COMPANY FINAL ACCOUNTS
Question1
Prepare the final accounts from the following trial balance as on 31.03.2019
Debit balance
Calls in arrears 5000
Premises 750000
Machinery 150000
Furniture 50000
Purchases 680000
Wages 125000
Salaries 60000
Interim dividend (including corporate dividend tax) 20000
Goodwill 200000
Debtors 60000
Bills receivable 13000
Bad debts 2000
Debenture interest (up to 30.9.2019) 20000
Stock on 1.4.2018 41000
2201000
Credit balance
Share capital 500000
Sales 1000000
Reserve fund 180000
P& l account 35000
Creditors 75000
10% debentures 400000
Bills payable 10000
Reserves for doubtful debts (1.4.2017) 1000
2201000
Adjustments
1. The stock on 31.3.2019 was valued at Rs.80000
2. Depreciate machinery and furniture by 10%
3. maintain R.DD at 5% on debtors
4. the directors proposed a final dividend at 15%
5. the debenture interest is unpaid for 6 months
Question 2
Premier company limited had an authorized capital of rs.6000000 in equity shares of
rs10/-each its trial balance on 31.03.2019 is given below:
Rs.
Calls in arrears 7500
Premises 300000
Plant and Machinery 330000
Interim dividend ( including Corporate Dividend tax) 37500
Stock on (1.4.2018) 75000
Fixtures 7200
Debtors 87000
Goodwill 25000
Cash in hand 760
Cash in bank 39900
Purchases 185000
Preliminary expenses 5000
Wages 84865
General expenses 16835
Freight and carriage 13115
Salaries 14500
Director’s fees 5725
Bad debts 2100
Debenture interest paid 9000
Called up capital 400000
6% debentures 300000
P & l account (1.4.2018) (cr.) 14500
Bills payable 38000
Creditors 50000
Sales 415000
General reserve 25000
Bad debts provision (1.4.2018) 3500
Adjustments
1. Depreciate plant and machinery by 10%
2. Write-off preliminary expenses rs.500
3. Provide for debenture interest due
4. Provide for reserve for doubtful debts at 5% on debtors
5. Of the debtor rs.500 are further bad
6. Closing stock rs.95000
Prepare trading and p & l account for the year ended 31st march 2019 and Balance sheet
as on that date as per law.
Question-3
Sunrise company Ltd company with an authorized capital of Rs.500000 divided into
5000 equity shares of Rs.100 each,2500 shares were called and fully paid, gives you the
following ledger balances as on 31.3.2019.
Stock(1.4.2018) 50000
Sales 425000
Purchases 300000
Wages 70000
Discount allowed 4200
Discount received 3150
Insurance paid 6720
Salaries 18500
Rent 6000
General expenses 8950
Profit and loss A/c(Cr) 6220
Printing and stationery 2400
Advertisement 3800
Bonus 10500
Debtors 38700
Creditors 35200
Plant and machinery 80500
Furniture 17100
Cash in bank 134700
Reserve 25000
Loan from M.D. 15700
Bad debts 3200
Calls in arrears 5000
You are required to prepare trading and profit and loss Account, Profit and loss
Appropriation Account, the Balance Sheet for the year ended 31.3.2018.
The following further information is also given for adjustments:
1. Closing stock as on 31.3.2019 Rs.91,500.
2. Provide 15% depreciation on plant and 10% on furniture respectively.
3. Outstanding liabilities were wages Rs.5200, salary Rs.1200 and rent Rs.600.
4. Dividend @ 5% on paid up capital is to be provided.
Question-4
The following is the trial balance of Detergent Company Ltd. As on 31.3.2019.The
Company has 20000 shares of Rs.100 each as registered Capital.
Particulars Dr. Cr.
Rs. Rs.
