VYSYA COLLEGE- SALEM-103

DEPARTMENT OF MANAGEMENT STUDIES

I-MBA
ACCOUNTING FOR MANAGERS

UNIT – I
PROBLEMS
JOURNAL
Problem No: 01(Others: Financial accounting- S.Manikandan and R.Rakesh Shankar- Sum No.1 Page No.
4.11)
Journalizes the following transaction in the books of Raja.
1. Sold goods for cash 15,000
2. Purchased goods for cash 10,000
3. Sold goods to Mr.A 25,000
4. Purchased goods from Mr.B 30,000
5. Paid salary Rs 5,000
6. Paid rent to Raman, the land lord 4,000
Solution

Journal Entries in the Books of Raja

Date Particulars L.F Debit Credit
1 Cash A/c Dr 15,000
To Sales A/c 15,000
(Being sales made in cash)
2 Purchase A/c Dr 10,000
To Cash A/c 10,000
(Being goods purchased)
3 Mr. A a/c Dr 25,000
To Sales A/c 25,000
(Being goods sold to Mr. A)
4 Purchase A/c Dr 30,000
To Mr. B A/c 30,000
(Being goods purchased from Mr.B)
5 Salary A/c Dr 5,000
To Cash A/c 5,000
(Being salary paid)
6 Rent A/c Dr 4,000
To Cash A/c 4,000
(Being Rent paid)

Problem No: 02 (T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 1 Page No. 2.36)
Journalize the following transactions.
1 Purchased goods for cash Rs.10000
2 Purchased stationery for cash Rs.500
3 Purchased furniture for cash Rs.3000
4 Sold goods for cash for Rs.8000
5 Sold goods to Jane for cash Rs.3000
6 Sold goods to James Rs.2000
7 Paid rent to Krishnan, the landlord Rs.800
8 Paid salary for Rs.8000
9 Paid lokesh, the manager his salary of Rs.3000
10 Paid freight on goods purchased Rs.300
1
 11 Paid freight on machinery purchased Rs.400
12 Paid wages Rs.500
13 Paid waged to Erect machine Rs.1000
14 Received Rs.800 from kamal
15 Received Rs.600 as Interest from kamal
16 Received Rs.7000 as loan 5% from kamal

Solution
Journal Entries in the Books of _________
Date Particulars L.F Debit Credit
1 Purchase A/c Dr 10,000
To Cash A/c 10,000
(Being goods purchased)
2 Stationary A/c Dr 500
To Cash A/c 500
(Being Stationary purchased)
3 Furniture A/c Dr 3,000
To Cash A/c 3,000
(Being furniture purchased)
4 Cash A/c Dr 8,000
To Sales A/c 8,000
(Being sales made in cash)
5 Cash A/c Dr 3,000
To Sales A/c 3,000
(Being sales made in cash)
6 Mr. James A/c Dr 2,000
To Sales A/c 2,000
(Being goods sold to James)
7 Rent A/c Dr 800
To Cash 800
(Being Rent paid)
8 Salary A/c Dr 8,000
To Cash A/c 8,000
(Being salary paid)
9 Salary A/c Dr 3,000
To Cash A/c 3,000
(Being manager salary paid)
10 Freight A/c Dr 300
To Cash A/c 300
(Being freight paid for Cash)
11 Machinery A/c Dr 400
To Cash A/c 400
(Being payment of freight on
machinery)
12 Wages A/c Dr 500
To Cash A/c 500
(Being wages paid)
13 Machinery A/c Dr 1,000
To Cash A/c 1,000
(Being wages paid to erect machine)

2
 14 Cash A/c Dr 800
To Kamal A/c 800
(Being received from Kamal)
15 Cash A/c Dr 600
To Interest A/c 600
(Being interest received from Kamal)
16 Cash A/c Dr 7,000
To 5% loan A/c 7,000
(Being loan from Kamal for interest)

Problem No: 03 (T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 1 Page No. 2.87)
1987Oct1. Commenced Business with Rs 50000
3. Purchased goods for cash Rs 10000 at 5% trade discount
4. Paid carriage Rs 50
8. Purchased Machinery for Rs. 20000
10. Sold goods to Madan on account for Rs. 1500
Journal Entries
Date Particulars L.F Debit Credit
1987
Oct, 1 Cash A/c Dr 50,000
To Capital A/c 50,000
(Being business commenced)
Oct,3 Purchase A/c Dr 9,500
To Cash A/c (10,000 - 500) 9,500
(10,000 X 5/100 = 500)
(Being goods purchased with trade
discount @ 5%)
Oct,4 Carriage A/c Dr 50
To Cash A/c 50
(Being carriage paid)
Oct,8 Machinery A/c Dr 20,000
To Cash A/c 20,000
(Being machinery purchased)
Oct,10 Madan A/c Dr 1,500
To Sales A/c 1,500
(Being goods sold to Madan)

