Final Accounts of Sole Proprietorship Questions
Final Accounts of Sole Proprietorship Questions
Final Accounts of Sole Proprietorship Questions
From the following balances extracted from the books of M/s Rajendra Kumar
Gupta & Co., pass the necessary closing entries, and prepare a Trading and Profit
and Loss Account.
2. From the following Trial Balance prepare the Manufacturing Account, the Trading
andProfit and Loss Account for the year ending 31st March, 1993.
4. From the following Trial Balance of Mr. Shyam as at 31st December 1993, you
are required to prepare a Trading and Profit and Loss Account for the year ended
31st December 1993 and a Balance Sheet as at the date, after making necessary
adjustments.
TRIAL BALANCE
Name of the Account Debit Credit
Mr. Shyam’ s Capital Account 80,000
Mr. Shyam’ s Drawings Account 6,000
Plant and Machinery (balance on 1st Jan. 1993) 20,000
Plant and Machinery (additions on 1st July 1993) 5,000
Stock on 1st January 1993 15,000
Purchases 82,000
Returns Inwards 2,000
Sundry Debtors 20,600
Furniture and Fixtures 5,000
Freight and Duty 2,000
Carriage outwards 500
Rent, Rates and Taxes 4,600
Printing and Stationery 800
Trade Expenses 400
Sundry Creditors 10,000
Sales 1,20,000
Returns outwards 1,000
Postage and Telegrams 800
Provision for Doubtful Debts 400
Discounts 800
Rent of premises sub-let for year to 30th June 1994 1,200
Insurance Charges 700
Salaries and Wages 21,300
Cash in Hand 6,200
Cash at Bank 20,500
2,13,400 2,13,400
ADJUSTMENTS
1) Stock on 31st December 1993 was valued at 14,600.
2) Write off .600 as bad debts.
3) The provision for Doubtful Debts is to be maintained at 5 % on Sundry Debtors.
4) Create a Provision for Discounts on Debtors and on Creditors at 2 %.
5) Provide for depreciation on Furniture and Fixture at 5 % p.a. and on Plantand
Machinery at 20 % p.a.
6) Insurance Prepaid was 100.
7) A fire occurred on 25th December 1993 in the godown and stock of the value of
5, 000 was destroyed. It was fully insured and the Insurance Company admitted
theclaim in full.
5. From the following balance extracted from the books of M/s. Jaya & Co. and the
subjoined information you are required to prepare the Trading and Profit and Loss
Account for the year ended on 31st December,1994 and also the Balance Sheet as
on that date:-
Particulars Debit Credit
a) Closing Stock on 31st December 1994 was valued at 65,000. Goods worth 500 are
reported to have been taken away by the proprietor for his personal use at home during
1994.
b) Interest on investments 500 is yet to be received while 1,000 of the
commission received is yet to be earned in 1995.
c) 500 of the fire insurance premium paid is in respect of the quarter ending 31st
March, 1995.
d) Salaries 1,000 for December 1994 and Bank Overdraft interest estimated at
2,000 have to be recorded asoutstanding charges.
e) Depreciation is to be provided on Land and Buildings @ 5% and on Furniture and
Fittings @ 10%.
Provision for doubtful debts @ 5% on Sundry Debtors.
6. The following Trial Balance was extracted from the books of M/S Tip Top &
Co. as on 31stDecember, 1993:
Debit Balances:
Plant and Machinery 20,000 Motor car 12,000
Manufacturing wages 34,500 Purchases 1,02,000
Salaries 15,850 Sales Returns 3,100
Furniture 10,000 Bad Debts 1,400
Freight on Purchases 1,860 Interest and Bank charges 400
Freight on Sales 2,140 Cash at Bank 4,200
Buildings 24,000 Cash in Hand 1,120
Manufacturing Expenses 9,500 Credit Balances:
Insurance and Tax 4,250 Capital Account 80,000
Goodwill 25,000 Sundry Creditors 44,560
General Expenses 8,200 Bank Loan 15,000
Factory Fuel and Power 1,280 Purchases Returns 1,740
Sundry Debtors 78,200 Sales 2,50,850
Factory Lighting 950 Reserve for bad debts 2,000
Opening Stock 34,200
Prepare the Trading and Profit and Loss Account for the year ended 31st December
1993 and the Balance Sheet as on that date taking into consideration the following
information:
(a) Stock in hand on 31st December 1993 was valued at 30,500.
(b) Depreciate Plant and Machinery by 10%, Furniture by 5% and Motor Car by
1,000.
(c) Bring Provision for Bad Debts to 5% on Sundry Debtors.
(d) A commission of 1% on the gross profit is to be provided for Works Manager.
(e) A commission of 2% on net profit (after charging the Works Manager's
commission) is to be credited to the General Manager.
7. The following are the balances abstracted from the books of Mr. Nirmal:
Balances ason 31st December, 1992.
Nirmal's Capital 30,000
Nirmal's Drawings 5,000
Furniture and Fittings 2,600
Bank Overdraft 4,200
Creditors 13,300
Business Premises 20,000
Stock on 1st January, 1992 22,000
Debtors 18,600
Rent from Tenants 1,000
Purchases 1,10,000
Sales 1,50,000
Sales Returns 2,000
Discounts - Debit 1,600
Discounts - Credit 2,000
Taxes and Insurance 2,000
General Expenses 4,000
Salaries 9,000
Commission-Debit 2,200
Carnage on Purchases 1,800
Provision for Bad & Doubtful Debts 600
Bad Debts written off 800
Stock on hand on 31st December, 1992 was estimated at 20,000. Rent 300, is
still due from the tenant. Salaries 750, are as yet unpaid. Write off Bad Debts 600
and depreciate Business Premises by 300 and Furniture and Fittings by 266.
Make a provision of 5 per cent on Debtors for Bad and Doubtful Debts and provision
of 2% for Discounts. Allow interest on Capital at 5 percent and carry forward 700
for unexpired insurance. The manager is entitled to a commission of 10% on profits
remaining after charging his commission. Prepare Trading Account, Profit and Loss
Account and BalanceSheet as on 31st December, 1992.