Shares (3000 shares of Rs.100 each) - 300000
Calls in arrears 16000 -
Reserve fund - 250000
Building 180000
Fixed deposit - 100000
Wages 30000
Machinery 89000
Furniture 80000
Purchases and sales 210000 525000
Salary 60000
Debtors and creditors 220000 150000
B/R and B/P 61000 90000
Directors fees 20000
Returns 15000 20000
Freight 10000
Manufacturing expenses 5000
Opening stock 65000
Interim dividend (Excluding CDT) 25000
Audit fees 15000
Profit and Loss A/c - 27000
Tools 38000
Preliminary expenses 60000
Debentures - 100000
Interest on debentures 14000
Investments 250000
Goodwill 52000
Insurance and Taxes 20000
Printing and Stationery 15000
Cash and Bank Balances 12000
1562000 1562000
Adjustments:
(a) Directors proposed a total dividend of 25%.
(b) Write off 25% of preliminary expenses and 10% of goodwill.
(c) Depreciate buildings by2% and furniture by 5%.
(d) Transfer Rs.60000 to Reserve Fund.
(e) Insurance prepaid Rs.1500.
(f) Closing stock Rs.80000
Prepare Trading and Profit and Loss Account and Balance Sheet.
Question-5
Mahendra Manufacturing Company, Mangalore was registered with a nominal capital of
Rs.600000 in equity shares of Rs.10 each. The following is the list of balances extracted
from the books on 31.3.2019.
Particulars Dr. Cr.
Rs. Rs.
Furniture 7200
Calls in Arrears 7500
Plant and Machinery 300000
Premises 330000
Interim Dividend (including CDT) 37250
Stock (1.4.2018) 75000
Debtors 87000
Goodwill 25000
Cash in hand 750
Cash at bank 60900
Purchases 185000
Preliminary expenses 5000
Wages 84865
General expenses 6835
Advertising 10000
Freight and Carriage 13115
Salaries 14500
Directors fees 5725
Bad debts 110
Debenture Interest Paid 9000
Subscribed Capital - 400000
6% Debentures - 300000
Profit/Loss Account - 14250
Bills Payable - 38000
Creditors - 50000
Sales - 415000
General reserve - 25000
Bad debts Reserve (1.4.2007) - 3500
Loan - 21000
1266750 1266750
Adjustments
1. Depreciate plant and machinery by5%, building by 2% and furniture by Rs.1200.
2. Write off Rs. 1000 from Preliminary expenses.
3. Provide half years debenture interest.
4. R.D.D. on 31.3.2019 should be equal to 1% on sales.
5. Outstanding Directors fee Rs.275.
6. Goods of value of Rs.1500 were distributed as free samples during the year but no
entry in this respect has been made.
7. Closing stock Rs.95000.
Prepare Final Accounts.
Question-6
The following is the trial balance of bharat company ltd. As on 31.3.2019.
Particulars Dr Cr
Paid up capital - 100000
Reserve fund - 17000
Provident fund - 3000
Goodwill 15000
Machinery 25000
Livestock 5000
Buildings 37000
8% Mortgage loans(debentures) - 30000
Sundry debtors 45000
Sundry creditors - 16000
Opening stock 46000
B/R and B/P 4000 5490
Advance payment of Income Tax 4000
Cash at Bank 11000
Purchase of Raw Materials 88000
Sales - 183700
Returns 2400 1000
Discount 2000 1000
Investments 8000
Manufacturing Wages 32000
Carriage inwards 1000
Factory expenses 14000
Office salary 6500
Office Furniture 5000
Preliminary Expenses 5000
Bad Debts 1500
Provident Fund Contribution 500
Directors Fees 1200
Interest on Debentures 1200
Dividend on Investment - 480
P/L A/c (1.4.2007) - 2630
3,60,300 3,60,300
Prepare trading and profit/loss account for the year ended 31.03.2018 and Balance Sheet
as that date after taking into account the following:
1. Closing Stock was valued at Rs.38380
2. Write off 50% of preliminary expenses.
3. Interest on Mortgage debenture is paid for 6 months upto 30.sept 2018.
4. Provide depreciation machinery @ 10%, building @ 5% and office furniture @
6%.
