FA Problems Solutions

PROBLEMS SOLUTIONS
S.No Particular Page No

1 - 21
1 Journal
2 Cash Book 22 -28
3 Trial Balance 29 -34
4 Rectification 35 - 51
5 Final Accounts 52 - 110
6 Bank Reconciliation Statement 111 – 123
7 Depreciation 124 – 179
8 Non-Profit Organisations 180 - 212

213 – 235
9 Fire Insurance Claim
Investment Accounts
10 236 - 243
11 Theory Questions 244

1
2
SUM NO 1
IN THE BOOKS OF SRI T.N
JOURNAL
Date Particulars L.f Debit Credit
1987 Cash A/c Dr. 50,000
1ST Oct To Sri T.N’s Capital A/c 50,000
(Being cash brought in as capital)
3RD Oct Purchases A/c Dr. 9,500

To Cash A/c 9,500
(Being cash purchase of goods
@5% trade discount)
4TH Oct Carriage A/c Dr. 50
To Cash A/c 50
(Being carriage purchased)
TH
8 Oct Machinery A/c Dr. 20,000
To Cash A/c 20,000
(Being machinery sold in cash)
TH
10 Oct Madan A/c Dr. 15,000
To Sales A/c 15,000
(Being goods sold on credit)
3
SUM NO 2
IN THE BOOKS OF BALAN
JOURNAL
1985 Cash A/c Dr. 50,000
1ST Jan To Balan’s Capital a/c 50,000
(Being cash brought into the
business)
1ST Jan Purchases A/c Dr. 4,000
To cash A/c 4,000
(Being Goods Purchased for
cash)
1ST Jan Furniture A/c Dr. 500
To Cash A/c 500
(Being furniture Purchased for
cash)
2ND Jan Building A/c Dr. 10,000
To Cash A/c 10,000
(Being building purchased by
cash)
3RD Jan Purchases A/c Dr. 3,000
To Cash A/c 3,000
(Being Goods Purchased for
cash)
4TH Jan Purchases A/c Dr. 2,500
To Accounts Payable / 2,500
supplier A/c
(Being goods purchased from on
credit)
5TH Jan Cartage a/c Dr. 20
To Cash a/c 20
(Being cartage paid)
4
SUM NO 3
JOURNAL ENTRY
1991 Rent A/c Dr. 600
1ST Mar To Cash a/c 600
(Being paid rent)
2st Mar Office stationery A/c Dr. 60
To Cash A/c 60
(Being office stationery purchased)
8th Mar Office equipment A/c Dr. 10,000
To Accounts payable A/c 10,000
(Being purchased on accounts
payable)
13th Mar Advertisement exp A/c Dr. 600
To Cash A/c 600
(Being advertisement exp paid)
15th Mar Cash A/c Dr. 8,000
To Kumar A/c 8,000
(Being received cash from Kumar)
18th Mar Maran A/c Dr. 4,000
To Accounts payable A/c 4,000
(Being paid to Maran)
25th Mar Drawings A/c Dr. 2,000
To Cash A/c 2,000
(Being withdrew for personal use)
29th Mar Telephone bill A/c Dr. 600
To Cash A/c 600
( Being telephone bill paid)
30th Mar Cash A/c Dr. 20,000
To Build customer A/c 20,000
(Being received cash)
31st Mar Repairs A/c Dr. 300
Electricity A/c Dr. 400
To Cash a/c 700
(Being paid for repairs, electricity)
5
SUM NO 4
IN THE BOOKS OF BALAN
JOURNAL
1991 Cash A/c Dr. 1,00,000
1ST Dec To Capital A/c 1,00,000
(Being capital commenced)
3rd Dec Purchase A/c Dr. 60,000
To Cash A/c 60,000
(Being purchased goods)
4th Dec Cash A/c Dr. 50,000
To Sales A/c 50,000
(Being sale of goods)
5th Dec IOB A/c Dr. 40,000
To Cash A/c 40,000
(Being deposited in bank)
6th Dec Purchase A/c Dr. 30,000
To Ravi A/c 30,000
(Being credit purchase)
7th Dec Furniture A/c Dr. 4,000
To Cash A/c 4,000
(Being purchased furniture)
8th Dec Nathan A/c Dr. 40,000
To Sales A/c 40,000
(Being sold good to Nathan)
9th Dec Seenu A/c Dr. 10,000
To Cash A/c 10,000
(Being cash paid to Seenu)
10th Dec Sales return A/c Dr. 2,000
To Nathan A/c 2,000
(Being goods returned to
Nathan)
11th Dec Advertisement charges A/c Dr. 4,000
To Cash A/c 4,000
(Being advertisement charges
paid)
6
12TH Dec Ravi A/c Dr. 3,000
To Purchase return a/c 3,000
(Being purchase return from
Ravi)
To Bank A/c 10,000
(Being withdrew cash from
bank)
15th Dec Bicycle A/c Dr. 3,000
To Cash A/c 3,000
(Being bicycle purchased)
To Commission received A/c 1,000
(Being commission received)
18th Dec Drawings A/c Dr. 6,000
To Cash A/c 6,000
(Being withdrew for personal
use)
19th Dec Electricity charges A/c Dr. 600
To Cash A/c 600
(Being electricity charges paid)
20th Dec Insurance premium A/c Dr. 1,500
To Cash A/c 1,500
(Being insurance premium
paid)
25th Dec Cash A/c Dr. 300
To Interest received A/c 300
(Being interest received)
31st Dec Rent A/c Dr. 1,200
Salaries A/c Dr. 9,600
To Cash A/c 10,800
(Being rent, salaries paid)
31st Dec Interest A/c Dr. 600
To Accrued interest A/c 600
(Being interest accrued)
7
31st Dec Salary A/c Dr. 1,000
To O/S Salary A/c 1,000
( Being salary due)
31ST Dec Insurance A/c Dr. 500
To Prepaid insurance A/c 500
(Being prepaid insurance)
31st Dec Commission A/c Dr. 100
To Commission received in
advance A/c 100
(Being commission received in
advance)
SUM NO 5
IN THE BOOK OF SANKAR & CO
JOURNAL
1999 Bank A/c Dr. 10,000
1st July To Cash A/c 10,000
(Being cash paid into bank)
1st July Stationary A/c Dr. 60

To Cash A/c 60
(Being bought stationery for
cash)
2nd July Purchase A/c Dr. 4,200
To Cash A/c 4,200
(Being bought goods for cash)
3rd July Postage stamps A/c Dr. 20

To Cash A/c 20
(Being bought stamps)
8
5th July Cash A/c Dr. 1,500
To Sales A/c 1,500
(Being sold goods)
6th July Furniture A/c Dr. 1,000

To Babu Bros. A/c 1,000
(Being bought furniture)
11th July Mohan A/c Dr. 2,000

To Sales A/c 2,000
(Being sold good)
12th July Bank A/c Dr. 2,000
to Mohan A/c 2,000
(Being received cheque)
14th July Babu Bros A/c Dr. 1,000
To Bank A/c 1,000
(Being paid cheque)
16th July Raj & Co A/c Dr. 1,000
To Sales a/c 1,000
(Being sold goods)
20th July Purchase A/c Dr. 1,400
To Swamy & bros a/c 1,400
(Being bought goods)
23rd July Purchase A/c Dr. 450
to Nathan & Co A/c 450
24th July Palani A/c Dr. 700
To Sales A/c 700
(Being sold goods)
9
26th July Bank A/c Dr. 500
To Raj & Co A/c 500
(Being paid on account)
27th July Swamy & Bros A/c Dr. 1,400
To Bank A/c 1,370
To Discount received A/c 30
(Being paid cheque)
31st July Salaries A/c Dr. 500
To Cash A/c 500
(Being paid salaries)
31st July Satyan A/c Dr. 200
To Outstanding Rent A/c 200
(Being rent is due)
SUM NO 6
IN THE BOOK OF MR. RAHIM
JOURNAL
2000 Cash A/c Dr. 1,60,000
st
1 March Stock A/c Dr. 80,000
Furniture A/c Dr. 30,000
To Capital A/c 50,000
(Being commenced business)
2nd March Indian Bank A/c Dr. 40,000
To Cash A/c 40,000
(Being opened current a/c)
3rd March Purchase A/c Dr. 20,000
To Santhanam A/c 20,000
(Being bought good)
10
4th March Radha A/c Dr. 16,000
To Sales A/c 16,000
(Being sales to Radha)
5th March Jagan A/c Dr. 80,000
To Sales A/c 80,000
(Being sold goods)
6th March Purchase A/c Dr. 10,000
To Swamy A/c 10,000
(Being sold good)
7th March Kannan A/c Dr. 6,000
To Sales A/c 6,000
8th March Typewriter A/c Dr. 12,000
To Cash A/c 12,000
(Being Typewriter purchased)
9th March Sales return A/c Dr. 1,400

To Radha A/c 1,400
(Being received goods)
11th March Santhanam A/c Dr. 1,000

To Purchase return A/c 1,000
(Being returned goods)
15th March Collection of cheques A/c Dr. 14,000
To Radha A/c 14,000
(Being received cheque)
16th March Bank A/c Dr. 14,000
To Collection of cheques A/c 14,000
(Being paid cheque)
18th March Sankar A/c Dr. 2,000
To Cash A/c 2,000
(Being sold goods)
11
19th March Bank A/c Dr. 2,000

To Cash a/c 2,000
(Being paid bank)
20th March Drawings A/c Dr. 60,000
To Cash A/c 60,000
(Being purchase of motor
cycle for personal use)
22nd March Stationery A/c Dr. 500
To Bank A/c 500
(Being purchase stationery)
24th March Steel cash Box A/c Dr. 4,000
To Bank A/c 4,000
(Being bought steel cash box)
25th March Drawings A/c Dr. 3,000
To Bank A/c 3,000
(Being drew cheque for
personal use)
27th March Cash A/c Dr. 6,000
To Bank A/c 6,000
(Being withdrew from bank)
31st March Salaries A/c Dr. 5,000
To Cash A/c 5,000
(Being paid salaries)
12
SUM NO 7
BOOKS OF M/S. KAMALESH & C0
JOURNAL
Date Particulars L.f. Debit Credit
1999 Cash A/c Dr. 7,000
1st Dec Bank A/c Dr. 40,000
Stock A/c Dr. 30,000
Furniture A/c Dr. 10,000
Building A/c Dr. 80,000
Mr. X A/c Dr. 6,000
Mr. Y A/c Dr. 10,000
To Bank loan A/c 14,000
To Mr. P A/c 14,000
To Mr. Q A/c 16,000
To Capital A/c 1,39,000
(Being various assets and liabilities
on 1.12.99, balance being capital)
nd
2 Dec Cash A/c Dr. 5,600
Discount allowed A/c Dr. 400
To Mr. X A/c 6,000
(Being cash received from Mr. X in
full settlement)
th
5 Dec Purchases A/c Dr. 20,000
To Discount received A/c 2,000
To Mr.R A/c 18,000
(Being goods purchased on credit)
th
7 Dec Mr.S A/c Dr. 16,000
To Sales A/c 16,000
(Being goods sold on credit)
Discount allowed A/c Dr. 1,600
To Mr. S A/c 16,000
(Being cash received from Mr. S)
13
14th Dec Salaries A/c Dr. 4,000
To Cash A/c 4,000
(Being salaries paid)
th
17 Dec Interest A/c Dr. 1,400
To Bank loan A/c 1,400
(Being interest on bank loan
debited)
19th Dec Free samples A/c Dr. 2,000
To Purchases A/c
(Being free samples distributed) 2,000
th
24 Dec Drawing A/c Dr. 4,000
To Cash A/c 4,000
(Being cash withdrawn for
personal use)
30th Dec Mr. P A/c Dr. 14,000
To Discount received A/C 2,000
To Cash A/C 12,000
(Being cash received from Mr. P in
full settlement)
31st Dec Cash A/c Dr. 9,000
To Sales A/c 9,000
(Being sale of goods at 10% trade
discount)
14
SUM NO 8
JOURNAL ENTRIES OF X
Date Particulars L.f. Debit Credit
1 Cash A/c Dr. 300
Bad debts A/c Dr. 200
To Kamal A/c 500
(Being 60% of due received from
Kamal and becoming insolvent)
2 Cash A/c Dr. 250
To Bad debts recovered A/c 250
(Being bad debts recovered)
3 Rent A/c Dr. 400
To Outstanding rent A/c 400
(Being rent due to landlord)
4 Depreciation A/c Dr. 50
To office furniture A/c 50
(Being depreciation charged on
office furniture)
5 Salary A/c Dr. 2,000
To outstanding salary A/C 2,000
(Being salary due to clerks)
15
SUM NO 9
IN THE BOOKS OF RAMESH
JOURNAL
Date particulars L.f Debit Credit
1999 Cash A/c Dr. 10,000
1st Jan Stock A/c Dr. 20,000
To Outstanding Wages A/c 360
To Outstanding Insurances A/c 400
To Capital A/c 29,240
(Being capital bought into business)
3rd Jan Charity A/c Dr. 10
To Cash A/c 10
(Being charity paid)
4th Jan Cash A/c Dr. 100
To Rent Received A/c 100
(Being rent received on sub- tenant)
10th Jan Cash A/c Dr. 1,360
To VPP A/c 1,360
(Being cash received through VPP)
Cartage A/c Dr. 10
To Cash A/c 10
(Being cartage paid for delivery of VPP)
16th Jan Baskar A/c Dr. 1,400
To Bank A/c 1,400
(Being cash paid to Baskar through
bank)
22nd Jan Debtor A/c Dr. 25
To Interest on loan A/c 25
(Being interest received on loan)
25th Jan Sales Return A/c Dr. 200
To Rahul A/c 200
(Being goods returned by Rahul)
26th Jan Sethu A/c Dr. 280
To purchase return A/c 280
(Being goods returned to Sethu)
16
Bad Debt A/c Dr. 425
To Karthik A/c 1,700
(Being cash received in full settlement
on insolvency)
30th Jan Drawing A/c Dr. 8,000
To Cash A/C 8,000
(Being motor cycle purchased for
personal use )
SUM NO 10
JOURNAL ENTRIES
1 Cash A/c Dr. 1,000
To Sales A/c 1,000
(Being sales of business)
2 Drawing A/c Dr. 2,000
To Bank A/c 2,000
(Being purchase of cycle for personal use
and paid by cheque)
3 Wages A/c Dr. 100
To Bank A/c 100
(Being wages paid by cheque)
4 Ram A/c Dr. 50
To Purchase Return A/c 50
(Being defected goods returned to ram)
5 Collection of cheques A/c Dr. 600
To Mani A/c 600
(Being cheque received from Mani)
6 Bank A/c Dr. 600
To Collection of cheques A/c 600
(Being deposited of cheque received from
Mani into bank)
17
SUM NO 11
IN THE BOOKS OF KUMAR
JOURNAL
DATE PARTICULARS L.F DEBIT CREDIT
(1994) Cash A/c Dr. Rs.50,000
1st Jan Buildings A/c Dr. Rs.1,00,000
Bank A/c Dr. Rs.1,00,000
To capital a/c Rs.2,50,000
(Being commencement of
business)
rd
3 Jan Purchase A/c Dr. Rs.7,000
To cash A/c Rs.7,000
(Being purchase of goods)
th
4 Jan Purchase A/c Dr. Rs.7,500
To Dhanam & co A/c Rs.7,500
(Being purchase of goods)
th
5 Jan Swamy & co A/c Dr. Rs.9,500
To sales A/c Rs.9,500
6th Jan Nithya & co A/c Dr. Rs.6,500
To sales A/c Rs.6,500
7th Jan Cash A/c Dr. Rs. 2,000
To sales A/c Rs. 2,000
th
8 Jan Indian Bank A/c Dr. Rs. 20,000
To loan A/c Rs. 20,000
(Being obtained by loan)
th
9 Jan Furniture A/c Dr. Rs.2,000
To cash A/c Rs. 2,000
(Being purchase of furniture)
th
10 Jan Land A/c Dr. Rs. 25,000
To bank A/c Rs. 25,000
(Being purchase of land )
18
SUM NO 12
IN THE BOOKS OF XYZ’S BUSINESS
JOURNAL
(1999) Cash: x A/c Dr. Rs.5,00,000
1st April y A/c Dr. Rs.3,00,000
z A/c Dr. Rs.1,00,000
Land: z A/c Dr. Rs.1,00,000
To capital A/c Rs.10,00,000
(Being commencement of
business)
2nd April Bank A/c Dr. Rs.2,00,000
To cash A/c Rs. 2,00,000
(Being opened bank A/c)
4th April Factory shed A/c Dr. Rs. 40,000
To bank A/c Rs. 40,000
(Being paid for factory shed)
6th April Machinery A/c Dr. Rs.1,30,000
To bank A/c Rs.1,30,000
(Being purchase of
machinery)
10th April Purchase A/c Dr. Rs. 75,000
To Ram mills Kancheepuram Rs.75,000
(Being purchase of clothes)
14th April Purchase A/c Dr. Rs.70,000
(Being purchase from Arni
Mills)
18th April John David (USA) A/c Dr. Rs.1,50,000
To sales A/c Rs.1,50,000
(Being sales to John)
21st April Stationary A/c Dr. Rs.2,000
(Being purchase of
stationery)
19
26th April Drawings A/c Dr. Rs. 28,000
X 10,000
Y 13,000
Z 5,000 Rs. 28,000
To Bank A/c
(Being drawings of x, y, z )
30th April Expense A/c Dr. Rs.30,000
(Being cash withdrawn for
office use)
30th April Salaries A/c Dr. Rs.20,000
(Being salaries paid)
SUM NO 13
IN THE BOOKS OF ZAHIR HUSSAIN
JOURNAL ENTRIES
1999 Cash A/c Dr. 1,00,000

1ST Jan To Capital A/c 1,00,000
(Contributed capital)
1st Jan Furniture A/c Dr. 4,000

To Cash A/c 4,000
(Paid for Furniture)
1st Jan Bank A/c Dr. 36,000
To Cash A/c 36,000
(Paid into Bank)
3rd Jan Purchase A/c Dr. 17,000
To Cash A/c 17,000
(Bought Goods)
20
3rd Jan Purchase A/c Dr. 12,000
To Kamakshi Mills A/c 12,000
(Bought goods for credit)
5th Jan M/s. Priya Mills A/c Dr. 18,000
To Sales A/c 18,000
(Sold Goods)
6th Jan Malan A/c Dr. 8,000
To Sales A/c 8,000
( Sold to Malan)
8th Jan Advertisement A/c Dr. 1,500
To Cash A/c 1,500
( Paid for advertisement)
10th Jan Stationery A/c Dr. 500
To Cash A/c 500
(Bought Stationary)
12th Jan Purchase A/c Dr. 8,000
To Kasi Mills A/c 8,000
(Bought from Kasi Mills)
12th Jan Freight and Carriage A/c Dr. 500
To Cash A/c 500
(Paid for Freight and Carriage)
15th Jan Bank A/c Dr. 11,800
To Cash A/c 11,800
(Paid by cheque)
15th Jan Cash A/c Dr. 200
To Discount Received A/c 200
(Discount Received)
To Sales A/c 4,000
(Cash Sales)
21
Discount Allowed A/c Dr. 150
To Malan A/c 8,000
(Received in full settlement)
21st Jan Drawings A/c Dr. 2,000
To Cash A/c 2,000
(Withdrew cash for personal use)
28TH Jan Rent A/c Dr. 1,000
To Bank A/c 1,000
(Paid rent by cheque)
29th Jan Commission A/c Dr. 600
To Cash A/c 600
(Paid Commission)
31st Jan Salaries A/c Dr. 10,000
To Cash A/c 10,000
(Paid Salaries)
22
23
SUM NO 37:
CASH BOOK (SINGLE COLUMN)
Date Particulars R.N L.F Amount Date Particulars V.N L.F Amount
July To Balance 10,000 1/7 By Bank A/c 9,000

1/7 B/D
2/7 To Sales A/c 150 1/7 By Stationary 40
A/c
3/7 To Gopal A/c 200 1/7 By Purchase A/c 650
6/7 To Sales A/c 160 1/7 By Office 200

Expenses
4/7 By Sethi & Co 140
A/c
5/7 By Sign Board 130
A/c
6/7 By Typewriter 300
A/c
31/7 By Balance C/D 50
10,510 10,510
24
SUM NO 38:
IN THE BOOKS OF MR. GOPAL

Date Particulars RN Lf Amount Date Particulars VN Lf Amount
Jan 1 To Balance 16,000 Jan 2 By Purchases A/c 10,000
B/D
4 To Sales A/c 200 10 By Bank A/c 6,000
5 To Manohar 720 12 By Honest Raj A/c 430

A/c
15 To Sales A/c 3,000 17 By Stationery A/c 30
20 To Kalidas A/c 1,360 10 By Office A/c 370
24 By Advertisement 180
A/c
26 By Postage 16
Stamps A/c
29 By Rent A/c 200
31 By Electricity A/c 30
31 By Balance C/D 4,024
Total 21,280 Total 21,280

25
SUM NO 39:
TWO COLUMN CASH BOOK

Date Particulars R L Discount Amount Date Particulars V L Discount Amount
N F Allowed N F Received
Nov To Balance 390 14 By 250

