20.

12 Double Entry Book

Keeping-IsSc XI
Illustration 1.
From the following Trial Balance of Rajan, prepare Trading and Profit and Loss
Account tor
the year ended 31st at that date after
March, 2021 and Balance Sheet takin8 into
adjustments given below:
as
account
account the a

TRIAL BALANCE
as at 31st March, 2021

Particulars Dr.
Cr.
Rajan's Capital
Rajan's Drawings
******
3,84 00
******* ******

7,600
Purchases 89,000
Sales
1,50,0
****.******+********

Sales Return ***** ******

2,800
Purchases Return
Stock on 1st April, 2020
4,500
******************* "** 12,000 **

Wages ******
8,000
Building ****************** *************e*******.
2,20,000
1296 Investments (Purchased on 1st July, 2020).. 1,00,000
Interest on Investments ***************°******
*************************** nsuu ******
9,000
Accrured Interest on Investments ***************
3,000
Freight and Carriage Inwards *****************.
20,000 **

Trade Expenses
*
2,000
Advertisement *******
****** ****
2,400 **

Commission 500
*****************e***.

Taxes and Insurance

********
1,300 *

Debtors ****
*****a***aeeseseee
65,000
Creditors
****** ***** 12,000
Bills Receivable
15,000
Bills Payable **************************
7,000
***

Cash at Bank
12,000
Cash in Hand
1,900
Salaries
8,000
Total 5,70,000

5,70,000

Adjustments:
G) Stock on 31st March, 2021 was valued at 7 15,000;
(i) Insurance was prepaid to the externt of 400;

iii) Outstanding liabilities were: Salaries 2,000; Taxes 1,300;

iv) Commission of R 5,000 is yet to be received; and
(v) Depreciate Building at 2% p.a.
 inalAccounts-bfsWith Adjustments
20.13
TRADING AND PROFIT AND
Solution:
LOSS ACCOUNT OF
for the year ended RAJAN
31st March, 2021 Cr.
Particulars
Particulars
To Opening Stock
12,000 By Sales
To Purchases 89,000 1,50,000
Less Purchases Return
Less: Sales Return 2,800 147,200
4,500 84,500 By Closing Stock 15,000
To Wages 8,000
Inwards
To Freight and Carriage 20,000
Profit cd
To Gross 37,700
Transferred to Profit and Loss A/c)

1,62,200 1,62,200
To Trade Expenses 2,000 By Gross Profit b/d 37,700
To Advertisement 2,400 By Interest on Investments 9,000
To Taxes and Insurance 1,300 By Commission 3,500
Add: Outstanding Taxes 1,300 Add: Commission Receivable 5,000 8,500
2,600
Less: Prepaid Insurance 400 2,200
To Salaries 8,000
Add: Outstanding Salaries 2,000 10,000
To Depreciation on Building 4,400
To Net Profit transferred to Capital A/c 34,200
55,200 55,200

BALANCE SHEET OF RAJAN

as at 31st March,2021

Liabilities Assets

Current Liabilities Current Assets

Creditors 12,000 Cash in Hand 1,900

Blls Payable 7,000 Cash at Bank 12,000
Outstanding Expenses: Bills Receivable 15,000
Taxes 1,300 Debtors 65,000
Salaries 2,000 3,300 Prepaid Insurance 400
Capital Closing Stock 15,000
Opening Balance 3,84,000
Commission Receivable 5,000
Accrued Interest on Investments (Note) 3,000
Add: Net Proft Fixed Assets
34,200
Building 2,20,000
4,18,200
Less: Drawings 4,10,600
Less: Depreciation 4,400 2,15,600
7,600 12% Investments 1,00,000
4,32,900
4,32,900
Note Interest wever,9,000 is shown as interest received
Howe
12/100=9,000.

Inves
onnInvestment=71,00 x 9/12x
oft 3,000 in the Iral Balance, means that the adiustina
duringne
the year.
year..Also Accrued Interest on Investment SIde or the Balance Sheet as Current Asset
entry is alreadyt
eady passed. It will be shown only
in the Assets
 Double Entry Book
20.32 Keeping_-Is

Illustration 13.
Amit, prepare Trading and Pro6.
From the balances taken from the books of
following
Loss Account for the year ended 31st March, 2021
and Balance Sheet as at that date date after
after takin,
into consideration the adjustments given beloW:
TRIAL BALANCE
s at 31st March, 2021

Particulars
Dr.) Cr.