5. Transfer to Reserve Fund Rs.2000.
Question-7
Camy Ltd. Hasan authorized capital of 10000 Equity Shares of Rs.10 each and 300, 5%
Preference Shares of Rs.100 each.
Particulars Dr. Cr.
Rs. Rs.
Equity Share Capital - 100000
5% Preference Share Capital - 20000
Purchases and Sales 110670 160800
Stock (1.4.2007) 29145
Preference Dividend (upto 30.9.2007) 500
CDT on Preference Dividend Paid 85
Provision for Bad debts - 600
Interest received
(Tax deducted at source) - 1000
Wages 16328
Motor Vehicle Expenses 5895
Motor Vehicle (cost Rs.18000) 9240
Debtors and Creditors 28370 25650
Rates and Insurance 1217
Land (cost) 88000
P/L A/c (1.4.2007) - 6954
Directors Fees 3000
Bad Debts 770
Investments 5800
Salaries 7890
Balance at Bank 8094
315004 315004
Other particulars
1. Stock on 31.3.2008 Rs.32630.
2. Provision for Bad debts to be increased to Rs.750.
3. A dividend of 10% on equity capital is proposed.
4. Depreciate vehicles at 20% of cost price.
5. Rs.3000 to be transferred to General Reserve.
6. Provide for balance of Preference Dividend.
7. Provide for Manager’s commission.
Question-8
The Bangalore Manufacturing Company, having an authorized capital of Rs.1000000 has
issued 20000 shares of Rs.10 each. The other details on 31.3.2008 were as follows:
Stock (1.4.2007) 93210
Manufacturing Wages and expenses 64490
Purchases 210730
Carriage inwards 6760
Carriage outwards 4630
Advance payment of Income Tax 7145
Bank Loan (5%) 25000
Interest on Bank Loan 625
Sundry Debtors 82200
Sundry Creditors 46110
P/L A/c (1.4.2007) (Cr.) 4320
Cash and Bank balance 4390
Machinery 71305
Electricity charges:
Factory 7105
Office 1700
Salary, Allowance etc. 12500
Audit Fees 625
Furniture 2500
Return Outward 4905
Return Inward 6320
Commission paid 4320
Preliminary expenses 3000
Transfer fee 20
Sales 384950
Investments 75000
Equipments 6250
Share Capital 200000
Calls in Arrears 500
Other Details
1. Write off 1/3 of the preliminary expenses.
2. Machinery to be depreciated by 10% and furniture by 5%.
3. Manufacturing wages due Rs.945 and salary due Rs.600.
4. Interest on Bank Loan has been paid up to 30.9.2007 only.
5. The closing stock was Rs.62, 420 and equipments were valued at Rs.Rs.5000 at
the end of the year.
6. Create a reserve of 5% on debtors for doubtful debts.
7. A further reserve of 2.5% is to be created on debtors for discount.
8. The Directors have proposed to pay a dividend of 5% (on paid up capital) for the
current year after providing Rs.11500 for Taxation.
Prepare the necessary Final Accounts.
Question-9
Following is the Trial balance of Shakthi company Ltd. On 31.3.2019:
Debit balances Rs. Credit balances Rs.
Stock (1.4.2007) 75000 Sales 350000
Purchases 245000 Profit & loss A/c 15030
Wages 50000 (31.3.2007)
Discount 7000 Share Capital in
Salaries 7500 Shares of Rs.10 each 100000
Rent 4950 Sundry creditors 17500
Sundry Expenses 17050 Reserve Fund 15500
Dividend paid(including CDT) 5000 Discount 5000
Interim dividend (including CDT) 4000
Debtors 37500
Machinery 29000
Cash 10200
Bank 6000
Loan to an employee 3250
Bad Debts 1580
503030 503030
Adjustments
1.Stock on 31.03.2019 was Rs.82000
2. Depreciate Machinery at 10%.
3. 6 Months Insurance was Unexpired at Rs.750 per annum.