1 B/D Electricity
A/c
5 To Sales A/c 6420 16 By 336

Stationary
A/c
10 To Mohan 40 4,240 24 By Varun 50 4,300

A/c A/c
19 To Bank A/c 2,800 30 By Salaries 2,000

A/c
29 To Velan 30 770 By Balance 7,734

A/c C/D
Total 70 14,620 Total 50 14,620

26
SUM NO 40:
CASH BOOK (DOUBLE COLUMN)
Date Particulars R L Discount Cash Date Particulars V L Discount Cash

N F Received N F Allowed
2000 To Balance 6,900 26th By Kailash 72 1,408
25th B/D Mar A/c
Mar
30th To Sales A/c 11,370 29th By Salaries 5,025
Mar Mar A/c
31st To Railway 4,380 30th By Drawings 1,020
Mar Authority A/c Mar A/c
To Shanthi 75 3,975 31st By Balance 19,152
Lal A/c Mar C/D
Total 75 26,625 Total 72 26,625
27
SUM NO 41:
CASH BOOK (DOUBLE COLUMN)
Date Particulars R L Discount Cash Date Particulars V L Discount Cash

N F Allowed N F Allowed
2000 To Balance 13,000 2nd By Purchases 1,370
1st B/D Mar A/c
Mar
10th To Sales A/c 6,000 3rd By Mohan A/c 10 190
Mar Mar
16th To Sales A/c 5,000 5th By Bank A/c 8,000
Mar Mar
20th To Jamuna 30 970 By Furniture A/c 930
Mar A/c
13th By Wages A/c 240
Mar
14th By Stationery 80
Mar A/c
18th By 90
Mar Miscellaneous
A/c
22nd By Radio set A/c 500
Mar
23rd By Electricity 70
Mar A/c
25th By 80
Mar Advertisement
A/c
26th By Bank A/c 5,000
Mar
30th By Rent A/c 180
Mar
31st By Salary A/c 800
Mar
31st By Balance C/D 7,440
Mar
30 24,970 10 24,970
28
SUM NO 42:
CASHBOOK (THREE COLUMN)

Date Particulars R L Discount Cash Bank Date Particulars V L Discount Cash Bank
N f N f
1999 To 410 8,920 3 By Bank C 4,000

JAN Balance A/c
1 B/D
2 To Sales 4,500 5 By 100

A/c Stationer
y A/c
3 To Cash C 4,000 8 By 20 280

A/c Mahesh
A/c
18 To Suresh 30 1,970 12 By 1,500

A/c Purchase
A/c
20 To Bank C 1,000 15 By 500

A/c Drawings
A/c
20 By Cash C 1,000
21 By Wages 800
22 By Suresh 1,970
31 By Bank 10
Charges
31 By 510 10,130
Balance
C/D
30 5,910 14,890 20 5,910 14,890

29
30
SUM NO 1:
Particulars Debit Credit

Capital 9,000
Plant and machinery 12,000
Purchases 8,000
Sales 12,000
Sundry creditors 8,000
Bank loan 22,000
Rent outstanding 1,000
Opening stock 2,000
Sales return 4,000
Investment 12,000
Debtors 14,000
Total 52,000 52,000
31
SUM NO 2:

Opening stock 10,600
Wages 2,200
Carriage 200
Commission 300
Purchases 12,000
Return inwards 440
Trade expenses 580
Rent 200
Plant 2,600
Repairs to plant 460
Cash in hand 200
Cash at bank 1,000
Debtors 3,000
Income tax 500
Drawings 700
Return outward 150
Sales 25,200
Discount received 400
Capital 7,000
Creditors 830
Loan(cr) 1,400
Total 34,980 34,980
32
SUM NO 3:

Capital 50,000
Sales 1,77,000
Rent outwards 750
Stock (1.9.99) 30,000
Discount(cr) 800
Debtors 45,000
Salaries 6,800
Wages 10,000
Bad debt provisions 525
Advertisement 2,000
Purchases 60,000
Return inward 1,000
Discount(dr) 350
Bank charges 75
Creditors 25,000
Carriage inward 750
Carriage outward 1,200
Rent and taxes 10,000
Cash in hand 900
Cash at bank 6,000
Total 2,54,075 2,54,075
33
SUM NO 4:

A. Brown’s drawing ac 5,800
A Brown’s capital ac 24,000
Sundry creditors 43,000
Bills payable 4,000
Sundry debtors 51,000
Bills receivable 5,200
Loans advanced to Rao and co 10,000
Fixtures and fittings 4,500
Stock at commencement 47,000
Cash in office 900
Cash at state bank 12,500
Overdraft with central bank 6,000
Purchases 50,000
Duty and clearing charges 3,500
Sales 1,28,000
Staff salaries 9,500
Return from customers 1,000
Return to creditors 1,100
Commission and travelling 4,700
expenses
Trade expense 2,500
Rent account 2,000
Discount received 4,000
Total 2,10,100 2,10,100
34
SUM NO 5:
PARTICULARS DEBIT CREDIT

Opening Stock 10,000
Salaries 5,000
Bills Payable 5,000
Cash in Hand 12,000
Bank Overdraft 4,000
Debtors 15,000
Cash at Bank 18,000
Sales 80,000
Wages 1,000
Prepaid Insurance 2,500
Depreciation on Plant 8,000
Capital 60,000
Creditors 10,000
Loan from Krishna 25,000
Discount Allowed 700
Accrued Interest Payable 5,000
Purchases 30,000
Reserve for Bad Debts 1,200
Trade Expenses 500
Outstanding Salaries 2,000
Plant & Machineries 90,000
Outstanding Interest on 500
Overdraft
TOTAL 1,92,700 1,92,700
35
36
SUM NO 1:
1. Debit return outwards A/c with Rs.150
2. Credit Shyam A/c with Rs.200
3. Debit purchase book by Rs.1,000
S.No Particulars Debit Credit
4 Raju A/c Dr. 500

To salaries A/c 500
(Wrong transaction rectified)
5 Madan A/c Dr. 150
To cash A/c 150
(Wrong transaction rectified)
37
SUM NO 2:
S.No Particulars Debit Credit
1 Drawings A/c Dr. 150

To stationary A/c 150
(Wrong entry rectified)
2 Purchases A/c Dr. 525
To John A/c 525
3 Bills receivable A/c Dr. 500
To Bills payable A/c 500
4 Machinery A/c Dr. 5,200
To purchase A/c 5,200
38
SUM NO 3:
Date Particulars Lf Debit Credit
1 Building A/c Dr. 2,700

To Repairs A/c 2,700
(Wrong Entry Rectified)
2 Ram A/c Dr. 300
To Allowance A/c 300
(Being Allowance A/c Was Debited
Wrongly on Dishonour Cheque)
3 Sales Return A/c Dr. 150
To Chandra A/c 150
(Being Goods Returned by Chandra
Were Not Recorded)
4 Repair A/c Dr. 567
To Plant and Machinery A/c 567
(Being Repairs Made to Plant and
Machinery Debited To Plant And
Machinery A/c)
5 Machinery A/c Dr. 550
To Wages A/c 550
(Wrong Entry Rectified)
6 Drawing A/c Dr. 100
To Travelling Expenses A/c 100
(Being Amt.Spent by Proprietor
Debited to Travelling Expense A/c)
39
SUM NO 4:

1. Furniture A/c Dr. 2,500
To Purchase A/c 2,500
(Being Purchase of Furniture
Wrongly Debited to Purchase A/c)
2. Drawings A/c Dr. 1,000
To Purchase A/c 1000
(Being Amt. Not Recorded In The
Books)
3. Ramu A/c Dr. 1,500
To Sales A/c 1,500
(Being Wrong Entry Rectified)
4. Gopal A/c Dr. 90
To Payment A/c 90
(Being Wrong Entry Rectified)
40
SUM NO 5:
S.No Particulars L.F Debit Credit

1. Salary A/c Dr. 2,000
To Ganesh A/c 2,000
2. Drawings A/c Dr. 500
To Trade expenses 500
3. S. Ravi A/c Dr. 700
To M. Ravi A/c 700
4. Purchase A/c Dr. 600
Sales A/c Dr. 600
To kali A/c 1200
5. Jankiram A/c Dr. 4,000
To Sales A/c 2,000

To Purchase A/c 2,000
SUM NO 6:

1. Buildings A/c Dr. 890
To wages A/c 890
2. Drawings A/c Dr. 300
To purchase A/c 300
3. Machinery A/c Dr. 800
To Cash A/c 800
4. Repairing charges A/C Dr. 250
To cash A/c 250
5. Suspense A/c Dr. 396
To Rent A/c 396
6. Sales A/c Dr. 150
To furniture A/c 150
41
SUM NO 7:
1. Repairs A/c Dr. 1,000
To buildings A/c 1,000
(Rectified entry passed)
2. Sales A/c Dr. 2,000
To Sugumar A/c 2,000
(Being omitted entry)
To Kavitha A/c 3,000
4. Type writer A/c Dr. 5,200
To Office expenses 5,200
(Error rectified)
5. S.Lal A/c Dr. 600
To K. Lal A/c 600
(Error rectified)
SUM NO 8:

1. Purchase A/c Dr. 500
Sales A/c Dr. 500
To Gopal A/c 100
(Rectified entry)
2. Drawings A/c Dr. 1,000
To purchases A/c 1,000
(Being goods withdrawn)
To Ramesh A/c 1,500
4. Debit discount A/c with 100
5. Debit Ramu A/c with 3,000
42
SUM NO 9:
Sl.No Particulars L.F Debit credit

To Mohamed A/c 600
(Being rectification entry passed)
2 Sales A/c Dr. 500
To P&L A/c 500
(Being rectification entry passed)
3 Cash A/c Dr. 75
To Discount A/c 75
4 Repair to Machine A/c Dr. 630
To Machinery A/c 630
(Error rectified)
5 Purchase A/c Dr. 1,500
Sales A/c Dr. 1,500
To Parthiram A/c 3,000
(Error rectified)
SUM NO 10:
15-05-90 Salary A/c Dr. 600
To Clerk’s Personal A/c 600
(Rectified entry)
15-06-90 Sales Return A/c Dr. 3,500
To Customer A/c 3,500
(Being Sales return entry passed)
10-04-90 Discount A/c Dr. 750
To Cash A/c 750
18-02-90 Godown A/c Dr. 2,500
To Repair to godown A/c 2,500
(Being rectification entry passed for
wrongly debiting repair a/c instated
of capital account)
43
SUM NO 11:
Sl.No Particulars L.F Debit Credit

1 Suspense A/c Dr. 55
To return outwards A/c 55
2 Purchase A/c Dr. 499.45
To suspense A/c 499.45
3 Gopalan’s A/c Dr. 25
To interest recived A/c 25
4 Sales A/c Dr. 75
To furniture A/c 75
SUM NO 12:
Sl.No Particulars L.F Debit Credit

To purchases A/c 5,600
To return outwards A/c 100
3 Gupta & Mukherjee A/c Dr. 18
To sales A/c 18
To M/S Guha & Roy A/c 430
5 Drawing A/c Dr. 30
To General expenses A/c 30
6 Sales A/c Dr. 200
To old furniture A/c 200
7 Show cases A/c Dr. 200
To wages A/c 200
8 Singh & co A/c Dr. 200
To suspenses A/c 200
44
SUM NO 13:
S.No. Particulars L.F Debit Credit

1 Drawings A/c Dr. 750
To Loss of Stock A/c 750
(Being cheque received for loss in
proprietor private bank account)

To Supplier A/c 100
To Suspense A/c 36
(Being purchase of Rs. 151 entered in
purchase book)

To Stock book A/c 500
(Being omission of sale return)
4 Bank A/C Dr. 250

To Discount A/c 250
(Being Rs.300 received from customer
and Discount allowed Rs. 50)
5 Bills Receivable A/c Dr. 1,000

Bills Payable A/c Dr. 1,000
To Suspense A/c 2,000
(Being bills receivable for Rs.1,000
wrongly credited to bills payable A/c)
45
SUM NO 15:

To Purchase A/c 500
To Sales A/c 500
(Being goods purchased was entered
in sales return book)
2 Purchase A/c Dr. 1500
Sales A/c Dr. 1050
To Ramlal A/c 2550
(Being purchase of good from Ramlal
wrongly passed through sales book)
3 Discount allowed A/c Dr. 50
To Gupta A/c 50
(Being discount allowed unposted,
now error rectified)
To Sales A/c 100
(Being sales book for the month of
April overcast)
5 Machinery A/c Dr. 460
To Suspense A/c 180
To Freight A/c 640*
(Being freight 460 paid wrongly
recorded in Freight A/C as Rs. 640)
46
ILLUSTRATION 3:
1. Purchases from Akila should have been posted to the credit of
Akila’s A/c, but it has been debited.
Hence:
Credit Akila’s A/c with double the amount i.e, Rs. 3,000.
2. Sales to Vijay must find itself on the debit side of Vijay’s

account but his account is credited with Rs. 1,250
Hence:
Debit Vijay’s A/c with Rs. 1,250 + Rs. 1,520 i.e., Rs. 2,770.
3. This is an omission to post to the personal A/c. Note that posting

must be to the credit of Chandra’s A/c
Hence:
Post Rs. 750 to the credit of Chandra’s A/c.
4. Here Kandan’s A/c has been debited with a wrong amount i.e.,
with excess amount. To rectify this error, the excess amount
must be credited to his amount.
Hence:
Credit Kandan’s A/c with RS.90
ILLUSTRATION 4:
47
1. The excess debit will be removed by a credit in the Salaries

Account by the entry: “By double posting on…. by Rs.1,500”.
2. The Purchase account should receive another debit of Rs.300

since it was debited short previously.
“To under casting of purchases book for the month of….Rs.300”
3. Rs. 1,000 should have been debited to the Bills Receivable

Account and not credited. To correct the mistake, the Bills
Receivable Account should be debited by Rs. 2,000 by the entry.
“To Wrong posting of Bills Receivable received on…..Rs. 2,000”
4. Due to this error, the Returns Inward Account has been posted
short by Rs. 75. The rectifying entry will be:
“To under casting of Returns Inward Book for the month
of…Rs.75”
5. The omission of the credit to the Machinery account will be

rectified by the entry.
“By Omission of posting on….Rs.400”
6. Due to this error, the Discount Account has been debited short
by Rs.125.
The required entry is:
“To Omission of discount allowed to Ramya on …. Rs. 125”
7. Due to this error, Harish has been debited short by Rs.27.

The correct entry is:
“To difference in amount posted on ….Rs. 27”
ILLUSTRATION 5:
48
1.Debit Sridhar’s A/c by Rs.27
2.Credit Manohar’s A/c by Rs.45
3.Credit Seenu’s A/c by Rs.900
4.Credit Furniture A/c by Rs.36
5.Credit Anbu’s A/c by Rs.18
6.Credit Babu’s A/c by Rs.2
7.Debit Furniture A/c by Rs.2000

49
ILLUSTRATION 6:
S.N0 Particulars L.f Debit Credit
1 Salaries A/c Dr 1,000
To Mohan A/c 1,000
2 Typewriter A/c Dr 1,500
To Office expenses A/c 1,500
3 Furniture A/c Dr 5,000
To Purchases A/c 5,000
4 Repairs A/C Dr 250
To Buildings A/c 250
5 Drawings A/c Dr 500
To Trade expenses A/c 500
6 Shajahan & Co A/c Dr 200
To Shanthi & Co A/c 200
50
ILLUSTRATION 7:
Errors Particulars L.F Debit Credit
Sales A/c Dr. 250
To Deva A/c 500
[Correction of wrong entry in sales book
of a purchase of goods from Deva]
2 Raja A/c Dr. 600
To Purchases A/c 300
To Sales A/c 300
[Correction of wrong entry in purchases
book of a credit sale of goods to Raja]
3 Sales A/c Dr. 1,500
To Furniture A/c 1,500
[Correction of wrong credit to sales
account for sale of old furniture]
4 Building A/c Dr. 10,000
To Wages A/c 10,000
[Correction of wrong debit to wages
account for wages paid for construction
of building]
5 Madan A/c Dr. 500
To Sales Returns A/c 500
[Correction of wrong debit to sales
returns account for dishonor of cheque
received from Madan]
To Wages A/c 1,000
[Correction of wrong debit to wages
account for wages paid for installation
of machinery]
To S.Singh A/c 500
[Entry of goods returned by him and
taken into stock omitted from records]
51
ILLUSTRATION 8:
Errors Particulars L.F Debit Credit
To Sales A/c 50
[Rectifying under credit to sales A/c]
2 Trade Expenses A/c Dr. 275
To Suspense A/c 275
[Rectifying omission to debit
trade expenses account]
To Commission A/c 125
[Rectifying double posting to
commission A/c]
To A. Gopal A/c 270
[Rectifying excess debit to Gopal's
A/c]
5 Suspense A/c Dr. 1,000
To L.Lal A/c 1,000
[Rectifying wrong debit, instead of
credit]
To Discount A/c 100
[Rectifying over debit given to
discount account through error in
totaling]
Suspense Account
Particulars Amount Particulars Amount

To A.Gopal A/c 270 By Balance b/d 1,270
To Sales A/c 50 By Trade expenses A/c 278
To L.Lal A/c 1,000

To Commission A/c 125
To Discount A/c 122
1,545 1,545
52
53
SHORT ANSWER PROBLEMS:
SUM NO 1:
Mr X’s Journal Entries For The Year Ended
31.12.1988
1)

Wages A/c Dr 20,000
To Outstanding Wages A/c 20,000
2)

Depreciation A/c Dr 50,000
To Machinery A/c 50,000
3)

Interest A/c Dr 15,000
To Interest Received In Advance A/c 15,000
54
SUM NO 2:
Mr X’s Journal Entry
1)

Closing Stock A/c Dr 49,280
To Trading A/c 49,280
2)

Depreciation A/c Dr 14,000
To Vehicles A/c 14,000
3)

Purchase A/c Dr 10,000
To X A/c 10,000
Working Notes:
10% Depreciation On Vehicles Rs- 1,40,000

= 1,40,000*10%
=1,40,000*10/100
= 14,000
SUM NO 3: 55
Journal Entries
1)

Drawings A/c Dr 500
To Purchase A/c 500
2)

Bad Debt A/c Dr 5,000
To Sundry Debtors A/c 5,000
Profit & Loss A/c Dr 2,500

To Provisions For Bad Debts A/c 2,500
3)

Provision For Discount On Creditors A/c Dr 2,125
To Profit & Loss A/c 2,125
Working Notes:
Debtors – Bad Debts
1,05,000 - 5000
=1,00,000
Provide 2.5% On Doubtful Debts
=1,00,000 *2.5 *
=1,00,000*2.5/100
=2500
Provide Discount For Creditors @ 2.5% On Closing

=85,000*2.5%
=85,000*2.5/100
=2125
56
SUM NO 4:
Journal Entry
1)

Travelling Expense A/c Dr. 1,000
To Cash A/c 1,000
2)

Drawings A/c Dr. 300
To Cash A/c 300
3)

Drawing A/c Dr. 500
To Cash A/c 500
Since it’s for the trader’s wife, it is a personal expense. So, it’s considered
drawing.
57
SUM NO 5:

Interest Accrued A/c Dr. 450
To Interest A/c 450
Working Note:
2,10,000 (Invested Amount) *9/12 (No of Months) *6 /100 (Rate of Interest)
Answer = 450
SUM NO 6:
Journal Entry
1)

Advertisement Expenses A/c Dr. 5,000
To Purchases A/c 5,000
2)

Drawings A/c Dr. 1,00,000
To Cash A/c 1,00,000
3)

Interest On Investment A/c Dr. 9,000
Bank Charges A/C Dr. 1,000
10,000
To Bank A/C
Working Notes:
50,000*20/100 = 10,000
58
SUM NO 7:
Trading Account
Particulars Amount Amount Particulars Amount Amount
To Gross 8,000 By 32,000
Profit Inventory
With
Customers
Balance Sheet
Liabilities Amount Assets Amount
Closing Stock 32,000
Working Notes:
25% On Cost=
¼ On Cost= 1/5 On Sales=20%
40,000*20/100=8000
SUM NO 8:
The items that belong to current accounting year are:
Cash sales
Outstanding expenses
Credit purchases
Salaries paid to employees and
Commission earned but not received.