Problem No: 04 (T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 2 Page No. 2.39)
Journalize the following transactions of M/s Radha & Sons.
2011 Jan 1 Business started with Rs. 2,50,000 and cash deposited with bank Rs. 1,50,000
3 Purchased machinery on credit from Rangan Rs.50,000
6 Bought furniture from Ramesh for cash Rs. 25,000
12 Goods sold to Yesodha Rs.22,500
13 Goods returned by Yesodha Rs.2,500
15 Goods sold for cash Rs. 50,000
17 Bought goods for cash Rs.25,000
20 Cash received from Yesodha Rs. 10,000
21 Cash paid to Ramola Rs.20,000
25 Cash withdrawn from bank Rs. 50,000

3
 29 Paid advertisement expenses Rs. 12,500
30 Bought office stationery for cash Rs. 5,000
31 Cash withdrawn from bank for personal use of the proprietor Rs. 6,250
31 Paid salaries Rs. 15,000
31 Paid rent Rs. 2,500
Solution
Journal Entries in the Books of M/s Radha & Sons
Date Particulars L.F Debit Credit
2000
Jan 1 Cash A/c Dr 2,50,000
To Capital A/c 2,50,000
(Being cash brought in as capital)
1 Bank A/c Dr 1,50,000
To Cash A/c 1,50,000
(Being cash deposited into bank)
3 Machinery A/c Dr 50,000
To Rangan A/c 50,000
(Being machinery purchased on
credit)
6 Furniture A/c Dr 25,000
To Cash A/c 25,000
(Being furniture purchased)
12 Yesodha A/c Dr 22,500
To Sales A/c 22,500
(Being goods sold to Yasodha)
13 Sales Return A/c Dr 2,500
To Yesodha A/c 2,500
(Being goods return by Yasodha)
15 Cash A/c Dr 50,000
To Sales A/c 50,000
(Being sales made in cash)
17 Purchase A/c Dr 25,000
To Cash A/c 25,000
(Being goods purchased)
20 Cash A/c Dr 10,000
To Yesodha A/c 10,000
(Being received from Yasodha)
21 Ramola A/c Dr 20,000
To Cash A/c 20,000
(Being cash paid to Ramola)
25 Cash A/c Dr 50,000
To Bank A/c 50,000
(Being cash withdrawn from bank)
29 Advertisement A/c Dr 12,500
To Cash A/c 12,500
(Being Advertisement exp. paid)
30 Office Stationary A/c Dr 5,000
To Cash A/c 5,000
(Being Office Stationary purchased)
31 Drawing A/c Dr 6,250
To Bank A/c 6,250
(Being cash withdrawn from bank for

4
 personal use)
31 Salaries A/c Dr 15,000
Rent A/c Dr 2,500
To Cash A/c 17,500
(Being Salaries & Rent paid)

Problem No: 05
(Others: Financial Accounting - S. Manikandan and R. Rakesh Shankar- Sum No. 10 Page No. 4.26)
Journalise the following transactions:
1. Kumar started with a capital of Rs. 10,00,000
2. Purchase Machinery Rs. 2,00,000
3. Cash purchase Rs. 1,50,000
4. Cash sales Rs. 2,20,000
5. Paid Salaries Rs. 15,000
6. Rent paid Rs. 24,000
7. Paid wages Rs. 15,000
8. Credit purchase from Bajaj Rs. 10,000.
9. Solution
10. Journal Entries
Date Particulars L.F Debit Credit
1 Cash A/c Dr 10,00,000
To Kumar Capital A/c 10,00,000
(Being business commenced)
2 Machinery A/c Dr 2,00,000
To Cash A/c 2,00,000
(Being machinery purchased)
3 Purchase A/c Dr 1,50,000
To Cash A/c 1,50,000
(Being goods purchased)
4 Cash A/c Dr 2,20,000
To Sales A/c 2,20,000
(Being sales made in cash)
5 Salary A/c Dr 15,000
To Cash A/c 15,000
(Being Salaries paid)
6 Rent A/c Dr 24,000
To Cash A/c 24,000
(Being Rent paid)
7 Wages A/c Dr 15,000
To Cash A/c 15,000
(Being wages paid)
8 Purchase A/c Dr 10,000
To Bajaj A/c 10,000
(Being Credit purchase from Bajaj)

Problem No: 06
(Others: Financial Accounting - S. Manikandan and R. Rakesh Shankar- Sum No. 3 Page No. 4.14)
Journalize the following transaction in the books of shah royal co.
2008 march 1. Mr. shah commenced business in the name of “shah royal co.” with Rs. 3,00,000 as capital
2. Opened bank account with HDFC by depositing Rs. 10,000
2. Purchased goods for cash from rahul bros. For Rs. 30,000. Trade discount 10 %
3. Sold goods on credit to raja for Rs. 15,000
5
 4. Paid for printing and stationery Rs. 250
7. Purchased chairs for office use Rs. 3,000
9. Purchased goods for cash from M.S. enterprises Rs. 35,000 at trade discount @5%
and cash discount of 2%
10. Sold goods to chandru for cash Rs. 15,000 at trade discount of 3%
11. With draw cash from bank for office use Rs. 3,000
17. Cash withdrawal from bank by shah for personal use Rs. 20,000
20. Cash deposited into bank Rs. 3,000
24. Paid for advertisement by cheque Rs. 3,000
31. Paid salary to staff Rs. 9,000
Rent to land lord Rs. 5,000

