NCERT Solutions for Class 11 Accounts Chapter 8 Financial Statements – I give insight into the preparation and presentation of financial statements of sole proprietorship businesses in detail. The chapter deals with the basics needed for the building of financial statements, namely the trading account, profit and loss account, and balance sheet. The solutions take students through the understanding of the essence of these statements in depicting the financial health of a business. Students can use the NCERT Solutions for Class 11 Accounts 9 to understand the proper classification of the transaction, preparation of ledgers, and derivation of the net results of operation.
The NCERT Solutions for Class 11 Accounts Chapter 8: Financial Statements I are tailored to help the students master the concepts that are key to success in their classrooms. The solutions given in the PDF are developed by experts and correlate with the CBSE syllabus of 2025-2026. These solutions provide thorough explanations with a step-by-step approach to solving problems. Students can easily get a hold of the subject and learn the basics with a deeper understanding. Additionally, they can practice better, be confident, and perform well in their examinations with the support of this PDF.
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Students can access the NCERT Solutions for Class 11 Accounts Chapter 8: Financial Statements I. Curated by experts according to the CBSE syllabus for 2025–2026, these step-by-step solutions make Accountancy much easier to understand and learn for the students. These solutions can be used in practice by students to attain skills in solving problems, reinforce important learning objectives, and be well-prepared for tests.
What are the objectives of preparing financial statements?
Financial statements are prepared with the following objectives:
1. Determine the financial position of a business.
2. Ascertain the financial performance of the business.
3. To measure the changes in the financial position of a business.
4. To compare the financial performance of business both intra and inter-firm wise.
What is the purpose of preparing the trading and profit and loss accounts?
The trading account is prepared for the following purposes:
1. To determine the gross profit or loss in a financial year or period.
2. Determine the ratio of gross profit to sales.
3. To determine the ratio of direct expense to sales.
The profit and loss account is prepared for the following purposes:
1. Determining net profit or loss incurred by the business.
2. To comply with statutory requirements such as the Company Act or Partnership Act.
Explain the concept of the cost of goods sold.
The costs incurred in the production of goods that are sold by the company is known as the Cost of Goods Sold or COGS
No goods left out: In this case, all goods are sold out. Hence, it can be calculated as follows:
Cost of goods sold = Purchases + Direct Expenses
Presence of a closing stock: There can be some stock that is yet to get sold at the end of the accounting period. At that time, it can be calculated as follows:
Cost of goods sold = Purchases + Direct Expenses – Closing Stock
Presence of an opening stock: Stock that is carried forward at the beginning of the accounting period from the previous accounting period is considered as opening stock and is calculated as follows:
Cost of goods sold = Opening Stock + Purchases + Direct Expenses – Closing Stock
What is a balance sheet? What are its characteristics?
A statement prepared to determine the assets and values of a business on a particular date is known as a balance sheet. Debits represent the assets, while credits signify the liabilities.
It has the following characteristics:
1. It reflects the financial position of a business.
2. It is dependent on other statements, such as trading and P & L account.
3. It is prepared at the end of an accounting period.
4. The balance of both sides should tally.
Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure:
(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.
(b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.
(c) Registration fees paid at the time of purchase of a building
(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.
(e) Depreciation charged on a plant.
(f) The expenditure incurred in erecting a platform on which a machine will be fixed.
(g) Advertising expenditure, the benefits of which will last for four years.
|
Basis of Difference |
Capital Expenditure |
Revenue Expenditure |
|
Meaning |
Expenditure beared for acquiring or improving an asset. |
Expenses beared for running daily business activities |
|
Term |
Long-term can span many accounting periods |
Short-term limited to an accounting period |
|
Benefits |
Benefits can be achieved across many accounting periods |
Benefits can be availed only in the current year |
|
Nature |
Non-recurring |
Recurring |
|
Shown in |
It is shown in the income statement and balance sheet |
It is shown in the income statement |
(a) Capital expenditure
(b) Revenue expenditure
(c) Capital expenditure
(d) Capital expenditure
(e) Revenue expenditure
(f) Capital expenditure
(g) Deferred revenue expenditure
What is an operating profit?
Operating profit, referred to as EBIT, is an accounting metric that measures the profits a company generates from its core business functions. It does not take into account interest deduction and the exclusion of tax from the calculation.