SUM NO 9:
Capital Account = 50,000
59
Net Profit = 12,400
Drawings = 7000
Charge On Drawings = 430
Interest On Capital = 5%
Therefore:
Particulars Amount
Capital 50,000
Less: Drawings (7,000)
Add: Interest On Capital 2,500
Less: Interest On Drawings (430)
Add: Net Profit 12,400
Closing Capital 57,470
Working Notes:
Interest On Capital: 50,000*5/100 = 2,500
60
SUM NO 1:
JOURNAL ENTRY
1 Salary A/c Dr 1,200
To outstanding salary A/c 1,200
2 Rent A/c Dr 300
To outstanding rent A/c 300
3 Prepaid insurance premium A/c Dr 450
To insurance premium A/c 450
4 O/s Interest on investment A/c Dr 400
To interest on investments A/c 400
5 Outstanding dividend A/c Dr 350
To dividend A/c 350
6 Discount received in A/c Dr 150
To discount received in advance A/c 150
7 Bad debts A/c Dr 200
To sundry debtors A/c 200
8 Interest on securities A/c Dr 500
To interest received in advance A/c 500
SUM NO 2: 61
1 Salary A/c Dr 1,500
To salary outstanding A/c 1,500
2 Prepaid insurance A/c Dr 170
To insurance A/c 170
3 Cycle shed A/c Dr 2000
To wages A/c 2000
4 Goods issues as sample A/c Dr 200
To purchases A/c 200
5 Rent paid in advance A/c Dr 250
To rent A/c 250
SUM NO 3:

1 Profit & loss A/c Dr 3000
To provision for bad debts A/c 3000
Profit & loss A/c Dr 675
To provision for discount on debts a/c 675
2 Closing stock A/c Dr 43000
To trading A/c 43000
3 Wages A/c Dr 2500
To wages outstanding A/c 2500
4 Prepaid insurance debt A/c Dr 1500
To insurance A/c 1500
To sundry debtors A/c 1000
6
To purchases A/c 15000
SUM NO 4: 62
Bad debts A/c
Particulars L.f Amount Particulars L.f Amount
To debtors A/c 1,870 By profit &loss A/c 1,870
Provision for bad debts A/c

To bad debts 1,870 By bad debts A/c 2,500
To bal. c/d 1,000 By profit &loss A/c 370
2,870 2,870
Profit & loss A/c

To bad debts A/c 1870
(+) new
provision[20000*5/100] 1000
(-) old provision 2500 370
63
SUM NO 5:
ADJUSTING ENTRIES
Date Particulars L.F Debit Credit
1994 Provision for bad debts A/c Dr 2,250
To bad debts A/c 2,250
P&L A/c Dr 6,050
To provision for bad debts A/c 6,050
1995 Provision for bad debts A/c Dr 1,350
To P&L A/c 1,350
Provision for bad debts A/c Dr 3,750
To bad debts A/c 3,750
Provisional bad debts A/c

Date Particulars L.f Amount Date Particulars L.f Amount
1994 To bad debts A/c 2250 1994 By balance b/d 3200
1994 To balance c/d 7000 1994 By p/l A/c 6050
9250 9250
1995 To bad debts A/c 1900 1995 By balance b/d 7000
1995 To balance b/d 3750
1995 To p/l A/c 1350
7000 7000
SUM NO 6:
64
Provisional bad debts A/c
Date Particulars L.F Amount Date Particulars L.F Amount
31st To bad debts A/c 1,600 Jan 1 By balance b/d 2,600
Dec 1992
1992
31 Dec To balance c/d 3,600 31 Profit and loss 2,600

dec (b.f)
5,200 5,200
31 Dec To bad debts A/c 1,280 1 Jan By balance b/d 3,600

1993 1993
31 Dec To balance c/d 2,000
Dec 31 To profit and loss 320

(b.f.)
3,600 3,600
Bad Debts A/c

Date Particulars Amount Date Particulars Amount
31st To debtors A/c 1,600 31st Dec By provision for bad 1,600
Dec 1992 debts a/c
1992
31st To debtors A/c 1,280 31st Dec By provision for bad 1,280
Dec 1993 debts a/c
1993
65
SUM NO 7:
Provision for bad debts A/c
Particulars L.F Amount Particulars L.F Amount
To bad debts A/c 4,000 By balance b/d 3,000
To balance c/d 5,000 By P&L A/c 6,000
9,000 9,000
To bad debts 1,000 By balance b/d 5,000
To balance c/d 1,500
To P&L A/c 2,500
5,000 5,000
To bad debts A/c 5,000 By balance b/d 1,500
To balance c/d 4,200 By P&L A/c 7,700
9,200 9,200
66
SUM NO 8:
Adjusting Entries
S.no Particulars L.f Debit Credit
1. Bad debts A/c Dr 4000
To provision for bad debts A/c 4000
2. P/L A/c Dr 2000
To Bad debts A/c 2000
3. Provision for bad debts A/c Dr 2000
To Bad debts A/c 2000
Bad Debts A/c

DR CR
Particulars L.f Rs. Rs. Particulars L.f Rs. Rs.
To provision for bad 4000 By P/L A/c 2000

debts A/c
By provision for bad 2000
debts A/c
4000 4000
Provision for bad Debts A/c

DR CR
Particulars L.f Rs. Rs. Particulars L.f Rs. Rs.
To bad debts A/c 2000 By bad debts A/c 4000
To balance c/d 2000
4000 4000
67
Profit or Loss A/c
DR CR
Particulars Rs. Rs. Particulars Rs. Rs.
To bad debts 2,000
(+) old bad debts 1,000 3,000
Balance sheet
Liabilities Rs. Rs. Assets Rs. Rs.
Debtors 80,000
(-) provision for bad debts 2,000 78,000
SUM NO 11:
Trading a/c for the year ended 31st March 20xx

To opening stock 3,600 By closing stock 4,420
To purchases 18,260 By sales 32,000
Less: purchase 900 17,360 Less: sales return 700 31,300
returns
To wages 3620
To rent 400
To carriage on 500
purchases
To gross profit c/d 10,240
35,720 35,720
68
Profit and loss a/c for the year ended 31st March 20xx
To carriage on sales 400 By gross profit b/d 10,240
To rent A/c 500 By interest from bank 200
To general expenses A/c 900

To discount to customers a/c 360
To net profit 8,280
10,440 10,440
SUM NO 12:
Trading a/c for the year ended 31st December 1995

To opening stock 19,890 By sales 1,56,364
To purchases 1,24,184 By closing stock 28,600
To wages 8,600
To gross profit [c/d] 32,290 32,290
1,84,964 1,84,964
Profit and loss A/c for the year ended 31st December
1995
Particulars Amount Particulars L.f Amount
To salaries 8000 By gross profit b/d 32290
To discount 2000
To postage 546
To postage 574
To interest 2590
To insurance 834
To net profit 17746
32,290 32,290
69
Balance sheet
Capital 72,000 Machinery 20,000
Add: net profit 17,746 89,746 Buildings 47,560
Creditors 17,440 Furniture 32,310
Bills payable 5,054 Debtors 7,770
Loan 24,000 Closing stock 28,600
1,36,240 1,36,240
SUM NO 13:
Trading A/c for the year 31st March 20xx

To opening stock 32400 By sales 1,30,720
To power 4480 By closing stock 47,000
To wages 14400
To purchases 94000
To gross profit 32440
1,77,720 1,77,720
70
Profit and loss A/c for the year 31st March 20xx
To general expenses 5,000 By gross profit 32,440
To taxes insurance 2,630 By commission 2,640
To charity 210
To bad debts 1,100
To car expenses 3,600
To net profit 22,540
35,080 35,080
Balance Sheet
Add: Net profit 22540 Buildings 22,000
less: drawings 4,000 68,540 Motor car 4,000
Bank overdraft 6,600 Debtors 12,560
Creditors 5,000 Cash 160
Loan 15,760 Closing stock 47,000
Reserve fund 1,800
Bills payable 6,700
1,04,400 1,04,400
71
SUM NO 14:
Trading a/c of Ravi for the year ended 31st December

1993
To opening stock 5,200 By sales 25,000
To purchases 15,000 By closing stock 4,900
To gross profit 9,700
29,900 29,900
Profit and loss A/c of Ravi for the year ended

31st December 1993
To salaries 2000 By gross profit 9,700
Add: outstanding 300 2,300
To rent 1500
Less: prepaid rent 200 1,300
To insurance 300
Less: prepaid 90 210
insurance
To net profit 5,890
9,700 9,700
72
Balance sheet
Add: net profit 5,890 Cash at bank 4,500
less: drawings 5,000 40,890 Cash in hand 2,000
Outstanding salaries 300 Closing stock 4,900
Creditors 1,000 Debtors 2,500
Prepaid rent 200
Prepaid insurance 90
42,190 42,190
SUM NO 15:
Trading Account as on year ended 31-12-1981

To purchase 11,870 Less: Returns 450 14,240
Less: Returns 350 11,520 By closing stock 4,200
To Gross profit 4,470
18,440 18,440
73
Profit and loss account as on year ended 31-12-1981

To rent 360 By gross Profit 4,470
Less: outstanding 120 480 By bad debts 250
recovered
To salaries 850
To travelling exp. 300
To discount allowed 40
To bad debts 80
Add: Reserve for 375 455
Bad Debts
To Net Profit 2,595
4,720 4,720
Balance sheet
Capital 8,000 Cash 210
Add: Net profit 2,595 Debtors 7,580
Less: Drawings 600 9995 Less: Bad debts 80
Creditors 1250 Less: Reserve for 375 7,125
Bad Debts
Bills payable 1350 Bank deposit 2,750
Bank overdraft 1570 Closing stock 4,200
Outstanding rent 120
14,285 14,285
74
SUM NO 16:
Trading account
To purchases 25,000 By Sales 32,000
To Gross profit 16,000 By closing stock 9000
41,000 41,000
Profit and loss Account

To salaries 5,500 By gross profit 16,000
Less: Outstanding 500 6,000
To rent 1,300
Less: Prepaid 100 1,200
To reserve for bad 2,000
debts
To trade expenses 600
To Net profit 6,200
16,000 16,000
Balance sheet
Liabilities Amount Amount Assets Amount Amount
Capital 30,000 Debtors 40000
Add: Net Profit 6,200 36,200 Less: Reserve 2000 38,000
Outstanding 500 Prepaid rent 100

salaries
Creditors 9,500 Advances 2,500
Loans 10,000 Bank Balances 5,600
Cash 1,000
Closing stock 9,000
56,200 56,200
75
SUM NO 17:
Trading Account
To Purchase 51,000 Less: Returns 2000 2,16,000
Less: returns 2,650 48,350 By closing stock 35,000
Carriage Inwards 1000
To wages 26,000
Less: Outstanding 1,500 27,500
To gross profit 1,34,150
2,51,000 2,51,000
Profit and Loss Account

To Carriage outward 500 By gross profit 1,34,150
To salaries 35,000
To rent 3000
To Discount 1,100
To repairs 2,300
To advertisement 3,500
Less: Prepaid 500 3,000
To depreciation:
Add: Machinery 4000
Add: Furniture 600 4,600
To bad debts 1200
Add: provision for 2,250 3450
bad debts
To general expenses 450
To Net Profit 80,750
1,34,150 1,34,150
76
Balance sheet as soon as year ended 31-12-1995
Capital 1,60,000 Machinery 40,000
Add: Net 80,750 Less: depreciation 4,000 36,000

profit
Less; 45,000 1,95,000 Goodwill 90,000
Drawing
Bills Payable 35,000 Building 60,000
Creditors 70,000 Bills receivable 6000
O/S wages 1,500 Cash 1,600
Debtors 45000
Less: provisions for 2,250
bad debts 42,750
Prepaid 500
advertisements
Closing stock 35,000
Bank 25,000
Furniture 6,000
Less: depreciation 600 5,400
3,02,250 3,02,250
SUM NO 18:
Trading account
To purchase 40,675 Less: returns 680 98,100
Less: Return 500 40,175 By closing stock 6,800
To wages 8,480
To carriage on 2,040
purchase
To fuel and power 4,730
1,04,900 1,04,900
77
Profit and loss account
To salaries 15,000 To gross profit 43,715
Add: outstanding 1,500 16,500
salaries
To insurance 600
Less: Prepaid 150 450
To depreciation
Add: Machinery 2000
Add: Patents 1500 3500
To provision for B.D 290
To carriage on sales 3,200
To general expenses 3000
To Net profit 16,775
43,715 43,715
Balance sheet
Capital 62,000 Land and building 42,000
Add: net profit 16,775 Machinery 20,000
Less: Drawings 5,245 73,530 Less: depreciation 2,000 18,000
Outstanding 1,500 Patents 7,500
salaries
Sundry creditors 6,300 Less: depreciation 1,500 6,000
Bills payable 9,000 Cash in hand 540
Cash at bank 2,630
Prepaid Insurance 150
Closing stock 6,800
Less: Provision for 290 14,210
bad debts
90,330 90,330
78
SUM NO 19:
Trading account
To Opening stock 6,000 By sales 16,000
To purchase 2,000 By closing stock 4,000
To wages 1,000
Add; Outstanding 100 1,100
Wages
20,000 20,000
Profit and loss account

To rent 450 By gross profit 10,900
Less: Prepaid rent 50 400 By interest on 200
drawings
To commission 250
To general 800
expenses
To interest on 1,200
capital
To net profit 8,450
11,100 11,100
79
Balance sheet
Capital 20,000 Cash at bank 1,700
Add: Net profit 8,450 Cash in hand 6,500
Add: Interest on 1,200 Building 10,000
capital
Less: Interest on 200 Sundry debtors 4,400
drawings
Less: Drawings 4,000 25450 Bills receivable 2,900
Outstanding wages 100 Furniture 500
Creditors 4500 Rent prepaid 50
Closing stock 4,000
30050 30,050
SUM NO 20:
Trading account
To purchase 21,200 By returns 420
outward
To return inwards 1,020 By closing stock 2,980
To wages 5,200
To freight and 560
carriage on
purchase
44,860 44,860
80
Profit & Loss account
Add: Outstanding 200 2400 By dividends 110

To bad debts 120 By interest 130
Add: New 300
provision for
doubtful debts
Less: Old provision 420 420
for doubtful debts
To rent 600
To miscellaneous
expenses 500
Less: prepaid 30 470
insurance
To postage 280
To stationary 260
To carriage on 800
sales
To repairs 900
To depreciation 1,700
To net profit 6,190
14020 14020
81
Balance sheet
Capital 12,000 Cash in hands 1,300
Add: Net 6,190 18,190 Building 17,000
profit
Outstanding 200 Less: 1,700 15,300
salary Depreciation
Bank loan 3,000 Furniture 1,000
Sundry 4,920 Debtors 6,000
creditors
Less: New 300 5,700
Provision for
doubtful
debts
Closing stock 2,980
Insurance 30
prepaid
26,310 26,310
82
SUM NO 21:
Trading & Profit & Loss account

To purchase 75,000 Less: sales 5,000 120000
return
To duty on purchase 15,000 By closing 14,000
stock
To wages 7,500
Add: outstanding 600
wages 8,100
To carriage inwards 2,500
1,34,000 1,34,000
To depreciation 596 By gross profit 20,900
To general charges 900
To interest paid 345
To carriage 750
outwards
To rates and taxes 90
To postage 135
To travelling 1,250
expenses
To rent 2,750
Add: Outstanding 250 3,000
rent
To salaries 4,400
Add: outstanding 400 4,800
salaries
Outstanding 75
interest
To bad debts 300
83
Add: New Provision 500
for doubtful debts
Less: Old provision 400 400
for doubtful debts
New provision for 238
discount for debtors
Old provision for 200 38
discount on debtors
To net profit 8,491
20,900 20,900
Balance Sheet
Capital 20,000 Cash in hands 250
Add: Net profit 8,491 Cash at bank 2,400
Less: Drawings 3,500 24,991 Building 10,000

Loan 5,000 Less: 250 9,750
Depreciation
Creditors 7,500 Machinery 2,500
Outstanding 250 Less: 250 2,250

Rent Depreciation
Outstanding 600 Cycle 400
wages
Outstanding 75 Less: 60 340
interest Depreciation
Outstanding 400 Furniture and 600
salary fittings
Less: 36 564
Depreciation
84
Debtors 10,000
Less: New 500
Provision for
doubtful debts
Less: New 238
Provision for 9,262
Discount on
debtors
38,816 38,816
SUM NO 22:
Trading & Profit & Loss account

To purchase 2,56,590 Less: return 2,780 353,650
inwards
To wages 40,970 By closing stock 1,28,960
Less: Erection 1,200 39,770
4,82,610 4,82,610
To bad debts 3,620 By gross profit 96,570
Add: New bad 500 By commission 5640
debts
Add: New 3,050 Add: Outstanding 600 6,240
Provision for
doubtful debts
Less: Old 2,500 4,670
Provision for
doubtful debts
85
To salaries 11,000
To rent and taxes 5,620
To interest and 5,870
discount
To travel 1,880
expenses
To repairs 8,370
To insurance 400
insurance
loans
Add: Outstanding 240 1,440
interest
capital
To depreciation
Add: Plants and 1,440
Machinery
Add: Furniture 897
and fittings 2,337
Net profit 61,583
1,02,810 1,02,810
86
Balance sheet
Capital 1,19400 Cash in hands 3,030
Add: Net 61,583 Cash at bank 18,970
profit
Add: 5,970 Debtors 62,000
Interest on
capital
Less: 10,550 1,76,403 Bills receivable 8,200
Drawings
Creditors 59,630 Fixtures and fittings 8,970
Less: Depreciation 897 8,073
Loan 2,000 Plants and 28,800
Machinery
Less: Depreciation 1,800 27,000
Interest on 200 Closing stock 1,28,960
loan
2,56,233 2,56,233
SUM NO 23:
Trading & profit & loss a/c of Edward’s books for the
year ended 31st December 1992
To opening 89,680 By closing stock 1,28,960
stock
To purchase 2, 56,590 By sales 3,50,000
Less: return 6,430 2,50,160 Less: return inward 2,780 3,47,220
outwards
To wages and 10,242.5
salaries
To gross profit 1,26,097.5
87
4,76,180 4,76,180
To wages and 30,727.5 By gross profit 1,26,097.5
salaries
To postage and 5,620 By commission 630
telegram received
To printing and 880 Less: commission 130 500
stationary prepaid
To repairs 3,620 To provision for 1,180
discount on
creditor
To interest on 300 By interest on 5,640
loan investment
Add: 900 1,200
outstanding
interest on loan
To travelling 12,000
expenses
Less: travelling 2,000 10,000
expenses
overdrawn by
employees
To provision for 3,100
debtors
To discount on 1,178 1,178
debtors
To Commission 470
To net profit 76,622.5
1,33,417.5 1,33,417.5
88
Balance sheet of Edward’s books as at 31st December

1992
Capital 1,08,850 Bills 4,500
receivable
Add: net 76,622 Land and 37,770
profit building
Less: 5,000 1,80,472 Sundry 62.000
drawings debtors
Loan @ 6% 20,000 Less: reserves 3,100
for debtors
Outstanding 900 Less: discount 1,178 57,772
interest on debtors
Sundry 59,000 Petty cash 70
creditor
Less : 1,180 57,820 Bank balance 8,800
provision on
discount for
sundry
creditors
Prepaid 130 Furniture 500
commission
Investment 19,000
Travelling 2000
expenses
overdrawn by
employees
Closing stock 1,28,960
2,59,322 2,59,322
89
SUM NO 24:
Trading & profit & loss account of
Mr. Xavier for the year ended 31st March 1993
To purchase 80,000 Less: return (5000) 1,25,000

inward
Less: return (2000) 78,000 By closing 21,000
outward stock
1,46,000 1,46,000
To salaries and 22,400 By gross profit 45,000
wages
Add : outstanding 800 23,200 By interest on 330
salary and wages drawing
To postage and 1,500 By discount 600
telegram received
To rent , rate and 3,600 Add : new 240 840
taxes provision
To bad debt 400
Add : new bad 400 800
debt
To trade 200
expenses
To insurance 800
Less : prepaid (100) 700
insurance
To interest on 150
loan
To travel 500
expenses
90
To sundry 300
expenses
capital
To depreciation 200
on furniture
on machinery
To provision on 500
discount on
debtors
49,170 49,170
Balance sheet of Mr. Xavier as on 31st March 1993

Capital 60,000 Debtors 20,400
A 10,920 Less : new bad (400)
dd : net profit debt
Add : interest 3,600 Less : reserve (500) 19,500
on capital for debtors
Less : interest 330 Furniture and 4000
on drawings fixture
Less : Drawings 12,000 62,190 Less : (200) 3,800
depreciation
Creditors 12,000 Plant and 30,000
machinery
Less : discount (240) 11,760 Less : (3,000) 27,000
on creditors depreciation
Loans 10,000 Prepaid 100
insurance
91
Outstanding 800 Cash in hand
89 3,050
salary
Cash at bank 10,300
84,750 84,750
SUM NO 25:
Trading and profit and loss account of Mr. Appu for

the year ended 31st March 1994
To opening stock By sales 1,67,200
Raw materials 21,000 By closing stock
Work in progress 9,500 Raw material 16,200
Finished goods 15,500 46,000 Work in progress 7,800
To carriage inward 1,500 Finished goods 18,100 42,100
To wages 13,000
Add: outstanding 2,000 15,000
wages
To purchases 85,000
To rent on factory 4,500
To lighting on 900
factory
2,09,300 2,09,300
Add: outstanding 900 10,900 By sale and scrap 2,500
To postage and 1,000 By commission 450
telegram received
To repair and 1,100 By provision on 1,650
reward doubtful debts
To general 1,850
expenses
92
To depreciation on 7,000
machinery
To depreciation on 750
furniture
To rent on office 1,500
To lighting on 450
office
59,350 59,350
Balance sheet of Mr. Appu as at 31st March 1994

Capital 1,00,000 Debtors 24,000
Add: net 36,450 1,36,450 Bills receivable 15,000
profit
Trade payable 23,500 Stock in hand 42,000
Creditor 7,500 Cash at bank 17,000
Bills payable Plant and 70,000
Machinery
Salary 900 Less: 7,000 63,000
outstanding Depreciation
Wages 2,900 Furniture 10,000
outstanding
Less: 750 9,250
Depreciation
1,70,350 1,70,350
93
SUM NO 26:
Trading & profit & loss a/c of Edward’s books for the
year ended 31st December 1992
To purchase 2,50,000 By closing 53,000
stock
To freight and octroi 4,800

