounts ..................................................................................................7..,.0..0..0................................................................................................
Sundry debtors .....................................................................................1..4..0..,.0..0..0................................................................................................
Cash in hand.............................................................................................2..,.6..0..0................................................................................................
Cash at bank...........................................................................................5..9..,.4..0..0................................................................................................
Insurance ..................................................................................................4..,.0..0..0................................................................................................
Trade Expenses........................................................................................3..,.0..0..0................................................................................................
Printing......................................................................................................1..,.5..0..0................................................................................................
Furniture..................................................................................................8..0..,.0..0..0................................................................................................
Machinery ...............................................................................................5..0..,.0..0..0................................................................................................
Total 720,500 720,500
Adjustments:
i. Closing stock was valued at Rs.7,000. ii. Insurance was prepaid to the extent of Rs. 600.
iii. Outstanding liabilities were: Salary Rs.2000, Wages Rs.1000 iv. Make provision for doubtful debts at 5% on sundry debtors
v. Interest on capital at 5% p.a. vi. Depreciate machinery at 5% and furniture at 10%
vii. Provide for discount on creditors at 1%.
Required: a. Income statement b. Vertical balance sheet
Solution:
a. Income Statement
as on 31th Ashadh 2074
Particular Amount Rs. Amount Rs.
321,500
Sales ..............................................................................................................................................................................................3..3..6. 500
Less: Sales return ....................................................................................................................................................................................1..5. 000 226,000
95,500
Less: Cost of Goods Sold 20,000
Opening stock................................................................................................................................................................ 127,400
Purchase........................................................................................................................................................................ 200,000 (31900)
20,000
Wages (12000 + 1000).................................................................................................................................................. 13,000 (11,900)
Less: Closing stock ..................................................................................................................................................................................(.7..,.000)
Gross Profit
Less: Operating Expenses
Salary (42000 + 2000) ....................................................................................................................................................................4..4..,000
Rent.................................................................................................................................................................................................3..5..,000
Bad debts ........................................................................................................................................... 4,000
Add: Provision for bad debt ........................................................................................................................ 7,000 11,000
Discount ............................................................................................................................................................................................7..,000
Insurance (4,000 – 600)....................................................................................................................................................................3..,400
Trade expenses ................................................................................................................................................................................3..,000
Printing .............................................................................................................................................................................................1..,500
Depreciation on Machinery...............................................................................................................................................................2..,500
Depreciation on furniture ..................................................................................................................................................................8..,000
Interest on capital............................................................................................................................................................................1..2..,000
Operating Income
Add: Other income ......................................................................................................................................................................................
Discount received ...........................................................................................................................................................................1..9..,000
Discount on creditors........................................................................................................................................................................1..,000
Net Loss
176 Accounting-XI
Balance Sheet
as on 31th Ashadh 2074
Particular Amount Rs. Amount Rs.
119,500
Assets
Fixed Assets 202,600
Furniture (80,000 – 8,000)..............................................................................................................................................................7..2..,000 322,100
Machinery (50,000 – 2,500) ...........................................................................................................................................................4..7..,500
195,100
Current Assets –
Sundry debtors .............................................................................................................................. 140,000
Less: Provision for bad debts ...................................................................................................................... 7,000 133,000 127,000
Cash in hand.....................................................................................................................................................................................2..,600
Cast at bank....................................................................................................................................................................................5..9..,400
Closing stock ....................................................................................................................................................................................7..,000
Insurance prepaid............................................................................................................................................................................... 600
Total assets
Capital and liabilities
Owner's equity
Capital...........................................................................................................................................................................................2..4..0..,000
Less: Net loss ...........................................................................................................................................................................................1..1..,900
Add: Interest on capital ...........................................................................................................................................................................1..2..,000
Less: Drawing...........................................................................................................................................................................................4..5..,000
Long-term debt
Current Liabilities
Sundry creditors (100,000 – 1,000)................................................................................................................................................9..9..,000
Bills payable....................................................................................................................................................................................2..5..,000
O/s salary..........................................................................................................................................................................................2..,000
O/s wages.........................................................................................................................................................................................1..,000
Total capital and liabilities 322,100
LQ-6. _____ The following Trial Balance was extracted from the books of Mr. Bijay as on 31st December 2018.
Particular Debit Rs. Credit Rs.
250,000
Capital.............................................................................................................................................................................................................. 50,000
Loan ................................................................................................................................................................................................................. 350,000
Sales ................................................................................................................................................................................................................ 40,000
Accounts payable ............................................................................................................................................................................................ 50,000
Bills payable..................................................................................................................................................................................................... 20,000
Purchase returns ............................................................................................................................................................................................. 30,000
Dividends received ..........................................................................................................................................................................................
Plant and machinery..................................................................................................................................................................................1..3..0..,000 790,000
Buildings ....................................................................................................................................................................................................1..7..0..,000
Receivable ...................................................................................................................................................................................................9..6..,500
Purchases..................................................................................................................................................................................................1..8..0..,000
Discount allowed..........................................................................................................................................................................................1..2..,000
Wages..........................................................................................................................................................................................................7..0..,000
Salaries ........................................................................................................................................................................................................3..0..,000
Travelling expense ........................................................................................................................................................................................7..,500
Freight............................................................................................................................................................................................................2..,000
Insurance .......................................................................................................................................................................................................3..,000
Commission paid ...........................................................................................................................................................................................1..,000
Cash in hand..................................................................................................................................................................................................1..,000
Bank.............................................................................................................................................................................................................1..6..,000
Repairs...........................................................................................................................................................................................................5..,000
Interest on loans ............................................................................................................................................................................................6..,000
Opening inventory .......................................................................................................................................................................................6..0..,000
Total 790,000
Additional data:
i. Closing inventory Rs.20,000
ii. Depreciation on plant and Machinery at 15% and 10% on building.
iii. Insurance prepaid Rs.500
iv. Outstanding Salary Rs.1000
v. Reserve for doubtful debts is to be maintained Rs.6500.
vi. Goods valued at Rs.15000 have been destroyed by fire and the insurance company admitted the claim for Rs.10,000.
Required: a. Income statement b. Vertical balance sheet
Preparation Financial Statement CHAPTER 14 177
Solution:
a. Income Statement
31st December 2018
Particular Amount Rs. Amount Rs.
350,000
Sales ...................................................................................................................................................................................................
Less: Cost of Goods Sold 257,000
Opening inventory....................................................................................................................................................... \] 60,000 93,000
Purchase (180,000 – 20,000)........................................................................................................................................ 160,000
Freight ............................................................................................................................................................................ 2,000 113,000
Wages.............................................................................................................................................................................................7..0..,000 (20,000)
Less: Closing stock ................................................................................................................................................................................(.2..0..,.000)
Good destroyed ...........................................................................................................................................................................(.1..5..,.000) 30,000
10,000
Gross Profit
Less: Operating Expenses
Discount allowed.............................................................................................................................................................................1..2..,000
Salaries (30,000 + 1,000) ...............................................................................................................................................................3..1..,000
Travelling expenses..........................................................................................................................................................................7..,500
Insurance (3,000 – 500) ...................................................................................................................................................................2..,500
Commission paid ..............................................................................................................................................................................1..,000
Repairs..............................................................................................................................................................................................5..,000
Interest on loan .................................................................................................................................................................................6..,000
Goods lost by fire..............................................................................................................................................................................5..,000
Depreciation on Machinery.............................................................................................................................................................1..9..,500
Depreciation on building.................................................................................................................................................................1..7..,000
Reserve for bad debts .....................................................................................................................................................................6..,500
Operating profit/loss
Add: Other income
Dividend received ..............................................................................................................................................................................
Net profit
Balance Sheet
31st December 2018
Particular Amount Rs. Amount Rs.
Assets 263,500
Fixed Assets
137,500
Plant and machinery (130,000 – 195,00).....................................................................................................................................1..1..0..,500 401,000
Building (170,000 – 17,000) .........................................................................................................................................................1..5..3..,000
260,000
Current Assets 50,000
Receivables (96,500 – 6,500) ........................................................................................................................................................9..0..,000
Cash in hand.....................................................................................................................................................................................1..,000 91,000
Bank................................................................................................................................................................................................1..6..,000 401,000
Closing stock ..................................................................................................................................................................................2..0..,000
Prepaid insurance............................................................................................................................................................................... 500
Insurance company ........................................................................................................................................................................1..0..,000
Total assets
Capital and liabilities
Owner's equity
Capital...........................................................................................................................................................................................2..5..0..,000
Add: Net profit ........................................................................................................................................................................................1..0..,000
Long-term loan.............................................................................................................................................................................................5..0..,000
Current Liabilities
Account payable ..........................................................................................................................................................................................4..0..,000
Bills payable.................................................................................................................................................................................................5..0..,000
Outstanding salary.........................................................................................................................................................................................1..,000
Total capital and liabilities
VERY SHORT ANSWER QUESTIONS
VQ-1._____ The following Trial Balance of Nepal Police Club for the year ended 31st Chaitra 2073.
Opening Balance ..................................................................................R..s....4..,.4..0..0......T..a..x..e..s...................................................................................................R...s...5..0...0......................................................
Subscriptions ............................................................................................3..7..,.6..0..0......S..a..l.a..r..ie..s...a..n..d...w...a..g..e..s..............................................................................2..1..,.5..0...0......................................................
Donations received ....................................................................................8..,.0..0..0......H...o..n..o..r.a..r.i.u..m....t.o...S...e..c..r.e..t.a..r.y........................................................................2..,.5...0..0......................................................
Entrance fees ..............................................................................................4..,.3..0..0......I.n..t.e..r.e..s..t..R...e..c..e..i.v.e..d....o..n...in..v..e..s..t.m...e..n..t.s...........................................................2..9...5..0......................................................
Rent realized from club hall.........................................................................5..,.2..5..0......P..r..in..t.i.n..g...a..n...d...S..t.a..t.i.o..n..e..r.y..............................................................................3...5..0......................................................
Electricity charges .....................................................................................3..,.4..4..0......P..e..t.t.y...e..x..p..e..n..s..e..s..........................................................................................5...0..0......................................................
Insurance premium paid..........................................................................3...1..0......................................................
Required: Receipts and Payments Account for 2073
Solution,
Nepal Police Club
Receipts and Payments Account
Dr. For the year ended 31st Chaitra, 2073 Cr.
Receipts Amount Rs. Payment Amount Rs.
To Opening balance ...................................................................................4..,.4..0..0......B..y...E...l.e..c.t.r..ic..i.t.y...C...h..a..r.g..e..s............................................................................3..,.4...4..0......................................................
To Subscriptions .......................................................................................3..7..,.6..0..0......B..y...T...a..x.e..s....................................................................................................5...0..0......................................................
To Donations received 8,000 By Salaries and wages ......................................................................2..1..,.5..0...0......................................................
To Entrance Fees........................................................................................4..,.3..0..0......B..y...H...o..n..o..r.a..r..iu..m....t.o....S..e..c..r.e..t.a..r.y...................................................................2..,.5...0..0......................................................
To Rent (Realized from club Hall)................................................................5..2..5..0......B..y...P...r.i.n..t.i.n..g...a..n..d...S..t.a..t.i.o..n..a..r..y........................................................................3...5..0......................................................
To Interest on Investments...........................................................................2..9..5..0......B..y...P...e..t.t.y...e..x..p..e..n..s.e...s....................................................................................5...0..0......................................................
By Insurance premium ...........................................................................3...1..0......................................................
By Closing balance ............................................................................3..3..,.4..0...0......................................................
62,500 62,500
VQ-2._____ On 1 January 2016 the MPC club has a cash balance of Rs.5000. Below is a summary of the cash transaction
occurred during the year.
Subscription fees ......................................................21,000 Entrance fees ................................................................ 7,000
Donations received.....................................................2,400 Wages......................................................................... 13,200
Rent ...........................................................................4,800 Light and Heat............................................................... 2,600
Magazines.....................................................................520 Sundry expenses.............................................................. 300
Required: Receipts and payments account for the ended 31 December 2016.
Solution,
MPC Club
Receipts and Payments Account
Dr. For the year ended 31st December, 2016 Cr.
Receipts Amount Rs. Payment Amount Rs.
To Balance b/d ...........................................................................................5..,.0..0..0......B..y...w...a..g..e..s..............................................................................................1..3..,.2..0...0......................................................
To Subscription..........................................................................................2..1..,.0..0..0......B..y...R...e..n..t..................................................................................................4..,.8...0..0......................................................
To Entrance fees .........................................................................................7..,.0..0..0......B..y...L..i.g..h..t..a..n..d...h..e..a...t..................................................................................2..,.6...0..0......................................................
To Donations ...............................................................................................2..,.4..0..0......B..y...M...a..g..a..z..i.n..e..s............................................................................................5...2..0......................................................
By Sundry expenses ...............................................................................3...0..0......................................................
By Balance c/d....................................................................................1..3..,.9..8...0......................................................
35,400 35,400
VQ-3._____ The following information are given you: Rs. 24,000
Subscriptions received during 2016................................................................................................................................................................ Rs. 3,200
Subscriptions received in advance for 2017 ................................................................................................................................................... Rs. 4,000
Subscriptions outstanding at the end of 2015 ................................................................................................................................................ Rs. 1,400
Subscriptions outstanding at the close of 2016 .............................................................................................................................................
24,000
Required: Calculate the amount of subscription for the year 2016 1,400
Solution, 25,400
4,000
Income from subscription for 2016 3,200
18,200
Subscription received during the year 2016
Add: Outstanding subscription for 2016
Less: Outstanding subscription at the end of 2015
Less: Advance subscription received for 2016
Accounting for Non-Profit Organizations CHAPTER 15 179
VQ-4._____ The following information are given you: Rs. 30,000
Subscriptions received during 2016................................................................................................................................................................ Rs. 2,000
Subscriptions received in advance at the end of 2015................................................................................................................................... Rs. 6,000
Subscriptions received in advance at the end of 2017................................................................................................................................... Rs. 4,000
Subscriptions outstanding at the end of 2015 ............................................................................................................................................... Rs. 10,000
Subscriptions outstanding at the close of 2016 .............................................................................................................................................
Required: Calculate the subscriptions amount to be credited to Income and Expenditure Account: 30,000
Solution, 2,000
10,000
Income from subscription for 2016 42,000
Subscription received during the year 2016....................................................................................................................................... 4,000
Add: Subscription received in advance in 2015 ......................................................................................................................................... 6,000
Add: Subscription outstanding for 2016................................................................................................................................................... 32,000
Less: Outstanding subscription for 2015 .....................................................................................................................................................