60
*****

Capital ***

7,500
Drawings * * * * * * * * * * * * * * * * * * " * * * *

72,100
Purchases **********"******
************ ***.

Sales 9503
1,300
Returns ***********

Sundry Debtors ************************ 18,20

Creditors *****
35,753
Opening Stock 19,800
Bad Debts 3,000
Bills Receivable ***************************
22,000
Bills Payable *ee******
************ 23.000
300
Cash in Hand ****

Office Expenses *********************

*** 6,210
Delivery Van *******************
15,000
Delivery Van Expenses " * * * * * * * * * * * * * * * * * * * * * * * * * * " " * * * * *
1,400
**
910
Dis ount **********************************

Rent 10,700
1,050
Telephone Charges **************************
**********

950
Postage Expenses ************************* ******"***|

Furniture ********* 5,000

2,750
Printing and Stationery ***
*****"***** ********************************************.

Commission ************
8,400
Carriage Inwards *************** 3,200
Salaries and Wages ******
20,500
2,1936
Total 2,19,360

Adjustments:
6) Closing Stock was valued at 7 67,700. However, its market value is 61,700.
(i) Depreciate Furniture and Machinery@ 10% p.a. and Delivery Van@ 20% p.a.
(ii) Outstanding Rent amounted to 7 900.

(iv) Bad Debts 7 200.

(v) Charge 1/4th of Salaries and Wages to the Trading Account.
was

(vi) A new machine was installed on 31st December, 2020 costing 7 15,000 but1
recorded in the books as no payment was made for it.
 Final Accounts- With Adjustments 20.33

Solution: TRADING AND PROFIT AND LOSS ACCOUNT OF AMIT

Dr. for the year ended 31st March, 2021 Cr.
Particulars Particulars
To Opening Stock
19,800 By Sales 95,000
To Purchases 72,100 Less: Returns Inward 1,300 93,700
Less: Returns Outward 2,700 69,400 By Closing Stock 61,700
To Carriage Inwards
3,200
To Salaries and Wages (1/4 of 20,500) 5,125
To Gross Profit c/d 57,875
(Transferred to Profit and Loss A/c)

1,55,400 1,55,400

To Office Expenses 6,210 By Gross Profit b/d 57,875

To Delivery Van Expenses 1,400 By Discount 2,910
To Rent 10,700
Add: Outstanding 900 11,600
To Telephone Charges 1,050
To Postage Expenses 950
To Printing and Stationery ,750
To Commission 8,400
To Salaries and Wages ( 20,500 x 3/4) 15,375
To Bad Debts 3,000
Add: Further Bad Debts 200 3,200
To Depreciation on: Delivery Van 3,000
Furniture 500
Machinery (Note 2) 375 3,875
To Net Profit transferred to Capital A/c 5,975
60,785 60,785

BALANCE SHEET OF AMIT as at 31st March, 2021

Liabilities Assets

Current Assets
Current Liabilities
23,000 Cash in Hand 300
Bills Payable
35,750 Bills Receivable 22,000
Sundry Creditors
Outstanding Rent 900 Sundry Debtors 18,200
15,000 Less: Bad Debts 200 18,000
Vendor for Machinery
Closing Stock 61,700
Capital Fixed Assets
Opening Balance 60,000
Less: Drawings 7,500 Machinery 15,000
52,500 Less: Depreciation
5,975 58,475 15,000 x 3/12 x 10/100) 375 14,625
Add. Net Profit
Delivery Van 15,000
Less: Depreciation 3,000 12,000
Furniture 5,000
Less: Depreciation 500 4,500
1,33,125 1,33,125

Notes: 1. Closing stock is accounted in the booksat 61,700becauseit is lower than the cost. The Prudence
Principle "stock is valued at Cost or Net Realisable Value (Market Value), whichever is less" is applied.
2. Depreciation on Machinery is calculated on 15,000 for 3 months.
 Double Entry
20.58
Book
Keeping-ISC x
PRACTICALPROBLEMS
Manish on 31st March, 2021:
Following are the balances extracted from the books of

1,90,000 Cash at Bank

Capita
Drawings
Plant and Machinery
7,000
1,20,000
Salaries
Repairs
2600
8,000
Stock on 1st April, 2020
Delivery Vehicle 26,000 1,900
Sundry Debtors 36,000 Rent 16000
4 500
Sundry Creditors 26,000 Manufacturing Expenses
Purchases 20,000 Bills Payable 1,500
Sales 42,000 Bad Debts 23 500
Wages 8,000 Carriage Inwards S000
Prepare Trading and Profit and Loss Account and Balance Sheet as at 31st March, 2021
2021 after
after follo 1600
following
adjustments are made.
Closing Stock was 16,000.
(RDepreciate Plant and Machinery @ 10% and Delivery Vehicle @ 15%.
(iki) Unpaid Rent amounted to R 500.
Prepare Trading and Profit and Loss Account and Balance Sheet from the following balances, relatina
the year ended 31st March, 2021: to