3,63,000 3,63,000
To trade expenses 500 By gross 63,200
profit
To salaries 5,500 By 1,300
commission
received
Add: outstanding 500 6000 Add: 122 1,426
salaries outstanding
commission
received
To discount allowed 200
Rent a/c 2,400
furniture
To bad debt 1,800
Add: new provision 1,200
Less: old provision (900) 2,100
To advertisement 1,250
expenses
To insurance 400
premium
Less: prepaid (100) 300
insurance
64,622 64,622
94
Balance Sheet As At 31st March 1999
Capital 9,000 Furniture 10,000
Add: net 50,872 Less: 1,000 9,000
profit Depreciation
Less: drawings (6,000) 1,24,872 Debtors 40,000
Outstanding 500 Less: new 1,200 38,800
salary provision
Creditors 20,000 Goodwill 20,000
Prepaid interest 100
cash 5,200
Cash at bank 5,800
Outstanding 122
commission
Advertisement 5000
Written off (1250) 3,750
Suspense a/c 9,600
1,45,372 1,45,372
95
SUM NO 27:
Trading and Profit and Less Account for the year

31st DEC 1994
Particulars L.f Amount Amount Particulars L.f Amount Amount
To opening 3,460 By closing 3,250
stock stock
Less purchase (125) 5,350 Less sales (200) 15,250
Returns returns
18,500 18,500
To salaries 3,300 By gross 9,690
Add outstanding 300 3,600 profit
salary
To general 782 By 375
expenses commission (125) 250
Less
advance
1
375 ∗
3
To taxes 1,250
insurance 120
Add outstanding (100) 1,270
Less prepaid
insurance
To depreciation: 375
Building 64
Furniture and fix 1,250
Motor vehicle 1,689
To interest 118
Add outstanding 85 203
interest
To bad debts 125
Add additional 185
bad debts Less (200) 210
old provision
96
To advertising 450
To net profit 1,736
9940 9940
Balance sheet as at 31 Dec 1994

Capital A/C 12,500 Building 7,500
Add: Net profit 1,736 14,236 Less: Depreciation 375 7,125
Bank overdraft 2,850 Furniture & 640
fittings
Advance 125 Less: Depreciation 64 576
commission
Outstanding 85 Motor vehicle 6250
interest
Outstanding salary 300 Less: Depreciation 1250 5,000
Outstanding tax 120 Cash 650
Creditors 2,500 Closing stock 3,250
Debtors 3,800
Less: Written off 100
Less: New 185 3,515
provision
20,216 20,216
97
SUM NO 28:
Trading and profit & loss account for the year ended
To opening 5760 By closing 6,800
stock stock
Less Returns 500 40,175 Less returns 680
98,100
To wages 10,480
Less erection of 2,000 8,480
shed
To fuel and 4730
power
To carriage 2040
inwards
1,04,900 1,04,900
To carriage 3,200 By gross 43,715
outwards profit
To salaries 15,000
To Sundry 3,000
expenses
To insurance 600
Less prepaid 300 300
To bad debts 0
Less old bad 725 725
debts
43,715 43,715
Balance sheet as on 31-12- 1999
98
Capital 71,000 Cash in hand and 540
bank +2630
3,170
Add: Net profit 21,940 Premises 30,000
Less: Drawings 5,245 85,245 Land 10,000
Creditors 6,300 Machinery
20,000
Reserve , Patents 7,500
Debtors 14,500
Less: New bad
debts 725 13,775
Erection of shed 2,000

Closing Stock 6,800
93,545 93,545
99
SUM NO 29:
Trading and profit & loss account

stock stock
To purchases 82,000 By sales 1,20,000
Less: Returns 1,000 81,000 Less: Returns 2,000 1,18,000

To gross 41,600 By abnormal 5,000
profit loss
1,37,600 1,37,600
To taxes 2,000 by gross 41,600
profit
To carriage 500 By discount 800
outward
To rent 4,600 By rent 1,200
received
To printing & 800 By discount 200
stationery on creditors
To trade 400
expenses
To post & 800
telegram
To reserve for
bad debts
New 1,000
Less: Old 400 600
To insurance 700
premium

To salary and 21,300
wages
100
To reserve for
discount on 380
debtors
To bad debts 600
To
depreciation 2,250
(1250+ 1000)
To net profit 8,970
43,800 43,800
Balance sheet
Capital 80,000 Cash at bank 20,500
Add: Net profit 8,970 Machinery 25,000

Less: Drawings 6,000 82,970 Less: Depreciation 1,250 23,750
Sundry creditors 10,000 Furniture 5,000
Less: Discount 200 9,800 Less: depreciation 1,000 4,000

Less: Bad debts 600
Less: Provision for 1000

bad debts
Less: Discount 380 18,620
Cash in hand 6,200
Abnormal loss 5,000
92,770 92,770
101
SUM NO 30:
Trading and Profit and Loss account

stock stock
Less returns
Add: More 5,000 Less: 600 98,200
returns Returns
Less: Returns 500 45,500
To productive 10,500
wages
To carriage 2,000
inward
To power and 4,000
fuel
To gross 37,400
profit
1,05,200 1,05,200
To salary and 15,000 By gross 37,400
wages 500 15,500 profit
To carriage 3,200 By int on 250
outward drawings
To general 3,000
expenses
To insurance 600
prepaid (170) 430
To o/s 1,000
advertising
To 6,500
depreciation
To net profit 8,020
37,650 37,650
102
Balance sheet
Capital + NP - Cash in hand and
Drawings - Int on 73,770 bank 3,900
drawings
Creditors 6,300 Building 40,000
o/s salary 500 Less: Depreciation 2,000 38,000

o/s advertisement Plant and 20,000
bill 1,000 machinery
Goods on 5,000 Less: Depreciation 3,000 17,000
Purchases
Furniture 7,500

Debtors 14,500
Closing stock 7,000
premium
86,570 86,570
103
SUM NO 31:
Trading & profit and loss account Rajesh for the year
ended 31st December 1995
To purchase 2,12,000 (-) sales returns 8,000 4,60,000
(-) purchase returns 4,000 2,08,000 By closing stock 30,800
To wages 1,00,000
To carriage 12,000
4,90,800 4,90,800
To salary 41600 By gross profit 1,50,800
To general expenses 72,000 By discounts 6,000
and insurance received
(-) unpaid insurance 400 71,600
To postage and carrier 4,000
To rent rates 14,400
To depreciation on
Furniture and fixture 720
Loose and tools 4,000 9,720
To provision on bad 2,800
and
Doubtful debt
(-) old provision 2,000 800
To remuneration 2,000
To Net profit 12,680
1,56,800 1,56,800
104
Balance sheet of Rajesh
Sundry 24,000 Plant & 1,00,000
creditors machinery
Bank Overdraft 20,000 Less: 5,000 95,000

Depreciation
Capital 1,76,000 Furniture & 12,000
fixture
Add: Net profit 12,680 Less: 720 11,280

Depreciation
Less: Drawings 2,000 1,86,680 Loose & tools 20,000

goodwill 10,000
Provision for 2,800 53,200

Doubtful debts
(5%)
Cash & bank 14,000
stock 30,800
Prepaid 400
insurance
2,30,680 2,30,680
105
SUM NO 32:
Trading and profit & loss account for Sridharan for

the years end 31st December 1990
(+) 500 6,750

Less: returns 1,346 65,112 Less: returns 7,821
To carriage inward 2929 Less: sale on return 600 1,01,822

1,08,572 1,08,572
To interest on loan 300 By gross profit 33,692
(+) o/s interest 285 585
To carriage out 2,404 By rent received 250

To salaries 9,097 By discount received 540
(+) o/s salary 750 9,847
To general expense 3,489

To rates, taxes 2,891
insurance
(+) o/s rates 350 3,241
(-) prepaid 150 3,091

insurance
To advertising 3264
To bad debts 525
(+) new provision 975
(-) old provision 710 790
To 792
managers
commission
106
To
depreciation 300
Land and
building
vehicles 2,000 2,300
To net profit 7,920
34,482 34,482
Balance sheet
capital 28,000 Cash in hand 2,050
(+) net profit 7,920
(-) drawings 3,,000 32,920 Motor vehicle 10000
Sundry creditors 10,401 Less: 2,,000 8,000

Depreciation
Loan on mortgage 9,500 Cash at bank 3555
Bills payable 2,614 Land and building 12,000
o/s Interest 285 Depreciation 300 11,700
o/s salary 750 Bills receivable 6,882
o/s notes 350 Sundry debtors 20,100
Managers 792 Less: Sale on returns 600

commission
(-) provision 975 18,525
Closing stock 6,750
57,612 57,612
SUM NO 33:
107
Trading and profit & loss account in the books of

Janaki Raman & Co As of 31st December 1993
To purchases 85,000 By sales 1,67,200
To carriage 1500
To wages 13,000
Add: o/s wages 1,750 14,750
2,17,200 2,17,200
To profit & loss 1,000 By gross profit 76,950
To interest on 2,500 By 450
capital miscellaneous
receipt
To salaries 10,000 12,500 By commission 2,500
o/s salary 2,500
To telephone 1,000 By new priority 175
To repairs 350
To mix exp 350
To o/s rent 7,500
80,075 80,075
108
Balance sheet
Capital 1,00,000 Bills receivable 15,000
Add: Net profit 49,675 Closing Stock 50,000

Less: Interest on 2,500 Cash at bank 17,000
capital 1,52,175
creditors 15,000 Plant and machinery 65,800
Bills payable 7,500 Furniture 9,000
o/s salary 2,500 Sundry debtors 30,000
o/s rent 7,500 Less: New provision 375 29,625
o/s wages 1,750
1,86,425 1,86,425
109
SUM NO 34:
Trading and profit & loss account in the books of

Shri. Ram As of 31st Dec 1994
Particular Amount Amount Particulars Amount Amount
To purchase 1,43,000 By sales 29,200
To wages 22,600 Less: Returns 2,600 2,89,400

To carriage 2,040
To fuel and power 6,430
3,24,400 3,24,400
To general 2,680 By gross profit 1,38,930
expenses
To Carriage 1,630 By accrued income 3,600
outwards
To salaries 8,420
To car expenses 6,108
To free samples 2,000
To new bad debts 2,000
(+) new provision 2,500 4,500
To
depreciation 350
On furniture 2,500
On machinery 4,400 7,250
On motor car
To rent rates and 3,600
taxes
To o/s interest on 500
loan
To insurance firm 2,400
+ Pre paid 1,800 600
To net profit 1,05,242
1,42,530 1,42,530
110
Balance sheet
Capital 20,000 Cash in hand 2,392
Add: Net profit 1,05,242 Furniture 3,500
Less: Drawings 8,000 1,17,242 Less: Depreciation 350 3,150
creditors 22,000 Motor car 22,000
o/s interest 500 Less: depreciation 4,400 17,600
Cash at bank 6,200
Machinery 24,000
Add: erection 1,000
charge
commission 3,600
Prepaid insurance 1,800
Debtors 52,000 47,500
Less: New debt 2,000
Less: New 2,500 47,500
provision
1,39,742 1,39,742
111
112
SHORT ANSWER PROBLEMS:
SUM NO 1:
Particulars Amount Amount

Balance As Per Cash Book (Debit) 2,28,800
Add: Cheque Issued but Not Presented for Payment 22,500 + 3740 28,940
+2700
2,57,740
Less: Cheque Sent for Collection but Not Credited 23,000 + 3700 26,700
During The Year
Credit Balance As Per Pass Book 2,31,040
SUM NO 2:

Overdraft As Per Cash Book (Credit) 7,100
Add: Interest on Overdraft Not Recorded in Cash Book 150
7,250
Less: Cheque Drawn but Not Presented for Payment 2,300
Overdraft As Per Pass Book (Debit) 4,950
SUM NO 3:

Balance As Per Pass Book 2,400
(+)Add Cheque Amounting to Rs.1,900 Deposited into Bank 1,900
Were Not Collected And Credited Before 31.3.99
(-)Less Cheque Issued to Creditors Amounting to Rs. 1,340 1,340
Were Not Presented To The Bank before 31.3.99
Balance As Per Cash Book 2,960
113
SUM NO 4:

Balance As Per Pass Book: 9,000
(+)Add Cheque Deposited but Not Credited 1,500 1,500
(-)Less Cheque Issued but Not Presented 15,000 15,150
Bank Has Given Credit for Interest 150

Overdraft Balance As Per Cash Book 4,650
SUM NO 5:

Overdraft As Per Passbook 7,200
Less: Cheques Sent For Collection But Not Collected 500
Less: Interest On Overdraft 125 (625)
Overdraft As Per Cashbook 6,575
SUM NO 6:

Balance As Per Cashbook 10,500
Add: Under casting in cash book 640
Add: Interest Credited 370 1,010
Bank Balance To Be Shown In Balance Sheet 11,510
114
SUM NO 1:

Balance as per cash book 7,225
Add:1. cheque issued 879
2. interest credited 15 894
Less:1. cheque deposited 675

2. bank charges 20 (695)
Balance as per pass book 7,424
SUM NO 2:

Add:1. cheque issued 515
2. interest credited 25 540
5,940
Less:1. cheque deposited 240
2. bank charges 30 (270)
115
SUM NO 3:

Add: Incidental charges 250
Cheque issued 885
Direct income 300
Banker wrong credited 250 1,686
6,535
Less: cheque sent 845
Bank charges 100
Cheque sent 200 1,145
SUM NO 4:

Add: cheque issued 675
Interest charged 400 1,075
3,575
Less: cheque paid not cleared 500
Commission charged 25
Dishonored of cheque 50 575
116
SUM NO 5:

Add: - cheque issued 680
Interest collected 75
Wrong credit 225 980
9,780
Less: - cheque deposited not Credited 800
Bank charges 15
Cheque interest but omitted 250
SUM NO 6:
Add : cheques issued 600
Bank interest 350 950
2,679
Less : cheque deposited Not credited 980
Cheque dishonor 150
Bank charges 15 1,145
117
SUM NO 7:

Add: - cheques deposited not cleared 750
Bank charges 35 785
11,285
Less: - bank received directly from 930
Customer (800+130)
Cheque presented 1,200 2,130
SUM NO 8:

Add: - cheque paid into bank 800
Cheque received 100
Bank charges 20 970
7,120
Less: - cheques issued 850
Interest 100 950
118
SUM NO 9:

Add: bank charges 130
Cheque deposited 7,000
Cheque entered as deposited instead of payment 440
(220+220)
Overcast in cash book 1,000
Overcast in cash book 364 8,937
24,134
Less: cheque issued 2,000
Cheque drawn 90 2,090
SUM NO 10:

Add: cheque received from customer 670
(450+220)
Cheque received from A 100
Cheque dishonored 120 890

8,290
Less: pass showed credit 75 (75)
119
SUM NO 11:

Add: cheque deposited not cleared John(5060) + 14,190
balu(9130)
Banker wrongly debit 2,250 16,440
78,900
Less: cheque issued not presented 20,130 (20,130)
(4590+5960+9580)
SUM NO 12:

Add: under cast 200
Cheque received 1,200
Insurance premium 600
Cheque received 1,000
Bill dishonored 5,000 8,000
18,000
Less: cheque deposited 500
Bank charges 20
Cheque issued 500 (1,020)
120
SUM NO 13:

Bank overdraft as per cash book 2,000
Add: - Cheque deposited 560
Bank charges 80 640
2,640
Less: - Cheque issued (1,350)
Interest on investment (905) (2,255)
Balance as per overdraft of pass book 385
SUM NO 14:

Balance as per pass book (overdraft) 6,000
Add: - Interest on overdraft 200
Bank charges 50
Cheques paid 2,500 2,750
8,750
Less: - Cheques issued (1,500)
Interest on govt (1,800) (3,300)
Balance as per cash book overdraft 5450
121
SUM NO 15:

Balance overdraft as per cash book 1,500
Add: - Bank charges 12.50
Cheque paid 625
Interest charge 50 687.5
2187.5
Less: - Cheque issued (1,500)
Dividend collected (450) (1,950)
Balance overdraft as per pass book 237.50
SUM NO 16:

Balance overdraft as per cash book 14,380
Add: - Interest on overdraft 320
Bank charges 140
Cheque deposited 4,420
Bills receivable discounted 1,200
20,460
Less: - Cheque issued (2,540) (2,540)
Balance overdraft as per pass book 17,920
122
SUM NO 17:

Overdraft balance as per cash book 7,600
Add: cheque paid into bank for collection on 28th 2,600
march.
Add: cheque received was entered in bank 400
column of cash book but omitted in pass book.
Add: bank debited on account of collection of 46
charges.
10,646
Less: out of 5 cheques of RS.4000, RS.1600 was (2,400)
only presented.
Less: credited by the bank in respect of dividend (1,000) (3,400)
Overdraft balance as per pass book. 7,246
SUM NO 18:

Overdraft balance as per pass book 12,500
Add: cheque of Rs.4000 was issued out of which (4000-600) = 3,400
only Rs.600 was presented.
3,400
15,900
Less: cheques of Rs.2100 issued and Rs.175 was (2100-175) = 1,925
alone credited in bank
Less: cash debited in bank column in books was 250
omitted to be banked.
Less: debit for interest and bank charges (150+50) = 200 (2,375)
123
SUM NO 19:

Overdraft balance as pass book 12,000
Add: cheque issued for RS.7000 but only (7000-3000) = 4,000
RS.3000 was encashed
Add: paid to debtor and income from 1,000 5,000
investment was debited directly into bank
17,000
Less: cheque of Rs.3500 paid into bank out of (3500-500) = 3,000
which Rs.500 only credited in pass book.
Less: bank charges interest for overdraft. 500 (3,500)
Overdraft balance as per cash book. 13,500
SUM NO 20:

Overdraft balance as per pass book 12,000
Add: cheque issued for RS.7000 but only (7000-3000) =4,000
RS.3000 was encashed
Add: paid to debtor and income from 1,000 5,000
investment was debited directly into bank
17,000
Less: cheque of RS.3500 paid into bank out of (3500-500)=3,000
which RS.500 only credited in pass book.
Less: bank charges interest for overdraft. 500
Less: bank had debited which was not recorded 1,200
in cash book
Less: cash book credit side was cast short 1,000 (5,700)
124
125
SHORT ANSWERS:
SUM NO 1
Amount of Depreciation = Cost - Scrap value / Number of year of expected life

= 30,000 - 5,000 / 5
= 5,000
Rate of Depreciation = Depreciation / Original Cost × 100
= 5,000 / 30,000 × 100
= 16.67 %
SUM NO 2
Machinery A/c
1ST YEAR To Bank A/c 40,000 1ST YEAR By Depreciation A/c 8,000
By Balance c/d 32,000
40,000 40,000
ND
2 YEAR To Balance b/d 32,000 2ND YEAR By Depreciation A/c 8,000
32,000 32,000
RD
3 YEAR To Balance b/d 24,000 3 RD YEAR By Depreciation A/c 8,000
24,000 24,000
126
Working Notes:
Amount of Deprecation = Original cost – Residual value / Estimate life of asset
= 40,000 / 5
= 8,000
Rate of Depreciation = Amount of Depreciation / Original Cost x 100
= 8,000 / 40,000 x 100
= 20 %
SUM NO 3
Working Notes:
Depreciation = Cost - Estimated scrap value / No. of years of life expected
Furniture = 1,46,400 – 960 / 6
= 24,240
Plant = 3,05,600 – 6,560 / 8
= 37,380
127
SUM NO 4
Balance Sheet As On 31.12.2002
Liabilities Amount Date Assets Amount Amount
31.12.2002 Asset 16,000
(-) Depreciation 2,000 14,000
14,000
Balance Sheet As On 31.12.2002

Liabilities Amount Date Assets Amount Amount
31.12.2002 Asset 24,000
(-) Depreciation 10,000 14,000
14,000
SUM NO 5
Machinery A/c
1.7.1995 To Bank A/c 1,00,000 31.12.1995 By Depreciation 5,000
A/c
By Balance C/D 95,000
1,00,000 1,00,000
1.1.1996 To Balance b/d 95,000 31.12.1996 By Depreciation 9,500
A/c
95,000 95,000
1.1.1997 To Balance b/d 85,500 31.12.1997 By Depreciation 8,550
A/c
85,500 85,500
1.1.1998 To Balance b/d 76,950
128
SUM NO 6
Date Particulars Straight Line Written Down Value

Method Method
1-1-99 Purchase of Asset 50,000 50,000
31-12-99 Depreciation
SLM: 50000*10% 5,000
WDV:50000*10% 5,000
1-1-2000 Value of Asset 45,000 45,000
SLM:50000*10% 5,000
WDV:45000*10% 4,500
1-1-2001 Value of Asset 40,000 40,500
SLM:50000*10% 5,000
WDV:40500*10% 4,050
1-1-2002 Value of Asset 35,000 36,450
129
SUM NO 7
Diminishing Balance Method
PARTICULARS AMOUNT
Purchase of Asset 1,00,000
Depreciation: (1st year) 10,000

100000*10%
Value of Asset at end of 1st year 90,000
Depreciation:(2nd year) 9,000