The following equation is used to calculate the operating profit:
Operating Profit = Net Profit + Non-operating Expenses – Non-operating Incomes
What are financial statements? What information do they provide?
Statements that contain financial information about a business which can satisfy the information requirements of internal and external users are known as financial statements. It serves as a source of financial information that caters to the diverse information requirement of users. It is prepared with the purpose of representing a true and fair view of the business.
To do so, it requires the creation of three statements, namely, trading and profit and loss account and balance sheet.
The financial statements are related to gross/net profit or loss, assets and liabilities. The users of information can be the following:
Current owners: These internal users would like to know the profits in the previous accounting period and the current position of the assets and liabilities.
Government: Government is an external user and wants to know the financial position of a business so that stakeholders’ rights are protected.
Prospective owner: These external users would like to know the past profits and financial position and also the future performance of the business to make an informed decision about whether to invest in the business or not.
Operating profit earned by M/s Arora and Sachdeva in 2016-17 was ₹ 17, 00,000. Its non-operating incomes were ₹ 1, 50,000 and non-operating expenses were ₹ 3, 75,000. Calculate the amount of net profit earned by the firm.
Net Profit = Operating Profit + Non-operating Income – Non-operating Expenses
= 17, 00,000 + 1, 50,000 – 3, 75,000
= ₹ 14, 75,000
Therefore, the net profit earned by M/S Arora and Sachdeva in 2016–17 is ₹ 14, 75,000.
What are closing entries? Give four examples of closing entries.
A journal entry that is made at the end of an accounting period that transfers balances from the temporary accounts to a permanent account is known as closing entries. Some examples are as follows:
1. The purchase returns are closed by transferring the balance to the purchase account, and the following entries are made:
Purchases return A/c
Dr
To Purchases A/c
2. Sales return account is closed by transfer of the balance to the sales account, and entries will be as follows:
Sales A/c
Dr
To Sales return A/c
3. Purchases account closed by transferring to the debit side of trading and P & L Account, and entries will be as follows:
Trading A/c
Dr
To Purchases A/c
4. Sales account closed by transferring the balance to the credit side of trading and P & L account, and entries will be as follows:
Sales A/c
Dr.
To Trading A/c
3. Discuss the need to prepare a balance sheet.
A balance sheet needs to be prepared due to following reasons:
1. To show the financial position of a business.
2. To show much assets and liabilities a business has.
3. It serves as an information source for internal and external users.
4. It acts as a reference for balances that need to be carried forward.
5. To gather an idea about the liquidity of the firm or business.
6. Helps management in planning and controlling business operations.
What is meant by grouping and marshalling of assets and liabilities? Explain the ways in which a balance sheet may be marshalled.
Grouping refers to including assets and liabilities of similar nature under a common heading. For example, different types of creditors can be placed in one heading. Similarly, work in progress, raw material and finished goods can be placed.
Marshalling refers to the arranging of assets and liabilities in order of liquidity and permanence.
In order of liquidity: It shows how easily an asset can be converted into cash or a liability can be paid off. The asset examples are arranged as follows:
1. Cash
2. Bank
3. Debtors
In order of permanence: In this system, the most important asset or liability gets the top position in the balance sheet, and the remaining assets are arranged in the reducing level of permanence. For example,
1. Debtors
2. Bank
3. Cash
Similarly, liabilities in order of permanence are as follows:
1. Capital
2. Long-term loan
3. Creditors
Calculate the gross profit from the following balances taken from the books of Simmi and Vimmi Ltd. for the year ending March 31, 2017.
₹
Closing stock 2,50,000
Net sales during the year 40,00,000
Net purchases during the year 15,00,000
Opening stock 15,00,000
Direct expenses 80,000
The gross profit can be calculated as given below:
|
Trading Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Opening Stock |
15,00,000 |
Net Sales |
40,00,000 |
|
Net Purchases |
15,00,000 |
Closing Stock |
2,50,000 |
|
Direct Expenses |
80,000 |
|
|
|
Gross Profit |
11,70,000 |
|
|
|
|
42,50,000 |
|
42,50,000 |
|
|
|
|
|
Therefore, the Gross Profit is ₹ 11,70,000.