Less: Advance subscription received for 2017 ............................................................................................................................................
VQ-5 _____ The following particulars of a service institution is provided to you:
1st Baishakh 2073 30th Chaitra 2073
Outstanding subscription 2,000 4,000
Advance received subscription 3,000 5,000
Additional information: Subscription received during the year 2073 Rs. 25,000
Required: Income from subscription for 2073
Solution,
Income from subscription for 2073 25,000
Subscription received during the year 2073....................................................................................................................................... 4,000
Add: Outstanding subscription on 30th chaitra 2073.................................................................................................................................. 3,000
Add: Advance subscription received on 1st Baisakh.................................................................................................................................. 32,000
2,000
Less: Outstanding subscription on 1st Baisakh 2073.................................................................................................................................. 5,000
Less: Advance subscription received on 31st Chaitra 2073........................................................................................................................ 25,000
VQ-6._____ The following information of a charitable institution of Patan is provided to you:
Receipts and Payments Account for the year ending December 31. 2016
To subscription Receipt Amount Rs. Payments Amount Rs.
120,000
For 2015........................................................................................1..2..,.0..0..0............................................................................................. 15,000
For 2016.....................................................................................1..2..0..,.0..0..0............................................................................................. 10,000
For 2017........................................................................................1..0..,.0..0..0............................................................................................. 145,000
Additional information
i. Subscription outstanding as on 31st December 2015 Rs. 12,000
ii. Subscription received in advance on 31st December 2015 Rs. 15,000
iii. Subscription outstanding as on 31st December 2016 Rs. 10,000
Required: Subscription income for 2016
Solution,
Subscription Income for 2016
Subscription received during the year 2016.......................................................................................................................................
Add: Subscription received in advance on 31st Dec. 2015........................................................................................................................
Add: Subscription outstanding as on 31st dec. 2016 .................................................................................................................................
VQ-7._____ The following information of a charitable institution of Kathmandu is provided to you:
Receipts and Payments Account for the year ending Chaitra 31. 2073
Receipt Amount Rs. Payments Amount Rs.
To subscription For 2072...........................................................................8..,.0..0..0.............................................................................................
For 2073.......................................................................2..2..0..,.0..0..0.............................................................................................
For 2074.........................................................................1..0..,.0..0..0.............................................................................................
The charitable institution has 2500 members and each member is to be paid Rs.100 per year. The Subscription
outstanding for 2072 was Rs. 10,000
Required: Income from subscription for 2073
Solution,
Subscription Income for 2073
Subscription received during one year 2073...................................................................................................................................... 220,000
Add: Outstanding subscription for year 2073 (2,500 × 100 = 2,50,000 – 220,000)................................................................................... 30,000
250,000
180 Accounting-XI
VQ-8._____ The following information of a charitable institution of Bhaktapur is provided to you:
30th Chaitra 2072 30th Chaitra 2073
Outstanding wages 2,500 4,500
Advance wages paid 4,000 5,500
Additional information
Wages paid during the year 2073 Rs. 35,000
Required: Wages expenses for 2073
Solution,
Wages expenses for 2073 35,000
Wages paid during the year ............................................................................................................................................................... 4,500
Add: Outstanding wages for 2073 .............................................................................................................................................................. 4,000
Add: Advance wages paid on 2072 ............................................................................................................................................................ 43,500
2,500
Less: Outstanding wages for 2072 .............................................................................................................................................................. 5,500
Less: Advance wage paid on 2073 .............................................................................................................................................................. 35,500
VQ-9._____ The following information regarding salaries is provided:
i. Salaries paid for the year 2006 – Rs.50,000 ii. Pre-paid salaries on 31-12-2005 – Rs.2,000
iii. Pre-paid salaries on 31-12-2006 – Rs.1,000 iv. Outstanding salaries on 31-12-2005 – Rs.3,500
v. Outstanding salaries on 31-12-2006 – Rs.4,000
Required: Calculate the amount to be debited to the income and expenditure a/c for the year 2006
Solution, Income and expenditure account for the year ended on 31stDec 2006 Cr.
Dr.
Expenditure Rs Income Rs
To salaries paid ................................................... 50,000 51500
Add: prepaid salaries of last year........................... 2,000
52,000
Add: outstanding salaries of current year .............. 4,000
56,000
Less: outstanding salaries of last year................... 3,500
52,500
Less: prepaid salaries for coming year .................. 1,000
SHORT ANSWER QUESTIONS
Receipts and Payment Account
SQ-1._____ The following information of Club, Kantipur for the year ended 31st December 2017 are provided to you:
Opening cash & bank 49,000 General donation 25,000
Subscription: Life membership fees 50,000
15,000
For 2016 10,000 Travelling expense 25,000
For 2017 240,000 Telephone expenses 30,000
For 2018 12,000 Email & internet 8,000
Interest received 3,00,000
Bank charge paid 5,000 Dividend received 72,000
Sale of a vehicle 2,500 Investment made 1,00,000
Entrance fee 49,000 Rent paid 24,500
Furniture purchased 24,000 Grant from Govt. 29,000
Donation for building 30,000 Legacy received 3,30,000
Tournament fund received 3,00,000 Tournament expenses
30,000 Purchase vehicle
Required: Receipts and payment account showing closing cash & bank balance
Solution,
Receipts and Payment Account
Receipt Amount Rs. Payments Amount Rs.
To balance b/d...........................................................................................4..9..,.0..0..0......B..y...B...a..n..k...c.h...a..r.g..e...p..a..i.d..............................................................................2..,.5...0..0......................................................
To subscription: By Furniture purchases .....................................................................3..0..,.0..0...0......................................................
2016: .................................................10,000 By Travelling expenses .....................................................................1..5..,.0..0...0......................................................
2017: ..............................................2,40,000 By Telephone expenses.....................................................................2..5..,.0..0...0......................................................
2018: ...................................................12,000 2,62,000 By Email and internet ........................................................................3..0..,.0..0...0......................................................
To Interest received ....................................................................................5..,.0..0..0......B..y...I.n..v..e..s..t.m...e..n..t...................................................................................3..,.0..0..,.0..0...0......................................................
To Sale of vehicle......................................................................................4..9..,.0..0..0......B..y...R...e..n..t..p..a..i.d.........................................................................................7..2..,.0..0...0......................................................
To Entrance fee .....................................................................................2..4..,.0..0..0......B..y...T...o..u..r.n..a..m...e..n..t..e..x..p..e..n..s..e..s....................................................................2..9..,.0..0...0......................................................
To Donation for building .........................................................................3..,.0..0..,.0..0..0......B..y...P...u..r.c..h..a..s..e...v..e..h..i.c.l.e..........................................................................3..,.3..0..,.0..0...0......................................................
To Tournament fund received 30,000 By Balance c/d....................................................................................9..3..,.0..0...0......................................................
To General donation..................................................................................2..5..,.0..0..0.............................................................................................
To Life membership fee.............................................................................5..0..,.0..0..0.............................................................................................
To Dividend received...................................................................................8..,.0..0..0.............................................................................................
To Grant from government.....................................................................1..,.0..0..,.0..0..0.............................................................................................
To Legacy received ..................................................................................2..4..,.5..0..0.............................................................................................
9,26,500 9,26,500
Accounting for Non-Profit Organizations CHAPTER 15 181
SQ-2._____ Below are all the cash transactions that have occurred during the year 2016 at the Sahara Club
Subscriptions fees .....................................................25000 Entrance fees ................................................................. 1240
Rent received from the use of the club's field...................... 1080 Donations collected ........................................................ 1100
Salaries .....................................................................10600 Light and heat ................................................................ 2400
Magazines and newspaper ............................................900 Printing and postage....................................................... 1320
Souvenirs ......................................................................760 General expenses ............................................................ 380
Required: receipts and payments account for the year ended 31 December 2016.
Sahara Club
Receipts and Payments Account
Dr. For the year ended 31st December, 2016 Cr.
Receipts Amount Rs. Payment Amount Rs.
To subscriptions fees ................................................................................2..5..0..0..0......B..y...s..a..l.a..r.i.e..s....................................................................... 10600
To entrance fees ..........................................................................................1..2..4..0......B..y...l.i.g..h..t..a..n..d...h..e..a..t............................................................. 2400
To rent received............................................................................................1..0..8..0......B..y...m...a..g..a..z..i.n..e..s...a..n..d...n..e..w...s..p..a..p..e..r....................................... 900
To donations.................................................................................................1..1..0..0......B..y...p..r..in..t.i.n..g...a..n..d...p..o...s.t.a..g..e................................................... 1320
By Souvenirs ...........................................................................................7...6..0......................................................
By General expenses ..............................................................................3...8..0......................................................
By Balance c/d 12040
28420 28420
Income and Expenditure Account
SQ-3 _____ The following is the Receipts and Payments Account of Jaulakhel Football Club for the year ended 30th Chaitra
2073:
Receipt Amount Rs. Payments Amount Rs.
To Balance b/d ............................................................................................7..,.2..5..0......B..y...S...a..l.a..r.y..............................................................................................1..2..,.0..0...0......................................................
To Donation ................................................................................................8..,.5..0..0......B..y...W....a..g..e..s...o..f..g..r.o..u..n..d...m...e..n.......................................................................4..,.0...0..0......................................................
To Entrance fee.........................................................................................1..5..,.0..0..0......B..y...P...r.i.n..t.i.n..g...a..n..d...p..o..s..t.a..g..e.........................................................................1..,.2...5..0......................................................
To Tournament receipts ............................................................................1..5..,.4..5..0......B..y...T...o..u..r.n..a..m...e..n..t..e..x..p..e..n..s..e..s....................................................................1..2..,.5..0...0......................................................
To Subscription..........................................................................................2..5..,.5..0..0......B..y...R...e..p..a..i.r.s.................................................................................................4..5...0......................................................
To Interest ..................................................................................................4..,.2..5..0......B..y...F...u..r.n..i.t.u..r.e...(.1...1...2..0..7..3..)........................................................................2..0..,.0..0...0......................................................
By Balance c/d 25,750
75,950 75,950
Additional information
i. 50% of entrance fee is to be treated as revenue income
ii. Donation is not for any specific purpose
iii. Tournament receipts should be treated as for specific purpose
iv. Furniture depreciated by 10%
Required: Income and expenditure for the year ended 30th Chaitra 2073
Solution,
Income and Expenditure Account
Dr. For the year ended 30th Chaitra 2073 Cr.
Expenditure Amount Rs. Income Amount Rs.
To Salary ...................................................................................................1..2..,.0..0..0......B..y...d..o..n..a..t.i.o..n.............................................................................................8..,.5...0..0......................................................
To wages of ground men ............................................................................4..,.0..0..0......B..y...e..n..t.r..a..n..c..e...f.e..e................................................1..5..,.0..0..0......
To printing & postage ............................................................... 1,250 Less: Capitalized ............................................. 7,500 7,500
To repairs .......................................................................................................4..5..0......B..y...s..u..b..s..c..r.i.p..t.i.o..n.....................................................................................2..5..,.5..0...0......................................................
To dep. on furniture (20,000 × 10%)...........................................................2..,.0..0..0......B..y...I.n..t.e..r..e..s..t.............................................................................................4...,2...5..0......................................................
To surplus i.e. excess of Income over expenditure ..................................2..6..,.0..5..0.............................................................................................
45,750 45,750
SQ-4._____ The following is the Receipts and Payments Account of NRT Club for the year ended 31th December 2016:
Receipt Amount Rs. Payments Amount Rs.
To Balance b/d .......................................................................................1..2..,.2..5..0......B..y...T..o..u..r.n..a..m....e..n..t..e..x.p...e..n..s.e..s........................................................................1..6..,.0..0..0.......................................................
To Tournament receipts .........................................................................2..0..,.5..0..0......B..y...S..a..l.a..r.y..................................................................................................1..8..,.0..0..0.......................................................
To Donation for building .........................................................................5..0..,.0..0..0......B..y...R...e..p..a..ir..s.................................................................................................1..,.5..0..0.......................................................
To Entrance fee......................................................................................1..2..,.5..0..0......B..y...O...f.f.i.c.e...m...a...t.e..r.i.a..l.p...u..r.c..h..a..s..e..d....................................................................6..,.5..0..0.......................................................
To Subsecription: By 10% investment ...............................................................................5..0..,.0..0..0.......................................................
2015: ........................................................ 9,000 By Telephone...........................................................................................2..,.7...5..0......................................................
2016: ...................................................... 36,000 By Email & internet .................................................................................5..,.0..0..0.......................................................
2017: ........................................................ 4,500 49,500 By Balance c/d .......................................................................................4..5..,.0..0..0.......................................................
144,750 144,750
Additional information
i. There are 300 members in the club and each member paying annual subscription of Rs.150 each. Subscription arrear
for 2015 was Rs. 9,000 and for 2016 Rs. 9,000
ii. Stock of office materials at the end of December 2015 was Rs.1,200 and at the end of December 2016 Rs. 1,500
iii. The opening value of building was Rs. 150,000 and furniture was Rs.25,000, and it is to be depreciated @ 5% and
@10% respectively.
iv. Investment was made on 1st July 2016, interest is still receivable.
Required: Income and Expenditure Account as on 31st December 2016
182 Accounting-XI
Solution,
NRT club, Income & expenditure Account
Dr. For the year ended 31st Dec. 2016 Cr.
Expenditure Amount Rs. Income Amount Rs.
To salary....................................................................................................1..8..,.0..0..0......B..y....e..n..t.r..a..n..c..e...f.e..e...................................................................................1..2..,.5..0...0......................................................
To repairs ....................................................................................................1..,.5..0..0......B..y...s..u..b..s..c..r.i.p..t.i.o..n....................................................3..6..,.0..0..0...
To office material....................................................... 6,500 Add: Outstanding for 2016 .................................9,000 45,000
Add: Closing stock 2015 ........................................... 1,200 6 2,500
7,700 By accrued interest on investment (50,000 × 10% × 12
Less: Closing stock of 2016 ..................................... 1,500 6,200 )
To telephone................................................................................................2..,.7..5..0......B..y...t.o..u..r..n..a..m...e..n..t..r.e..c..e..i.p..t.s.........................................................................2..0..5..0...0......................................................
To email & internet ......................................................................................5..,.0..0..0.............................................................................................
To dep. on building (150,000 × 5%)............................................................7..,.5..0..0.............................................................................................
To dep. on furniture (25,000 × 10%)...........................................................2..,.5..0..0.............................................................................................