Capital 1,00,000 Wages

Creditors 12,000 Bank
50,000
Returns Outward 10,000
5,000 Repairs
Saies 500
1,64,000 Stock on 1st April, 2020
Bills Payabie 20,000
5,000 Rent
Piant and Machinery 4,000
40,000 Manufacturing Expenses
Sundry Debtors 8,000
24,000 General Expenses
Drawings 7,000
10,000 Bad Debts
Purchases 2,000
1,05,000 Carriage
Returns inward 1,500
3,000 Fuel and Power 1,000
Additional information:
i) Closing Stock was valued at 7 14,500.
() Depreciate Plant and Machinery by 4,000.
i) Write off Bad Debts5,000.
(iv) A sum of 400 is due for repairs.
3. Foliowing Trial Balance has been extracted from the
books of M/s Ram Prasad & Sons on 213
Particulars 31st Marcn,
Dr.() Particulars Cr.
Machinery
Cash at Bank 40,000 Capital 90,000

Cash in Hand 10,000 Sales 1,60,000

Wages 5,000 Sundry Creditors 5,000

Purchases 10,000 Interest Received 3.000

Stock on 1st April, 2020 80,000

Sundry Debtors 60,000
Bilis Receivable 44,000
Rent 29,000
Commission 4,500
General Expenses 2,500
Salaries 8,000
5,000
98,000
2,98,000
Final Accounts-With Adjustments 20.59

Additional Information:

() Outstanding salaries were 4,500.

(i) Depreciate Machinery at 10%.
(ii) Wages outstanding were 500
(iv) Rent prepaid 1,000.
()Stockon 31st March, 2021 80,000.
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2021 and Balance Sheet as at
that date.
4. Trial Balance of a business as at 31st March, 2021 is given below:
Particulars Dr..R) Particulars Cr.()
Stock on 1st April, 2020 25,000 Sales 2,27,800
Furniture 8,000 Commission 500
Plant and Machinery 1,50,000 Returns Outward 1,000
Debtors 30,000 Creditors 40,000
Wages 12,000 Capital 1,50,000
Salaries 20,000
Bad Debts 1,000
Purchases 1,20,000
Electricity Expenses 1,200
Telephone Expenses 2,400
General Expenses 3,000
Postage and Courier 1,800
Returns Inward 900
Insurance Premium 1,500
Cash in Hand 2,500
Cash at Bank 40,000
4,19,300 4,19,3000

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2021 and Balance Sheet
that date after taking into account the following adjustments:
as at

) Closing Stock was valued at 7,000.

(i) Outstanding liabilities for wages were 600 and salaries 1,400.
(ii) Depreciation is to be provided @ 5% p.a. on all fixed assets.
(iv) Included in Plant and Machinery is a machine purchased for T 10,000 on 1st October, 2020.
(v)Insurance premium paid in advance R 200.
Lal
5. Following are the balances extracted from the books of Narain
on 31st March, 2021:

Particulars Particulars

Narain Lal's Capital 3,00,000 Sales 15,00,000

Narain Lal's Drawings 50,000 Sales Return 20,000
Furniture and Fittings 26,000 Discount (Dr) 16,000
Bank Overdraft 42,000 Discount (Cr) 20,000
Creditors 1,38,000 Insurance 20,000
Business Premises 2,00,000 General Expenses 40,000
Stock on 1st April, 2020 2,20,000 Salaries 90,000
Debtors 1,80,000 Commission (Dr.) 22,000
Rent from Tenants 10,000 Carriage on Purchases 18,000
Purchases 11,00,000 Bad Debts Written off 8,000
 With Adjustments 20.61
Final Accounts-

PrepareTrading ana rront and Loss Account for the year ended 31st March, 2021 and Balance sheet a at
date after giving effect to the following adjustments:
(a Stock as on 31st March, 2021 was valued at
7 2,30,000.
(b) Write off further 1,800 as Bad Debts and maintain the
<
Provision for Doubtful Debts at 50.
(c)Depreciate Machinery at 10%.
ProvideR 7,000 as outstanding interest on loan.
td)