From the following balances extracted from the books of M/s Ahuja and Nanda, calculate the amount of:
(a) Cost of goods available for sale
(b) Cost of goods sold during the year
(c) Gross Profit
₹
Opening stock 25,000
Credit purchases 7,50,000
Cash purchases 3,00,000
Credit sales 12,00,000
Cash sales 4,00,000
Wages 1,00,000
Salaries 1,40,000
Closing stock 30,000
Sales return 50,000
Purchases return 10,000
a) Cost of Goods Sold Available for Sales
Or
Cost of Goods Manufactured = Opening Stock + Net Purchases + Wages
= 25,000 + 10, 40,000 + 1, 00,000
= ₹ 11, 65,000
(b) Cost of Goods Sold = Opening Stock + Net Purchases + Wages – Closing Stock
= 25,000 + 10, 40,000 + 1, 00,000 – 30,000
= ₹ 11, 35,000
Or
Cost of Goods Sold = Net Sales – Gross Profit
= 15, 50,000 – 4, 15,000
= ₹ 11, 35,000
(c) Gross Profit
|
Trading Account |
|||||||
|
Dr. |
|
|
Cr. |
||||
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
||||
|
Opening Stock |
25,000 |
Sales |
|
||||
|
Purchases |
|
|
Add: Credit Sales |
12,00,000 |
|
||
|
|
Add: Credit Purchases |
7,50,000 |
|
|
Add: Cash Sales |
4,00,000 |
|
|
|
Add: Cash Purchases |
3,00,000 |
|
|
|
16,00,000 |
|
|
|
|
10,50,000 |
|
|
Less: Sales Return |
(50,000) |
15,50,000 |
|
|
Less: Purchases Return |
(10,000) |
10,40,000 |
|
|
|
|
|
Wages |
|
1,00,000 |
|
Closing Stock |
|
30,000 |
|
|
Gross Profit |
|
4,15,000 |
|
|
|
|
|
|
|
|
|
15,80,000 |
|
|
|
15,80,000 |
|
|
|
|
|
|
|
|
|
Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv and Sons for the year ended March 31, 2017.
₹
Opening stock 50,000
Net sales 11,00,000
Net purchases 6,00,000
Direct expenses 60,000
Administration expenses 45,000
Selling and distribution expenses 65,000
Loss due to fire 20,000
Closing stock 70,000
The solution is as follows:
|
Trading Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Opening Stock |
50,000 |
Net Sales |
11,00,000 |
|
Net Purchases |
6,00,000 |
Closing Stock |
70,000 |
|
Direct Expenses |
60,000 |
|
|
|
Gross Profit |
4,60,000 |
|
|
|
|
11,70,000 |
|
11,70,000 |
|
|
|
|
|
|
Operating Profit |
= |
Sales – (Opening Stock + Net Purchases + Direct Expenses + Administration Expenses + Selling and Distribution Expenses) + Closing Stock |
|
|
= |
11,00,000 – (50,000 + 6,00,000 + 60,000 + 45,000 + 65,000) + 70,000 |
|
|
= |
₹ 3,50,000 |
The following are the extracts from the trial balance of M/s Bhola and Sons as on March 31, 2017.
|
Account title |
Debit ₹ |
Credit ₹ |
|
Opening Stock |
2,00,000 |
|
|
Purchases |
8,10,000 |
|
|
Sales |
|
10,10,000 |
|
|
10,10,000 |
10,10,000 |
|
|
|
|
(Only relevant items)
The closing Stock as on date was valued at ₹ 3,00,000.
You are required to record the necessary journal entries and show how the above items will appear in the trading and profit and loss account and balance sheet of M/s Bhola and Sons.