Solution
Journal Entries in the Books of Shah Royal Co.
Date Particulars L.F Debit Credit
2008 Cash A/c Dr 3,00,000
Mar, 1 To Capital A/c 3,00,000
(Being business commenced)
Mar,2 HDFC Bank A/c Dr 10,000
To Cash A/c 10,000
(Being HDFC Bank account opened)
Mar,2 Purchase A/c Dr 27,000
To Cash A/c (30000-3000) 27,000
(30000x10/100=3000)
(Being goods purchased with trade
discount @ 10%)
Mar,3 Raja A/c Dr 15,000
To Sales A/c 15,000
(Being goods sold to Raja)
Mar,4 Printing and Stationary A/c Dr 250
To Cash A/c 250
(Being Printing/Stationary purchased)
Mar,7 Furniture & Fitting A/c Dr 3,000
To Cash A/c 3,000
(Being Furniture & Fitting purchased)

Mar,9 Purchase A/c Dr

(35,000-(35,000x5%) 33,250
To Cash (33250-(33250x2%) 32,585
To Discount received 665
(33250x2/100)
(Being goods purchased with trade
discount and cash discount)
Mar,10 Cash A/c Dr 14,550
To Sales A/c (15000-(15000x3%) 14,550
(Being goods sold with trade discount)

Mar,11 Cash A/c Dr 3,000

To HDFC Bank A/c 3,000
(Being cash withdrawn for office use)
Mar,17 Drawings A/c Dr 20,000
To HDFC Bank A/c 20,000

6
 (Being cash withdrawn for personal use)

Mar,20 Bank A/c Dr 25,000

To Cash A/c 25,000
(Being cash deposited into HDFC Bank)
Mar,24 Advertisement A/c Dr 3,000
To HDFC Bank A/c 3,000
(Being adv. charges paid by cheque)
Mar,31 Salary A/c Dr 9,000
Rent A/c Dr 5,000
To Cash A/c 14,000
(Being Salaries & Rent paid)

Problem No: 07
(Others: Financial Accounting - S. Ganeson and S. R. Kalavathi- Sum No. 1 Page No. 4.11)
Journalize the following transactions.
2015. Rs
March 1 Amin stared business with 10 000
2 Purchased furniture for cash 2,000
3 Purchased goods for cash 4,500
4 Purchased goods from John on credit 4,200
5 Sold goods for cash 5,000
6 Sold goods to Jose on credit 6,000
9 Paid for stationery 200
11 Paid for advertising 300
15 Sold goods 2,400
21 Purchased goods 1,100
28 Paid to John 3,000
29 Received from Jose 4,500
30 Paid rent 300
30 Paid salary 400
31 Received commission 200
31 Withdrew of cash for domestic use 300
Solution
Journal Entries in the Books of ...
Date Particulars L.F Debit Credit
2015
Mar, Cash A/c Dr 10,000
1
To Capital A/c 10,000
(Being business started)
2 Furniture A/c Dr 2,000
To Cash A/c 2,000
(Being Furniture purchased)
3 Purchase A/c Dr 4,500
To Cash A/c 4,500
(Being goods purchased)
4 Purchase A/c Dr 4,200
To John 4,200
(Being goods purchased from John)
5 Cash A/c Dr 5,000
To Sales A/c 5,000
(Being sales made in cash)
7
 6 Jose A/c Dr 6,000
To Sales A/c 6,000
(Being Sold goods to Jose)
9 Stationary A/c Dr 200
To Cash A/c 200
(Being Stationary paid)
11 Advertisement A/c Dr 300
To Cash A/c 300
(Being advertisement charges paid)
15 Cash A/c Dr 2,400
To Sales A/c 2,400
(Being sales made in cash)
21 Purchase A/c Dr 1,100
To Cash A/c 1,100
(Being goods purchased)
28 John A/c Dr 3,000
To Cash 3,000
(Being Paid to John)
29 Cash A/c Dr 4,500
To Jose 4,500
(Being Received from Jose)
30 Rent A/c Dr 300
Salary A/c Dr 400
To Cash A/c 700
(Being Salaries & Rent paid)
31 Drawings A/c Dr 300
To Cash A/c 300
(Being cash withdrawn for domestic
use)

Problem No :08 (Others:Financial Accounting -S.Manikandan and R.Rakesh Shankar- Sum No.2 Page
No.5.9)
Record the following transaction in the personal account of Shri Naresh
May 1,2009 Purchased goods from Shri Naresh Rs. 50,000
May 4, 2009 Paid Shri Naresh by way of chequu in full settlement Rs. 49,900
May 14, 2009 Purchased goods from Shri Naresh by payment of Cash Rs. 10,200
May 29, 2009 Purchased goods from Shri Naresh Rs. 72,400
June 4, 2009 Paid cash to Shri Naresh Rs. 40,000
June 9, 2009 Returned goods to Shri Naresh Rs. 5,720