90000*10%
Value of Asset at the end of 2nd year 81,000
SUM NO 8
Working Note:
1-1-91 2,00,000
31-12-91 (20,000)
_______
Book value 1,80,000
Sale value (1,21,000)
________
Loss 59,000
________
130
MACHINERY A/C
1/1/91 To Bank A/c 4,00,000 31/12/91 By Depreciation A/c 40,000
By Bank A/c 1,21,000
By Profit and Loss A/c 59,000
By Balance c/d 1,80,000
4,00,000 4,00,000
1/1/92 To Balance 1,80,000 31/12/92 By Depreciation A/c 18,000
b/d
By Balance c/d 1,62,000
1,80,000 1,80,000
1/1/93 To Balance 1,62,000
b/d
131
SUM NO 9
1-1-90 80,000
31-12-90 80,000 x 5%. (4,000)
--------
1-1-91 76,000
31-12-91 (4,000)
--------
1-1-92 72,000
1-7-92 4,000 x 6/12 (2,000)
--------
Book value 70,000
--------
Book value 70,000
Sale value (50,000
---------
Loss 20,000
---------
132
SUM NO 10
Machinery A/c
1.1.95 To Bank A/c 3,00,000 31.3.95 By Depreciation A/c 7,500
By Balance C/D 2,92,500
3,00,000 3,00,000
1.4.95 To Balance B/D 2,92,500 31.3.96 By Depreciation A/c 29,250
2,92,500 2,92,500
1.4.96 To Balance B/D 2,63,250 31.12.96 By Depreciation A/c 19,744
By Bank A/c 1,56,000
By Profit and Loss 87,506
A/c
2,63,250 2,63,250
SUM NO 11
WORKING NOTES:
1.1.95 --- 75,000

(1875)
1.4.95 --- 73,125
(7312.5)
1.4.96 --- 65,812.5
(6581.2)
1.4.97 --- 59,231.3
(1480.7)
Calculation Of Trade In Allowance
75,000 - 40,000 = 35,000
133
Machinery A/c
1.1.95 To Bank A/c 75,000 31.3.95 By Depreciation 1,875
A/c
75,000 75,000
1.4.95 To Balance B/D 73,125 31.3.96 By Depreciation 7,312.5
a/c
By Balance c/d 65,812.5
73,125 73,125
1.4.96 To balance b/d 65,812.5 31.3.97 By depreciation 6,581.2
A/c
By balance c/d 59,231.3
65,812.5 65,812.5
1.4.97 To balance b/d 59,231.3 1.7.97 By depreciation 1,480.7
A/c (m1)
By Loss on sale 22,712.5
of machinery
A/c
31.3.98 By depreciation 3,788.1
A/c (m2)
1.7.97 To bank A/c 40,000 31.3.98 By balance c/d 71,250
99,231.3 99,231.3
134
SUM NO 12
Working Notes :
TOTAL DEPRECIATION = 15,000 + 13,500 + 6,075
= 34,575
ADD: SCRAP SOLD+INSURANCE COMPANY
= 34,575 + 1,600 + 62,000
= 98,175 – TOTAL DEPRECIATION
PROFIT/LOSS = ORIGINAL COST – TOTAL DEPRECIATION
= 1,50,000 – 98,175
NET LOSS = 51,825

135
Machinery A/c
1/1/95 To Bank A/c 1,50,000 1/12/95 By Depreciation 15,000
A/c 1,35,000
By Bal c/d
1,50,000 1,50,000
1/1/96 To Bal b/d 1,35,000 1/12/96 By Depreciation 13,500
A/c 1,21,500
By Bal c/d
1,35,000 1,35,000
1/1/97 To Bal b/d 1,21,500 1/7/97 By Depreciation 6,075
A/c 1,600
By Bank A/c 62,000
By Insurance 51,825
company
By Profit and Loss
A/c
1,21,500 1,21,500
136
SUM NO 13
Straight Line Depreciation Method = Cost Of An Asset - Residual Value / Useful
Life Of An Asset.
Cost = 62,000
Shipping & Forwarding Charges = 4,000
Import Duty = 6,000
Carriage Inward = 1,700
Repairs Charges = 2,300
Installation Charges = 500
Brokerage = 600
Iron Pad = 200
Total = 77,300
DEPRECIATION = 77,300 – 2,300 / 20
= 3,750
137
SUM NO 1
Amount of Depreciation = Cost – Scrap Value /Number of Years of Expected Life
= 14,400 - 3,400 / 10
= 1,100
Rate of Depreciation = Depreciation / Original Cost * 100
= 1,100 / 14,400 * 100
= 7.64 %
Machinery A/c
1 JAN To Bank A/c 14,400 31 DEC By Depreciation A/c 1,100
1992 1992
14,400 14,400
1 JAN To Balance b/d 13,300 31 DEC By Depreciation A/c 1,100
1993 1993
13,300 13,300
1 JAN To Balance b/d 12,200 31 DEC By Depreciation 1,100
1994 1994 A/c
12,200 12,200
138
SUM NO 2
Amount of Depreciation = Cost – Scrap Value / Number of Years
= 25,000 – 5,000 / 10
=20,000 / 10
= 2,000
Rate of Depreciation = Depreciation / Original cost * 100
= 2,000/25,000 * 100
=8%
Asset A/c
To Bank a/c 25,000 By Depreciation a/c 2,000
25,000 25,000
To Balance b/d 23,000 By Depreciation a/c 2,000
23,000 23,000
To Balance b/d 21,000 By Depreciation a/c 2,000
21,000 21,000
139
SUM NO 3
Plant A/c
1/1/90 To Bank a/c 35,000 31/12/90 By Depreciation a/c 3,500
35,000 35,000
1/1/91 To Balance b/d 31,500 31/12/91 By Depreciation a/c 3,500
31,500 31,500
28,000 28,000
24,500 24,500
21,000 21,000
17,500 17,500
1/1/96 To Balance b/d 14,000 1/1/96 By Bank a/c 15,000
To P&L a/c 1,000
15,000 15,000
140
SUM NO 4
Plant A/c
1/4/90 To Bank a/c 11,500 31/12/90 By Depreciation a/c 862.50
11,500 11,500
1/1/91 To Balance b/d 10,637.50 31/12/91 By Depreciation a/c 1,150
10,637.50 10,637.50
1/1/92 To Balance b/d 9,487.50 31/12/92 By Depreciation a/c 1,150
9487.50 9487.50
1/1/93 To Balance b/d 8,337.50 30/6/93 By Depreciation a/c 575
By Bank a/c 6,500
By P&L a/c 1,262.50
8,337.50 8,337.50
WORKING NOTES:
Jan-Dec - 12 Months
April- Dec – 9 months
Jan– June – 6 months
11,500 X 10/100 X 9/12 = 862.50
11,500 X 10/100 = 1,150 One Year
11,500 X 10/100 X 6/12 = 575 Half A Year
11,500 – 862.50 (1990) – 1,150 (1991) – 1,150 (1992) – 575 (Up To 30th June)
= 7,762.50 – 6,500 (Sale Value)
= 1,262.50 (Loss)
141
SUM NO 5
Machinery A/c
1/1/96 To Bank A/c 2,50,000 31/12/96 By Depreciation 25,000
A/c
2,50,000 2,50,000
1/1/97 To Balance B/D 2,25,000 31/12/97 By Depreciation 27,917
A/c
1/6/97 To Bank A/c 50,000 By Balance C/D 2,47,083
2,75,000 2,75,000
1/1/98 To Balance B/D 2,47,083 31/12/98 By Depreciation 32,667
A/c
1/3/98 To Bank A/c 32,000 By Balance C/D 2,46,416
2,79,083 2,79,083
1/1/99 To Balance B/D 2,46,416 30/6/99 By Bank A/c 30,000
30/6/99 To P&L A/c 4,000 30/6/99 By Depreciation 2,000
A/c
31/12/99 By Depreciation 29,200
A/c
2,50,416 2,50,416
142
Working Notes:
WN1Calculation of Profit or Loss on Sale of M1
Particulars Amount
Value of sold M1 as on 1.1.1996 40,000
Less: Depreciation (for 1996) (4,000)
Value as on 01.01.1997 36,000
Value as on 01.01.1998 32,000
Value as on 01.01.1999 28,000
Less: Depreciation (for 6 months) (2,000)
Value as on 30.06.1999 26,000
Less: Sale Value (30,000)
Profit on Sale 4,000
WN2Calculation of Depreciation on remaining M1

Value of Remaining M1 (Rs 2,50,000 – Rs 40,000) = Rs 2,10,000
Depreciation (2,10,000 × 10%) = Rs 21,000
143
SUM NO 6.
Machinery A/c
Date Particulars Amount Amount Date Particulars Amount Amount
1.4.86 To Bank A/C 31.12.86 By
Machinery I 30,000 Depreciation
A/C 2750
Machinery 2,250
I(9M)
Machinery II 500
1.10.86 To Bank A/C 31.12.86 By Balance C/D
Machinery II 20,000 Machinery I 27,750
Machinery II 19,500 47,250
50,000 50,000
1.1.87 To Balance 31.12.87 By
B/D Depreciation
Machinery I 27,750 47,250 Machinery I 3,000
Machinery II 19,500 Machinery II 2,000 5,500
Machinery III 500

Machinery III 10,000 Machinery I 24,750
Machinery II 17,500
Machinery III 9,500 51,750
57,250 57,250
1.1.88 To Balance 1.1.88 By Bank A/C
B/D Machinery I
Machinery I 24,750 (1/3rd portion) 3,000
Machinery III 9,500
1.1.88 By Profit and 5,250
Loss A/C
31.12.88 By
Depreciation
A/C
Machinery I (on 2,000
2/3rd Portion 5,000
Machinery II 2,000
Machinery III 1,000
144
31.12.88 By Balance C/D
Machinery I 14,500
(on2/3rd
portion 15,500
Machinery III
51,750 51,750
Working Notes:
Calculation of Depreciation
Machine I = 30,000*10/100 = Rs 3,000 p.a
And depreciation of 2/3rd portion = 3,000*2/3 = Rs 2,000

Machine II = 20,000*10/100 = Rs 2,000 p.a
Machine III = 10,000*10/100 = Rs 1,000 p.a

Calculations of profit and loss on sale of 1/3rd portion of machine I
Particulars Amount
Book value of 1/3rd portion of Machine I on 1.1.88 (24,750*1/3) 8,250
Less: Sale Value 3,000
Loss on sale 5,250

145
SUM NO 7
Machinery A/c
Date Particulars Amount Date Particulars Amount Amount
1.1.90 To Balance b/d 1,80,000 31.12.90 By (18,000 +
Depreciation 1,000) 19,000
A/c
30.6.90 To Bank A/c 20,000 31.12.90 By Bank A/c 4,200
30.12.90 To Profit and loss 600 31.12.90 By Balance c/d 1,77,400
A/c
2,00,600 2,00,600
1.1.91 To Balance b/d 1,77,400 31.12.91 By (17,600 +
Depreciation 2,000) 19,600
A/c
31.12.91 By Bank A/c 8,000
31.12.91 By Profit and 1,600
Loss A/c
31.12.91 By Balance 1,48,200
c/d
1,77,400 1,77,400
1.1.92 To Balance b/d 1,48,200
146
Working notes:
Calculation of Profit/Loss on machinery sold on 31.12.90
Machine on 1.1.90 = 4,000
Depreciation on 31.12.90 = 400
Current value = 3,600
Sale price = Rs 4,200

Therefore, Profit = 4,200 – 3,600 = Rs 600
Calculation of Profit/Loss on machinery sold on 31.12.91

Machine on 1.1.90 = 12,000
Depreciation on 31.12.90 = 1,200
Depreciation on 31.12.91 = 1,200
Current value = 9,600
Sale price = Rs. 8,000

Therefore, Loss = 9,600 – 8,000 = Rs. 1,600
147
SUM NO 8
Machinery A/c
1.7.78 To Bank A/C (20,000 + 31.3.79 By

Machinery I 3000) 23,000 Depreciation
A/C 2,025
Machinery I 1,725
(9M)
Machinery II 300
(3M)
35,000 35,000
1.4.79 To Balance 31.3.80 By
B/D Depreciation
Machinery I 21,275 32,975 A/C 3,500
Machinery II 1,200
31.3.80 By Balance C/D
Machinery I 18,975
32,975 32,975
1.4.80 To Balance 30.6.80 By Bank A/C
B/D Machinery II 8,000
Machinery I 18,975 29,475
Machinery II 10,500
1.7.80 To Bank A/C By
Machinery III 15,000 Depreciation 300
A/C
Machinery II
(3M)
148
By Profit and 2,200
Loss A/C
31.12.80 By
Depreciation
A/C
Machinery I 2,300 3,425
Machinery III 1,125
(On 15,000 for
9M)
By Balance C/D
Machinery I 16,675
Machinery III 13,875 30,550
44,475 44,475
Working notes:
Calculation of depreciation
Machine I = 23,000*10/100 = Rs 2,300 p.a.
Machine II = 12,000*10/100 = Rs 1,200 p.a.
Calculation of profit on loss on sale of Machine II

Particulars Amount
Book value of machine II on 1.4.80 10,500
Less: Depreciation for 3 months 300
Book value on 30.6.80 10,200
Less: Sale 8,000
Loss on Sale 2,200
149
SUM NO 9
Machinery A/c
1/1/1991 To Bank A/c 40,000 31/12/1991 By Depreciation A/c 4,000
31/12/1991 By Balance C/D 36,000
40,000 40,000
1/1/1992 To Balance 36,000 31/12/1992 By Depreciation A/c 4,500
B/D (4000+500)
1/7/1992 To Bank A/c 10,000 31/12/1992 By Balance C/D 41,500
(M-II)
46,000 46,000
1/1/1993 To Balance 41,500 1/7/1993 By Bank A/c 28,000
B/D
1/7/1993 To Bank A/c 25,000 By P&L A/C (Loss) 2,000
(M-III)
By Depreciation A/c 2,000
31/12/1993 By Depreciation A/c 1,000
(Mac-II)
(Mac-III)
31/12/1993 By Balance C/D 32,250
66,500 66,500
1/1/1994 To Balance 32,250 1/7/1994 By Bank A/c 2,000
B/D
By Depreciation A/c 500
By P&L A/C (Loss) 6,000
(Mac-III)
32,250 32,250
1/1/1995 To Balance 21,250
B/D
150
WORKING NOTES:
M1: - Value = 40,000, sold for =28,000

40,000 – 10,000 = 30,000 (current value), dep = 4,000
Current value – sold value = 30,000 – 28,000 = 2,000 (loss)
M2: – Value = 10,000, sold for = 2,000

10,000 -500 -1,000 -500 = 8,000 (current value), depreciation = 500,1000
Current value – sold value = 8,000 – 2,000 = 6,000 (loss)
SUM NO 10
Plant A/c
1/1/1991 To Bank A/c 10,000 31/12/1991 By Balance C/D 15,000
1/7/1991 To Bank A/c 5,000
15,000 15,000
1/1/1992 To Balance B/D 15,000 1/7/1992 By Bank A/c 4,000
By P&L A/c (Loss) 4,500
By Provision For 1,500
Depreciation A/c
31/12/1992 By Balance C/D 5,000
15,000 15,000
1/1/1993 To Balance B/D 5,000 1/7/1993 By Bank A/c 4,200
1/7/1993 To Bank A/c 12,000 By Provision For 1,000
Depreciation A/c
To P&L A/c 200 31/12/1993 By Balance C/D 12,000

(Profit)
17,200 17,200
151
Provision For Depreciation A/c
31/12/91 To Balance C/D 1,250 31/12/91 By Depreciation 1,250
A/c
1,250 1,250
1/7/92 To Plant A/c 1,500 1/1/92 By Balance B/D 1,250
31/12/92 To Balance C/D 750 1/7/92 By Depreciation 500
A/c (Jan–June-I
500)
31/12/92 By Depreciation 500
A/c M II
2,250 2,250
1/7/93 To Plant A/c 1,000 1/1/93 By Balance B/D 750
1/7/93 By Depreciation 250
A/c
31/12/93 To Balance C/D 600 31/12/93 By Depreciation 600
A/c (M III
12,000*10%*6/12)
1,600 1,600
SUM NO 11
Machinery Disposal A/c
1/1/1988 To Machinery 30,000 1/1/1988 By Bank A/c 12,000
A/c
To P&L A/C 4,500 By Provision 22,500
(Profit) For
Depreciation
A/c
34,500 34,500
152
SUM NO 12
Machinery Account
1/1/80 To Balance B/d 40,000 1/1/80 By Bank A/c 4,350
Depreciation A/c
By Profit And 450
Loss
(Loss On Sale)
31/12/80 By Balance C/D 32,000
40,000 40,000

To Machinery A/c 3,200 By Balance B/D 18,000
To Balance C/D 18,000 By Profit And Loss A/c 3,200
21,200 21,200
8,000 - 3,200 - 4,350 = 450 Loss

153
SUM NO 13
(1)
Machinery Account
1.1.1989 To Bank A/c 90,000 31.12.1989 By Balance C/D 90,000
90,000 90,000
1.1.1990 To Balance B/D 90,000 1.1.90 By Machinery 15,000
Disposal A/c
1.7.1990 To Bank A/c 28,000 31.12.90 By Balance C/D 1,03,000
1,18,000 1,18,000
1.1.1991 To Balance B/D 1,03,000 By Asset 15,000
Disposal A/c
1,03,000 1,03,000
(3)
31.12.1989 To Balance C/D 9,000 31.12.1989 By Depreciation 9,000
A/C
9,000 9,000
1.1.1990 To Asset 1,500 1.1.90 By Balance B/D 9,000
Disposal A/C
31.12.1990 To Balance C/D 16,400 31.12.90 By 8,900
Depreciation
(7,500+1,400)
17,900 17,900
1.1.1991 To Machinery 3,000 1.1.1991 By Balance B/D 16,400
Disposal A/C
To Balance C/D 22,200 By 8,800
Depreciation
(6,000+2800)
25,200 25,200
154
WORKING NOTES:
90,000 - 30,000 = 60,000 x 10% = 6,000
28,000X10%=2,800
(2)
1.1.1990 To Machinery A/c 15,000 1.1.1990 By Bank A/c 12,500

Depreciation A/c
By Profit And 1,000
Loss A/c
15,000 15,000
To Profit And 500 By Provision For 3,000
Loss Account A/c Depreciation A/c
15,500 15,500
Working Notes:
15,000-1500=13,500-12,500=1000 Loss
15,000-3,000=12,000 =12,500=500 Profit

155
SUM NO 14
Machinery Account
1.4.1983 To Bank A/c 20,000 31.12.198 By Depreciation 3,000
3 A/c
31.12.1983 To Bank A/c 10,000 By Balance C/D 27,000
30,000 30,000
1.1.1984 To Balance B/D 27,000 31.12.1984 By Depreciation 6,000
A/c
(4,000+2,000)
27,000 27,000
1.1.1985 To Balance B/D 21,000 1.10.1985 By Insurance 8,000
Company A/C
1.10.85 To Bank A/c 30,000 By Profit And Loss 2,000
Account
By Depreciation 3,000
A/c
31.12.1985 By Depreciation 3,500
A/c(2,000+1,500)
51,000 51,000
1.4.1986 To Balance B/D 34,500
Working notes:
20,000-3,000=17,000-4,000=13,000
13,000-3,000=10,000-8,000=2,000
156
SUM NO 15
Track A/c
1.1.85 To Bank A/c 20,000 31.12.85 By Depreciation A/c 5,800
(4000 +1800)
38,000 38,000
1.1.86 To Balance 32,200 31.12.86 By Depreciation A/c 7,600
B/D (4000 + 3600)
31.12.86 By Balance C/D 24,600
32,200 32,200
B/D (4000 + 3600+2250)
1.7.87 To Bank A/c 10,500
47,100 47,100
B/D
By Bank A/c 2,000
By P & L A/c 4,000
31.12.88 By Depreciation A/c 8,100
31.12.88 By Balance C/D 21,150

37,250 37,250
1.189 To Balance B/D 31,150 1.1.89 By Bank A/c 8,400
31.12.89 By Depreciation A/c 7,700

31,150 31,150
157
SUM NO 16
Formula
R = 1 - 𝑛√𝑅𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑉𝑎𝑙𝑢𝑒
-------------------------
Acquisition Cost
R = 1 - 4√16200
------------
51200
R = 1 - √0.5625
= 1 – 0.75
= 0.25
Rate = 0.25 x 100
= 25 %
SUM NO 17
Machinery A/c
1st year To Bank A/c 20,000 1st year By Depreciation A/c 2,000
20,000 20,000
2nd year To Balance B/D 18,000 2nd year By Depreciation A/c 1,800
18,000 18,000
SUM NO 18
158
Machinery A/c

st To Bank A/c st
40,000 1 Year By Depreciation A/c 4,000
1 Year
40,000 40,000
nd To Balance 36,000 2nd Year By Depreciation A/c 3,600
2 Year
B/D
36,000 36,000
3rd Year To Balance 32,400 3rd Year By Depreciation A/c 3,240
B/D
32,400 32,400
WORKING NOTES:
1ST Year Depreciation = 10% = 40,000 X 10/100 = 4,000

2ND Year Depreciation = 36,000 X 10/100 = 3,600
3RD Year Depreciation = 32,400 X 10/100 = 3,240
Total Amount of Purchase= Purchase Amt + Shipping and Forwarding +
Import Duty + Installation Expenses
= 20,000+4,000+14,000+2,000 = 40,000
159
SUM NO 19
Car A/c
Date Particulars Amount Amount Date Particulars Amount
1.7.80 To Bank 18,000 31.12.80 By Depreciation 1,000
A/C Add: A/C
Repairs 2,000 20,000
20,000 20,000
1.1.81 To Balance B/D 19,000 31.12.81 By Depreciation A/c 1,900

19,000 19,000

17,100 17,100
1.1.83 To Balance 15,390 30.6.83 By Depreciation A/c 769.50
By Bank A/c 13,600