|
Books of M/s Bhola and Sons Journal |
||||||
|
Date |
|
Particulars |
|
L.F. |
Debit Amount ₹ |
Credit Amount ₹ |
|
2017 |
|
|
|
|
|
|
|
Mar. 31 |
Trading A/c |
Dr. |
|
10,10,000 |
|
|
|
|
|
To Opening Stock A/c |
|
|
|
2,00,000 |
|
|
|
To Purchases A/c |
|
|
|
8,10,000 |
|
|
(Balances from Purchases Account and Stock Account transferred to Trading Account) |
|
|
|
||
|
|
|
|
|
|
|
|
|
Mar. 31 |
Sales A/c |
Dr. |
|
10,10,000 |
|
|
|
|
Closing Stock A/c |
|
|
3,00,000 |
|
|
|
|
|
To Trading A/c |
|
|
|
13,10,000 |
|
|
(Balance from sales and closing stock transferred to Trading Account) |
|
|
|
||
|
|
|
|
|
|
|
|
|
Mar.31 |
Trading A/c |
Dr. |
|
3,00,000 |
|
|
|
|
|
To Profit and Loss (Gross Profit) A/c |
|
|
|
3,00,000 |
|
|
(Balance of Trading Account (gross profit) transferred to Profit and Loss Account) |
|
|
|
||
|
|
|
|
|
|
||
|
Trading Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Opening Stock |
2,00,000 |
Sales |
10,10,000 |
|
Purchases |
8,10,000 |
Closing Stock |
3,00,000 |
|
Profit and Loss A/c – Gross Profit |
3,00,000 |
|
|
|
|
|
|
|
|
|
13,10,000 |
|
13,10,000 |
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
|||
|
Liabilities |
Amount ₹ |
Assets |
Amount ₹ |
|
|
|
Closing Stock |
3,00,000 |
|
|
|
|
|
|
|
|
|
|
Prepare trading and profit and loss accounts from the following particulars of M/s Neema Traders as on March 31, 2017.
|
Account Title |
Debit Amount ₹ |
Account Title |
Credit Amount ₹ |
|
Buildings |
23,000 |
Sales |
1,80,000 |
|
Plant |
16,930 |
Loan |
8,000 |
|
Carriage inwards |
1,000 |
Bills payable |
2,520 |
|
Wages |
3,300 |
Bank overdraft |
4,720 |
|
Purchases |
1,64,000 |
Creditors |
8,000 |
|
Sales return |
1,820 |
Capital |
2,36,000 |
|
Opening stock |
9,000 |
Purchases return |
1,910 |
|
Machinery |
2,10,940 |
|
|
|
Insurance |
1,610 |
|
|
|
Interest |
1,100 |
|
|
|
Bad debts |
250 |
|
|
|
Postage |
300 |
|
|
|
Discount |
1,000 |
|
|
|
Salaries |
3,000 |
|
|
|
Debtors |
3,900 |
|
|
The stock on March 31, 2017, is ₹ 16,000.
The trading and profit and loss account and balance sheet are prepared below:
|
Trading Account as on March 31, 2017 |
|||||||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
||||
|
Liabilities |
Amount ₹ |
Assets |
Amount ₹ |
||||||||
|
Opening Stock |
|
9,000 |
Sales |
1,80,000 |
|
||||||
|
Purchases |
1,64,000 |
|
|
Less: Sales Return |
(1,820) |
1,78,180 |
|||||
|
|
Less: Purchases Return |
(1,910) |
1,62,090 |
Closing Stock |
|
16,000 |
|||||
|
|
|
|
|
|
|
|
|
||||
|
Carriage Inwards |
|
1,000 |
|
|
|
|
|||||
|
Wages |
|
3,300 |
|
|
|
|
|||||
|
Profit and Loss (Gross Profit) |
18,790 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
1,94,180 |
|
|
|
1,94,180 |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Insurance |
1,610 |
Trading (Gross Profit) |
18,790 |
|
Interest |
1,100 |
|
|
|
Bad Debts |
250 |
|
|
|
Postage |
300 |
|
|
|
Discount |
1,000 |
|
|
|
Salaries |
3,000 |
|
|
|
Net Profit |
11,530 |
|
|
|
|
18,790 |
|
18,790 |
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
||||||
|
Liabilities |
Amount ₹ |
Assets |
Amount ₹ |
|||
|
Capital |
2,36,000 |
|
Building |
23,000 |
||
|
|
Add: Net Profit |
11,530 |
2,47,530 |
Plant |
16,930 |
|
|
|
|
|
|
Machinery |
2,10,940 |
|
|
Loan |
|
8,000 |
Debtors |
3,900 |
||
|
Creditors |
|
8,000 |
Closing Stock |
16,000 |
||
|
Bills Payable |
|
2,520 |
|
|
||
|
Bank Overdraft |
|
4,720 |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
2,70,770 |
|
2,70,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepare trading and profit and loss account and balance sheet as on March 31, 2017:
|
Account Title |
Amount ₹ |
Account Title |
Amount ₹ |
|
Machinery |
27,000 |
Capital |
60,000 |
|
Sundry debtors |
21,600 |
Bills payable |
2,800 |
|
Drawings |
2,700 |
Sundry creditors |
1,400 |
|
Purchases |
58,500 |
Sales |
73,500 |
|
Wages |
15,000 |
|
|
|
Sundry expenses |
600 |
|
|
|
Rent and taxes |
1,350 |
|
|
|
Carriage inwards |
450 |
|
|
|
Bank |
4,500 |
|
|
|
Openings stock |
6,000 |
|
|
The closing stock, as on March 31, 2017, is ₹ 22,400
The trading and profit and loss account and balance sheet are prepared as follows:
|
Trading Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Opening Stock |
6,000 |
Sales |
73,500 |
|
Purchases |
58,500 |
Closing Stock |
22,400 |
|
Wages |
15,000 |
|
|
|
Carriage Inwards |
450 |
|
|
|
Profit and Loss (Gross Profit) |
15,950 |
|
|
|
|
95,900 |
|
95,900 |
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
|
Sundry Expenses |
600 |
Trading (Gross Profit) |
15,950 |
|
|
Rent and Taxes |
1,350 |
|
|
|
|
|
|
|
|
|
|
Net Profit |
14,000 |
|
|
|
|
|
15,950 |
|
15,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
|||||
|
Liabilities |
Amount ₹ |
Assets |
Amount ₹ |
||
|
Capital |
60,000 |
|
Fixed Assets |
|
|
|
|
Add: Net Profit |
14,000 |
|
Machinery |
27,000 |
|
|
|
74,000 |
|
|
|
|
|
Less: Drawings |
2,700 |
71,300 |
Current Assets |
|
|
|
|
|
|
Bank |
4,500 |
|
Sundry Creditors |
|
1,400 |
Closing Stock |
22,400 |
|
|
Bills Payable |
|
2,800 |
Sundry Debtors |
21,600 |
|
|
|
|
|
75,500 |
|
75,500 |
|
|
|
|
|
|
|
The following trial balance was extracted from the books of M/s Ram on March 31, 2017. You are required to prepare trading and profit and loss account and the balance sheet as on date:
|
Account Title |
Amount ₹ |
Account Title |
Amount ₹ |
|
Debtors |
12,000 |
Apprenticeship premium |
5,000 |
|
Purchases |
50,000 |
Loan |
10,000 |
|
Coal, gas and water |
6,000 |
Bank overdraft |
1,000 |
|
Factory wages |
11,000 |
Sales |
80,000 |
|
Salaries |
9,000 |
Creditors |
13,000 |
|
Rent |
4,000 |
Capital |
20,000 |
|
Discount |
3,000 |
|
|
|
Advertisement |
500 |
|
|
|
Drawings |
1,000 |
|
|
|
Loan |
6,000 |
|
|
|
Petty cash |
500 |
|
|
|
Sales return |
1,000 |
|
|
|
Machinery |
5,000 |
|
|
|
Land and building |
10,000 |
|
|
|
Income tax |
100 |
|
|
|
Furniture |
9,900 |
|
|
The trading and profit and loss account and balance sheet are prepared as follows:
|
Trading Account as on March 31, 2017 |
|||||||||
|
Dr. |
|
|
|
Cr. |
|||||
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
||||||
|
Purchases |
|
|
50,000 |
Sales |
80,000 |
|
|||
|
Coal, Gas and Water |
|
|
6,000 |
|
Less: Sales Return |
1,000 |
79,000 |
||
|
Factory Wages |
|
|
11,000 |
|
|
||||
|
Profit and Loss (Gross Profit) |
12,000 |
|
|||||||
|
|
|
|
79,000 |
79,000 |
|||||
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Salaries |
9,000 |
Trading (Gross Profit) |
12,000 |
|
Rent |
4,000 |
Apprenticeship Premium |
5,000 |
|
Discount |
3,000 |
|
|
|
Advertisement |
500 |
|
|
|
Net Profit |
500 |
|
|
|
|
|
|
|
|
|
17,000 |
|
17,000 |
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
|||||||
|
Liabilities |
|
Amount ₹ |
Assets |
|
Amount ₹ |
||
|
Capital |
20,000 |
|
Machinery |
|
5,000 |
||
|
|
Add: Profit and Loss (Net Profit) |
500 |
|
Land and Building |
|
10,000 |
|
|
|
|
20,500 |
|
Furniture |
|
9,900 |
|
|
|
Less: Drawings |
(1,000) |
|
Loan (Given) |
|
6,000 |
|
|
|
Less: Income Tax |
(100) |
19,400 |
Debtors |
|
12,000 |
|
|
|
|
|
|
Petty Cash |
|
500 |
|
|
Loan (Taken) |
|
10,000 |
|
|
|
|
|