Solution:
Shri Naresh Account
Dr Cr
Date Particulars Rs. Date Particulars Rs.
2009 2009
May 4 To Bank A/c 49,900 May 1 By Purchase A/c 50,000
May 4 To Discount 100 May 29 By Purchase A/c 72,400
May To balance C/d 72,400
31
1,22,400 1,22,400
June 4 To Cash A/c 40,000 June 1 By balance b/d 72,400
June 9 To Purchase 5,720
return
8
 June To balance C/d 26,680
30
72,400 72,400
July 1 By balance b/d 26,680

Ledger
Problem No: 09 (T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 14 Page No. 2.92)
Journalise the following transactions, post them in the ledger and balance the accounts on 31st Jan 1999
Jan, 1 lakshmi started business with a capital of Rs.50,000
2 Purchased goods from mala on credit Rs. 10,000
5 Paid cash to mala Rs. 5,000
7 Sold goods to Shanthi Rs. 10,000
10 Received cash from Shanthi Rs. 8,000
15 Further Purchased goods from mala Rs. 12,000
20 Paid cash to mala Rs. 4,000
25 Further Sold goods to Shanthi Rs. 10,000
30 Received cash from Shanthi Rs. 8,000
Solution:
Journal Entries in the Books Lakshmi
Date Particulars L.F Debit Credit
Jan 1 Cash A/c Dr 50,000
To Capital A/c 50,000
(Being business started)
2 Purchase A/c Dr 10,000
To Mala A/c 10,000
(Being goods purchased from Mala)
5 Mala A/c Dr 5,000
To Cash 5,000
(Being cash paid to Mala)
7 Shanthi A/c Dr 10,000
To Sales 10,000
(Being Sold goods to Shanthi)
10 Cash A/c Dr 8,000
To Shanthi A/c 8,000
(Being Cash Received from Shanthi)
15 Purchase A/c Dr 12,000
To Mala A/c 12,000
(Being goods purchased from Mala)
20 Mala A/c Dr 4,000
To Cash 4,000
(Being cash paid to Mala)
25 Shanthi A/c Dr 10,000
To Sales 10,000
(Being Sold goods to Shanthi)
30 Cash A/c Dr 8,000
To Shanthi A/c 8,000
(Being Cash Received from Shanthi)

Ledger Accounts
Cash Account
Date Particulars Rs. Date Particulars Rs.
Jan 1, 99 To Capital A/c 50,000 Jan 5 By Mala A/c 5,000
9
 Jan 10 To Shanthi A/c 8,000 Jan 20 By Mala A/c 4,000
Jan 30 To Shanthi A/c 8,000 Jan 31 By balance c/d 57,000
66,000 66,000
Feb 1 To balance b/d 57,000

Capital Account
Date Particulars Rs. Date Particulars Rs.
Jan 31 To balance c/d 50,000 Jan 1, 99 By cash 50,000
50,000 50,000
Feb 1 By balance b/d 50,000

Purchase A/c
Date Particulars Rs. Date Particulars Rs.
Jan 2, 99 To Mala A/c 10,000
Jan 15 To Mala A/c 12,000 Jan 31 By balance c/d 22,000
22,000 22,000
Feb 1 To balance b/d 22,000
Mala A/c
Date Particulars Rs. Date Particulars Rs.
Jan 5 To Cash 5,000 Jan 2, 99 By Purchase 10,000
Jan 20 To Cash 4,000 Jan 15 By Purchase 12,000
Jan 31 To balance c/d 13,000
22,000 22,000
Feb 1 By balance b/d 13,000
Shanthi A/c
Date Particulars Rs. Date Particulars Rs.
Jan 7 To Sales 10,000 Jan 10 By Cash A/c 8,000
Jan 25 To Sales 10,000 Jan 30 By Cash A/c 8,000
Jan 31 By balance c/d 4,000
20,000 20,000
Feb 1 To balance b/d 4,000
Sales A/c
Date Particulars Rs. Date Particulars Rs.
Jan 7 By Shanthi A/c 10,000
Jan 31 To balance c/d 20,000 Jan 25 By Shanthi A/c 10,000
20,000 20,000
Feb 1 By balance b/d 20,000

Solution
Journal Entries in the Books of Hans Raj
L.
Date Particulars Debit Credit
F
Mar 1 Cash A/c Dr 30,000
To Capital A/c 30,000
(Being business started)
Mar 3 Purchase A/c Dr 1,500
To Cash A/c 1,500
(Being goods purchased)
Mar 4 Bank A/c Dr 21,000
To Cash A/c 21,000
(Being cash deposited into bank)
Mar 5 Cash A/c Dr 1,500
10
 To Bank A/c 1,500
(Being cash withdrawn from
bank)
Mar 6 Ramu a/c Dr 1,500
To Sales A/c 1,500
(Being goods sold to Ramu)
Mar 10 Purchase A/c Dr 680
To Kannan A/c 680
(Being goods purchased on credit)
Mar 19 Cash A/c Dr 1,500
To Ramu A/c 1,500
(Being cash Received from Ramu)
Mar 20 Cash A/c Dr 2,400
To Sales A/c 2,400
(Being sales made in cash)
Mar 27 Kannan A/c Dr 680
To cash 680
(Being Paid to Kannan in full
settlement)
Mar 28 Rent A/c Dr 150
Salaries A/c Dr 300
To Cash A/c 450
(Being Rent & Salaries paid)