To tournament expenses ..........................................................................1..6..,.0..0..0.............................................................................................
To surplus..................................................................................................2..1..,.0..5..0.............................................................................................
80,500 80,500
SQ-5._____ The following is the Receipts and Payments Account of a non-profit social institution of Rupandehi for the year
ended 30th Chaitra 2073:
Receipt Amount Rs. Payments Amount Rs.
To balance b/d...........................................................................................2..4..,.4..0..0......B..y...F...u..r.n..i.t.u..r.e..........................................................................................6..5..,.0..0...0......................................................
To subscription: By Salary & wages ............................................................................1..2..,.5..0...0......................................................
2072: ...................................................4,000 By Administrative expenses .................................................................6..,.5...0..0......................................................
2073: .................................................65,000 69,000 By Telephone & internet ......................................................................3..,.2...5..0......................................................
To Donation ...............................................................................................1..,.2..5..0......B..y...A...d..v..e..r.t.i.s..e..m...e..n..t..................................................................................3..,.5...0..0......................................................
To Entrance fees .........................................................................................4..,.2..5..0......B..y...B...a..l.a..n..c.e....c./.d......................................................................................1..4..,.1..5...0......................................................
To Legacy ..............................................................................................6..,.0..0..0.............................................................................................
104,900 104,900
Additional adjustments:
i. Outstanding salary and wages Rs.1,500 ii. Entrance fee is to be capitalized.
iii. In 2072 subscription for 2073 was received Rs. 5,000 iv. Outstanding subscription for 2073 Rs.4,500
v. Depreciation charged on furniture @10% for the whole year.
Required: Income and expenditure account as on 30th Chaitra 2073
Solution,
Income & expenditure account Cr.
Dr. For the year ended 3oth Chaitra 2073
Expenditure Amount Rs. Income Amount Rs.
To salary & wages................................................... 12,500 By subscription ...................................................................................................................................................
Add: outstanding ....................................................... 1,500 14,000 Add: Advance received ......................................................................................................................................
To administrator expenses..........................................................................6..,.5..0..0......A..d..d...:..o..u..t.s..ta...n..d..in..g....f.o..r..2..0..7..3....................................................................7..4..,.5..0...0......................................................
To telephone & internet...............................................................................3..,.2..5..0......B..y...d..o..n..a..t.i.o..n.............................................................................................1..,.2...5..0......................................................
To advertisement.........................................................................................3..,.5..0..0.............................................................................................
To dep. on furniture (65,000 × 10%)...........................................................6..,.5..0..0.............................................................................................
To surplus..................................................................................................4..2..,.0..0..0.............................................................................................
75,750 75,750
SQ-6._____ The following Receipt and Payment account and the additional information related to educational institution for all
for the year ending 31 December 2016:
Receipt Amount Rs. Payments Amount Rs.
To Balance b/d ..........................................................................................3..1..,.1..5..0......B..y...S...a..l.a..r.i.e..s...........................................................................................6..3..,.2..5...0......................................................
To Donations .............................................................................................2..0..,.1..0..0......B..y...G...e..n..e..r.a...l.E...x..p..e..n..s..e..s..........................................................................1..3..,.7..5...0......................................................
To Subscriptions .......................................................................................4..0..,.0..0..0......B..y...R...e..n..t..................................................................................................5..,.6...0..0......................................................
To Entrance Fees........................................................................................3..,.5..0..0......B..y...P...r.i.n..t.i.n..g...&...S...t.a..t.io..n...e..r.y.........................................................................2..,.2...0..0......................................................
To Legacies ...............................................................................................2..0..,.0..0..0......B..y...S...c..h..o..la...r.s..h..ip..s...e..x..p..e..n..s..e..s.....................................................................7..,.1...5..0......................................................
To Scholarship Fund for special purpose ...................................................8..,.5..0..0......B..y...I.n..v..e..s..t.m...e..n..t.s.....................................................................................1..5..,.0..0...0......................................................
To Interest on Investments..........................................................................6..,.7..5..0......B..y...B...a..l.a..n..c.e....c./.d......................................................................................2..4..,.2..5...0......................................................
To Interest on deposit..................................................................................1..,.2..0..0.............................................................................................
131,200 131,200
Additional Information:
i. One half of legacies should be treated as income.
ii. Rent was unpaid to the extent of Rs. 1,600.
iii. Rs. 250 for advertisements income in Annual magazine was accured but not received yet.
iv. Interest on investments Rs. 1,500 accrued and due but was not received.
v. Subscription Outstanding Rs. 5,000.
Required: Prepare an Income and Expenditure Account for the year ended December 31, 2016
Accounting for Non-Profit Organizations CHAPTER 15 183
Solution,
Income & expenditure account Cr.
Dr. For the year ended 31st Dec. 2016
Expenditure Amount Rs. Income Amount Rs.
To salaries .................................................................................................6..3..,.2..5..0......B..y...d..o..n..a..t.i.o..n...................................................................... 20,100
To general expenses.................................................................................1..3..,.7..5..0......B..y...s..u..b..s..c..r.i.p..t.i.o..n....................................................4..0..,.0..0..0...
To rent ...................................................................... 5,600 Add: Outstanding................................................5,000 45,000
Add: Outstanding....................................................... 1,600 7,200 By entrance fees...................................................................................3..,.5...0..0......................................................
To printing & stationery ..............................................................................2..,.2..0..0......B..y...l.e..g..a..c..i.e..s..........................................................2..0..,.0..0..0...
To surplus....................................................................................................1..,.9..0..0......L..e..s..s..:..c..a..p..it.a...li.z..e..d...(.h..a..l.f.)........................................1..0..,.0..0..0... 10,000
By interest on investment ..................................6,750
Add: Accrued interest .........................................1,500 8,250
By interest on deposit...........................................................................1..,.2...0..0......................................................
By outstanding advertisement in annual magazine 250
88,3000 88,3000
SQ-7._____ The following information about an Animal Protection Society was given for the year 2016:
Receipt Amount Rs. Payments Amount Rs.
To Opening Balance: By Salaries........................................................................................2..4..0...,0...0..0......................................................
Cash ....................................................................................................1..0..,.0..0..0......B..y...R...e..n..t................................................................................................2..5..,.0..0...0......................................................
Bank.....................................................................................................8..0..,.0..0..0......B..y...S...t.a..t.i.o..n..e..r.y........................................................................................1..0..,.0..0...0......................................................
To Subscriptions: By Equipment .....................................................................................1..5..,.0..0...0......................................................
2015: ...............................................................25,000 By Investments .................................................................................1..5..0...,0...0..0......................................................
2016: .............................................................400,000 By Utility Expenses.............................................................................1..0..,.0..0...0......................................................
2017: ...............................................................30,000 455,000 By Balance: Cash..............................................................................1..5..,.0..0...0......................................................
To Sale of investment..............................................................................1..0..0..,.0..0..0...........................B...a..n..k..............................................................................1..9..5...,0...0..0......................................................
To Sale of Equipment................................................................................1..5..,.0..0..0.............................................................................................
660,000 660,000
Additional Information
i. The book value of the Equipment sold during the year was Rs 20,000
ii. Subscriptions Outstanding at the end of 2016 were Rs. 30,000.
iii. Interest due on Investments Rs. 500.
iv. Rent includes outstanding Rs. 2,500 for 2015 and Rs. 5,000 for 2016.
Required: Prepare an Income and Expenditure Account for 2016
Solution
Income & expenditure account Cr.
Dr. For the year ended 31st Dec. 2016
Expenditure Amount Rs. Income Amount Rs.
To salaries ...............................................................................................2..4..0..,.0..0..0......B..y...s..u..b..s..c..r.i.p..t.i.o..n...............................................4..0..0..,.0..0..0......
To rent .................................................................... 25,000 Add: subtending............................................. 30,000 430,000
Less: O/S of 2015....................................................(2,500) By Accrued interest on investment .........................................................5...0..0......................................................
Add: O/s for 2016 ...................................................... 5,000 27,500
To stationery..............................................................................................1..0..,.0..0..0.............................................................................................
To utility expenses.....................................................................................1..0..,.0..0..0.............................................................................................
To loss on sale of equipment ......................................................................5..,.0..0..0.............................................................................................
To surplus................................................................................................1..3..8..,.0..0..0.............................................................................................
430,500 430,500
SQ-8._____ The following is the receipt and payment account of Bhaktapur Gymkhana Club, for the year ending on 31st
December 2005.
Dr. Receipt and payments account Cr.
Receipt Rs. Payment Rs.
To Balance b/d .........................................................................................5..,.0..0..0......B..y...S..p..o..r..t.s..e..q...u..ip..m...e...n..t................................................................................7..,.0..0..0.......................................................
To Subscription: By Salaries ..............................................................................................3..,.0..0..0.......................................................
2004 .............................................................................................2..,.0..0..0......B..y...O...f.f.i.c.e...e..x..p..e..n..s..e..s.......................................................................................4..0...0......................................................
2005 ...........................................................................................1..0..,.0..0..0......B..y...E..l.e..c..t.r.i.c...c..h..a..r.g..e..s.......................................................................................6..0...0......................................................
To Donations ............................................................................................1..,.0..0..0......B..y...T..e..l.e..p..h..o..n..e...c..h..a..r.g..e....................................................................................6..0...0......................................................
To Entrance fees (To be capitalized).......................................................2..,.0..0..0......B..y...B..a..l.a..n..c..e...c../.d...........................................................................................8..,.4..0..0.......................................................
20,000 20,000
Additional information:
i. In 2004 subscription for 2005 was received Rs.1,000
ii. Outstanding subscription Rs.1,500
iii. Outstanding salaries Rs.1,000
iv. Depreciation is to be charged 20% on sports equipment.
Required: Prepare the income and expenditure account of the club for 2005.
184 Accounting-XI
Solution,
Bhaktapur Gymkhana Club
Income and expenditure account
Dr. for the year ended 31st December, 2005 Cr.
Expenditure Amount Income Amount
To Salaries ............................................................. 3,000 By Subscription received ......................................10,000
Add: Outstanding.................................................... 1,000 4,000 Add: Advance of previous.......................................1,000
To Depreciation on sports equipment (20%) ...........................................1..,.4..0..0......A..d..d..:..O...u..t.s..t.a..n..d..i.n..g...o..f..c..u..r.r.e..n..t......................................1..,.5..0..0.. 12,500
To Office expenses .....................................................................................4..0..0......B..y...D...o..n..a..t.io..n...s.............................................................................................1..,.0..0..0.......................................................
To Electric charges.....................................................................................6..0..0................................................................................................
To Telephone charge .................................................................................6..0..0................................................................................................
To Surplus ................................................................................................6..,.5..0..0................................................................................................
Total 13,500 Total 13,500
SQ-9._____ From the following receipt and payments account of Victoria Club and the given particular, prepare an income and
expenditure account.
Dr. Receipts and Payment Account Cr.
Receipt Rs. Payment Rs.
To Balance b/d ............................................................................................3..1..0......B..y...W...a..g..e..s...................................................................................................1..,.2..3..0.......................................................
To Entrance fees (capitalized) ......................................................................7..5......B..y...S..t.a..t.i.o..n..e..r..y................................................................................................2..8..0.......................................................
To Subscriptions ......................................................................................3..,.3..2..0......B..y...N...e..w...e..q..u..i.p..m...e..n..t.......................................................................................5..7...0......................................................
To Competition participation fees ...............................................................1..5..0......B..y...P..r..iz..e..s.......................................................................................................4..2...0......................................................
By Sundry expenses...................................................................................1..2...5......................................................
By Loss on refreshments............................................................................3..4...0......................................................
By Rent of grounds .....................................................................................6..0...0......................................................
By Balance c/d ............................................................................................2..9..0.......................................................
3,855 3,855
Additional information:
i. Subscriptions in arrear amounted to Rs.170
ii. A printing bill of Rs.40 was unpaid.
iii. Charge Rs.120 as depreciation on equipment.
Solution,
Victoria Club
Income and expenditure account Cr.
Dr. for the year ended … …
Expenditure Amount Income Amount
To Printing bill payable..................................................................................4..0......B..y...S..u..b..s..c..r.i.p..t.i.o..n...r.e..c..e..i.v..e..d...........................................3..,.3..2..0..
To Depreciation on equipment....................................................................1..2..0......A..d..d..:..O...u..t.s..t.a..n..d..i.n..g...o..f..c..u..r.r.e..n..t.........................................1..7..0.. 3,490
To Wages .................................................................................................1..,.2..3..0......B..y...C...o..m...p..e..t.it.i.o..n...p..a...r.t.i.c.i.p..a..t.i.o..n...f.e..e..s.................................................................1..5..0.......................................................
To Stationery ...............................................................................................2..8..0................................................................................................
To Prizes......................................................................................................4..2..0................................................................................................
To Sundry expenses ...................................................................................1..2..5................................................................................................
To Loss on refreshments ............................................................................3..4..0................................................................................................
To Rent of grounds......................................................................................6..0..0................................................................................................
To Surplus ...................................................................................................4..8..5................................................................................................
Total 3,640 Total 3,640
SQ-10.____ From the following receipt and payment of Leo Club for the year ended on 31st Dec 2016.
Receipt Rs. Payments Rs.
To Balance of cash in hand:.....................................................................1..,.0..0..0......B..y...B..a..n..k...o..v..e..r.d..r..a..f.t.....................................................................................3..,.2..0..0.......................................................
To Subscription: By Investment ..........................................................................................3..,.0..0..0.......................................................
Last year .........................................................................................4..0..0......B..y...F..u..r.n..i.t.u..r.e................................................................................................1..,.5..0..0.......................................................
This year ....................................................................................1..6..,.6..0..0......B..y...S..a..l.a..r.i.e..s.................................................................................................6..,.2..0..0.......................................................
Next year.........................................................................................5..0..0......B..y...P..r..in..t.i.n..g.....................................................................................................8..0...0......................................................
To Entrance fee...........................................................................................3..5..0......B..y...S..u..n..d..r..ie..s...................................................................................................9..0...0......................................................
To Sales of old newspaper.......................................................................1..,.0..5..0......B..y...B..a..l.a..n..c..e...c../.d...........................................................................................4..,.3..0..0.......................................................
19,900 19,900
Additional information:
i. The club has 200 members each paying an annual subscription of Rs.100.
ii. Salary of Rs.800 is still outstanding.
iii. Amount of Rs.150 is still receivable for the sale of newspapers.
iv. Rs.300 is provided as depreciation on assets.