|
Creditors |
|
13,000 |
|
|
|
|
|
|
Bank Overdraft |
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,400 |
|
|
|
43,400 |
|
|
|
|
|
|
|
|
|
The following is the trial balance of Manju Chawla on March 31, 2017. You are required to prepare a trading and profit and loss account and a balance sheet as on date:
|
Account Title |
Debit Amount ₹ |
|
Credit Amount ₹ |
|
Opening stock |
10,000 |
|
|
|
Purchases and sales |
40,000 |
|
80,000 |
|
Returns |
200 |
|
600 |
|
Productive wages |
6,000 |
|
|
|
Dock and Clearing charges |
4,000 |
|
|
|
Donation and charity |
600 |
|
|
|
Delivery van expenses |
6,000 |
|
|
|
Lighting |
500 |
|
|
|
Sales tax collected |
|
|
1,000 |
|
Bad debts |
600 |
|
|
|
Misc. incomes |
|
|
6,000 |
|
Rent from tenants |
|
|
2,000 |
|
Royalty |
4,000 |
|
|
|
Capital |
|
|
40,000 |
|
Drawings |
2,000 |
|
|
|
Debtors and Creditors |
6,000 |
|
7,000 |
|
Cash |
3,000 |
|
|
|
Investment |
6,000 |
|
|
|
Patents |
4,000 |
|
|
|
Land and Machinery |
43,000 |
|
|
The closing stock is ₹ 2,000.
The trading and profit and loss account and balance sheet are prepared as follows:
|
Trading Account as on March 31, 2017 |
|||||||
|
Dr. |
Cr. |
||||||
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
||||
|
Opening Stock |
10,000 |
Sales |
80,000 |
|
|||
|
Purchases |
40,000 |
|
|
Less: Sales Returns |
(200) |
79,800 |
|
|
|
Less: Purchases Returns |
(600) |
39,400 |
|
|
||
|
Productive Wages |
6,000 |
Closing Stock |
2,000 |
||||
|
Dock and Clearing Charges |
4,000 |
|
|
||||
|
Royalty |
4,000 |
|
|
||||
|
Profit and Loss (Gross Profit) |
18,400 |
|
|
||||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
81,800 |
|
81,800 |
||||
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Donation and Charity |
600 |
Trading (Gross Profit) |
18,400 |
|
Delivery Van Expenses |
6,000 |
Misc. Incomes |
6,000 |
|
Lighting |
500 |
Rent from Tenants |
2,000 |
|
Bad Debts |
600 |
|
|
|
Net Profit |
18,700 |
|
|
|
|
|
|
|
|
|
26,400 |
|
26,400 |
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
|||||||||
|
Liabilities |
|
Amount ₹ |
Assets |
|
Amount ₹ |
||||
|
Capital |
40,000 |
|
Patents |
|
4,000 |
||||
|
|
Add: Profit and Loss (Net Profit) |
18,700 |
|
Land and Machinery |
|
43,000 |
|||
|
|
|
58,700 |
|
Investment |
|
6,000 |
|||
|
|
Less: Drawings |
(2,000) |
56,700 |
Debtors |
|
6,700 |
|||
|
|
|
|
|
Cash |
|
3,000 |
|||
|
Sales Tax Collected |
|
1,000 |
Closing Stock |
|
2,000 |
||||
|
Creditors |
|
7,000 |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
64,700 |
|
|
|
64,700 |
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
The following is the Trial Balance of Mr. Deepak as on March 31, 2017. You are required to prepare the trading account, profit and loss account and balance sheet as on date:
|
Account Title |
Debit Amount ₹ |
Account Title |
Credit Amount ₹ |
|
Drawings |
36,000 |
Capital |
2,50,000 |
|
Insurance |
3,000 |
Bills payable |
3,600 |
|
General expenses |
29,000 |
Creditors |
50,000 |
|
Rent and taxes |
14,400 |
Discount received |
10,400 |
|
Lighting (factory) |
2,800 |
Purchases return |
8,000 |
|
Travelling expenses |
7,400 |
Sales |
4,40,000 |
|
Cash in hand |
12,600 |
|
|
|
Bills receivable |
5,000 |
|
|
|
Sundry debtors |
1,04,000 |
|
|
|
Furniture |
16,000 |
|
|
|
Plant and machinery |
1,80,000 |
|
|
|
Opening stock |
40,000 |
|
|
|
Purchases |
1,60,000 |
|
|
|
Sales return |
6,000 |
|
|
|
Carriage inwards |
7,200 |
|
|
|
Carriage outwards |
1,600 |
|
|
|
Wages |
84,000 |
|
|
|
Salaries |
53,000 |
|
|
The closing stock is ₹ 35,000.