By P & L A/c (Loss) 1,020.50
15,390 15,390
WORKING NOTES:
31.12.80 : 1ST YEAR = 20,000 x 10/100 x 6/12 = 1,000
31.12.81 : 2ND YEAR = 19,000 x 10/100 = 1,900
31.12.82 : 3RD YEAR = 17,100 X 10/100 = 1,710
31.12.83: 4TH YEAR = 15,390 X 10/100 X 6/12 = 769.50
Account Chargeable to P & L A/C For the Year 1983
=Loss On Sale of Second-Hand Car + Depreciation
= 1,020.50 + 769.50 = 1,790

160
SUM NO 20
Plant A/c
1.1.85 To Bank A/C 35,000 31.12.85 By Depreciation A/C 3,500
Balance C/D 31,500
35,000 35,000
1.1.86 To Balance B/D 31,500 31.12.86 By Depreciation A/C 3,150

31,500 31,500
1.1.87 To Balance B/D 28,350 31.12.87 By Depreciation A/C 2,835
28,350 28,350
1.1.88 To Balance B/D 25,515 31.12.88 By Depreciation A/C 2551.50
By Balance C/D 22,963.50
25,515 25,515
1.1.89 To Balance B/D 22,963.50 31.12.89 By Depreciation A/C 2,296.35

22,963.50 22,963.50
1.1.90 To Balance B/D 20,667.15 31.12.90 By Depreciation A/C 2,066.715
By Bank A/C 15,000
By P&L A/C 3,600.43
20,667.15 20,667.15
161
SUM NO 21
Machinery A/c
1.1.86 To Bank A/C 40,000 31.12.86 By 5,000
(Machinery 1) Depreciation
30.6.86 To Bank A/C 20,000 31.12.86 By Balance C/D 55,000
(Machinery 2)
60,000 60,000
1.1.87 To Balance B/D 55,000 30.6.87 By 950
Depreciation
(Machinery 2)
30.6.87 By Bank 15,000
30.6.87 By Profit Or 3,050
Loss (Loss)
31.12.87 By 3,600
Depreciation
(Machinery 1)
31.12.87 By Balance C/D 32,400
55,000 55,000
1.1.88 To Balance B/D 32,400
WORKING NOTES:
20,000 x 10/100 x 6/12 = 1,000
20,000 - 1,000 = 19,000
19,000 x 6/12 x 10/100 = 950
19,000 – 950 = 18,050 - 15,000 = 3,050 (LOSS)
I MACHINERY
40,000 - 4,000 = 36,000
162
SUM NO 22
WORKING NOTES :
12,000 x 15/100 = 1,800
10,200 x 15/100 = 1530
2,000 x 15/100 x 6/12 = 150
2,000 – 150 = 1850 (1.1.94)
1850 x 15/100 = 277.5 (31.12.94)
1850 - 277.5 = 1572.5 (1.1.95)
12,000 – 500 = 11,500 (1.1.92)
11,500 x 15/100 = 1725 (31.12.92)
11,500 – 1725 = 9775 (1.1.93)
9775 x 15/100 = 1466.25 (31.12.93)
9775 - 1466.25 = 8308.75
500 x 15/100 = 75 (31.12.92)
500-75 = 425 (1.1.93)
425 x 15/100 = 63.75 (31.12.93)
425 - 63.75 = 361.25 (1.1.94)
800 x 15/100 x 9/12 = 90 (31.12.94)
800 – 90 = 710 (1.1.95)
361.25 x 15/100 x 3/12 = 13.546 (31.3.94)
361.25 -13.546 = 347.7 (Book Value as on 31.3.94)
Sale Value =50
Loss On Sale 347.7 – 50 = 297.7
163
Machinery A/c
1.1.92 To Bank A/C 12,000 31.12.92 By Depreciation A/c 1,800
31.12.92 By Balance C/D 10,200
12,000 12,000
1.1.93 To Balance B/D 31.12.93 By Depreciation A/c (1 1,530
10,200
Machinery)
30.6.93 To Bank A/C 31.12.93 By Depreciation A/C 150
2,000
(2machinery)
31.12.93 By Balance C/D 10,520
12,200 12,200
1.1.94 To Balance B/D 10,520 31.3.94 By Depreciation 13.54
31.3.94 To Bank 31.3.94 By Bank 50
800
(3 Machinery)
31.3.1994 By Profit And Loss 297.70
(Loss)
31.12.94 By Depreciation 1,613.81
(1,2,3 Machinery)
11,320 11,320
164
SUM NO 23
Machinery A/c
1.1.94 To Bank A/C 80,000 31.12.94 By Depreciation A/c 8,000
31.12.94 By Balance C/D 72,000
80,000 80,000
1.1.95 To Balance B/D 72,000 31.12.95 By Depreciation (1) 7,200
1.1.95 To Bank 40,000 31.12.95 By Depreciation (2) 4,000
1,12,000 1,12,000
1.1.96 To Balance B/D 1,12,000 31.3.96 By Depreciation (1) 270
31.3.96 To Profit and 470 31.3.96 By Bank A/C 11,000
Loss (Sale Of 1)
30.6.96 To Profit and Loss 2,076 30.6.96 By Depreciation (1) 1,296
(Sale Of 2)
1.10.96 To Bank (3) 20,000 30.6.96 By Bank (Sale) 26,700
31.12.96 By Depreciation (1) 3,888
31.12.96 By Depreciation (2) 2,520
31.12.96 By Depreciation (3) 500
31.12.96 By Balance C/D 77,172
1,23,346 1,23,346
165
WORKING NOTES:
80,000 x 10/100 = 8,000 (1.1.94)
32,000 x 10/100 = 3,200 (31.12.94)
80,000 – 8,000 = 72,000
32,000 – 3,200 = 28,800 (1.1.95)
72,000 x 10/100 = 7,200 (31.12.95)
28,800 x 10/100 = 2,880 (31.12.95)
40,000 x 10/100 = 4,000 (31.12.95)
48,000 x 10/100 = 4800 (31.12.94) 28,000 – 2,880 = 25,920 (1.1.96)
48,000 – 4,800 = 43,200 (1.1.95) 25,920 x 10/100 x 6/12 = 1,296 (30.6.96)

43,200 x 10/100 = 4,320 (31.12.95) 25,920 – 1,296 = 24,624 (Bought Value)
43,200 – 4,320 = 38,880 (1.1.96)
26,700 (Sold Value)
38,880 x 10/100 = 3,888 (31.12.96)
26,700 – 24,624 = 2,076 (Profit)
38,880 – 3,888 = 34,992 (Balance)
20,000x10/100x3/12=500 (31.12.96)
12,000 x 10/100 = 1200 (31.12.95)
20,000 – 500 = 19,500 (Balance)
12,000 – 1,200 = 10,800 (1.1.96)
10,800 x 10/100 x 3/12 = 270 (31.3.96) 28,000 x 10/100 = 2,800 (31.12.95)
10,800 – 270 = 10,530 28,000 – 2,800 = 25,200 (1.1.96)

Sale Value = 11,000 (31.12.96) 25,200 x 10/100 = 2,520 (31.12.96)
11,000 – 10,530 = 470 (Profit)
25,200 – 2,520 = 22,680 (Profit)
Balance 1: 34,992
Balance 2: 22,680
Balance 3: 19,500
Total: 77,172
166
SUM NO 24
Plant Account
1.1.1992 To Bank A/c 4,000 31.12.1992 By Depreciation 400
a/c
31.12.1992 By Balance C/D 3,600
4,000 4,000
1.1.1993 To Balance B/D 3,600 31.12.1993 By Depreciation 360
31.12.1993 By Balance C/D 3,240
3,600 3,600
1.1.1994 To Balance B/D 3,240 1.7.1994 By Depreciation 162
1.7.1994 To Bank 2,200 By Profit Loss Ac 2,278
(Loss)
1.7.1994 To Trade In 800 By Trade 800
Allowance Allowances
(Contra)
31.12.1994 By Depreciation 150
31.12.1994 By Balance C/D 2,850
6,240 6,240
1.1.1995 To Balance B/D 2,850
WORKING NOTES:
31.12.1992 : 4000 x 10/100 = 400
31.12.993 : 3600 x 10/100 = 360
01.07.1994 : 3000 – 800 = 2200
Depreciation : 3240 x 10/00 x 6/12 = 162
Profit And Loss Acc: 3240-(162+800)

3240-962 = 2278 (Loss on exchange Of Plant)
31.12.94
3000 x 10/100 x 6/12 = 150
167
SUM NO 25
Machinery A/c
01.04.80 To Balance B/D 2,50,000 31.12.80 By Machinery Disposal 15,000
31.12.80 To Bank A/C 20,000 By Machinery Disposal 12,000
31.12.80 To Bank A/C 15,000 31.3.81 By Balance C/D 2,58,000
2,85,000 2,85,000

31.2.80 To Machinery 4,323 1.04.80 By Balance B/D 1,05,000
Disposal 1
To Machinery 3,459 31.3.81 By Depreciation 12,422
Disposal 2 (Remaining
Machinery)
31.03.81 To Balance C/D 1,12,073 31.3.81 By Depreciation 875
Of New
Machine
Purchased
31.3.81 By Depreciation 1,558
(Sold)
1,19,855 1,19,855
Working Notes : 1
Depreciation Of New Machine
31.12.80
20,000 x 10/100 x 3/12 = 500
15000 x 10/100 x 3/12 = 375

875
By Depreciation Sold
865.7 + 692.5 = 1558.2
168
31.12.80 By Provision for 4,323

Depreciation a/c
By Profit 2,677
And Loss
A/c(Loss)
31.12.80 To Machinery A/c 12,000 31.12.80 By Provision For 3,459
Depreciation a/c
31.12.80 By Profit And Loss 5,541
A/c (Loss)
31.12.80 By Balance C/D 3,000
27,000 27,000
WORKING NOTES: 2
1.10.1977 15000
(15000 x 10/100 x 6/12) 750

1.4.1978 14250
(14250 x 10/100) 1425 (31.3.79)
1.4.79 12825
(12825 x 10/100) 1282.5 (31.3.80)
1.4.80 11542.5
(11542.5 x 10/100 x 9/12) 865.5 = 10,677
(Selling Cost) = 8000

10677 – 8000 = 2677 (Loss)
Total Depreciation
750+1425+1282.5+865.5 = 4323
169
WORKING NOTES:3
1.10.1977 12,000
(31.3.1978)
(12,000 x 10/100 x 6 /12) 600
--------------
11400
31.3.79
11400 x 10/100 1140
(31.3.1980) 10260
(10260 x 10/100) 1026
1.4.1980 9234
31.12.1980
(9234 x 10/100 x 9/12) 692.55
8541
(Selling Cost) 3000

LOSS 5541
Total Depreciation
600 +1140+1026+692.55 = 3458.55
170
SUM NO 26
Machinery A/c
1.1.82 To Bank A/c 30,000 31.12.82 By Depreciation A/c 3,000
31.12.82 By Balance C/D 27,000

30,000 30,000
31.12.83 By Balance C/D 24,000

27,000 27,000
31.12.84 By Balance C/D 20,400

24,000 24,000
31.12.85 By Balance C/D 17,340

20,400 20,400
1.1.86 To Balance B/D 17,340 1.1.86 By Bank (Sold) A/c 15,000
By Profit And Loss 2,340

A/c (Loss)
17,340 17,340
171
WORKING NOTES:
1.1.1982 Purchase 30,000
31.12.1982 Depreciation
(30000*10/100) (SLM) 3,000
1.1.1983 27,000
(Written Down)
31.12.1983 Depreciation 3,000
(3000 SLM)
1.184 (Written Down) 24,000
31.12.84
Depreciation 3,600
(24,000*15/100)
1.1.85 20,400
31.12.85 3,060
Depreciation
(20400*15/100)
1.1.86 17,340
(Written Down Value)
Sold 15,000
(Loss On Sale) 2,340
SUM NO 27
172
Machinery A/c
Dr. Cr.
1/1/90 To Bank A/c 90,000 31/12/90 By DepreciationA/c 9,000
By Bal. c/d 81,000
90,000 90,000
1/1/91 To Bal. b/d 81,000 31/12/91 By DepreciationA/c 13,500
(9,000 + 4,500)
1/4/91 To Bank 60,000 31/12/91 By Bal. c/d 1,27,500
1,41,000 1,41,000
1/1/92 To Bal. b/d 1,27,500 1/7/92 By Bank A/c 60,000
By DepreciationA/c 4,500
By P&L A/c(Loss) 7,500
31/12/92 By DepreciationA/c 8,325
By Bal. c/d 47,175
1,27,500 1,27,500
Working notes:
1. Bank A/c = 84,000 + 6,000 = 90,000
2. 90,000 x 10% = 9,000
3. 81,000 – 9000 = 72,000
4. 72,000 – (90,000 x 10% x 6/12)
= 72,000 – 4,500 = 67,500
5. 60,000- (60,000 x 10% x 9/12)
= 60,000 – 4,500 = 55,500
6. 55,500 x 15 % = 8,325
7. Book Value: 67,500
Sale Value: (60,000)
Loss: 7,500
173
SUM NO 28
Machinery A/c
Dr. Cr.
(WDV)
By Bal. c/d 45,000
50,000 50,000
(WDV)
By Bal. c/d 40,500
45,000 45,000
(SLM)
By P&L A/c(Loss) 500
By Bal. c/d 35,000

40,500 40,500
Working Notes:
WDV 10%, Machinery – 40,500 On 1/4/99
1984. 40,500 x 100/90 = 45,000

2. 45,000 x 100/ 90 = 50,000
3. 1997-98 (WDV):50,000 – 5,000 = 45,000
4. 1998-99 (WDV):45,000 – 4,500 = 40, 500
5. Year SLM WDV
1997-98 5,000 5,000
1998-99 5,000 4,500
(50,000 X 10%)
Total = 10,000 9,500
6. 10,000 – 9,500 = 500

174
SUM NO 29
Machinery A/c
Dr. Cr.

1/7/84 To Bank A/c 60,000 31/ 12/84 By Depreciation 3,000
A/c (WDV)
By Bal. c/d 57,000
60,000 60,000
1/1/85 To Bal. b/d 57,000 31/12/85 By Depreciation 5,700
A/c (WDV)
By Bal. c/d 51,300
57,000 57,000
1/1/86 To Bal. b/d 51,300 31/12/86 By Depreciation 6,000
A/c (SLM)
By P&L A/c 300
(Loss)
By Bal. c/d 45,000
51,300 51,300
Working Notes:
(WDV) (SLM)
Year Amount Amount
1984 3,000 3,000
1985 5,700 6,000

8,700 9,000
Total : 9,000 – 8,700 = 300

175
SUM NO 30
Machinery A/c
1ST yr. To Bank A/C 40,000 1ST yr. By Depreciation a/c 4,000
By Bal C/D 36,000
40,000 40,000
2ND yr. To Bal B/D 36,000 2ND yr. By Depreciation A/C 4,000
By Bal C/D 32,000
36,000 36,000
3RD yr. To Bal B/D 32,000 3RD yr. By Depreciation A/C 4000
By Bal C/D 28,000
32,000 32,000
4TH yr. To Bal B/D 28,000 4TH yr. By Depreciation A/C 2,916
To P&L A/C 1,160 By Bal C/D 26,244
29,160 29,160
SLM: WDV:
40,000*10/100 = 4,000 -) 1ST YEAR 40,000*10/100= 4,000 -) 1ST
4,000 -) 2ND YEAR 36,000*10/100= 3,600 -) 2ND
4,000 -) 3RD YEAR 32,400*10/100= 3,240 -) 3RD
12,000 10840
SLM- WDV
12,000-10,840= 1,160
176
SUM NO 31
Machinery A/c
1/1/96 To Balance B/D 4,05,000 1/7/96 By Bank A/C 75,000
1/7/96 To Bank A/C 1,00,000 By P&L (Loss) A/C 1,950
By Depreciation On 4,050
Machinery A/C
31/12/96 By P&L (Diff) A/C 4,000
By Depreciation A/C 45,000
(40,000+5,000)
5,05,000 5,05,000
WORKING NOTES:
405000 -) 3RD YEAR
4,05,000*100/90 = 4,50,000 -) 2ND YEAR
4,50,000*100/90 = 5,00,000 -) 1ST YEAR
5,00,000 - 1,00,000 = 4,00,000
SLM: 4,00,000*10/100=40,000
40,000 + 40,000 = 80,000

WDV:
4,00,000*10/100 = 40,000
4,00,000 - 40,000 = 3,60,000*10/100 = 36,000
40,000 + 36,000 = 76,000
(80,000 – 76,000 = 4,000)
Sold Machinery
1,00,000 -, 10,000 = 90,000 - 9000 = 81,000 - 4050 = 76,950

CURRENT VALUE- SOLD VALUE
76,950 – 75,000 = 1,950 -) LOSS ON
Machinery Depreciation:
5,00,000 - 1,00,000 = 4,00,000*10/100 = 40,000 -) 1ST MACHINERY
1,00,000*10/100*6/12 = 5,000 -) 2ND MACHINERY

40,000 + 5,000 = 45,000
177
SUM NO 35
Date Particulars Debit Credit

1.1.91 Lease A/C Dr. 30,000
To Bank A/C 30,000
31.12.9 Depreciation A/C Dr. 9,516.24
1
To Sinking Fund A/C 9,516.24
(30,000*0.317208)
31.12.91 Sinking Fund Investment Dr. 9,516.24
To Bank A/C 9,516.24
Bank A/C Dr. 475.812
To Sinking Fund A/C 475.812
Siking Fund Investment A/C Dr. 475.812
To Sinking Fund A/C 475.812
31.12.92 Depreciation A/C Dr. 9,516.24
Sinking Fund Investment A/C Dr. 9,992.052
To Bank A/C 9,992.052
P&L A/c Dr. 9,516.24
To Depreciation A/C 9,516.24
31.12.93 Bank A/C Dr. 975.4146
To Interest on Sfi A/C 975.4146
Depreciation A/C Dr. 9,516.24
Sinking Fund A/C 30,000
To Lease A/C 30,000
178
Lease A/c
1.1.91 To Bank A/C 30,000 31.12.91 By Bal C/D 30,000
30,000 30,000
1.1.92 To Bal B/D 30,000 31.12.92 To Bal C/D 30,000
30,000 30,000
1.1.93 To Bal B/D 30,000 31.12.93 To Sinking Fund 30,000
A/C
30,000 30,000
Sinking Fund A/c (Depreciation Fund)

31.12.91 To Bal C/D 9,992.052 31.12.91 By Depreciation A/C 9,516.24
By Sinking Fund 475.812
Investment A/C
9,992.052 9,992.052
1.1.92 By Bal B/D 9,992.052
31.12.92 To Bal C/D 19,508.292 31.12.92 By Depreciation A/C 9,516.24
19,508.292 19,508.292
31.12.93 To Lease A/C 30,000 1.1.93 By Bal B/D 19,508.292
31.12.93 By Depreciation A/C 9,516.24
By Interest of SFI 975.41
A/C
30,000 30,000
179
Sinking Fund Investment A/c
31.12.91 To Bank 9,516.24 31.12.91 By Bal C/D 9,516.24
9,516.24 9,516.24
1.1.92 To Bal B/D 9,516.24 31.12.92 By Bal C/D 19,508.29
31.12.92 To Bank A/C 9,992.05 19,508.29
19,508.29 19,508.29
1.1.93 To Bal B/D 19,508.29 31.12.93 By Bank A/C 19,508.29
19,508.29 19,508.29
180
181
SUM NO 1:
Receipts and payments A/c
Receipts Amount Amount Payments Amount Amount
To Balance b/d By Purchase of 1,000
Investment
Cash 100
Bank 500 600
To Subscription 3,300 By Rent Paid 400
To Donation 260 By General Expenses 210
By Postage & 70
Stationary
By Sundry Expenses 30
By Balance c/d
Cash 20
Bank 2430 2450
4,160 4,160
182
SUM NO 2:
Receipts and payments A/c for the year ended
31-12-1999
Receipts Amount Amount Payments Amount Amount
To Balance b/d 6,000 By Rent Paid 1,04,000
To Entrance By Purchase of
Fees 11,000 Stationery 61,360
To Subscription By Purchase of
Billiards Table 78,000
(+) 1998 4,000
1999 3,38,000
2000 6,000 3,48,000
To Donation 10,000 By Wages Paid 1,06,600
To Special By Repairs &
Subscription for Renewals 16,120
Annual Day
Party 69,000
By Interest Paid 30,000
4,44,000 4,44,000
183
SUM NO 3:
Income & expenditure A/c for the year ended
31-12-1997
Expenditure Amount Amount Income Amount Amount
To Rent 1,000 By Sale of
Newspapers 300
To Cost of By Subscription 15,300
Entertainment 10,100
To Miscellaneous 800 (-) o/s - 1996 (700)
expenses
To Surplus 4,500 (-) Advance-1998 (200)
(+) o/s - 1998 1,300 15,700
By Interest on
Investment 400
16,400 16,400
184
SUM NO 4:
Dr Income and expenditure A/c for the year ended 1997 Cr
To Salaries 4,800 By Subscription 8,300
To Rent 500 (+) o/s (1977) 700 9,000
(+) o/s (1997) 60 560 By Interest on 3,000
saving +100 3,100
certificate
To Stationary &
postage 200
To Bicycle
purchased 300
To Help to needy
students 2,000
To Bank balance 2,700
To Loss on sale of 400
old furniture (-)300 200
To Surplus 1,440
12,100 12,100
185
SUM NO 5:
Dr Income and expenditure A/c for the year ended 31st March 1998 Cr
To Printing & By Subscription 6,865
stationery 465
To Newspaper 1,110 By Interest on
investment 1,900
To Sports By Sale of old
materials 5,000 newspaper 465
(-) consumed 4,000 1,000 By Sundry
receipts 125
To Repairs 650 By Proceeds
from
entertainment 865
To Salary 1,500
To Surplus 5,495
10,220 10,220
186
SUM NO 6:
Dr Income and expenditure A/c for the year ended 31st December 199 Cr