Required: Prepare income and expenditures account for the year ending on 31st Dec 2016
Accounting for Non-Profit Organizations CHAPTER 15 185
Solution,
Leo Club
Income and expenditure account
Dr. for the year ended 31st December, 2016 Cr.
Expenditure Amount Income Amount
To Salaries ............................................................ 6,200 By Subscription received ......................................16,600
Add: Outstanding....................................................... 800 7,000 Add: Outstanding of current....................................3,400 20,000
To Depreciation on assets ..........................................................................3..0..0......B..y...E..n..t.r..a..n..c.e....f.e..e............................................................................................3..5...0......................................................
By Printing ...................................................................................................8..0..0......B..y...S..a..l.e..s...o..f..o..l.d...n..e..w...s..p..a..p..e..r.......................................1..,.0..5..0..
By Sundries .................................................................................................9..0..0......A..d..d..:..R...e..c..e..iv..a..b..l.e............................................................1..5..0.. 1,200
To Surplus ..............................................................................................1..2..,.5..5..0................................................................................................
Total 21,550 Total 21,550
SQ-11.____ From the details given below, prepare an income and expenditure a/c for 2016 for an association.
Balance sheet on 1-1-2016
Liabilities Rs. Assets Rs.
Capital fund ............................................................................................2..1..,.2..5..0......F..u..r.n..i.t.u..r.e...................................................................................................2..0..,.0..0..0.......................................................
10% Loan .................................................................................................5..,.0..0..0......S..u..b..s..c..r.i.p..t.i.o..n...d..u..e...........................................................................................2..5...0......................................................
Advance subscription ..................................................................................5..0..0......B..a..n..k...........................................................................................................6..,.0..0..0.......................................................
Wages outstanding......................................................................................1..0..0......P..r.e..-..p..a..id...r..e..n..t................................................................................................6..0..0.......................................................
26,850 26,850
Dr. Receipt and payment a/c for the year ended in 2016 Cr.
Receipt Amount Payments Amount
To Balance b/d .........................................................................................6..,.0..0..0......B..y...W...a..g..e..s...................................................................................................1..,.1..0..0.......................................................
To Subscription: By Rent:
2015 .........................................................Rs.250 2015 ............................................................ Rs.600
2016 – ...................................................Rs.9,000 2016 ............................................................ Rs.600 1,200
2017 – ......................................................Rs.300 9,550 By Interest on loan......................................................................................2..5...0......................................................
To Legacies ..............................................................................................4..,.0..0..0......B..y...S..u..n..d..r..y..e...x.p..e..n..s..e..s..................................................................................4..,.0..0..0.......................................................
To Rent........................................................................................................2..0..0......B..y...M...e..e..t.i.n..g...e..x..p..e..n..s..e..s...................................................................................7..0...0......................................................
To Life membership fees..........................................................................1..,.0..0..0......B..y...L..o..a..n...r.e..p..a..y..m...e..n..t..(..D..e..c...3..1..s..t.).................................................................5..,.0..0..0.......................................................
By Balance c/d .........................................................................................8..,.5..0..0.......................................................
20,750 20,750
Additional information:
i. The association has 500 members and subscription rate @ Rs.20 each.
ii. Written off Rs.2,000 on furniture.
Solution,
… … Association
Income and expenditure account
Dr. for the year ended 31st December, 2016 Cr.
Expenditure Amount Income Amount
To Depreciation on furniture.....................................................................2..,.0..0..0......B..y...S..u..b..s..c..r.i.p..t.i.o..n..........................................................9..,.0..0..0..
To Rent...................................................................... 600 Add: Outstanding of current.......................................500
Add: Pre-paid of previous.......................................... 600 1,200 Add: Advance of previous..........................................500 10,000
To Wages ............................................................... 1,100 By Rent (received) ......................................................................................2..0...0......................................................
Less: Outstanding of previous................................... 100 1,000
To Interest on loan .................................................... 250
Add: Outstanding....................................................... 250 500
To Sundry expenses ................................................................................4..,.0..0..0................................................................................................
To Meeting expenses..................................................................................7..0..0................................................................................................
To Surplus ...................................................................................................8..0..0................................................................................................
Total 10,200 Total 10,200
SQ-12.____ A club furnished you the following receipts and payment account as 31st Chaitra 2073:
Receipt Amount Rs. Payments Amount Rs.
To donation ...............................................................................................1..5..,.0..0..0......B..y...f.u..r..n..it.u..r..e...........................................................................................2..4..,.0..0...0......................................................
To sundry incomes ...................................................................................1..4..,.2..5..0......B..y...E...q..u..i.p..m...e..n..t......................................................................................2..5..,.0..0...0......................................................
To subscription ........................................................................................1..2..4..,.0..0..0......B..y...1..0..%.....in..v..e..s..t.m...e..n..t..............................................................................7..0..,.0..0...0......................................................
To entrance fee ........................................................................................3..5..,.0..0..0......B..y...r..e..n..t............................................................................ 24,000
To interest on investment ...........................................................................5..,.0..0..0......B..y...P...r.i.n..t.i.n..g...&...s..t.a..t.i.o..n..e..r.y..........................................................................4..,.0...0..0......................................................
By salary & wages..............................................................................1..8..,.0..0...0......................................................
By closing cash balance ....................................................................2..8..,.2..5...0......................................................
193,250 193,250
Additional adjustments: ii. Subscription due for 2073 Rs.4,000
i. Subscription includes Rs.6,000 for 2074 iv. One fourth of entrance fee is to be treated as income
iii. Outstanding salary Rs.2,000 and rent Rs.1,000
Required: Income and Expenditure Account
186 Accounting-XI
Solution,
a. Income & Expenditure A/c Cr.
Dr. For the year ended 31st December 2073
Expenditure Amount Rs. Income Amount Rs.
To Rent................................................................ 24,000 By subscription ............................................ 124,000
Add: outstanding ................................................... 1,000 25,000 Less: Advance ................................................ 6,000
To printing & stationery ...............................................................................4..,.0..0..0............................................................................1..1..8..,.0..0..0......
To salary & wages............................................... 18,000 Add: outstanding.............................................. 4,000 122,000
ATodds:uorpultussta..n..d..in...g.........................................................................................................2..,.0..0..0..........................1..21..08..,,.00..00..00......B..y...e..n..t.r..a..n..c..e...f.e..e...(.3..5..,.0..0..0...×...41..).........................................................................................................8..,.7..5..0.......................................................
By interest on investment ..............................5,000 7,000
Add: Accrued ..................................................2,000
By donation.........................................................................................1..5..,.0..0..0.......................................................
By sundry Income...............................................................................1..4..,.2..5..0.......................................................
167,000 167,000
SQ-13.____ The following is the Receipts and Payment of Sewak Club for the year ended 30th Chaitra 2073:
Receipt Amount Rs. Payments Amount Rs.
To Sale of old newspaper ...........................................................................5..,.2..5..0......B..y...R...e..n..t..o..f..o..f.f.i.c..e...................................................................................2..4..,.0..0...0......................................................
To Dividend received .................................................................................4..,.5..0..0.......B..y...S...a..l.a..r.y.............................................................................................4..8...,0..0...0......................................................
To Admission fee.......................................................................................2..2..,.0..0..0......B..y...C...o..s..t..o..f..e..n..t.e..r.t.a..i.n..m...e..n..t.......................................................................5..,.5...0..0......................................................
To Subscription .......................................................................................1..5..5..,.0..0..0......B..y...F...u..r.n..i.t.u..r.e..........................................................................................7..5..,.0..0...0......................................................
To Interest on investment............................................................................2..,.5..0..0......B..y...1..0..%.....in..v..e..s..t.m...e..n..t............................................................................1..2..5...,0...0..0......................................................
To Donation for building ........................................................................1..5..0..,.0..0..0......B..y...P...u..r.c..h..a..s..e...o..f..b..o..o..k..s............................................................................7..,.5...0..0......................................................
By Balance c/d....................................................................................5..4..,.2..5...0......................................................
339,250 339,250
Additional information:
i. Subscription includes Rs. 4,250 received for 2074. Subscription outstanding for 2073 is amounted to Rs.7,250
ii. Rent of office includes Rs. 2,500 paid for 2074
iii. Depreciation on furniture @ 10%
iv. 25% of admission fee is to be treated as revenue income
Required: Income and expenditure account,
Solution,
a. Sewak club, Income & Expenditure A/c Cr.
Dr. For the year ended 3oth Chaitra 2073
Expenditure Amount Rs. Income Amount Rs.
To rent ................................................................ 24,000 By sale of old newspaper .....................................................................5..,.2..5..0.......................................................
Less: Prepaid......................................................... 2,500 21,500 By dividend received ............................................................................4..,.5..0..0.......................................................
To salary....................................................................................................4..8..,.0..0..0......B..y...A...d..m...i.s.s..i.o..n...f.e..e...(..2..2..,.0..0..0...×...2..5..%...).........................................................5..,.5..0..0.......................................................
To Cost of entertainment.............................................................................5..,.5..0..0......B..y...s..u..b..s..c..r.i.p..t.i.o..n..............................................1..5..5..,.0..0..0.......
To dep. on furniture .....................................................................................7..,.5..0..0......L..e..s..s..:..A..d..v..a..n..c..e...f.o..r..2..0..7..4.....................................4..,.2..5..0.......
To surplus................................................................................................1..0..3..,.2..5..0...........................................................................1..5..0..,.7..5..0.......
Add: outstanding for 2073 ..............................7,250 158,000
By interest on investment...............................2,500
Add: Accrued ................................................10,000 12,500
185,750 185,750
SQ-14.____ From the following balance sheet and receipts & payments a/c of Kathmandu Sports Club, prepare closing balance
sheet for the year ended on 30th Chaitra, 2074, after taking the additional information into account.
Balance Sheet
as on 1st Baishak, 2074
Liabilities Amount Assets Amount
Capital fund ............................................................................................1..4..,.0..0..0......F..i.x.e..d....A..s..s..e..t.s............................................................................................1..3..,.0..0..0.......................................................
Subscription.................................................................................................1..0..0......C..a..s..h..............................................................................................................9..0...0......................................................
Subscription ................................................................................................2..0...0......................................................
14,100 14,100
Receipts & Payments Account
for the year ended on 30 Chaitra, 2074
Receipts Rs. Payments Rs.
To Balance ..................................................................................................9..0..0......B..y...S..a..l.a..r.i.e..s....................................................................................................6..0...0......................................................
To Subscription By Electricity................................................................................................1..4...0......................................................
2073 ................................................................................................2..0..0......B..y...G...e..n..e..r.a..l..e..x..p...............................................................................................6...0......................................................
2074 .............................................................................................1..,.0..5..0......B..y...B..a..l.a..n..c..e...c../.d...........................................................................................1..,.9..9..5.......................................................
2075 ..................................................................................................6..0................................................................................................
To Donation .................................................................................................5..4..0................................................................................................
To Sale of newspaper ...................................................................................4..5................................................................................................
2,795 2,795
Additional information: ii. Subscription due for 2074 Rs.100
i. Salaries outstanding for 2074 Rs.50
iii. Surplus Rs.985
Accounting for Non-Profit Organizations CHAPTER 15 187
Solution,
Kathmandu Sports Club
Balance Sheet
for the year ended 30th Chaitra, 2074
Liabilities and Capital Amount Assets Amount
Capital fund .......................................................... 14,000 Outstanding subscription ............................................................................1..0...0......................................................
Add: Surplus .............................................................. 985 14,985 Fixed assets...........................................................................................1..3..,.0..0..0.......................................................
Advance subscription
Outstanding salaries 60 Cash.........................................................................................................1..,.9..9..5.......................................................
50
Total 15,095 Total 15,095
SQ-15.____ The opening balance sheet and receipts and payments account of a club are given below:
Balance Sheet
as on 31st December Last year
Liabilities Amount Assets Amount
Capital fund ............................................................................................1..8..,.0..0..0......C..l.u..b...p..r.e..m...i.s..e..s..........................................................................................1..5..,.8..0..0.......................................................
Outstanding salaries.................................................................................1..,.2..0..0......F..u..r.n..i.t.u..r.e.....................................................................................................1..,.5..0..0.......................................................
Subscription due ......................................................................................1..,.7..0..0.......................................................
Cash ............................................................................................................2..0...0......................................................
19,200 19,200
Receipts and Payments Account Cr.
Dr. for December 31st Current year
Receipts Amount Payments Amount
To Balance b/d ............................................................................................2..0..0......B..y...S..a..l.a..r.i.e..s.................................................................................................5..,.5..0..0.......................................................
To Subscription.......................................................................................2..2..,.5..0..0......B..y...P..r..in..t.i.n..g..................................................................................................2..,.5..0..0.......................................................
To Donation ..............................................................................................5..,.5..0..0......B..y...W...a..g..e..s...................................................................................................4..,.8..0..0.......................................................
By Furniture............................................................................................1..0..,.0..0..0.......................................................
By Balance c/d .........................................................................................5..,.4..0..0.......................................................
28,200 28,200
Additional information
i. Depreciate furniture by 10% ii. Donation is to be capitalized.
iii. Salary paid includes the outstanding of last year. iv. Surplus Rs.8050.
Required: Balance sheet as at December end current year
Solution,
… ... Club
Income and expenditure account
for the year ended 31st December, Current year
Expenditure Amount Income Amount
To Depreciation on furniture.....................................................................1..,.1..5..0......B..y...S..u..b..s..c..r.i.p..t.i.o..n........................................................2..2..,.5..0..0.. 20,800
To Salaries ............................................................. 5,500 Less: Outstanding of previous ................................1,700 -
Less: Outstanding of previous................................ 1,200 4,300 By Donation.............................................................5,500
To Printing ................................................................................................2..,.5..0..0......L..e..s.s..:..C...a..p..i.t.a..l.i.z.e..d........................................................5..,.5..0..0.. 20,800
To Wages .................................................................................................4..,.8..0..0................................................................................................
To Surplus ................................................................................................8..,.0..5..0................................................................................................
Total 20,800 Total
… ... Club
Balance Sheet
for the year ended 31st December, Current year
Liabilities and Capital Amount Assets Amount
Capital fund .......................................................... 18,000 Furniture .................................................................. 1,500
Add: Surplus ........................................................... 8,050 Add: Purchase ......................................................10,000
Add: Donation capitalized ...................................... 5,500 31,550 Less: Depreciation (10%) .......................................1,150 10,350
Total Club premises ........................................................................................1..5..,.8..0..0.......................................................
Cash .........................................................................................................5..,.4..0..0.......................................................