Eallowing Trial Balance has been extracted from the books

of Shri Sunder Lal on 31st March, 2021:
Particulars
Dr.) Cr.()
Cash in Hand and at Bank 2****** * *****i*s******

******************************* 7,740
Capital ******************************
*********************************e*************************** 3,00,000
Drawings *******e*** 12,600
Bills Receivable
**********************************************e************************** 3,720
Land and Building ***°***************°T**************°***°**** °***se
*********
65,160
Furniture ***.**************o*******
*****.
*e******* 10,240
Wages 93,770
Discount Allowed *****a************e****** *°*****
7,920
Discount Received ********************9***************************e*****
5,970
6% Loan *******e*******e*******e***********
***********
30,000
Bank Charges ******
********* 210
Bad Debts ************************e*****
2,760
Sundry Debtors ********** *********** 1,31,550
Office Salaries *******e***************e*******
******
20,16
Purchases **************************** ***°*°***** *******
3,98,160
Stock on 1st April, 2020 **************************. **********
1,20,450
Sales Return *********************e*****e******e************* 3,750 **

Carriage Inwards *****.*********************** 10,360

General Expenses **************************** ********** 15,360
Plant and Machinery *******e*******ee*n*************** *******e***
43,280 **

Purchases Return * * * * * " * * * * * * * * * * * * * * * * * * *

******* **
2,910
Sales ***e********s*********************************** 5,63,010
Insurance ****************************** 1,410
Provision for Doubtful Debts .. ***********
9,300
Sundry Creditors ********************* 37,350
Total 9,48,5400 9,48,540

Closing Stock on 31st March, 2021 was 1,27,410.

PrepareTrading and Profit and Loss Account for the year ended 31st March, 2021 and Balance Sheet as at
that date after giving effect to the following adjustments:

a)Depreciate Plant and Machinery @ 10% and Furniture @ 5%.

6) Raise the Provision for Doubtful Debts to 7 15,000.
cInsurance includes annual premium of 720 on a policy which will expire on 30th September, 2021
(d) Purchases includes a computer costing 76,000 purchased on 1 stJuly, 2020 and is subjectto depreciation

@10% p.a.
 Final Accounts-
With
Adjustments 20.63

rom the following Trial Balance of Shubho, prepare final accounts

Balance Sheet as at that date: for the year ended 31st idry

Particulars
Dr. Balances Cr. Balances

Land and Building ***************

*************************************************** 50,000
Purchases (Adjusted) * * **
* *e***

Closing Stock
************* ****************************.******** 2,07,500
*******
****'*************************** *** 45,000
Returns Inward
******************************
1,500
Wages *********

*****************a********e*****************e******** 45,300
Salaries *******es***

39,000
Office Expenses *****************************
15,400
Carriage Inwards
****
**************
e******n**** 1,200
Carriage Outwards ***********

****°*°*****°********°************| 2,000
Discount allowed ******************
*****

750
Discount received ***********
******************
********************e*********************
1,200
Bad Debts *****
****
*********************************************** 1,200
Sales ***************"******* *****
3,85,000
Capital Account ********************************************** ************************.
1,15,000
Chatterji's Loan A/c (taken on 1st Oct, 2020 @ 18%
p.a.). *********************°*************************************************
25,000
Insurance ****************************************** 1,500
Commission ************************
1,500
Plant and Machinery **********************************a*****a******************************* *********
50,000
Furniture and Fixtures * * * * * * * * * * * * * * * * *

**************
20,000
Bills Receivable 20,000 *

Sundry Debtors *** ***** ************

40,000 **

Sundry Creditors ********************************************************************* **

25,000
Cash at Bank *************************************°************ 16,000 **

Office Equipments ***************a********n*******ssss*nsannss

12,000
Bills Payable *****
************************************

12,350
Expenses Payable **
******** ************

3,300
Total 5,68,350
-
5,68,350

he following adjustments be taken care of:

) Depreciate: Land and Building@ 6%, Plant and Machinery @ 10%, Office equipments @ 20%
and Furniture and Fixtures @ 15%.

Create Provision for Doubtful Debts at 2% on Sundry Debtors.

Insurance premium includes 250 paid in advance.