To Salaries 1,200 By Subscription 25*50 1,250
(+) o/s (1991) 100 By Rent received 740
(-) o/s (1990) (100) 1,200 By Profit from
entertainment 400
To General By Sale of old
expenses 300 newspaper 100
To Electricity 200
To Newspaper 400
To Postage 50
To Loss on sale of 100
old furniture -60 40
To Surplus 300
2,490 2,490
187
SUM NO 7:

To Rent 700 By Subscription 1,800
(+) o/s 200 900 (+) o/s (1993) 400
To Salaries 600 (-) advance
(1994) (100) 2,100
(+) o/s 200 800 By Interest on
investment 50
To Cricket 200 (+) accrued 150 200
To Tennis 500 By Cricket 150
To Gardening 100 By Tennis 400
To Printing 50 By Playing cards 300
To Telephones 175 By Sale of old 125
newspaper
To Advertisement 100 By Sundries 100
To Playing cards 200
To Surplus 350
3,375 3,375
188
SUM NO 8:
To Maintenance 682 By Interest On FD 90
To Match 1,324 (+) Outstanding 90 180
Expenses
To Salary 1,100 By Subscription 4,000
(+) Outstanding 100 1,200 (-)1993 600
To Conveyance 82 (+) 1994 800 4200
To Upkeep of 424 By Entrance Fees 275
Lawn
To Postage 105 By Tournament 2,000
Stamps Fund
(+) Opening 75 (-) Tournament 1,880 120
Stock Expenses
(-) Closing Stock 90 90 By Profit On Sale 80
of Crockery
To Cricket 972 By Deficit (Excess 160
Goods Expenditure Over
Income)
(+) Opening 321
Stock
(-) Closing Stock 280 1,013
To Sundries 200
5,015 5,015
189
SUM NO 9:
To Rent 5,200 By Entrance fees 550
(-) prepaid (1,300) 5,200 By subscription 16,900
To Stationery 3,068 (+) o/s sub. 468 17,368
expenses
(-) 1988 - 89 (312) By Locker rent 500
(+) 1989 - 90 364 3,120 (-) last year (60)
To Wages 5,330 (+) o/s rent 90 530
To Repair & 806 By Special 3,450
renewals subscription
To Interest 1,500 (+) o/s 550 4,000
To Surplus 6,492
22,448 22,448
190
SUM NO 10:
To Charities 14,500 By Donations 4,000
To Salaries 2,600 By Subscription 4,000
(+) o/s 300 2,900 By Legacies 3,000
To Rent and taxes 1,200 By Interest on 9500
investment
(+) o/s 200 1,400 (+) accrued 500 10,000
To Printing 300 By Interest on 150
deposit
To Postage 100
To Advertisement 250
(+) o/s 50 300
To Surplus 1,650
21,150 21,150
191
SUM NO 11:
To Depreciation 4000*10/100 400 By Entrance 400
on furniture fees
To Ground rent 1,000 By subscription 46,000
To Electricity 4,800 (-) o/s (1994) (1,200)
To Municipal 560 (+) o/s 1,600
taxes (1995)
To Cost of 5,000 (-) adv. (1,400) 45,000
annual dinner (1996)
To Ground 4,800 By Interest 2,600
upkeep received
To Insurance 1,440 (+) accrued 200 2,800
int.
(-) prepaid 300 1140 By Sundry 600
receipts
To Printing & 400 By Receipts 6,400
stationery from annual
dinner
(+) o/s printing 100 500
To Surplus 37,000
55,200 55,200
192
SUM NO 12:
Balance sheet as on 31st December, 1990 (opening)
Capital fund 78,000 Pavilion and grounds 44,000
(Balancing figure)
Sports equipment’s 25,000
Furniture and fixtures 4,000
Cash in hand 4,200
78,000 78,000
Balance sheet as on 31st December 1991 (closing)

Opening capital 78,000 Pre-paid printing
fund and stationery 400
Add: surplus 14,300 92,300 Sports equipment’s 25,000
Subscriptions Less: Depreciation 9,000 19,000
received 400
in advance
Salaries 500 Pavilion and Grounds 44,000
outstanding
Audit fees 500 Furniture and 4000
Fixtures
Outstanding
Subscriptions
(+)1990 200
1991 600 800
Outstanding Rent 500
Investments 20,000
Cash in hand 7,800
93,700 93,700
193
SUM NO 13:
Income and expenditure account for the year ended 31st December, 2000
To expenses 2,000 By subscriptions 2,100
To Interest 4,000 Add: Outstanding
advance 600 2,700
To Miscellaneous 2,000 By entrance fees 800
expenses
To Surplus 3,560 By locker rent 700
Less: Outstanding 240 460
By miscellaneous
income 4,000
7,960 7,960
Balance sheet as on 31st December, 2000 (closing)

Capital fund 33,620 Building 30,000
Add: Surplus 3,560 37,180 Subscription 180
Outstanding
Loan 5000 Cash 8,300
Subscription 100 Land 4,000
Outstanding 200
expenses
42,480 42,480
194
SUM NO 14:
creditors 1,200 Utensils 800
Capital fund 4,850 Furniture 2,500
(Balancing figure)
Consumable store 300
Outstanding
subscriptions 100
Cash in hand 2,350
6,050 6,050
To salaries 1,200 By entrance fees 300
To electricity 120 By subscriptions 3,500
To journals 525 Add: Outstanding 75 3,575
To Surplus 2,475 By profit from
refreshments 100
By locker rent 200
By income sundry 120
By interest on fixed
deposit 25
4,320 4,320
195
Creditors 5,550 Fixed deposits 2,500
Capital fund 4,850 Utensils 200
Add: Surplus 2,475 7,325 Add: Purchases 800 1,000
Furniture 2,500
Consumable store 700
Outstanding
subscription 75
Fixed deposit 25
accrued
cash 1,150
7,950 7,950
196
SUM NO 15:
Outstanding 20 Cash 1,375
subscription
Building funds 3,000 Investment 3,000
Capital fund (Note- opening
(Balancing figure) 1,355 building balance has
to represent equally
in investment)
4,375 4,375
Income and expenditure account for the year ended

31st December, 1981
To salaries 4,760 By subscriptions 7,445
To taxes 390 By entrance fees
(Half of entrance 600
fees)
To usages 1,440 By interest 1,330
To printing and By surplus from 2,700
stationery 630 matches
10% 270 2,430
To postage 120
To repairs 950
To subscription for 1,230
newspaper
Less: 1980 20
1982 30 1,180
To surplus 2,335
11,805 11,805
197
Capital fund 1,355 Cash in hand 14,960
Add: Donations 10,430 Interest 3,000
Surplus 2,335 14,120
Match fund Pre-paid 30
Opening balance 3,000 Subscription
Add: Entrance 600
fees
Surplus match 270 3,870
17,990 17,990
SUM NO 16:
In the books of Erode sports club
Capital Fund 10,400 Stock of Balls 3,000
(Bal. Fig.)
Printing and Stationery 400
Cash at Bank 6,000
Outstanding 1,000
Subscription
10,400 10,400
198
Dr. Cr.
To secretary’s 340 By sale of old balls 100
honorarium and bats
To telephone 100 By admission fee 600
To rates and 400 By members 10,000
insurance subscriptions
To upkeep of field 4,000 Add: 1,500

and pavilion outstanding
subscription
To write off: Less: o/s 1,000 10,500
Bats & balls (50% of 2,200 subscription (1-
4,4000-3000+1400) 1-1997)
Printing & stationery
(25% of 600)
150 2,350
To general charges 100 By hire of ground 600
To grass seeds 60
To Surplus 4,450
11,800 11,800
Balance sheet as on 31st December, 1996

Capital Fund 10,400 Printing and Stationery 400
Add: Surplus 4,450 14,850 Add: Purchases 200
Less: Written off (25% (150) 450
of 600)
Reserve for Bats and balls 3,000
permanent pavilion
(Donation +Surplus on Add: Purchases 1,400
tournament) 20,600
Less: Write Off (2,200) 2,200
199
Cash in bank 6,000
(31/12/1996) 33,300
Lodged in bank (8,000) 31,300
Drawn From bank
Outstanding 1,500
Subscription
35,450 35,450
SUM NO 17:
In the books of Vani nursing home
Balance sheet as on 30th June, 1998
Capital Fund (Bal. Fig.) 10,010 Cash 2,010
Freehold Land 8,000
10,010 10,010
Income and expenditure account for the year ended 30th June, 1999
Dr. Cr.

To Salaries 656 By Fees from non- 270
members
To Rent & Taxes 200 By Municipal grant 1,000
O/s Medicine Bill 129 By Subscriptions 1,115
Expenses of vehicle 840 Less: Donations for 100 1,015

building fund
Boarding 380 By Interest 38
Drugs 670 By Deficit (Bal. Fig.) 552
2,875 2,875
200
Balance sheet as on 30th June, 1999
Capital fund: Freehold land 8,000
Opening Balance 10,100 Cost Of Vehicle 2,000
Less: Deficit 552 9,458 Cash 1,247
Building Fund 1,560
donations
Add: Wrongly inc. in 100 1,660
subs.
Outstanding 129
Medicine bill
11,247 11,247
SUM NO 18:
In the books of Trichy club
Capital Fund (Bal. 6,075 Buildings 5,000
Fig.)
Cash 1,025
Outstanding 50
Subscription
6,075 6,075
201
Income and expenditure account for the year ended 31st December ,1991
Dr. Cr.

To Salaries 600 By Sale of waste 45
paper
Add: O/s Salaries 50 650 By Subscriptions 2,050
:1991
To Expenses 75 Add: O/s for 1991 450 2,500
To Drama Expenses 450 By Sale of drama 950
tickets
To Municipal Taxes 40 By Accrued
Interest on 50
Investments
Less: Prepaid MT 10 30
To Electric Charges 145
To Charity 350
To Newspapers 150
To Surplus 1,695
3,545 3,545

Capital
fund(bal.fig)
Add: Surplus 1,695 Buildings 5,000
Add: Donations 540 8,310 Cash 900
Advance 60 Prepaid Municipal 10
Subscription taxes
Outstanding 50 Outstanding
salaries Subscriptions-1991 450
Accrued Interest 50
o/s Subscriptions- (50-40) 10
1990
8,420 8,420
202
SUM NO 19:
In the books of Santhosh club
Balance sheet as on 31st December,1991
Capital Fund 66,570 Stock of Stationery 300
(Bal. Fig.)
Building 60,000
Cash 6,000
Outstanding Subscription 270
66,570 66,570
Income and expenditure account for the year ended 31st December,1992
Dr. Cr.
To Salaries 12,450 By Sale of old 1,120
newspapers
To Rent and Taxes 3,600 By Miscellaneous 450
receipts
To Telephone 600 By Profits from 9,000
Charges Canteen
To Advertisement 1,050 By Subscriptions 12,660
Cost of Stationery 2,160 Add: O/s 9,840 22,500

Subscriptions
To Postage 1,000 By Dividend 4,850
To Sundry 3,500
Expenses
To Depreciation 3,000
To Surplus 10,560
37,920 37,920
203
Balance sheet as on 31st December ,1992
Liabilities Amount Amount Assets Amou Amount
nt
Capital Fund 66,570 Building 60,000
Add: Surplus 10,560 77,130 Less: Depreciation @5% 3000 57,000

Advance Subscription 480 Investments 7,500
Stationery 540
Cash 2,700
Outstanding Subscription- 9,840
1992
Outstanding Subscription- 30
1991
77,610 77,610
SUM NO 20:
Balance sheet as on 31st March 1984(opening)
Capital fund 2,51,200 cash 30000
Furniture 35000
Land and 160000
building
Books 24000
Investment 12000
O/S tuition fee 2200
2,51,200 2,51,200
204
Income and expenditure account for the year ended 31st March 1984
To pay and allowance 70,500 By tuition fee 56,800
To provident fund 5,540 By fines 1,000
To printing and 700 By grants 30,000

stationery
To postage and telegram 500 By interest 300
To Newspaper 300 By rent 1,000
To laboratory 500 By deficit 9,625
To repairs 600
To audit fee 300
To general charges 580
To depreciation
(+) Books 5,720

Furniture 5,250
Land and Building 8,235 19,205
98,725 98,725
Balance sheet as on 31st March 1984 (closing)

Liabilities Amount Amount Assets Amount
Capital 2,51,200 cash 22,000
(-) deficit 9,625 2,41,575 books 22,880
Land and building 1,56,465
Furniture 29,750
Investment 10,000
Science equipment 480
2,41,575 2,41,575
205
SUM NO 21:
Balance sheet as on 31st December 1995(opening)

o/S payment 8,000 cash 4,000
Capital fund 36,000 bank 10,000
Billiard table 30,000
44,000 44,000
Income and expenditure account for the year ended 31-12-1996

Salary 2,000 Donation 2,500
Repair expenses 500 Subscription 12,550
Miscellaneous 410 Entrance fee 1,000
Insurance 240 Interest 300
(investment)
Paper INR 150 Interest (bank) 400
Drama expenses 500 Sale of old 150
newspaper
Surplus 14,150 Sale of Dt 1,050
17,950 17,950
Balance sheet as on 31st December 1996 (closing)

Subscription 350 O/S 900
advance subscription
O/S premium 40 O/S interest 200
Capital fund 36,000 Furniture 6,000
(+) surplus 14,150 50150 Prepaid 90
expenses
Donations 2500 Investment 6,000
Billiard table 30,000
cash 2,650
bank 7,200
53,040 53,040
206
SUM NO 22:
Balance sheet as on 1.1.1985(opening)
Subscription cash 7130
received in advance 64
Capital fund 1,77,316 Outstanding 240
subscription
Stock of 8810
medicine
Equipment 21200
Building 40000
Investment 100000
1,77,380 1,77,380
Income and expenditure account for the year ended 31st December 1985
To medicines 29,660 By subscription
(8810+30590-9740) (47996+280+64- 48,000
240-100)
To salaries 27,500 By interest on 7,000
investment
To petty expenses 461 By proceeds from
charity show 10,450
To equipment By deficit 8,521
(21200+15000-
31600) 4,600
36200- 31600
To expenses on 750
charity show
machine
To doctors 9,000
Honorarium
73,971 73,971
207
Balance sheet as on 31st dec 1985(closing)
Donations 14,500 cash 3,775
Subscription In 100 Outstanding 280
advance subscription
Capital fund 1,77,316 Stock of 9,740
(-)8521 1,68,795 medicine
Equipment 31,600
Building 38,000
Investment 1,00,000
1,83,395 1,83,395
SUM NO 23:
Balance sheet as on 31st December 1988(opening)
Outstanding office 300 Cash in hand 150
expenses
Capital fund 3,950 Cash at bank 2,100
Equipment 1,100
Outstanding 900
subscription
4,250 4,250
208
Income and expenditure account for the year ended 31st December 1988
To ground men fees 1500 By subscription
(5800+800- 5500
900- 200)
To depreciation on 110 By 1500
moving machine tournament
fund
To rent 500 By entrance 200
fees
To salaries to 3600 By sale of grass 100
coaches
To tournament 900
expenses By deficit 2810
To office expenses 2500
(2400- 300+400)
To opening sports 1000
equipment
(1100+1200-1300)
10,010 10,010
209
Balance sheet as on 31st December 1988(closing)
Outstanding office 400 Cash in hand 350
expenses
Advance 200 Cash at bank 3,300
subscription
Donation for 3,000 Sports equipment 1,300
pavilion
Life membership 2,000 Mowing 5machine 990
fee (1100- 110)
Capital fund 3950 Outstanding 800
(-) deficit 2810 1,140 subscription
6,740 6,740
SUM NO 24:
Balance sheet(opening) as on 31st December 1994
Sports Fund 30,000 Cash 5,000
Capital 7,950 Furniture 2,000
Fund
Sports fund 30,000
Investment
Outstanding 950
Subscription
37,950 37,950
210
Income and expenditure a/c for the year ended 31st December 1995
To wages 1,000 By 15,000 16,000
Subscriptions +1000
To Depreciation 550 By sale of Scrap 2000
on furniture
To Sundry 15,200 By deficit 550
Expenses
16,750 16,750
Balance sheet(closing)as on 31st December 1995

Life Membership fees 12,000 Cash 14,000
Advance subscription 1,000 Outstanding 450
Subscription
1994
Sports fund 30,000- 30,500 Outstanding 1,000
2500(exp)+2000+1000 Subscription
sports investment 1995
interest accrued
Opening capital fund 7,950 7,400 Furniture 2,000 4,450
-550 +purchase +3,000
+5,000
+550
Accrued Interest 1,000
on investment
50,900 50,900
211
SUM NO 25:
Balance sheet(opening) as on 31st December 1996
Capital Fund (balance 14,500 Sports Goods 3,000
figure)
Investment 6,000
Books 2,000
Cash in hand 3,000
Subscription 500
outstanding
14,500 14,500
Income and expenditure a/c of the year ended 31st December 1997
To Salaries 1500 1800 By 19,000
+300 Subscription
To Electric Charges 300 By Interest 100 600
+500
To Sports Expenses 1000 By Charities 2400
To Miscellenous 700
To Charity 2000
To Depreciation 1500
To Surplus 14,700
22,000 22,000
212
Balance sheet(closing) as on 31st December 1997

Capital Fund 29,200 Outstanding 100
Subscription
Entrance Fees 1,000 Books 2,000
Subscription received 600 Investment 8,000
in advance
Outstanding salaries 300 Sports Goods 9,000
Donations 5,000 Interest on 500
Investment
36,100 36,100
213
214
SUM NO 1:
Memorandum Trading a/c for the period ending 15-06-89
1.4.89 To opening 36,750 15.6.89 By sales 1,56,500
stock 1,04,940 By stock on 41,530
To 56,340 date of
purchases fire(bf)
To gross
profit
(156500*36 1,98,030 1,98,030
/100)
Stock on the date of fire – salvaged cost
41530-45000 = 37030
SUM NO 2:
Memorandum Trading a/c for the period ending 31-12-83
31.12.82 To opening 2,36,000 31.12.83 By sales 1,28,000
stock 8,40,000 By stock on
To the date of 2,44,000
purchases 4,48,000 fire(BF)
To gross
profit
(128000*35
/100)
15,24,000 15,24,000
Amount of claim = 2,44,000-30,000=2,14,000
215
SUM NO 3:
Memorandum Trading a/c for the period ending
20-09-2001
1.1.01 To 17,000 By sales 2,00,000
opening 30.8.01 By stock on 44,000
stock the date of
To fire (bal fg)
purchases 1,70,000
To wages 17,000
To gross 44,000
profit
2,44,000 2,44,000
Gross profit = 2,00,000*25/125=40,000+4,000=44,000
SUM NO 4:
Memorandum trading a/c for the period ending 1-09-93
Date Particulars Amount Amount DateParticulars Amount Amount
1.1.93 To opening stock 25,300 By sales 1,56,000
To purchases. 50400 1.9.93 By stock on 13,200
Less goods taken (2500) 47,900 the date of
To wages fire(bf)
(156000*30/130) 36,000
1,69,200 1,69,200
Amount of claim = Closing stock-value of salvaged stock
= 13,200-3,600=9,600
216
SUM NO 5:
Memorandum trading account for the period 1-4-1987
To purchases 2,10,000 By stock on 40,600
the date of
fire
To wages 12,000
(15000-3000)
To carriage 5,000
inward
(320000*23/100)
3,60,600 3,60,600
Statement of claim:
Stock on the date of fire - 40600
Less: stock saved - (600)

_______
40000
________
Formula: claim = insured stock / stock on the date of fire * actual

loss
32000/40600*40000= 31527
Gross profit % = 20+25+24/3 = 23

217
SUM NO 6:
Sundry debtors account
To balance c/d 80,000 By cash 2,88,000
By balance b/d 60,000
To credit sales b/f 2,68,000
3,48,000 3,48,000
Sundry creditors account

To cash 40,000 By balance c/d 2,00,000
To purchase returns 10,000 By credit purchase b/f 2,50,000
To balance b/d 4,00,000
4,50,000 45,0000
Memorandum Trading Account For The Period

30/9/1994
30-9-94 To opening 30,000 By sales 2,68,000
stock
To 2,50,000 By stock on 65,600
purchases the date of
fire
To gross 53,600
profit
(268000*20
%)
3,33,600 3,33,600
218
SUM NO 7:
Sundry creditors account
To cash 64,000 By balance b/d 10,000
To balance c/d 8,000 By credit purchase 62,000
(b/f)
72,000 72,000
Memorandum trading account for the period 13-7-1986

Date Particular Amount Amount Date Particular Amount Amount
13-7-86 To opening 1,20,000 By sales 1,10,000
stock Less: return (6500)
inwards 1,03,500
To 62,000 By stock on 120000
purchases 2,000 the date of
Less: 60,000 fire
return
outwards
To gross 34,500
profit
2,23,000 2,23,000
Actual loss - stock on the date of fire – stock saved
120000-20000 = 100000
Claim - insured stock / stock on the date of fire * actual loss
90000/120000*100000 = 75000
219
SUM NO 8:
Trading account for the year ended 31-12-1991
Date Particular Amount Date Particular Amount
To opening stock 19228 By sales 104000
To purchases 90516 By closing stock 26544
To gross profit b/f 20800
130544 130544
Memorandum trading account 1-10-1992