31,550 Total 31,550
LONG ANSWER QUESTIONS
Income and Expenditure Account and Balance Sheet
LQ-1._____ The opening Balance Sheet and Receipts and Payment Account of cricket sport club are given below:
Balance Sheet as on Baishakh 1st, 2073
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund .............................................................................................1..0..0..,.0..0..0......E..q..u...ip..m...e..n...t.s..........................................................................................5..5..,.0..0...0......................................................
10% bank loan ..........................................................................................5..0..,.0..0..0......F..u..r.n...it.u..r..e...............................................................................................2..5..,.0..0...0......................................................
Outstanding salaries .................................................................................4..,.0..0..0......O...u..t.s..t.a..n..d..i.n..g...s..u..b..s..c.r..ip..t.i.o..n........................................................................2..,.5...0..0......................................................
Advance subscription ...............................................................................5..,.0..0..0......5..%....i.n..v..e..s..t.m...e..n..t.....................................................................................4..5..,.0..0...0......................................................
Cash at bank ....................................................................................3..1..,.5..0...0......................................................
188 Accounting-XI
159,000 159,000
Receipts and Payments Account 31st Chaitra 2073
Receipt Amount Rs. Payments Amount Rs.
To balance b/d...........................................................................................3..1..,.5..0..0......B..y...s..a..l.a..r.y..:.......2..0..7..2..................................................................................4..,.0...0..0......................................................
To entrance fees .......................................................................................2..5..,.0..0..0............................2..0..7..3................................................................................5..8..,.0..0...0......................................................
To subscription 2072...................................................................................2..,.5..0..0......B..y...f.u..r..n..it.u..r..e...(.1....7...2..0..7..3..).........................................................................5..5..,.0..0...0......................................................
To subscription 2073...............................................................................1..2..5..,.0..0..0......B..y...o..f.f.i.c..e...m...a..t.e..r.i.a..l.s..................................................................................4..,.0...0..0......................................................
To subscription 2074...................................................................................3..,.5..0..0......B..y...G...e..n..e..r.a...l.e..x..p..e..n..s..e..s...........................................................................1..5..,.2..5...0......................................................
To sundry income .....................................................................................1..2..,.2..5..0......B..y...t.e..l.e..p..h..o..n..e...a..n..d....in..t.e..r..n..e..t.....................................................................2..,.0...0..0......................................................
To interest in investment .........................................................................2..,.2..5..0......B..y...b..a..l.a..n..c..e...c../.d......................................................................................6..3..,.7..5...0......................................................
202,000 141,000
Additional adjustments: ii Half of Entrance fees are to be capitalized
i. Closing stock of office material was Rs. 1,000 iv. Subscription due for the year 2073 Rs.10,000
iii. Depreciate equipment by 10% and furniture by 5%
v. Interest on bank loan is due for the full year. b. Balance Sheet as on Chaitra 30th, 2073
Required: a. Income and Expenditure Account ,
Solution,
Cricket sport club, Income & expenditure Account
Dr. For the year ended 31st Chaitra 2073
Cr.
Expenditure Amount Rs. Income Amount Rs.
To salary....................................................................................................5..8..,.0..0..0......B..y...e..n..t.r..a..n..c..e...f.e..e..s.................................................2..5..,.0..0..0...
To office material................................................... 4,000 Less: capitalized (50%) ....................................12,500 12,500
Less: Closing stock ............................................ 1,000 3,000 By subscription ...............................................125,000
To general expenses.................................................................................1..5..,.2..5..0......A..d..d...:..A..d..v....r.e..c..e..i.v..e..d...o..n...2..0..7..2..................................5..,.0..0..0...
To telephone & internet...............................................................................2..,.0..0..0......A..d..d...:..O..u..t.s..t.a..n..d..i.n..g.................................................1..0..,.0..0..0... 140,000
To depreciation on equipment (55,000 × 10%) .........................................5..,.5..0..0......B..y...s..u..n..d..r.y...i.n..c..o..m...e.................................................................................1..2..,.2..5..0.......................................................
To dep. on furniture (25,000 × 5% + 55,000 × 5% × 162)............................2..,.6..2..5......B..y...i.n..t.e..r.e..s..t..o..n...i.n..v..e..s..t.m...e..n..t....................................................................................................................2..,.2..5..0.......................................................
To O/S interest on bank loan ......................................................................5..,.0..0..0.............................................................................................
To surplus..................................................................................................7..5..,.6..2..5.............................................................................................
167,000 167,000
Balance sheet
As on 31st Chaitra 2073
Liabilities Amount Rs. Assets Amount Rs.
Capital fund ....................................................... 100,000
Add: surplus......................................................... 75,625 Equipment....................................................... 55,000
Entrance fee ................................................................... 175,625 Less: Dep.......................................................... 5,500 49,500
10% bank loan................................................................ 12,500 Furniture ......................................................... 25,000
Advance subscription ..................................................... 50,000 Add: addition................................................... 55,000
Outstanding Int. on bank loan ........................................ 3,500 80,000
5,000 Less: depreciation ............................................ 2,625 77,375
Outstanding subscription....................................................................1..0..,.0..0..0.......................................................
5% investment....................................................................................4..5..,.0..0..0.......................................................
Closing stock of office manual .............................................................1..,.0..0..0.......................................................
Cash at bank ......................................................................................6..3..,.7..5..0.......................................................
246,625 246,625
LQ-2._____ The following is the balance sheet of a club as on Ashadh 31, 2060:
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund ...............................................................................................5..0..,.0..0..0......C...lu..b....p..r.e..m...i.s..e..s......................................................................................4..4..,.0..0...0......................................................
Outstanding salaries ...................................................................................1..,.0..0..0......F..u..r.n...it.u..r..e.................................................................................................5..,.0...0..0......................................................
Subscription ............................................................................................8...0..0......................................................
Cash 1,200
51,000 51,000
Receipts and Payments Account for the year ended Ashadh,31 2061
Receipt Amount Rs. Payments Amount Rs.
To Balance b/d ............................................................................................1..,.2..0..0......B..y...S...a..l.a..r.y................................................................................................6..,.0...0..0......................................................
To Subscription .........................................................................................2..0..,.0..0..0......B..y...P...r.i.n..t.i.n..g...a..n..d...s..t.a..t.i.o..n..e..r.y......................................................................3..,.2...0..0......................................................
To Donation ................................................................................................6..,.0..0..0......B..y...F...u..r.n..i.t.u..r.e..(.2..0..6..0...4...1...)..........................................................................1..,.5...0..0......................................................
To Rent received ......................................................................................4..,.0..0..0......B..y...M...i.s..c..e..l.la...n..e..o..u..s...................................................................................1..,.2...5..0......................................................
By Audit fees ........................................................................................3..,.0...0..0......................................................
By Investment ....................................................................................1..0..,.7..5...0......................................................
By Balance c/d......................................................................................5..,.5...0..0......................................................
31,200 31,200
Additional adjustments:
i. Half of the donation is to be capitalized
ii. Subscription of Rs.600 is outstanding for the current year and Rs.1,000 is received for 2062.
iii. Outstanding for printing and stationery Rs.300
iv. Depreciate furniture by 10% p.a.
Accounting for Non-Profit Organizations CHAPTER 15 189
Required: a. Income and Expenditure Account, b. Balance Sheet as on Ashadh 31, 2061
Solution,
Income and expenditure A/c
Dr. For the year ended 31st Ashadh 2061 Cr.
Expenditure Amount Rs. Income Amount Rs.
To salary................................................................. 6,000 By subscription .............................................20,000
Less: outstanding of 2060 ...................................... 1,000 5,000 Add: outstanding................................................600
To printing & stationery .......................................... 3,200 20,600
Add: outstanding ...................................................... 3,00 3,500 Less: outstanding of 2060 .................................800
To miscellaneous ........................................................................................1..,.2..5..0......L..e..s..s..:..a..d..v..a..n..c..e...f.o..r..2..0..6..2.....................................1..,.0..0..0....... 18,800
To audit fees................................................................................................3..,.0..0..0......B..y...d..o..n..a..t.i.o..n........................................................6..,.0..0..0.......
To depreciation of furniture (5,000 + 1,500) × 10%.......................................6..5..0......L..e..s..s..:..c..a..p..it.a...li.z..e..d................................................3..,.0..0..0....... 3,000
To surplus..................................................................................................1..2..,.4..0..0......B..y...r..e..n..t..r.e..c..e..i.v.e..d......................................................................................4..,.0..0..0.......................................................
25,800 25,800
Balance sheet
As on 31st Ashad 2061
Liabilities Amount Rs. Assets Amount Rs.
Capital fund ......................................................50,000 Club premises.....................................................................................4..4..,.0..0..0.......................................................
Add: surplus......................................................12,400 62,400 Furniture .........................................................5,000
Capitalized donation....................................................................................3..,.0..0..0......A..d..d...:..a..d..d..it.i.o..n......................................................1..,.5..0..0.......
Advance subscription for 2062....................................................................1..,.0..0..0......L..e..s..s..:..d..e..p..r.e..c..i.a..t.i.o..n................................................6..5..0....... 5,850
Outstanding printing and stationary .............................................................3..0..0......I.n..v..e..s..t.m...e..n..t...........................................................................................1..0..,.7..5..0.......................................................
Cash .....................................................................................................5..,.5..0..0.......................................................
Subscription due......................................................................................6..0...0......................................................
66,700 66,700
LQ-3._____ The balance sheet and Receipts and Payments account of Cricket Club are given below:
Balance sheet as at 30 Chaitra 2062
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund ...............................................................................................3..3..,.6..0..0......B..u..i.l.d..i.n..g..s...............................................................................................3..0..,.0..0...0......................................................
Advance subscription .................................................................................1..,.4..0..0......O...u..t.s..t.a..n..d..i.n..g...s..u..b..s..c.r..ip..t.i.o..n...........................................................................4...0..0......................................................
Outstanding expenses.................................................................................5..,.0..0..0......O...u..t.s..t.a..n..d..i.n..g...r.e..n..t.......................................................................................2...0..0......................................................
Loan ...............................................................................................................6..0..0......C...a..s..h...in...h..a...n..d........................................................................................1..0..,.0..0...0......................................................
40,600 40,600
Receipts and Payments Account as on 30th Chaitra 2063
Receipt Amount Rs. Payments Amount Rs.
To opening balance of cash 10,000 By expenses paid :
To subscription - 2062 .........................................................................................1..,.2...0..0......................................................
2062: ........................................................ 200 - 2063 .........................................................................................2..,.0...0..0......................................................
2063: ....................................................... 2,100 - By land .................................................................................................4..,.0...0..0......................................................
2064: .........................................................100 2,400 By interest paid .......................................................................................4...0..0......................................................
To rent received..............................................................................................7..0..0......B..y...m...i.s..c..e..l.la...n..e..o..u..s...e..x.p..e..n..s..e..s...................................................................2..,.0...0..0......................................................
To registration fee ..........................................................................................8..0..0......B..y...c..a..s..h...b..a..l.a..n..c..e...a..t..c..l.o..s.e........................................................................8..,.3...0..0......................................................
To miscellaneous receipts ........................................................................4..,.0..0..0.............................................................................................
17,900 17,900
Additional adjustments:
i. Depreciation building @5% ii. Capitalize the registration fees
Required: a. Income and Expenditure Account b. Balance Sheet as at 30 Chaitra 2063
Solution,
Income and expenditure A/c Cr.
Dr. For the year ended 30th Chaitra 2063
Expenditure Amount Rs. Income Amount Rs.
To expenses for 2063 .................................................................................2..,.0..0..0......B..y...s..u..b..s..c..r.i.p..t.i.o..n..................................................2..,.1..0..0.......
To interest.......................................................................................................4..0..0......A..d..d...:..A..d..v..a..n..c..e...r.e..c..e..i.v..e..d...o..n...2..0..6..2.......................1..,.4..0..0....... 3,500
To miscellaneous Expenses .......................................................................2..,.0..0..0......B..y...r..e..n..t..r.e..c..e..i.v.e..d....................................................7..0..0.......
To depreciation on building .........................................................................1..,.5..0..0......L..e..s..s..:..o..u..t.s..t.a..n..d..i.n..g...o..f..2..0..6..2....................................2..0..0....... 500
To surplus....................................................................................................2..,.1..0..0......B..y...m...i.s..c..e..l.la...n..e..o..u..s...r.e..c..e..ip...t.s.....................................................................4..,.0..0..0.......................................................
8,000 8,000
Balance sheet
As on 30th Chaitra 2063
Liabilities Amount Rs. Assets Amount Rs.
Capital fund ......................................................33,600 Building .........................................................30,000 28,500
Add: surplus........................................................2,100 Less: depreciation ..........................................1,500
Add: capitalized Registration fee ..........................800 36,500 Outstanding subscription (400-200)........................................................2..0...0......................................................
Outstanding expenses (5,000 – 1,200).......................................................3..,.8..0..0......L..a..n..d........................................................................................................4..,.0..0..0.......................................................
Loan................................................................................................................6..0..0......C...a..s..h...in...h..a...n..d..........................................................................................8..,.3..0..0.......................................................
190 Accounting-XI
Advance subscription .....................................................................................1..0..0............................................................................................. 41,000
41,000
LQ-4._____ Given below is the balance sheet of a club as on 31st December 2005:
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund ...............................................................................................5..0..,.0..0..0......C...a..s..h.......................................................................................................2..,.0...0..0......................................................
Outstanding wages......................................................................................1..,.0..0..0......F..u..r.n...it.u..r..e.................................................................................................8...0...0..0......................................................
Buildings .............................................................................................4..0..,.0..0...0......................................................
Subscription receivable ......................................................................1..,.0...0..0......................................................
51,000 51,000
Receipts and Payments Account as at December 2006
Receipt Amount Rs. Payments Amount Rs.
To Opening balance....................................................................................2..,.0..0..0......B..y...W....a..g..e..s.............................................................................................1..5..,.0..0...0......................................................
To Membership fees .................................................................................2..5..,.0..0..0......B..y...P...r.i.n..t.i.n..g...&...s..t.a..t.i.o..n..e..r.y..........................................................................3..,.0...0..0......................................................
To Miscellaneous sales ..............................................................................3..,.0..0..0......B..y...A...u..d..i.t..f.e..e............................................................................................2..,.0...0..0......................................................
To Donation ............................................................................................2..0..,.0..0..0......B..y...I.n..v..e..s..t.m...e..n..t.s.....................................................................................2..0..,.0..0...0......................................................