Problem No. 10
Enter the following transaction in the journal and ledger of Hans Raj of Chennai 1999:
Mar 1 Hans Raj commenced business with cash Rs. 30,000
3 Purchased goods for cash Rs. 1,500
4 Deposited into Bank Rs. 21,000
5 Withdrew from bank for office use Rs. 1,500
6 Sold goods to Ramu Rs. 1,500
10 Purchased goods on credit from Kannan Rs. 680
19 Received from Ramu 1,500
20 Cash sales Rs. 2,400
27 Paid to Kannan in full settlement
28 Paid Rent Rs. 150
Paid Salary Rs. 300

Ledger Accounts
Cash Account
Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
Mar 1 To Capital A/c 30,000 Mar 3 By Purchase A/c 1,500
Mar 5 To Bank A/c 1,500 Mar 4 By bank A/c 21,000
Mar 19 To Ramu A/c 1,500 Mar 27 By Kannan A/c 680
Mar 20 To Sales A/c 2,400 Mar 28 By Rent A/ 150
By Salaries A/c 300
Mar 31 By balance c/d 11,770
35,400 35,400
Apr 1 To balance b/d 11,770

Capital Account
Dr. Cr.
11
 Date Particulars Rs. Date Particulars Rs.
Mar 4 To Cash A/c 21,000 Mar 5 By Cash A/c 1,500
Mar 31 By balance c/d 19,500
21,000 21,000
Apr 1 To balance b/d 19,500
Date Particulars Rs. Date Particulars Rs.
Mar 31 To balance c/d 30,000 Mar 1 By cash 30,000
30,000 30,000
Apr 1 By balance b/d 30,000

Purchase A/c
Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
Mar 3 To Cash A/c 1,500
Mar 10 To Kannan A/c 680 Mar 31 By balance c/d 2,180
2,180 2,180
Apr 1 To balance b/d 2,180

Bank Account
Dr. Cr.
Journal Entries in the Books of Hans Raj
L.
Date Particulars Debit Credit
F
Mar 1 Cash A/c Dr 30,000
To Capital A/c 30,000
(Being business started)
Mar 3 Purchase A/c Dr 1,500
To Cash A/c 1,500
(Being goods purchased)
Mar 4 Bank A/c Dr 21,000
To Cash A/c 21,000
(Being cash deposited into bank)
Mar 5 Cash A/c Dr 1,500
To Bank A/c 1,500
(Being cash withdrawn from
bank)
Mar 6 Ramu a/c Dr 1,500
To Sales A/c 1,500
(Being goods sold to Ramu)
Mar 10 Purchase A/c Dr 680
To Kannan A/c 680
(Being goods purchased on credit)
Mar 19 Cash A/c Dr 1,500
To Ramu A/c 1,500
(Being cash Received from Ramu)
Mar 20 Cash A/c Dr 2,400
To Sales A/c 2,400
(Being sales made in cash)
Mar 27 Kannan A/c Dr 680
To cash 680
(Being Paid to Kannan in full
settlement)
12
 Mar 28 Rent A/c Dr 150
Salaries A/c Dr 300
To Cash A/c 450
(Being Rent & Salaries paid)

Ramu Account
Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
Mar 6 To Sales A/c 1,500 Mar 19 By Cash A/c 1,500
1,500 1,500

Sales Account
Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
Mar 6 By Ramu A/c 1,500
Mar 31 To balance c/d 3,900 Mar 20 By Cash A/c 2,400
3,900 3,900
Apr 1 By balance b/d 3,900

Kannan Account
Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
Mar 27 To cash 680 Mar 10 By Purchase A/c 680
680 680

Rent Account
Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
Mar 28 To Cash A/c 150 Mar 31 By balance c/d 150
150 150
Apr 1 To balance b/d 150

Salary Account
Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
Mar 28 To Cash A/c 300 Mar 31 By balance c/d 300
300 300
Apr 1 To balance b/d 300

Trial Balance
Problem No: 11 (T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 3 Page No. 3.9)
From the following trial balance of Kamal (Containing obvious errors) prepare a correct trial balance.
Particulars Dr. Cr.

13
 Capital - 15,560
Sales - 27,560
Sales returns - 980
Drawings 5,640 -
Sundry Debtors - 5,300
Leasehold premises 7,410 -
Purchases 12,680 -
Purchase returns 2,640 -
Loan from Sharma - 2,500
Creditors 5,280 -
Trade and office expenses 7,840 -
Cash in hand 1,420 -
Bills payable 1,000 -
Salaries and wages 5,980 -
Stock ( 1st Jan) - 2,640
Factory Expenses 4,650 -
54,540 54,540
Solution
Trial Balance
S. L. Debit Credit
Name of the Account
No. F. Balance Balance
1 Capital - 15,560
2 Sales - 27,560
3 Sales returns 980 -
4 Drawings 5,640 -
5 Sundry Debtors 5,300 -
6 Leasehold premises 7,410 -
7 Purchases 12,680 -
8 Purchase returns - 2,640
9 Loan from Sharma - 2,500
10 Creditors - 5,280
11 Trade and office expenses 7,840 -
12 Cash in hand 1,420 -
13 Bills payable - 1,000
14 Salaries and wages 5,980 -
15 Stock ( 1st Jan) 2,640 -
16 Factory Expenses 4,650 -