1-10- To opening 26,544 By sales 1,00,000
92 stock Add: 2,000
unrecorded 1,02,000
cash
To 70,000 By stock on 9,944
purchases the date of
Less: free 5,000 65,000 fire b/f
sample
To gross 20,400
profit
(102000 *
20%)
1,11,944 1,11,944
Gross profit ratio – GP/SALES *100

20800/104000*100= 20%
Claim -
Stock on fire – 9944
Less:stock saved (1500)

= 8444
220
SUM NO 9:
Trading A/c
DATE PARTICULARS Amount Amount DATE PARTICULARS Amount Amount
To opening 45,000 By sales 5,87,500
stock
To purchases 4,75,000 By closing 50,000
stock
To gross 1,17,500
profit
6,37,500 6,37,500
Memorandum Trading A/c

stock
To purchases 4,40,000 By stock on 1,70,000
the date of
fire
To gross 80,000
profit
(400000*20/
100)
5,70,000 5,70,000
Gross profit % = gross profit /sales *100

= 117500/587500*100
= 20%
221
SUM NO 10:
Trading A/C
1.1.93 To 1,00,000 By sales 4,10,000
opening
stock
To 3,65,000 Less: 10,000 4,00,000
purchase returns
Less: 5,000 3,60,000 31.12.93 By closing 1,40,000
returns stock
To gross 80,000
profit
5,40,000 5,40,000

To opening 1,40,000 By sales 1,03,000
stock
To purchase 84,000 Less: 4,000 99,000
returns
To gross profit 19,800 By stock 1,44,800
(99,000*20/100) on the
date of
fire
2,43,800 2,43,800
Gross profit – 80,000/4,00,000*100 = 20%
Closing stock – stock salvaged
1,44,800 – 19,800 = 1,25,000

222
SUM NO 11:
Trading a/c for the year 1991
1.1.93 To 90,000 By sales 3,40,000
opening
stock
To 2,58,500 31.12.1993 By closing 1,10,000
purchase stock
To 42,000
expense
To gross 59,500
profit
4,50,000 4,50,000
Gross profit - 59,500/3,40,000*100 = 17.5%
Memorandum Trading Account for the year ended 31

March 1992
To opening stock 1,10,000 By sales 2,00,000
To purchase 1,20,000 By stock 75,500
on the
date of
fire
To expense 10,500
(2,00,000*17.5/100)
Total 2,75,500 Total 2,75,500
Manufacturing – 42,000*3/12 = 10,500

Closing stock – stock salvaged
75,500-14000 = 61,500
223
SUM NO 12:
Trading a/c for the year 1994
1.1.94 To opening 50,000 By sales 2,00,000
stock
To purchase 1,40,000 31-2- By closing 30,000
94 stock
To gross 40,000
profit
2,30,000 2,30,000
Gross profit – 40,000/2,00,000*100= 20%
Memorandum Trading Account for the year ended

31 March 1995
stock
To purchase 1,46,000 By stock 48,000
on the
date of fire
To gross 32,000
profit
2,08,000 2,08,000
Amount of claim= Closing stock – salvaged
= 48,000 -13,000 = 35,000

224
SUM NO 13:
Trading A/c
To Opening 34,000 To Sales 27000/90 1,80,000
stock *100
(30,600*100/90)
To Purchase 1,22,000 To Closing Stock 30,000
(27,000*100/90)
To Gross Profit 54,000
(bal.fig)
2,10,000 2,10,000
Gross profit = 54,000/1,80,000*100
= 30%
To opening stock 30,000 By Sales 1,50,000
(27,000*100/90)
To Purchases 1,47,000 By Stock on 72,000
the date of
fire
To Gross Profit 45,000
2,22,000 2,22,000
Actual loss = stock on date of fire – stock saved
72,000-18,000 = 54,000
Claim = Insured stock/stock on date of fire * Actual loss
63,000/72,000* 54,000
Claim = 47,250
225
SUM NO 14:
Trading A/c
To Opening Stock 4,000 By Sales 14,000
(3,600*100/90)
To Purchases 8,100 By Closing Stock 4,100
(3,690*100/90)
To wages 2,090
18,100 18,100
Gross Profit = 3,910/14,000 *100 = 28 %
To purchases 600 By stock on the 4036
returns date of fire
To Wages 200
To Gross Profit 336
5236 5236
226
SUM NO 15:
Trading account 1993

(36,000*100/90)
(22,500*100/90)
To gross 40,000
profit(bal.fig)
2,25,000 2,25,000
Memorandum trading account 1994

To purchases 1,46,000 By stock on date 27,000
of fire(bal.fig)
2,16,000 2,16,000
NOTE:
G. P=40,000/2,00,000 x 100 = 20% on sales
5% raise in 1994 = 25/105
If sales/prices are increasing by 5% gross profit will also increase by 5%
1,89,000 x 25/105 = 45,000
Claim = 27,000-6,200
=20,800
227
SUM NO 16:
NOTES:
1/n on cost=1/n+1 on sales
Gross profit on cost 50%
50/100=1/2
Cost + Profit = sales
100+50=150 sales
50/150 = 1/3
½ on cost=1/2+1 1/3 on sales
=1/3 x 9,00,000 = 3,00,000

stock
To purchases 13,00,000 By stock on 10,34,000
date of
fire(bal.fig)
To carriage 8,000
To commission 26,000
19,34,000 19,34,000
Stock on date of fire = 10,34,000
Policy amount insured=8,00,000
Actual loss= stock on the date of fire- stock saved
=10,34,000-2,06,800
=8,27,200
Claim= insured stock/stock on the date of fire x actual loss
= 8,00,000/10,34,000 x 8,27,200 = 6,40,000
228
SUM NO 17:
stock
To purchases 4,60,000 By stock on date 1,71,400
of fire(bal.fig)
8,19,400 8,19,400
NOTE:
1984= 1,80,000/6,00,000 x 100 = 30%
1985 = 1,98,000/6,60,000 x 100 = 30%
1986 G.P = 30%

229
SUM NO 18:
Trading account 1992

(79,600+2300)
To gross 97,400
profit(bal.fig)
5,68,900 5,68,900
Gross profit % = 97,400/4,87,000*100 = 20%
Memorandum trading account
Particulars Normal Abnormal Total Particulars Normal Abnormal Total

To Opening 75,000 6,900 81,900 By sales 2,28,000 3,200 2,31,200
stock
To purchases 1,62,000 1,62,000 By gross 250 250
loss
To gross profit 45,600 45,600 By stock on 54,600 3,450 58,050
(2,28,000*20/ date of
100) fire(bal.fig)
2,82,600 6,900 2,89,500 2,82,600 6,900 2,89,500
NOTE:
Gross profit = 2,28,000 x 20/100
= 45,600
Claim = 58,050-5,800
= 52,250
230
SUM NO 19:
Trading account
To purchase 1,03,850 By closing stock 38,350
( 37,550 + 800 )
1,90,850 1,90,850
Gross profit % = 42,700/1,52,500*100
= 28%

To opening 36550 1800 38350 By sales 48250 1750 50000
stock
To 37350 37350 By gross loss 50 50
purchases
To gross 13510 13510 By stock on 39160 39160
profit the date of
(48250*28/1 fire
00)
87410 1800 89210 87410 1800 89210
Claim – stock on the date of fire – salvaged stock
39160 – 5100 = 34060

231
SUM NO 20:
Trading account
To purchase 62310 By closing stock 23010
(22530+430 )
114510 114510
Gross profit % = 25620/91500*100 = 28%

stock
To purchase 22410 22410 By gross loss 30 30
To gross 9618 9618 By stock on 19608 19608
profit date of fire
(34350*
28/100)
53958 1080 55958 53958 1080 55038
Claim = 19608 – 3063
= 16545
232
SUM NO 21:
Trading account
To 12900 5600 18500 By sales 192000 4500 196500
opening
stock
To 153500 153500 By closing 22400 2000 24400
purchases stock
To gross 48000 900 48900
profit
214400 6500 220900 214400 6500 220900
Work Note:
20 % on sales
Sales 100 profit = 20
Sales = cost + profit
100 = x + 20
x+20 =100
x =100 – 20 =80
5600*100/80 = 7000 – 2500
= 4500
20/100 = 1/5 on sales = ¼ on cost
233
SUM NO 22:
Trading account as on 31.12.1984
stock
To 160000 160000 By loss 2400 2400
purchases
To gross 37000 37000 By closing 29400 5000 34400
profit stock
229400 10000 239400 229400 10000 239400
Gross profit %
37000/200000*100 = 18.5%
Memorandum trading account as on 16.05.1985

stock
To 54000 54000 By loss 2100 2100
purchases
To gross 11100 11100 By stock on 34500 1500 36000
profit the date of
fire (b.fig)
94500 5000 99500 94500 5000 99500
ORIGINAL COST 10,000 x 1/4 = 2,500 1400 2500-1400-1100 LOSS

10,000-5000=5000-2500* = 2,500 X 60% = 1500 2500-1500=1000
1100 + 1000**=2100
18.5% ON 60000 = 11100
10,000 – 1/4 th OF THE ORIGINAL STOCK (10000)
¼ X 10000 2,500* worth of stock selling it for 1400* loss 1100
2500 – 60% 1500 2500-1500 = 1000** ( loss )
Stock on the date of fire-Stock salvaged =36000- 12000 =24000
30000/36000x 24000 = Rs. 20,000
234
SUM NO 23:
Trading account for the year ended 31/12/1990

To purchase 18,76,000 By loss 1,00,000
To wages 2,00,000 By closing 4,40,000
stock
(bal.fig)
28,60,000 28,60,000
Opening stock
2,88,000*100/90 = 3,20,000
Closing stock
484000*100/110 = 4,40,000
Gross profit %
464000/23,20,000*100 = 20%
Memorandum trading account as on 1/4/1991

stock
To purchase 3,46,000 By stock on the 4,56,000
date of fire
(bal.fig)
To wages 54,000
9,36,000 9,36,000
Actual loss = 4,56,000-56,000(stock salvage) = 4,00,000
Claim = insured stock/stock on the date of fire * actual loss
3,42,000/4,56,000*4,00,000 = 3,00,000
235
SUM NO 24:
Trading Account
To purchases 7,00,000 By closing stock 3,20,000
14,20,000 14,20,000
Gross profit %
4,20,000/11,00,000*100 = 38.18%

(360000-
60000(1/6*360000)
To purchases 2,00,000 By stock on the 3,34,540
(2,40,000*1/6=40,000- date of fire
2,40,000)
(3,00,000*38.18/100)
6,34,540 6,34,540
STOCK ON THE DATE OF FIRE – SALVAGED COST
3,34,540—1,01,000 = 2,33,540
236
237
SUM NO 1:
In The Books of Mr X
Journal Entries [Cum Interest Price]
Date Particulars L.F. Debit Credit
1.5.97 Investment A/c Dr. 27,80,000
Interest On Investment A/c Dr. 1,00,000
To Bank A/c 28,80,000
[Being Purchase Of 3000 Debentures Of
Rs.1000 At Rs.960 Cum-Interest]
Working Notes:
Total Amount Payable = 3000 x 960 = 28,80,000
Less: Interest Included In The
Price For Jan To April
30,00,000 x 10/100 x 4/12 = 1,00,000
----------------
Cost Of Investment = 27,80,000
-----------------
31.12.97 Bank A/c Dr. 2,00,000
To Interest A/c 2,00,000
[Being Receipt Of Interest For 6
Months Ending 31st Dec 1997]
238
For Purchase Of Investment & Ex-Interest Price:
Date Particulars LF Debit Credit
1.5.97 Investment A/c Dr. 28,80,000
Interest On Investment A/c Dr. 1,00,000
To Bank A/c 29,80,000
[Being Purchase Of 3000 Debentures Of
Rs. 1000 Each At Rs.960 Ex-Interest]
SUM NO 2:
In The Books Of Murugan
For Sale Of Investment Of Cum-Interest Price:
1.3.97 Bank A/c Dr. 48,020
To Investment A/c 47,270
To Interest On Investment A/c 750
[Being Sale Of 500 Debentures Of Rs. 98 Cum-
Interest & Interest Received Thereon]
Working Notes:
Total Amount 500 x 98 = 49000
Less: Brokerage 49,000 x 2/100 = 980
---------------
Sale Proceeds Received = 48,020
Less: Interest For 31.12 - 1.3.97 (2 Months)
500 x 100 = 50,000
50,000 x 9/100 x 2/12 = 750
------------------
Net Sale Value = 47,270
-------------------
239
For Purchases Of Investment & Ex-Interest Price:
Investment A/c Dr. 50,000
Interest On Investment A/c Dr. 1000
To Bank A/c 51,000
[Being Purchase Of 1000 Of Rs. 49 Each
Ex- Interest]
Working Notes:
Total Amount 1000 X 49 = 49,000
Add: Interest Included
31.12 - 1.3.97 (2 Months)
1000 X 50 X 12/100 X 2/12 = 1000
-----------------
= 50,000
Add: Brokerage 50000 X 2/100 = 1000
-----------------
Total Cash Paid = 51,000
-----------------
240
SUM NO 3:
IN THE BOOKS OF BALASWAMY
12% DEBENTURES IN STC LTD.
(INTEREST PAYABLE ON 1ST APRIL AND 1ST OCTOBER)
Date Particulars Face Interest Amount Date Particulars Face Interest Amount
Value Value
1998 1998
1 Jan To Balance B/D 50,000 1,500 48,000 1 Apr By Bank A/C 3,000
1 To P & L A/C 800 1 June By Bank A/C 20,000 400 20,000
June (Profit On Sale)
31 To P & L A/C 4,600 1 Oct By Bank A/C 1,800
Dec (Bal. Fig)
31 Dec By Balance 30,000 900 28,800
C/D
50,000 6,100 48,800 50,000 6,100 48,800
Working Notes:
Accrued Interest On Rs. 50,000 For 3 Months = 50,000 × 12 /100 × 3/12 = 1,500
Interest On April 1st = 50,000 × 12/100 × 6/12 = 3,000
Accrued Interest On Sale At Cum-Interest = 20,000 × 12/100 × 2/12 = 400
Amount Of Sold Debentures = Cum-Interest Price – Accrued Interest
= 102 × 200 = 20,400
= 20,400 – 400 = 20,000
Profit On Sale = 20,000 /50,000 × 48,000 = 19,200
= 20,000 – 19,200 = 800
Interest On October 1st = 30,000 × 12/100 × 6/12 = 1,800
Accrued Interest On Debentures Held At Close For 3 Months
= 30,000 ×12/100 ×3/12
= 900
241
SUM NO 5:
In The Books Of Modern Chemicals Ltd.
(6% Debentures)
(Interest Payable On 1st April & 1st October)
Investment A/C
Value Value
1992 1992
31/1 To Bank A/C 2,50,000 5,000 2,47,000 1/4 By Interest 7,500
A/C
31/12 To P & L A/C 13,750 1/10 By Interest 7,500
(Bal. Fig) A/C
31/12 By Interest 3,750
A/C
31/12 By Balance 2,50,000 2,47,000
C/D
2,50,000 18,750 2,47,000 2,50,000 18,750 2,47,000
Interest A/C
1992 1992
1/4 To Investment A/C 7,500 31/1 By Bank A/C 5,000
1/10 To Investment A/C 7,500 31/12 By P & L A/C (Bal. Fig) 13,750
31/12 To Investment A/C 3,750
18,750 18,750
Working Notes:
Accrued Interest On Rs. 2,50,000 For 4 Months = 2,50,000 × 6/100 × 4/12
= 5,000
st
Principle Amount On 31 Jan = 2,52,000 – 5,000 = 2,47,000
Interest On 1st April = 2,50,000 × 6/100 × 6/12 = 7,500
Interest On 1stoctober = 2,50,000 × 6/100 × 6/12 = 7,500
Accrued Interest On Debentures Held At Close For 3 Months
= 2,50,000 × 6/100 × 3/12
= 3,750
242
SUM NO 6:
In The Books Of Ramya
6% Debentures In Ltd.
(Interest Payable On 30th June And 31st December)
Value Value
1991 1991
15/4 To Balance 1,000 17.5 1182.5 30/6 By Interest 30
B/D (20×50) ((60×20)- A/C
17.5)
31/12 To P & L 28.75 15/7 By Sales A/C 500 1.25 580
A/C (10×50×6 (58×10)
(Bal. Fig) %×0.5/12)
15/7 By Loss A/C 11.25
(118.5/2=59
1.25-580)
31/12 By Interest 15
A/C
(10×50×6%×
6/12)
31/12 By Balance 500 591.25
C/D
1000 46.25 1182.5 1000 46.25 1182.5
243
SUM NO 7
IN THE BOOKS OF TELCO LTD.
(6% DEBENTURES)
(INTEREST PAYABLE ON 30TH JUNE & 31ST DECEMBER)
INVESTMENT A/C
Value Value
1994 1994
15/3 To Balance 1000 12.5 1187.5 30/6 By Interest A/C 27.5
B/D (10×100) (1000x6% (10x120 – (1000×6/100×
x2.5/12) 12.5) 5.5/12)
31/1 To P&L A/C 31.25 By Sales A/C 500 1.25 590
2 (bal. fig) (5x100) (500×6/10 (15x18)
0×0.5/12)
By Loss A/C 3.75
(1187.5/2
– 590)
31/1 By Interest C/D 15
2 (1000×6/100×
3/12)
31/1 By Balance C/D 500 593.75
2
1000 43.75 1187.5 1000 43.75 1187.5
244
1. Define accounting.
2. List the objectives of accounting.
3. Different between book keeping and accounting.
4. Distinguish between journal and ledger.
5. Explain accounting concepts and conventions.
6. Distinguish between cash discount and trade discount.
7. Distinguish between sales book and sales accounts, purchase
books and purchase accounts.
8. What is an Accounting Equation?
9. What are the needs of preparing trial balance?
10. Discuss the errors disclosed by trial balance and not
disclosed by trial balance.
11. What is the suspense A/c?
12. Describe the different types of errors.
13. What are the need for preparing BRS?
14. What is window dressing?
15. Distinguish between trial balance and balance sheet.
16. What do you understand by depreciation?
17. What is the necessity of providing depreciation?
18. What are the Causes for depreciation?
19. Distinguish between straight line method and written down
value method.
20. What are the other methods of depreciation?
21. What is an average clause?
22. What is the Purpose of fire insurance?
23. What are investments? What u understand by ex-interest
and cum interest?
24. Distinguish between profit and non-profit organization.
25. What is the primary objective of trading organization?
26. Write short notes on entrance fees, life membership fees,
subscription, donation, and legacy.

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PROBLEMS SOLUTIONS

S.No Particular Page No

2 Cash Book 22 -28

3 Trial Balance 29 -34

5 Final Accounts 52 - 110

6 Bank Reconciliation Statement 111 – 123

7 Depreciation 124 – 179

8 Non-Profit Organisations 180 - 212

11 Theory Questions 244

3RD Oct Purchases A/c Dr. 9,500

1st July Stationary A/c Dr. 60

3rd July Postage stamps A/c Dr. 20

6th July Furniture A/c Dr. 1,000

11th July Mohan A/c Dr. 2,000

9th March Sales return A/c Dr. 1,400

11th March Santhanam A/c Dr. 1,000

19th March Bank A/c Dr. 2,000

1999 Cash A/c Dr. 1,00,000

1st Jan Furniture A/c Dr. 4,000

July To Balance 10,000 1/7 By Bank A/c 9,000

6/7 To Sales A/c 160 1/7 By Office 200

IN THE BOOKS OF MR. GOPAL

4 To Sales A/c 200 10 By Bank A/c 6,000

5 To Manohar 720 12 By Honest Raj A/c 430

15 To Sales A/c 3,000 17 By Stationery A/c 30

20 To Kalidas A/c 1,360 10 By Office A/c 370

29 By Rent A/c 200

31 By Balance C/D 4,024

Total 21,280 Total 21,280

TWO COLUMN CASH BOOK

Nov To Balance 390 14 By 250

5 To Sales A/c 6420 16 By 336

10 To Mohan 40 4,240 24 By Varun 50 4,300

19 To Bank A/c 2,800 30 By Salaries 2,000

29 To Velan 30 770 By Balance 7,734

Total 70 14,620 Total 50 14,620

Date Particulars R L Discount Cash Date Particulars V L Discount Cash

Date Particulars R L Discount Cash Date Particulars V L Discount Cash

CASHBOOK (THREE COLUMN)

1999 To 410 8,920 3 By Bank C 4,000

2 To Sales 4,500 5 By 100

3 To Cash C 4,000 8 By 20 280

18 To Suresh 30 1,970 12 By 1,500

20 To Bank C 1,000 15 By 500

30 5,910 14,890 20 5,910 14,890

Particulars Debit Credit

Particulars Debit Credit

Particulars Debit Credit

Particulars Debit Credit

PARTICULARS DEBIT CREDIT

2. Credit Shyam A/c with Rs.200

3. Debit purchase book by Rs.1,000

S.No Particulars Debit Credit

4 Raju A/c Dr. 500

S.No Particulars Debit Credit

1 Drawings A/c Dr. 150

1 Building A/c Dr. 2,700

Date Particulars Lf Debit Credit

S.No Particulars L.F Debit Credit

To Sales A/c 2,000

2,10,000 (Invested Amount) 9/12 (No of Months) 6 /100 (Rate of Interest)