By Miscellaneous purchase ................................................................4..,.0...0..0......................................................
By Furniture (Jan,2005)........................................................................3..,.0...0..0......................................................
By Closing balance ..............................................................................3..,.0...0..0......................................................
50,000 50,000
Additional information:
i. Out of the subscription received Rs.1,000 was for 2007 and Rs.2,000 is still outstanding for the current year
ii. Depreciation on furniture to be charged @ 10% p.a.
iii. Auditors remuneration paid in advance Rs.1,000
iv. Capitalize the donation fully b. Balance Sheet as on 31st December 2006
Required: a. Income and Expenditure Account
Solution,
Income and expenditure A/c Cr.
Dr. For the year ended 31st December 2006 Amount Rs.
Expenditure Amount Rs. Income 25,000
To wages .............................................................. 15,000 By membership.............................................25,000 3,000
Less: paid for 2005................................................. 1,000 14,000 Add: outstanding for 2006 ..............................2,000 28,000
To printing & stationery ...............................................................................3..,.0..0..0.............................................................................2..7..,.0..0..0.......
To audit fee.............................................................. 2,000 Less: received for 2007..................................1,000
Less: prepaid........................................................... 1,000 1,000 Less: outstanding for 2005.............................1,000
To mis. purchases .......................................................................................4..,.0..0..0......B..y...m...i.s..c..e..l.la...n..e..o..u..s...s.a..l.e..s...................................................
To depreciation on furniture (800 + 300) ....................................................1..,.1..0..0..............................................................................0) × 10%
To surplus....................................................................................................4..,.9..0..0.............................................................................................
28,000
Balance sheet
As on 31st December 2006
Liabilities Amount Rs. Assets Amount Rs.
Capital fund .......................................................... 50,000 Building ...............................................................................................4..0..,.0..0..0.......................................................
Add: surplus............................................................ 4,900 Furniture .........................................................8,000
Add: capitalized donation .................................... 20,000 74,900 Add: Addition ..................................................3,000
Advance subscription ..................................................................................1..,.0..0..0....................................................................................1..1..,.0..0..0
Less: depreciation ..........................................1,100 9,900
Investment ..........................................................................................2..0..,.0..0..0.......................................................
Cash at bank ........................................................................................3..,.0..0..0.......................................................
Subscription due...................................................................................2..,.0..0..0.......................................................
Prepaid Audit fees ................................................................................1..,.0..0..0.......................................................
75,900 75,900
LQ-5._____ Balance sheet of a Sport Council as on Chaitra 31st, Last year is given below:
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital Fund ...........................................................................................2..,.0..0..,.0..0..0......F..u..r.n...it.u..r..e............................................................................................1..,.0..0..,.0..0...0......................................................
Outstanding Salary....................................................................................2..0..,.0..0..0......E..q..u...ip..m...e..n...t.s.......................................................................................1..,.0..0..,.0..0...0......................................................
Bank .................................................................................................5..,.0...0..0......................................................
Outstanding subscription....................................................................1..5..,.0..0...0......................................................
Total 2,20,000 Total 2,20,000
Receipt and payment account for the current year ended Chaitra 31 is:
Receipt Amount Rs. Payments Amount Rs.
Opening Balance.........................................................................................5..,.0..0..0......S..a..l.a..r..y...................................................................................................4..5..,.0..0...0......................................................
Subscription............................................................................................1..,.0..0..,.0..0..0......P..r..in..t.i.n..g...E...x..p..e..n..s..e..s................................................................................1..0..,.0..0...0......................................................
Sale of papers .............................................................................................5..,.0..0..0......E..q..u...ip..m...e..n...t.s..(..B..a..i.s..h..a..k..h...1..)....................................................................5..0..,.0..0...0......................................................
Donation .................................................................................................1..,.2..5..,.0..0..0......M...i.s..c..e..ll.a..n..e..o..u..s.......................................................................................1..5..,.0..0...0......................................................
Accounting for Non-Profit Organizations CHAPTER 15 191
Audit Expenses.....................................................................................5..,.0...0..0......................................................
Closing balance...............................................................................1..,.1..0..,.0..0...0......................................................
Total 2,35,000 Total 2,35,000
Additional Information:
i. Subscription outstanding for the current year Rs. 10,000
ii. Salary payable for the year Rs. 5,000
iii. Depreciation on equipments to be charged at 10% p.a.
iv. 50% of donation is to be capitalized.
Required: a. Income and expenditure account b. Balance sheet as on Chaitra 31 current year.
Solution,
Income and expenditure A/c Cr.
Dr. For the year ended 31st Chaitra last year
Expenditure Amount Rs. Income Amount Rs.
To salary...........................................................45,000 By subscription ............................................100,000
Add: outstanding ................................................5,000 Add: outstanding............................................10,000
50,000 110,000
Less: paid for previous year.............................20,000 30,000 Less: outstanding of previous year ...............15,000 95.000
To printing expenses.................................................................................1..0..,.0..0..0......B..y...s..a..l.e...o..f..p..a..p..e..r.s....................................................................................5..,.0..0..0.......................................................
To miscellaneous ......................................................................................1..5..,.0..0..0......B..y...d..o..n..a..t.i.o..n....................................................1..2..5..,.0..0..0.......
To Audit expense ........................................................................................5..,.0..0..0......L..e..s..s..:..c..a..p..it.a...li.z..e..d...5..0..%.......................................6..2..,.5..0..0....... 62,500
To depn on equipment (100,000+50,000) × 10%..................................................1...5..,.0..0...0............................................................................................................
To surplus..................................................................................................8..7..,.5..0..0.............................................................................................
1,62,500 1,62,500
Balance sheet
As on 31st Chaitra cast year
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund .........................................................200,000 Furniture 100,000
Add: surplus...........................................................87,500 287,500 Equipments.....................................................100,000
Capitalized donation..................................................................................6..2..,.5..0..0......A..d..d...:....................................................................5..0..,.0..0..0...
Outstanding salary ......................................................................................5..,.0..0..0...............................................................................1..5..0..,.0..0..0...
Less: depreciation ............................................15,000 135,000
Cash at bank ....................................................................................1..1...0..,0...0..0......................................................
Subscription due.................................................................................1..0..,.0..0...0......................................................
355,000 355,000
LQ-6._____ Following transactions of Apolo Hospital are given:
Balance sheet as on 1-1-2008
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund ............................................................................................1..,.4..5..,.5..0..0......M...a..c..h..i.n..e..r.y...........................................................................................1..2..0...,0...0..0......................................................
Outstanding salaries....................................................................................1..,.5..0..0......F..u..r.n...it.u..r..e...............................................................................................1..0..,.0..0...0......................................................
Advance subscription ..................................................................................3..,.0..0..0......S..u..b...s.c..r.i.p..t.i.o..n...d..u..e.....................................................................................2..,.0...0..0......................................................
Cash and bank ...................................................................................1..8..,.0..0...0......................................................
1,50,000 1,50,000
Receipt and payment Account on 31st December 2008
Receipt Amount Rs. Payments Amount Rs.
To Balance b/d ..........................................................................................1..8..,.0..0..0......B..y...S...a..l.a..r.i.e..s...........................................................................................2..0..,.0..0...0......................................................
To Subscription By Stationary ........................................................................................2..,.5...0..0......................................................
2007 ................................................................................................2..,.0..0..0......B..y...F...u..r.n..i.t.u..r.e..........................................................................................1..5..,.0..0...0......................................................
2008 ..............................................................................................2..9..,.0..0..0......B..y...R...e..p..a..i.r...............................................................................................1..,.5...0..0......................................................
To Sundry receipt ........................................................................................5..,.0..0..0......B..y...B...a..l.a..n..c.e....c./.d......................................................................................2..1..,.0..0...0......................................................
To Entrance fees .........................................................................................6..,.0..0..0.............................................................................................
60,000 60,000
Additional Information: ii. Half of the entrance fees are to be capitalized.
iv. Subscription due for 2008 Rs. 4,000.
i. Depreciate on furniture @ 15% p.a.
iii. Outstanding salaries Rs. 2,000.
Required: a. Income and expenditure account
b. Balance sheet as on 31st December, 2008.
Solution,
a. Income and Expenditure Account Cr.
Dr. For the year ended 31st December, 2008
Expenditure Amount Rs. Income Amount Rs.
To Salaries .......................................................... 20,000 By Subscription ............................................29,000
Less: O/S of last year............................................. 1,500 Add: Advance of last year ..............................3,000
Add: O/S of current year ........................................ 2,000 20,500 Add: Outstanding of current year ...................4,000 36,000
To Stationary ...............................................................................................2..,.5..0..0......B..y...S...u..n..d..r.y...r.e..c..e..i.p..t.s.................................................................................5..,.0..0..0.......................................................
To Repair.....................................................................................................1..,.5..0..0......B..Y....E..n..t.r..a..n..c..e...f.e..e..s..............................................6..,.0..0..0.......
192 Accounting-XI
To Depreciation on furniture 15% of (10,000 + 15,000) .............................3..,.7..5..0......L..e..s..s..:..C..a..p...it.a..l.i.z..e..d...............................................3..,.0..0..0....... 3,000
To Surplus .................................................................................................1..5..,.7..5..0............................................................................................. 44,000
44,000
b. Balance Sheet
Dr. As on 31st December, 2008 Cr.
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund ..........................................................1,45,500 Machinery .......................................................................................1..,.2..0..,.0..0...0......................................................
Add: Surplus ............................................................15,750 1,61,250 Furniture ...........................................................25,000
Entrance fee ................................................................................................3..,.0..0..0......L..e..s..s..:..D..e..p...r.e..c..ia..t.i.o..n.................................................3..,.7..5..0... 21,250
Outstanding salaries ...................................................................................2..,.0..0..0......C...a..s..h...a..n..d...b..a..n..k.....................................................................................2..1..,.0..0...0......................................................
Subscription outstanding .....................................................................4..,.0...0..0......................................................
1,66,250 1,66,250
LQ-7._____ The balance sheet and receipt and payment account of a club are as under:
Balance sheet as on 31st, 2066
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund ............................................................................................2..,.0..0..,.0..0..0......F..i.x..e..d...a..s..s..e..t.s......................................................................................1..,.5..0..,.0..0...0......................................................
Outstanding salaries .................................................................................1..0..,.0..0..0......S..u..b...s.c..r.i.p..t.i.o..n...d..u..e...................................................................................2..0..,.0..0...0......................................................
Cash at bank ......................................................................................4..0..,.0..0...0......................................................
Total 2,10,000 2,10,000
Receipt and payment Account on 31st Chaitra, 2067
Receipt Amount Rs. Payments Amount Rs.
To Balance b/d ..........................................................................................4..0..,.0..0..0......B..y...S...a..l.a..r.i.e..s......................................................................
To Entrance fees .......................................................................................6..0..,.0..0..0...................2..0..6..6.....................................................1..0..,.0..0..0......
To Subscriptions 2067 .................................................. 70,000 80,000
2066 ............................................................ 20,000 By General expenses .........................................................................3..0..,.0..0...0......................................................
2067 ......................................................... 1,10,000 By Seminar expenses .......................................................................5..0..,.0..0...0......................................................
2068 ............................................................ 20,000 1,50,000 By Electricity and telephone...............................................................4..5..,.0..0...0......................................................
To Sundry income ....................................................................................5..0..,.0..0..0......B..y...S...t.a..t.i.o..n..a..r.y........................................................................................2..5..,.0..0...0......................................................
By Balance c/d....................................................................................7..0..,.0..0...0......................................................
Total 3,00,000 Total 3,00,000
Additional Information: ii. Depreciated fixed assets by 10%
iv. Outstanding general expenses Rs. 5,000.
i. Entrance fees are to be capitalized.
iii. Subscription due for the current year Rs. 20,000.
Required: a. Income and expenditure account
b. Balance sheet as on 31st Chaitra, 2067.
Solution,
a. Income and Expenditure Account Cr.
Dr. For the year ended 31st Chaitra, 2067
Expenditure Amount Rs. Income Amount Rs.
To Salaries ...............................................................................................7..0..,.0..0..0......B..y...S...u..b..s..c..r.ip...t.io..n..............................................1..1..0..,.0..0..0.......
To General expense.......................................... 30,000 Add: Outstanding of current year ................20,000 1,30,000
Add: Outstanding for the year .............................. 5,000 35,000 By Sundry income ..............................................................................5..0..,.0..0..0.......................................................
To Seminar expenses ...............................................................................5..0..,.0..0..0......B..y...D...e..f.i.c..it..c../.d.........................................................................................6..0..,.0..0..0.......................................................
To Electricity and telephone......................................................................4..5..,.0..0..0.............................................................................................
To Stationary .............................................................................................2..5..,.0..0..0.............................................................................................
To Depreciation(10% of Rs. 1,50,000) ....................................................1..5..,.0..0..0.............................................................................................
2,40,000 2,40,000
b. Balance Sheet Cr.
Dr. As on 31st Chaitra, 2067
Capital and Liabilities Amount Rs. Assets Amount Rs.
Capital fund ......................................................... 2,00,000 Fixed assets .................................................1,50,000
Less: Deficit ............................................................ 60,000 140,000 Less: Depreciation............................................15,000 1,35,000
Entrance fee ..............................................................................................6..0..,.0..0..0......B..a..n...k..b..a..l.a..n..c..e........................................................................................7..0..,.0..0...0......................................................
Outstanding general expenses ...................................................................5..,.0..0..0......S..u..b...s.c..r.i.p..t.i.o..n...d..u..e...................................................................................2..0..,.0..0...0......................................................
Advance subscription ................................................................................2..0..,.0..0..0.............................................................................................
2,25,000 2,25,000
LQ-8._____ From the details given below, prepare the income and expenditure a/c and balance sheet for 2006 for an
association.
Balance sheet as on 31-12-2005
Liabilities Rs. Assets Rs.
Capital fund ............................................................................................1..0..,.0..5..0......B..u..i.l.d..in...g....................................................................................................1..0..,.0..0..0.......................................................
10% Loan .................................................................................................2..,.0..0..0......S..u..b..s..c..r.i.p..t.i.o..n...d..u..e.............................................................................................5...0......................................................
Advance subscription ..................................................................................2..0..0......B..a..n..k...........................................................................................................2..,.0..0..0.......................................................
Wages outstanding......................................................................................1..0..0......P..r.e..-..p..a..id...r..e..n..t................................................................................................3..0..0.......................................................