54,540 54,540

Problem No: 12 (T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 2 Page No. 3.8)
The following balances were extracted from the ledger of Ramakrishna Engineering Works on 31 st
March 1997. You are required to prepare a trial balance as on that date in proper form.
Rs. Rs.
Drawing 6,000 Salaries 9,500
Capital 24,000 Sales Returns 1,000
Sundry creditors 43,000 Purchase Returns 1,100
Bills payable 4,000 Travelling expenses 4,600
Bills receivable 5,200 Commission paid 100
Loan from Karthik 10,000 Trading expense 2,500
Furniture & fixtures 4,500 Discount earned 4,000
Opening stock 47,000 Rent 2,000
14
Cash in hand 900 Bank overdraft 6,000
Cash at bank 12,500 Purchases 70,800
Tax 3,500 Sales 1,28,000
Sundry debtors 50,000
Solution
Trial Balance of Ramakrishna Engineering Work as on 31-3-1997
S. L. Debit Credit
Name of the Account
No. F. Balance Balance
1 Drawing 6,000
2 Capital - 24,000
3 Sundry creditors - 43,000
4 Bills payable - 4,000
5 Bills receivable 5,200 -
6 Loan from Karthik - 10,000
7 Furniture & fixtures 4,500 -
8 Opening stock 47,000 -
9 Cash in hand 900 -
10 Cash at bank 12,500 -
11 Tax 3,500 -
12 Sundry debtors 50,000 -
13 Salaries 9,500 -
14 Sales Returns 1,000 -
15 Purchase Returns - 1,100
16 Travelling expenses 4,600 -
17 Commission paid 100 -
18 Trading expenses 2,500 -
19 Discount earned - 4,000
20 Rent 2,000 -
21 Bank overdraft - 6,000
22 Purchases 70,800 -
23 Sales 1,28,000
2,20,100 2,20,100

FINAL ACCOUNTS
Problem No: 13 (Others: Financial Accounting - S. Ganeson and S. R. Kalavathi- Sum No. 3 Page No.
7.18)
Draw up the manufacturing account showing cost of production and the Trading account showing
gross profit for the following:
Purchase of raw materials 3,000
Electric power consumed 750
Opening stock finished goods 5,000
Carriage on raw materials 100
Opening stock of party finished goods 1,000
Returns-raw materials 200
Opening stock of raw materials 2,500
Sales 10,000
Repairs-Plant and machinery 200
Wages –Manufacturing 2,500
Factory rent and taxes 400
Sales returns 500
Depreciation –Factory buildings 100
- Plant and machinery 300
Factory insurance 150
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 The closing stock was: Raw materials 2000
Partly finished Rs. 1,600 and Finished goods Rs.8, 000

Solution
Manufacturing and Trading A/c for the year ending 31.12.98.
Particulars Rs Particulars Rs
To Material Consumed By Cost of Production (Trans. to 7,200
Opening Raw Material 2,500 Trading A/c)
(+) Purchase 3,000
5,500
(+) Carriage On 100
Raw material -------
5,600
(-) Cl. Stock 2,000
3,600
(-) Returns 200 3,400
To Electric power 750
To Wages –Manufacturing 2,500
To Repairs-Plant & machinery 200
To Factory rent and taxes 400
To Dep. Factory buildings 100
To Dep. Plant and machinery 300
To Factory insurance 150
To Gross Cost of Production 7,800
(+) Opening stock of party finished goods 1,000
-------
(-)closing stock of party finished goods 8,800
1,600
------- ----------
To Opening Stock of Finished goods 7,200 7,200
To Cost of Production ------- By Sales 10,000 ----------
To Gross Profit 5,000 (-) Returns 500
7,200 -------- 9,500
5,300 By Closing Finished Goods 8,000
--------- ----------
17,500 17,500

Problem No. 14
(T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 2 Page No. 5.51)
Prepare trading and profit and loss account from the information given below:
Particulars Rs. Particulars Rs.
Opening stock 3,600 Rent (Factory) 400
Purchases 18,260 Rent office 500
Wages 3,620 Sales returns 700
Closing stock 4,420 Purchases returns 900
Sales 32,000 General expenses 900
Carriage on purchases 500 Discount on customers 360
Carriage on sales 400 Interest from bank 200

16
Solution
Trading A/c and Profit and Loss A/c
Dr Cr
Particulars Rs Rs Particulars Rs Rs
To Opening 3,600 By sales 32,000
stock
To Purchase 18,260 Less: Sales 700 31,300
return
Less: Purchase 900 17360 By Closing stock 4,420
return
To Wages 3620
To Carriage on 500
purchase
To Factory rent 400
To Gross profit 10240
35,720 35,720
To Carriage on 400 By Gross profit 10,240
sales
To Rent office 500 By Interest from 200
bank
To General 900
expenses
To Discount to 360
customer
To Net profit 8280
10,440 10,440