(V) Provide
salary to Shubho 15,000 p.a.
(v)
Outstanding Salaries 11,500.
70 of the final profit is to be transferred to General Reserve.
 Final Accounts-With Adjustments 20.65

12 The Trial Balance of Shyam for the year ended 31st March, 2021 is
given below
Heads of Accounts
Dr.) Cr.)
Furniture ********************************************************* * *** ******************* ****** *** 64,000
Building ********************************************************************** ************************ **** ***** 7,50,000
Machinery ** ****************

******************************* *************************************** 6,25,000

Cash **************************************************************************oe************** **************** 65,000
Debtors **** **** Y

****************"*********************************************************************************** 3,80,000
Creditors 2,50,000
*************************************************************************** ****************************"***** ****
Sales 15,45,000
*********************************************************************************************************************** ******
Purchase Return 12,500
************************************************************************************************************ ***** **
Bad Debts ********************************************
*****"*****"******************************************************************************"
12,500
Provision for Doubtful Debts ********* ***********************************************e**************ar*ssssssesn 20,000
Opening Stock ******"*************
****************************************************************assssns*** **sensense 3,46,000

Bank Overdraft *************************************************************************************sssnn***enannoann**** .*. 2,85,000

Capital ************************************************************************************snsssons****nesonn ********* 12,50,000

Purchases ************************************************************************************************ssssesnes**nsososoe**sesoseee** 5,47,500
Sales Return ******************************************************************************************************************************** 20,000
Advertisement ********************************************************************************************************************************** 45,000
Interest *************************** *****************e************************************s*******ss*******************e** 11,800
Commission ********** ********************************************************************************** 37,500
Tax an Insurance *********************************************************************************************************** *******"
1,25,000

General Expenses ******s*ere**************************************************************************************************** 78,200

Salary *****************************"***********"**************** ******** ************* **7*********************** 3,30,000 ***

Total 34,00,000 34,00,000

Adjustments to be taken into account:

i) Closing Stock is valued at 3,25,000 against its purchase cost of R 3,35,000.

i) Interest of ? 8,500 is due on bank overdraft.

(i) Depreciation on building is to be provided @ 5%, furniture @ 10% and machinery @ 20%.

(IV) Salary outstanding is 30,000; and tax outstanding is R 12,000.

(v) Prepaid insurance is 10,000 and one-third of commission has been received in advance.

(vi) Purchase include furniture of? 10,000.

(vii) Remaining debtors are good.

Prepare Trading and Profit and Loss Account for the year ended 31lst March, 2021 and a Balance Sheet as

on that date.
 Double Entry Book Keeping
20.68
Profit and Loss Acce.
-ISC XI
Sons, prepare Trading, ount for the
Trial Balance of M/s Ram Lal &
15. From the following
a Balance
Sheet as on that date
yearending 31st March, 2021 and
Dr.)
Heads of Accounts Cr.
***********
* * * * * * * * * * * * * * * * * * * * * " *

15,000
*****

Drawings ***********e***************

350M
* * * * * * * * * " * * * * *

Capital ***** *
*

***********"****** **
***************e****
2,05,000
Pant and Machinery ****** ***
*******

*****°°**** ***
* * * * * * * * * * * * * * * * *

50,000
Dobtors ********** *
*******

*******************

2500
***************

Creditors ********

****** 8,000
Returns Inward
* * * * * * * * * * * * * * *

***
*******

*
************* ********
Returns Outward 7,00
Discount Allowed
7,000

Discount Received
*

6,00
Commission ******************"° 15,000
Interest on Bank Loan 12,000

irniture ******************** **** 55,000

Provision for Doubtful Debts ****.****************************
13,000
Wages ************
50,000
laries *******************
45,000
Avertisement Expenses 15,000
Rent and Taxes *****
13,000
Pfchases 2,60,000 **

ales **************** **
4,00,00
Stock on 1st April, 2020 ***°*********°*******°******
70,000
Carriage Inwards **********************
5,000
and and Building *********
*******°*****.******
98,000
Cash in Hand
***************************************************** 8,000
Cash at Bank
*************************************************************** 20,000
10% Bank Loan as on 1st April, 2020 1,5000
*********************************************************** **

Total 9,51,0
9,51,000
Adjustments:
(i) The cost of stock on 31st March, 2021 was 37,000. However, its market value 0.
(ii)
was 35,00
Wages outstanding were 6,000 and salaries
outstanding were 5,000 on 31st March,
40
ii) Depreciate: Land and
Building @ 2/%, Plant and
Machinery @ 10% p.a. and Furniture 96 p.a
(iv) Amount of
Purchases includes purchase of machinery for 10,000 on 1st October,
() 2020
Debtors include bad debts of 2,000. Maintain a
provision for doubtful debts
btors

@ 10% On
(vi) One-third of advertisement
expenses are to be written off.