Accounting for Non-Profit Organizations CHAPTER 15 193
12,350 12,350
194 Accounting-XI
Dr Receipt and payment a/c for the year ended in 2006 Cr
Receipt Amount Payments Amount
To balance b/d..........................................................................................2..,.0..0..0......B..y...w...a..g..e..s...................................................................................................1..,.1..0..0.......................................................
To subscription: By rent:
2005 ................................................................Rs.50 2006 ........................................................... Rs.300
2006 .............................................................Rs.2000 2007 ........................................................... Rs.300 600
2007 .............................................................. Rs.100 2,150 By interest on loan ......................................................................................1..0...0......................................................
To legacies ...............................................................................................1..,.5..0..0......B..y...s..u..n..d..r.y...e..x..p..e..n..s..e..s..................................................................................4..,.0..0..0.......................................................
To rent .........................................................................................................2..0..0......B..y...m...e..e..t.i.n..g...e..x..p..e..n..s..e..s...................................................................................5..0...0......................................................
To life membership fees.........................................................................1..0..,.0..0..0......B..y...l.o..a..n...r.e..p..a..y..m...e..n..t..(.D...e..c...3..1..s..t.)..................................................................2..,.0..0..0.......................................................
By balance c/d .........................................................................................7..,.5..5..0.......................................................
15,850 15,850
Additional information:
i. The association has 500 members and subscription rate @ Rs. 5 each.
ii. Written off Rs.1000 on building
Solution:
Dr. Income and expenditure account for the year ended in 2006 Cr.
Expenditure Rs. Income Rs.
To wages ................................................................ 1,100 By subscription........................................................2,000
Less: outstanding of 2005 ......................................... 100 1,000 Add: advance received in 2005 .................................200
To rent ....................................................................... 300 2,200 2,500
Add: advance received in last year........................... 300 600 Add: outstanding for 2006..........................................300
To interest on loan..................................................... 100 By rent ........................................................................................................2..0...0......................................................
Add: outstanding interest on loan ............................. 100 200 By deficit (excess expenditure over income)...........................................4..,.6..0..0.......................................................
To sundry expenses.................................................................................4..,.0..0..0................................................................................................
To meeting expenses..................................................................................5..0..0................................................................................................
To written off (depreciation) building........................................................1..,.0..0..0................................................................................................
7,300 7,300
Balance sheet as on 31st Dec. 2006
Liabilities Rs. Assets Rs.
Capital fund .......................................................... 10,050 Building .................................................................10,000
Less: deficit ............................................................ 4,600 Less: written off (depreciation) ................................1000 9,000
5,450 Prepaid rent.................................................................................................3..0...0......................................................
Add: legacies.......................................................... 1,500 Subscription outstanding ............................................................................3..0...0......................................................
6,950 Bank .........................................................................................................7..,.5..5..0.......................................................
Add: life membership fees.................................... 10,000 16,950
Subscription received for 2007....................................................................1..0..0................................................................................................
Outstanding interest on loan .......................................................................1..0..0................................................................................................
17,150 17,150
LQ-9._____ Receipts and payments account of a club as on 31st December, 2008 is given below:
Receipt Amount Rs. Payments Amount Rs.
To subscription ........................................................................................1..3..0..,.0..0..0......B..y...f.u..r..n..it.u..r..e...........................................................................................8..0..,.0..0...0......................................................
To donation for building ..........................................................................3..0..0..,.0..0..0......B..y...i.n..v..e..s..t.m...e..n..t....................................................................................1..0..0...,0...0..0......................................................
To interest from investment ........................................................................4..,.0..0..0......B..y...r..e..n..t.................................................................................................3..0..,.0..0...0......................................................
To sundry incomes ...................................................................................1..0..,.0..0..0......B..y...s..a..l.a..r.y...&....w..a..g..e..s................................................................................4..0..,.0..0...0......................................................
By printing & stationery ......................................................................2..0..,.0..0...0......................................................
By Misc. expenses ............................................................................1..0..,.0..0...0......................................................
By closing balance ..........................................................................1..6..4...,0...0..0......................................................
444,000 444,000
Additional adjustments:
i. Accrued interest from investment Rs.6,000
ii. Subscription received for 2009, Rs. 8,000 and outstanding subscription for 2008 is Rs. 4,000.
iii. Depreciate furniture by 10%
iv. Capitalize the donation for building fully. b. Balance Sheet as on 31st December 2008
Required: a. Income and Expenditure Account
Solution,
Income and expenditure A/c
Dr. For the year ended 31st December 2008
Cr.
Expenditure Amount Rs. Income Amount Rs.
To Rent......................................................................................................3..0..,.0..0..0......B..y...s..u..b..s..c..r.i.p..t.i.o..n..............................................1..3..0..,.0..0..0.......
To salary & wages.....................................................................................4..0..,.0..0..0......A..d..d...:..o..u..t.s..ta...n..d..in..g....f.o..r..2..0..0..8.................................4..,.0..0..0.......
To printing & stationery .............................................................................2..0..,.0..0..0...........................................................................1..3..4..,.0..0..0.......
To mics. expenses ....................................................................................1..0..,.0..0..0......L..e..s..s..:..a..d..v..a..n..c..e...f.o..r..2..0..0..9.....................................8..,.0..0..0....... 126,000
To depreciation on furniture ........................................................................8..,.0..0..0......B..y...i.n..t.e..r.e..s..t..f.r..o..m....in...v.e..s..t.m...e..n..t..............................4..,.0..0..0.......
To surplus..................................................................................................3..8..,.0..0..0......A..d..d...:..a..c.c..r.u...e..d...in..t.e...r.e..s..t.......................................6..,.0..0..0....... 10,000
By sundry income...............................................................................1..0..,.0..0..0.......................................................
146,000 146,000
Accounting for Non-Profit Organizations CHAPTER 15 195
Balance sheet
As on 31st December 2008
Liabilities Amount Rs. Assets Amount Rs.
Capital fund ................................................................. Nil Furniture ........................................................80,000
Add: surplus.......................................................... 38,000 38,000 Less: depreciation ...........................................8,000 72,000
Donation for building ...............................................................................3..0..0..,.0..0..0......I.n..v..e..s..t.m...e..n..t.........................................................................................1..0..0..,.0..0..0.......................................................
Advance subscription ..................................................................................8..,.0..0..0......C...a..s..h...a..t..b..a..n..k......................................................................................1..6..4..,.0..0..0.......................................................
Accrued interest on investment............................................................6..,.0..0..0.......................................................
Subscription due...................................................................................4..,.0..0..0.......................................................
346,000 346,000
LQ-10.____ The following is the Receipts and Payment of Sewali Club for the year ended 30th Chaitra 2073:
Receipt Amount Rs. Payments Amount Rs.
To Admission fee.......................................................................................2..5..,.0..0..0......B..y...F...u..r.n..i.t.u..r.e..........................................................................................7..5..,.0..0...0......................................................
To Subscription .......................................................................................1..2..5..,.0..0..0......B..y...1..0..%.....in..v..e..s..t.m...e..n..t..............................................................................5..0..,.0..0...0......................................................
To Donation for building .........................................................................1..0..0..,.0..0..0......B..y...R...e..n..t..o..f..o..f.f.i.c..e...................................................................................3..3..,.0..0...0......................................................
To Interest on investment............................................................................5..,.0..0..0......B..y...S...a..l.a..r.y..............................................................................................2..4..,.0..0...0......................................................
To Sale of old newspaper ..............................................................................2..5..0......B..y...C...o..s..t..o..f..e..n..t.e..r.t.a..i.n..m...e..n..t.......................................................................4..,.5...0..0......................................................
To Dividend received ..................................................................................2..5..0..0......B..y...P...u..r.c..h..a..s..e...o..f..b..o..o..k..s............................................................................5..,.0...0..0......................................................
By Balance c/d....................................................................................6..6..,.2..5...0......................................................
257,750 257,750
Additional information:
i. Half of admission fee is to be treated as revenue income
ii. Subscription includes Rs. 2,500 received for 2074. Subscription outstanding for 2073 is amounted to Rs.5,000
iii. Rent of office includes Rs. 3,000 paid for 2074
iv. Depreciation on furniture @ 10% b. Balance sheet as on 30th Chaitra 2073
Required: a. Income and expenditure account
Solution,
Income and Expenditure Account
Dr. For the year ended 31th Chaitra 2073
Cr.
Expenditure Amount Rs. Income Amount Rs.
To rent ................................................................33,000 By admission fee ...........................................25,000
Less: Prepaid rent ..............................................3,000 30,000 Less: capitalized............................................12,500 12,500
To salary....................................................................................................2..4..,.0..0..0......B..y...s..u..b..s..c..r.i.p..t.i.o..n...............................................1..2..5..,.0..0..0......
To cost of entertainment .............................................................................4..,.5..0..0......L..e..s..s..:..A..d..v..a..n..c..e...f.o..r..2..0..7..4......................................2..,.5..0..0......
To dep. on furniture .....................................................................................7..,.5..0..0............................................................................1..2..2..,.5..0..0......
To surplus..................................................................................................8..1..,.7..5..0......A..d..d...:..O..u..t.s..t.a..n..d..i.n..g...f.o..r...2..0..7..3.................................5..,.0..0..0...... 127,500
By interest on investment.....................................................................5..,.0..0..0.......................................................
By sale of old newspaper ........................................................................2..5...0......................................................
By dividend received ............................................................................2..,.5..0..0.......................................................
147,750 147,750
Balance sheet
As on 30th Chaitra 2073
Liabilities Amount Rs. Assets Amount Rs.
Capital fund ................................................................ Nil Furniture ........................................................ 75,000 67,500
Add: surplus......................................................... 81,750 81,750 Less: depreciation ........................................... 7,500
capitalized admission fee ..........................................................................1..2..,.5..0..0......1..0..%....i.n..v..e..s..t.m...e..n..t...................................................................................5..0..,.0..0..0.......................................................
donation for building ...............................................................................1..0..0..,.0..0..0......B..o..o...k.s......................................................................................................5..,.0..0..0.......................................................
Advance subscription 2,500 Cash balance......................................................................................6..6..,.2..5..0.......................................................
Outstanding subscription .....................................................................5..,.0..0..0.......................................................
Prepaid rent ..........................................................................................3..,.0..0..0.......................................................
196,750 196,750
LQ-11.____ The opening balance sheet and receipts and payments account of the Kathmandu Club are given below.
Balance Sheet as on 1st, Baishakh, 2055
Liabilities Amount Assets Amount
Capita fund ..........................................................................................1..,.0..0..,.0..0..0......F..i.x.e..d....a..s.s..e..t.s.............................................................................................8..0..,.0..0..0.......................................................
Advance subscription ...............................................................................5..,.0..0..0......S..u..b..s..c..r.i.p..t.i.o..n...d..u..e......................................................................................1..0..,.0..0..0.......................................................
Outstanding salaries.................................................................................5..,.0..0..0......P..r.e..p..a..i.d...i.n..s..u..r.a..n..c..e...(.P...o..u..s..h...e..n..d..)................................................................5..,.0..0..0.......................................................
Cash at bank..........................................................................................1..5..,.0..0...0......................................................
1,10,000 1,10,000
Receipts and Payments Account
Receipts Amount Payments Amount
To Balance b/d .......................................................................................1..5..,.0..0..0......B..y...S..a..l.a..r.i.e..s..........................................................................
To Entrance fees ....................................................................................2..0..,.0..0..0.............2..0..5..4....................................................................................................5..,.0..0..0.......................................................
To Life membership fees........................................................................3..0..,.0..0..0.............2..0..5..5..................................................................................................2..5..,.0..0..0.......................................................
To Subscription By Electricity and telephone ..................................................................3..0..,.0..0..0.......................................................
2054...................................................................................................1..0..,.0..0..0......B..y...P..r..in..t.i.n..g...a..n..d...s..t.a..t.i.o..n..e..r.y........................................................................1..0..,.0..0..0.......................................................
2055...................................................................................................8..0..,.0..0..0......B..y...G...e..n..e..r.a..l..e..x..p..e..n..s..e..s..............................................................................3..0..,.0..0..0.......................................................
2056.....................................................................................................5..,.0..0..0......B..y...S..e..m...i.n..a..r..s..a..n..d...p...a..r.t.y...e..x.p...e..n..s.e..s............................................................2..0..,.0..0..0.......................................................
To Sundry income ..................................................................................4..0..,.0..0..0......B..y...I.n..s..u..r.a..n..c..e...p..r.e..m...i.u..m....f.o..r...2..0..5..6...P..o..u..s..h...e..n..d............................................1..0..,.0..0..0.......................................................
By Balance c/d .......................................................................................7..0..,.0..0..0.......................................................
2,00,000 2,00,000
196 Accounting-XI
Additional information ii. Depreciate fixed assets by 10%
i. Capitalise 50% of entrance fees. b. Balance sheet at the end of Chaitra
iii. Subscription due for 2055 Rs.20,000
Required: a. Income and expenditure account
Solution,
Kathmandu Club
Income and expenditure account
Dr. for the year ended 30th Chaitra, 2055 Cr.
Expenditure Amount Income Amount
To Depreciation on fixed assets...............................................................8..,.0..0..0......B..y...S..u..b..s..c..r.i.p..t.i.o..n........................................................8..0..,.0..0..0..
To Salaries .............................................................................................2..5..,.0..0..0......A..d..d..:..A...d..v.a..n...c.e...o..f..p...r.e..v..io..u..s..........................................5..,.0..0..0..
To Insurance......................................................... 10,000 Add: Outstanding of current..................................20,000 105,000
Add: Pre-paid of previous....................................... 5,000 By Entrance fees...................................................20,000
Less: Pre-paid of current........................................ 7,500 7,500 Less: Capitalized (50%)........................................10,000 10,000
To Electricity and telephone...................................................................3..0..,.0..0..0......B..y...S..u..n..d..r..y..i.n..c..o..m...e....................................................................................4..0..,.0..0..0.......................................................
To Printing and stationery ......................................................................1..0..,.0..0..0................................................................................................
To General expenses.............................................................................3..0..,.0..0..0................................................................................................
To Seminars and party expenses ..........................................................2..0..,.0..0..0................................................................................................
To Surplus ..............................................................................................2..4..,.5..0..0................................................................................................
Total 155,000 Total 155,000
Kathmandu Club
Balance Sheet
for the year ended 30th Chaitra, 2055
Liabilities and Capital Amount Assets Amount
Capital fund ........................................................ 100,000
Add: Surplus ......................................................... 24,500 Outstanding subscription .......................................................................2..0..,.0..0..0.......................................................