Problem No. 15 (T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 4 Page No. 5.52)
The following balances were extracted from the books of asad on 31 st March 1994.
Particulars Rs. Particulars Rs.
Capital 50,000 Creditors 5,000
Drawings 4,000 Bad debts 1,100
General Expenses 5,000 Loan 15,760
Buildings 22,000 Sales 1,30,720
Machinery 18,680 Purchases 94,000
Stock 32,400 Motor Car 4,000
Power 4,480 Reserve Fund (Cr.) 1,800
Taxes and Insurance 2,630 Commission (Cr.) 2,640
Wages 14,400 Car Expenses 3,600
Debtors 12,560 Bills Payable 6,700
Bank Overdraft 6,600 Cash 160
Charity 210
Stock on 31st Mar 94 was valued at Rs.47,000. Prepare the final Accounts for the year ended on 31st mar 94.
Solution
Trading A/c and Profit and Loss A/c
Dr Cr
Particulars Rs Rs Particulars Rs Rs
To Op. stock 32,400 By sales 1,30,720
To Purchase 94,000 By Clo. stock 47,000
To Wages 14,400
To Power 4,480

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To Gross profit 32,440
1,77,720 1,77,720
To General 5,000 By Gross profit 32,440
expenses
To Taxes & 2,630 By Commission 2,640
Insurance
To Charity 210
To Bad debts 1,100
To Car exp. 3,600
To Net Profit 22,540
35,080 35,080
Balance sheet
Liabilities Rs Rs Assets Rs Rs
Capital 50,000 Buildings 22,000
Add: N. P 22,540 Machinery 18,680
72,540 Debtors 12,560
Less: Drawings 4,000 68,540 Motor car 4,000
Reserve fund 1800 Cash 160
Bank overdraft 6600 Closing stock 47,000
Creditors 5000
Loan 15760
Bills payable 6700
1,04,400 1,04,400

Problem No: 10 (Others:Financial Accounting - S.Manikandan and R.Rakesh Shankar- Sum No.7 Page No.
10.32)
Following is the balance as on 31st Dec 2008 of Sri. Rajan. Prepare trading and profit and loss account for
the year 2008 and a balance sheet as on that date.
Debits Rs. Credits Rs.
Purchases 8,000 Capital 40,000
Salaries 3,000 Creditors 8,500
Rent 1,500 Sales 38,000
Debtors 30,000 Loan 12,000
Cash 1,500
Wages 2,000
Bank Balance 3,000
Stock on 1.1.08 2,000
Machinery 15,000
Building 30,000
Insurance 2,500
Adjustments:
(1) The closing stock was Rs. 18,000. (4) Depreciate machinery @ 10%
(2) Salary outstanding Rs. 500. (5) Create a provision on Debtors @ 2% for
(3) Insurance prepaid Rs. 250. bad debts.
Solution
Trading, Profit and Loss account for the year ending...
Dr Cr
Particulars Rs. Rs. Particulars Rs. Rs.
To op. stock 2,000 By Sales 38,000
To Purchases 8,000 By clo. stock 18,000
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To wages 2,000
To GP 44,000
56,000 56,000
To Salary 3,000 By GP 44,000
Add: outstanding 500 3,500
To rent 1,500
To Insurance 2,500
Less: prepaid 250 2,250
To dep. On machinery 1,500
To Pro. For bad debts 600
To Net Profit 34,650
44,000 44,000
Balance Sheet as on 31.12.2008
Liabilities Rs. Rs. Assets Rs. Rs.
Capital 40,000 Machinery 15,000
Add: Net 34,650 74,650 Less: 1,500 13,500
Profit Depreciation
Creditors 8,500 Building 30,000
Loan 12,000 Debtors 30,000
Salary 500 Less: provision 600 29,400
outstanding
Cash 1,500
Bank balance 3,000
Closing stock 18,000
Prepaid insurance 250
95,650 95,650

Problem No: 17 (Others: Financial Accounting-S.Manikandan & R.Rakesh Shankar- Sum No 21 Page No.
10.57)
From the following balances as at 31st December 2009 of a trader, prepare a trading and profit and loss for
the year and balance sheet as on that date.
Particulars Rs. Particulars Rs.
Salaries 5,500 Creditors 9,500
Rent 1,300 Sales 32,000
Cash 1,000 Capital 30,000
Debtors 40,000 Loan 10,000
Trade expenses 600
Purchase 25,000
Furniture 2,500
Bank balance 5,600
81,500 81,500
Adjustments
1. The closing stock amounted to Rs. 9000 4. Provide 5% for doubtful debts
2. Salary is outstanding Rs. 500 5. Depreciate furniture by 10%.
3. Rent paid in advance Rs. 100
Solution
Trading, Profit and Loss account for the year ending…
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Dr Cr
Particulars Rs. Rs. Particulars Rs. Rs.
To purchase 25,000 By sales 32,000
By clo. stock 9,000
To Goss Profit 16,000
41,000 41,000
To Salaries 5,500 By GP 16,000
Add: Outstanding 500 6,000
To Rent 1,300
Less: Advance 100 1,200
To trade expenses 600
To provision for 2,000
bad debts
To depreciation 250
To Net profit 5,950
16,000 16,000