4. Rent of Rs.950 was due.
5. Provide reserve for doubtful debts at 5%.
6. Provide reserve for discount on creditors at 5%.
7. Make a provision for Income Tax to the extent of Rs.15000.
8. Proposed Dividend at 10%
9. The managing Director is entitled at 10% commission on net profits before charging
such commission.
Prepare Final Accounts from the above particulars.
Question-10
Following is the trial balance of Chaitra Ltd., as on 31.3.2008
Particulars Dr. Cr.
Rs. Rs.
Equity Share Capital - 300000
12% preference shares - 200000
Reserve fund - 150000
Buildings 500000 -
10%debentures - 200000
Plant and machinery 200000 -
Purchases and sales 250000 600000
Salary 60000 -
Debtors and creditors 230000 175000
Bills 80000 90000
Directors fees 20000 -
Bad debts 5000 -
Returns 15000 20000
Wages 15000 -
Opening stock 45000 -
Profit and Loss A/c on 1-4-07 - 60000
Loose Tools 60000 -
Goodwill 80000 -
Discount on issue of shares 20000 -
Cash and bank balances 33000 -
12%investments(1-4-07) 200000 -
Interest on investments - 18000
1813000 1813000
Adjustments:
1. Closing stock is valued at Rs.140000.
2. Outstanding wages Rs.2500.
3. Write off 10% of Discount on issue of shares
4. Debenture interest is outstanding for the whole year
5. Write off Rs.5000 further bad debts and create Reserve for doubtful debts at 5%.
6. Buildings and plant and machinery to be depreciated by 5% and 10%.
7. Transfer Rs.25000 to reserve
8. The directors propose 15% dividend to equity shareholders.
You are required to prepare company’s final accounts.
Question -11
The following is the profit and loss account of X Ltd., for the year ended 31st March
2008,before providing for the following:
(a) Director’s commission of 1% of net profits.
(b) Managerial commission of 10% on the net profit.
Particulars Amount Particulars Amount
To depreciation on fixed assets 30000 By Gross Profit 500000
To voluntary compensation 5000 By Profit on investment sold 20000
To other expenses 340000 (non trading)
To net profit 145000
Note: Depreciation for the purpose of managerial remuneration (section 350) is Rs.
25000.
Redraft the profit and loss account for the amounts of managerial commission on net
profit due in accordance with the provisions of the companies Act and show the
computation of such amount of commission.
Question-12
The managing director of Desi Manufacturing Ltd., is entitled for a commission of 5% on
the net profits before charging such commission:
The following details are available for the year ended 31st March 2008:
(i) Net profits before charging such commission- Rs.3500000.
(ii) The following had been charged off against the profits determined in (i)
above:
(a) Depreciation on fixed assets Rs. 14,50,000.
(b) Provision for bad debts Rs.16000.
(iii) Other relevant information:
(a) Bad debts during the year – Rs. 1,75,000
(b) Depreciation for calculation of managerial remuneration- Rs. 17,80,000.
What is the amount of commission payable to the Managing Director?
Question-13
Eswar Ltd., earned a net profit of Rs.4,00,000 after considering the following items:
Depreciation
Preliminary expenses
Provision for taxation
MD’s remuneration paid
Directors fees
Bonus paid
Profit on sale of fixed asset
(Original cost Rs.40000, WDV Rs.22000)
Question -14
From the following calculate the maximum commission permissible to directors:
a. When not assisted by managing director, or manager of whole-timer director,
b. When assisted by managing director
c. When assisted by manager
d. When assisted by whole-time director.
Question-15
Net Profits before tax and managerial remuneration Rs.4000000
Depreciation as per books of accounts Rs. 500000
Depreciation as per section 350 of the companies Act Rs. 600000
The manager is entitled to a commission of 4% on net profit. Calculate the commission
payable to the manager if it is to be calculated on-
(a) Profits before charging such commission, and
(b) Profits after charging such commission.