Add: Entrance fee capitalized .............................. 10,000 Fixed assets..........................................................80,000
Advance subscription 134,500 Less: Depreciation (10%) .......................................8,000 72,000
Life membership fees 5,000 Pre-paid insurance...................................................................................7..,.5..0..0.......................................................
30,000 Cash at bank..........................................................................................7..0..,.0..0..0.......................................................
Total 169,500 Total 169,500
VERY SHORT ANSWER QUESTIONS
VQ-1. _____Krishna started business with Rs. 40,000 cash on 1st January 2017. His capital on 31st December 2017 was Rs. 112,000.
Required: Profit or loss during the year
Solution,
Statement of Profit and Loss
Particulars Amount Rs.
Closing capital ................................................................................................................................................................................................ 112,000
Less: Opening capital ..................................................................................................................................................................................... 40,000
Profit for the year 72,000
VQ-2. _____ Mrs. Samjhana commenced his business on 1st January with a capital of Rs. 250,000. At the end of the year, his
capital was Rs. 450,000 was she able to earn profit?
Solution,
Statement of Profit or Loss
Particulars Amount Rs.
Closing capital ................................................................................................................................................................................................. 450,000
Less: Opening capital ..................................................................................................................................................................................... 250,000
Profit for the year 200,000
VQ-3. ___ The following are the transactions provided by Mr. Shrestha to you: Opening capital Rs. 150,000, capital at the end
Rs. 2,25,000, drawing during the year Rs. 25,000, and additional capital introduced during the year Rs.30,000
Required: Profit or loss during the year
Solution,
Statement of Profit or Loss
As on .........
Particulars Amount Rs.
Closing capital ................................................................................................................................................................................................ 2,25,000
Add: Drawings during the year........................................................................................................................................................................ 25,000
Total 250,000
Less: Additional capital.................................................................................................................................................................................... 30,000
Adjusted capital 220,000
Less: Opening capital...................................................................................................................................................................................... 150,000
Profit for the year 70,000
VQ-4. _____ On 1st January Mr. Rai started a sole trading small business with a capital of Rs. 125,000. His capital at the end of
year was Rs. 175,000. He informs you that during the year he withdrew Rs. 12,000 for his domestic use. He sold his
investment of Rs. 20,000 and brought that money into business.
Required: Profit or loss for the year
Solution,
Statement of Profit or Loss
As on .........
Particulars Amount Rs.
Closing capital ................................................................................................................................................................................................ 175,000
Add: Drawings during the year.................................................................................................................................................................... 12,000
Total 187,000
Less: Additional capital................................................................................................................................................................................. 20,000
Adjusted capital 167,000
Less: Opening capital................................................................................................................................................................................... 125,000
Profit for the year 42,000
VQ-5. _____ Mr. Suraj keeps his records under single entry system provided you the following information:
Opening capital Rs. 160,000, capital at the end Rs. 2,75,000, drawing during the year Rs. 20,000, and profit earned during
year Rs. 50.000.
Required: Additional capital introduced during the year
Solution,
Statement of Profit or Loss
As on ........
Particulars Amount Rs.
Closing capital ................................................................................................................................................................................................ 275,000
Add: Drawings during the year.................................................................................................................................................................... 20,000
Total 295,000
198 Accounting-XI
Less: Additional capital (balancing figure) ................................................................................................................................................... 85,000
Less: Adjusted capital 210,000
Opening capital................................................................................................................................................................................... 160,000
Profit for the year 50,000
VQ-6. _____ Mr. Santosh, a retail trader maintains records on single entry system. The following information of accounting of
Mr. Santosh is provided to you:
Particulars Amount Rs.
Capital as on 31st December 2016 ................................................................................................................................................................. 185,000
Capital as on 1st January 2016 ...................................................................................................................................................................... 125,500
Additional capital introduced during the year ................................................................................................................................................. 35,000
Drawing made by Mr. Hari during the year .................................................................................................................................................... 10,000
Required: Statement of Profit or Loss as on 31st December 2016
Solution,
Statement of Profit or Loss
As on 31st December 2016
Particulars Amount Rs.
Closing capital (31st December 2010)............................................................................................................................................................ 185,000
Add: Drawings during the year.................................................................................................................................................................... 10,000
195,000
Total 35,000
Less: Additional capital (balancing figure) ................................................................................................................................................... 160,000
125,500
Adjusted capital
Less: Opening capital...................................................................................................................................................................................
Profit for the year 34,500
VQ-7. _____ Mrs. Sushmita started a small business unit by investing capital of Rs. 100,000. During the year, her business
made a profit of Rs. 50,000. She withdrew Rs. 500 per month for her personal use. She sold some part of gold her
ornament for Rs. 20,000 and invested that amount into the business.
Required: Capital at the end of the year.
Solution,
Statement of Profit or Loss
As on year ending...........
Particulars Amount Rs.
Closing capital ................................................................................................................................................................................................. 164,000
Add: Drawings during the year (500 × 12).................................................................................................................................................. 6,000
Total 170,000
Less: Additional capital................................................................................................................................................................................. 20,000
Adjusted capital 150,000
Less: Opening capital................................................................................................................................................................................... 100,000
Net Profit for the year 50,000
SHORT ANSWER QUESTIONS
SQ-1. _____ A trader started a business with Rs.50,000 cash and stock in trade of Rs.30,000. His position at the end of the year
was as follows:
Stock at the end .............................................................................. Rs.20,000 Sundry debtors .............................................. Rs.50,000
Sundry creditors .............................................................................. Rs.10,000 Cash at bank.................................................. Rs.20,000
Machinery less depreciation............................................................ Rs.30,000
Required: Statement of profit and loss
Solution,
Statement of affairs
as on … …
Liabilities Amount Assets Amount
Trade creditors .........................................................................................................1..0..,.0..0..0......S..t.o..c..k...a..t..t.h..e...e..n..d.....................................................................2..0..,.0..0...0......................................................
Closing capital (bal. figure).....................................................................................1..1..0..,.0..0..0......M...a..c.h..i.n..e..r..y..(..n..e..t.).....................................................................3..0..,.0..0...0......................................................
Sundry debtors.....................................................................5..0..,.0..0...0......................................................
Cash at bank........................................................................2..0..,.0..0...0......................................................
Total 120,000 Total 120,000
Statement of profit and loss
for the year ended … …
Particulars Amount Amount
110,000
Closing capital -
Add: Drawings............................................................................................................................................................................................. 110,000
80,000
Adjusted capital 30,000
Less: Opening capital (50,000+30,000).......................................................................................................................................................
Profit for the year
Single and Double Entry System CHAPTER 16 199
SQ-2. ____ Mr. Mishra, a small trader who keeps his books of account under single entry system provided you the following for
the year ended 31st December 2016:
Creditors ............................................................Rs. 55,000 Debtors ................................................................. Rs. 45,000
Stock ..................................................................Rs. 45,000 Furniture................................................................ Rs. 28,500
Cash ..................................................................Rs. 15,000 Bank...................................................................... Rs. 15,000
Prepaid expenses ............................................... Rs. 5,000 Plant ................................................................... Rs. 125,000
Required: Closing statement of affairs
Solution,
Statement of Affairs
As on 31st December 2016
Capital and Liabilities Amount Rs. Assets Amount Rs.
Creditors ...................................................................................................5..5..,.0..0..0......S..t.o..c..k.....................................................................................................4..5..,.0..0...0......................................................
Closing capital (bal figure).......................................................................2..2..3..,.5..0..0......C...a..s..h.....................................................................................................1..5..,.0..0...0......................................................
Debtors ..............................................................................................4..5..,.0..0...0......................................................
Furniture ............................................................................................2..8..,.5..0...0......................................................
Bank ...................................................................................................1..5..,.0..0...0......................................................
Plant .................................................................................................1..2..5...,0...0..0......................................................
Prepaid expenses ................................................................................5..,.0...0..0......................................................
278,500 278,500
SQ-3. _____ Capital of Rs. 150,000. His position at the end of Ashad, 2074 showed the following:
Cash ..................................................................Rs. 10,000 Debtors ................................................................. Rs. 35,000
Stock ..................................................................Rs. 55,000 Furniture................................................................ Rs. 25,000
Creditor ..............................................................Rs. 25,000 Plant ................................................................... Rs. 150,000
Required: a. Statement of Affairs b. Statement of profit or loss
Solution,
Statement of Affairs
As on 31st Ashad 2074
Capital and Liabilities Amount Rs. Assets Amount Rs.
Creditors ...................................................................................................2..5..,.0..0..0......C...a..s..h.....................................................................................................1..0..,.0..0...0......................................................
Closing capital (bal figure).......................................................................2..5..0..,.0..0..0......S..t.o..c..k.....................................................................................................5..5..,.0..0...0......................................................
Debtors ..............................................................................................3..5..,.0..0...0......................................................
Furniture ............................................................................................2..5..,.0..0...0......................................................
Plant .................................................................................................1..5..0...,0...0..0......................................................
275,000 275,000
Statement of Profit or Loss
As on 31st Ashad 2074
Particulars Amount Rs.
Closing capital ................................................................................................................................................................................................ 250,000
Add: Drawings during the year.................................................................................................................................................................... Nil
Total 250,000
Less: Additional capital................................................................................................................................................................................. Nil
Adjusted capital 250,000
Less: Opening capital................................................................................................................................................................................... 150,000
Profit for the year 100,000
SQ-4. _____ Hari Prasad keeps his books of accounts under single entry system. The opening capital as on 1-1-2013was
Rs.26,500. On 31st December 2013, his position was as follows.
Cash in hand Rs.300 Cash at bank Rs.2,000
Plant and machinery Rs.27,000 Sundry creditors Rs.29,000
Sundry debtors Rs.14,000 Stock Rs.19,000
Furniture and fittings Rs.1,500
Required: Profit and loss statement for the year ended on 31-12-2013
Solution,
Statement of Affairs
As on 31-12-2013
Liabilities Amount Assets Amount
300
Sundry creditors ............................................................. 29,000 Cash in hand ...............................................................
Capital (balancing figure) ............................................... 34,800 Cash at bank ............................................................... 2,000
2,7000
Plant and Machinery ................................................... 1,4000
Sundry debtors............................................................ 1,9000
Stock............................................................................ 1,500
Furniture and fittings ................................................... 63,800
63,800
200 Accounting-XI
Statement of profit and loss Amount
34,800
Particulars -
Closing capital ................................................................................................................................................................................................. -
Add: Drawings............................................................................................................................................................................................. 34,800
Less: Additional capital................................................................................................................................................................................. 26,500
8,300
Adjusted capital
Less: Opening capital...................................................................................................................................................................................
Profit for the year
SQ-5. ____ A small trader commenced business on Shrawan 1, 2073 with a capital of Rs. 150,000. His position at the end of
Ashad, 2074 showed the following:
Cash ................................................................... Rs. 5,500 Debtors ................................................................. Rs. 40,000
Stock ..................................................................Rs. 55,000 Creditor ................................................................. Rs. 25,500
Bank Loan ..........................................................Rs. 25,000 Plant .................................................................... Rs. 50,000
Required: a. Statement of Affairs b. Statement of profit or loss
Solution,
Statement of Affairs
As on 31st Ashad 2074
Capital and Liabilities Amount Rs. Assets Amount Rs.
Bank loan...................................................................................................2..5..,.0..0..0......P..l.a..n..t.....................................................................................................5..0..,.0..0...0......................................................
Creditors ....................................................................................................2..5..,.5..0..0......D...e..b..t.o..r.s.................................................................................................4..0..,.0..0...0......................................................
Closing capital (bal. figure)......................................................................1..0..0..,.0..0..0......S..t.o..c..k.....................................................................................................5..5..,.0..0...0......................................................
Cash .....................................................................................................5..,.5...0..0......................................................
150,500 150,500
Statement of Profit or Loss
for the year ended 31st Ashad 2074
Particulars Amount Rs.
Closing capital ................................................................................................................................................................................................. 100,000
Add: Drawings during the year.................................................................................................................................................................... Nil
Total 100,000
Less: Additional capital................................................................................................................................................................................. Nil
Adjusted capital 100,000
Less: Opening capital................................................................................................................................................................................... 150,000
Net Loss for the year (50,000)
SQ-6. _____ A trader commenced a business on January 1, 2000 with a capital of Rs.90,000. His position at the end of the year
2000 revealed:
Stock Rs.51,000 Cash Rs.20,000
Creditors Rs.17,000 Furniture Rs.14,000
Overdraft Rs.16,000 Debtors Rs.40,000
Drawings for the domestic and personal use during the year amounted to Rs.15,000.
Required: a. Statement of affairs showing the amount of closing capital.
b. Statement of profit and loss showing profit or loss made during the year.
Solution,
Statement of affairs
as on 31st December, 2000
Liabilities Amount Assets Amount
Creditors .....................................................................................................1..7..,.0..0..0......S..t.o..c..k....................................................................................................5..1..,.0..0...0......................................................
Overdraft.....................................................................................................1..6..,.0..0..0......C..a..s..h.....................................................................................................2..0..,.0..0...0......................................................
Closing capital (bal. figure).........................................................................9..2..,.0..0..0......F..u..r.n..i.t.u..r.e...............................................................................................1..4..,.0..0...0......................................................
Debtors ..............................................................................................4..0..,.0..0...0......................................................
Total 125,000 Total 125,000
Statement of profit and loss
for the year ended 31st December, 2000
Particulars Amount Amount
107,000
Closing capital ........................................................................................................................................................................................9..2..,.0..0..0 90,000
Add: Drawings ........................................................................................................................................................................................1..5..,.0..0..0 17,000
Adjusted capital ...............................................................................................................................................................................................
Less: Opening capital......................................................................................................................................................................................
Profit for the year
SQ-7. _____ A trader started a business with bank balance of Rs.40,000. His financial position at the end of the year revealed that:
Cash in hand and bank........................................Rs.15,000 Drawings for the year ............................ Rs.1,000 (per month)
Sundry debtors ....................................................Rs.21,000 Furniture................................................................. Rs.11,000
Stock .................................................................... Rs.9,000 Sundry Creditors .................................................... Rs.12,000
Bank overdraft ...................................................... Rs.6,000 Bills receivable ......................................................... Rs.7,000
Required: a. Statement of affairs at the end of the year determining the amount of closing capital.
b. Statement of profit and loss showing the amount of profit or loss.
The words you are searching are inside this book. To get more targeted content, please make full-text search by clicking here.
Accounting XI Manual 2020
Discover the best professional documents and content resources in AnyFlip Document Base.
Search