Balance Sheet as on 31.12.2009

Liabilities Rs. Rs. Assets Rs. Rs.
Capital 30,000 Cash 1,000
Add: NP 5,950 35,950 Debtors 40,000
Creditors 9,500 Less: Provision 2,000 38,000
Loan 10,000 Furniture 2,500
Salary is 500 Less: 250 2,250
outstanding depreciation
Bank 5,600
Closing stock 9,000
Advance rent 100
55,950 55,950

Problem No. 19
(T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 10 Page No. 5.55)
The following Trial Balance of Arun as at 31st Dec 2004 is given to you. Prepare final Accounts.
Opening Stock 15,500 Capital 90,000
Land and Buildings 35,000, Sundry Creditors 9,600
Machinery 50,000 Purchase Returns 2,100
Furniture and Fixtures 5,000 Sundry Income 1,200
Purchases 1,06,000 Reserve for bad debts 300
Salaries 11,000 Sales 2,07,000
General expenses 2,500
Rent 3,000
Postage and Telegrams 1,400
Stationery 1,300
Wages 26,000
Freight on purchases 2,800
Carriage on Sales 4,000
Repairs 4,500
Sundry Debtors 30,000
Bad debts 600
Cash in hand 100
Cash at Bank 6,400
Sales Returns 5,100
3,10,200 3,10,200
20
Adjustments:
1. Wages outstanding Rs.2,100
2. Included in General Expenses is insurance premium, Rs.600 paid for the year ending 31 st March
2005.
3. Provision of 5% on debtors for Bad debts is required.
4. Depreciate: land and buildings 2%, machinery 10% and furniture and fixtures 15%.
5. Closing Stock value Rs.14,900
Solution

Trading A/c and Profit and Loss A/c

Dr Cr
Particulars Rs Rs Particulars Rs Rs
To Purchases 25000 By sales 32000
To Gross profit c/d 16000 By closing stock 9000
41000 41000
By Gross profit
To salary 5500 b/d 16000
Add: outstanding 500 6000
To Rent 1300
Less: Advance paid 100 1200
To Trade expenses 600
To pro. bad debts 2000
To Net Profit 6200
16000 16000
Balance Sheet
Liabilities Rs Rs Assets Rs Rs
Capital 30,000 Bank deposit 5600
Add: Net
Profit 6200 36200 Cash 1000
Creditors 9500 Closing stock 9000
Bank loan 10000 Debtors 40000
salary
outstanding 500 Less: provision 2000 38000
Advances 2500
Advance Rent
paid 100
56200 56200

Problem No. 20 (T.B: Financial Accounting - T. S. Reddy and A. Murthy- Sum No. 6 Page No. 5.53)
From the following balances as at 31st Dec 1994 of a trader, prepare a trading and profit & loss account for
the year ended 1994 and a balance sheet as on that date
Particulars Rs. Particulars Rs.
Salaries 5,500 Creditors 9,500
Rent 1,300 Sales 32,000
Cash 1,000 Capital 30,000
Debtors 40,000 Loans 10,000

21
 Trade expenses 600
Purchases 25,000
Advances 2,500
Bank balance 5,600
81,500 81,500
Adjustments
1. The closing stock amounted to Rs. 9,000
2. One month’s salary is outstanding
3. One month’s rent has been paid in advance
4. Provide 5 percent for doubtful debts

22
Solution
Trading and Profit & Loss Account
Particulars Rs Rs Particulars Rs Rs
To Opening stock 15,500 By Sales 2,07,000
To Purchase 1,06,000 Less: sales 5,100 2,01,900
Return
Less: purchase return 2,100 1,03,900 By Closing stock 14,900
To Wages 26,000
Add: Outstanding Wages 2,100 28,100
To freight on Purchase 2,800
To Gross Profit c/d 66,500
2,16,800 2,16,800
To Salaries 11,000 By Gross Profit 66,500
b/d
To General expenses 2,500 By Reserve for 300
bad debts
Less: Prepaid insurance 150 2,350 By Sundry 1,200
(600/12x3) income
To Rent 3,000
To Postage & Telegram 1,400
To Stationary 1,300
To Carriage on sales 4,000
To Repairs 4,500
To Bad debts 600
To Provision for bad debts 1,500
To Deprecation:
Land & Building 2% 700
Machinery 10% 5,000
Furniture 15% 750 6,450
To Net Profit c/d 31,900
68,000 68,000

Balance Sheet
Liabilities Rs Rs Assets Rs Rs
Capital 90,000 Land & Building 35,000
Less: Deprecation 700 34,300
Add: Net profit 31,900 1,21,900 Machinery 50,000
Sundry Creditors 9,600 Less: Deprecation 5,000 45,000
Out Standing 2,100 Furniture & Fixture 5,000
Wages
Less: Deprecation 750 4,250
Sundry Debtors 30,000
Less: Provision for doubt 1,500 28,500
full Debt
Cash in hand 100
Cash at Bank 6,400
Closing stock 14,900
Prepaid insurance 150
1,33,600 1,33,600