The trading account, profit and loss account and balance sheet are prepared below:
|
Trading Account as on March 31, 2017 |
||||||||
|
Dr. |
|
|
|
|
Cr. |
|||
|
Particulars |
|
Amount ₹ |
Particulars |
|
Amount ₹ |
|||
|
Opening Stock |
|
40,000 |
Sales |
4,40,000 |
|
|||
|
Purchases |
1,60,000 |
|
|
Less: Sales Return |
6,000 |
4,34,000 |
||
|
|
Less: Purchases Return |
(8,000) |
1,52,000 |
Closing Stock |
|
35,000 |
||
|
|
|
|
|
|
|
|||
|
Lighting (Factory) |
|
2,800 |
|
|||||
|
Carriage Inwards |
|
7,200 |
|
|||||
|
Wages |
|
84,000 |
|
|||||
|
Profit and Loss (Gross Profit) |
1,83,000 |
|
||||||
|
|
4,69,000 |
4,69,000 |
||||||
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
||||||||
|
Dr. |
Cr. |
|||||||
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|||||
|
Insurance |
|
3,000 |
Trading (Gross Profit) |
|
1,83,000 |
|||
|
General Expenses |
|
29,000 |
Discount Received |
|
10,400 |
|||
|
Rent and Taxes |
|
14,400 |
|
|
|
|
||
|
Travelling Expenses |
|
7,400 |
|
|
|
|
||
|
Carriage Outwards |
|
1,600 |
|
|
|
|
||
|
Salaries |
|
53,000 |
|
|
|
|
||
|
Net Profit |
|
85,000 |
|
|
|
|
||
|
|
|
|
1,93,400 |
|
|
|
1,93,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
|||||
|
Liabilities |
Amount ₹ |
Assets |
Amount ₹ |
||
|
Capital |
2,50,000 |
|
Plant and Machinery |
1,80,000 |
|
|
|
Add: Net Profit |
85,000 |
|
Furniture |
16,000 |
|
3,35,000 |
|
Sundry Debtors |
1,04,000 |
||
|
|
Less: Drawings |
(36,000) |
2,99,000 |
Closing Stock |
35,000 |
|
|
|
Bills Receivable |
5,000 |
||
|
Creditors |
50,000 |
Cash in Hand |
12,600 |
||
|
Bills Payable |
3,600 |
|
|
||
|
|
|
|
|||
|
3,52,600 |
3,52,600 |
||||
|
|
|
||||
Prepare trading and profit and loss account and balance sheet from the following particulars as on March 31, 2017.
|
Account Title |
Debit Amount ₹ |
Credit Amount ₹ |
|
Purchases and sales |
3,52,000 |
5,60,000 |
|
Return inwards and return outwards |
9,600 |
12,000 |
|
Carriage inwards |
7,000 |
|
|
Carriage outwards |
3,360 |
|
|
Fuel and power |
24,800 |
|
|
Opening stock |
57,600 |
|
|
Bad debts |
9,950 |
|
|
Debtors and creditors |
1,31,200 |
48,000 |
|
Capital |
|
3,48,000 |
|
Investment |
32,000 |
|
|
Interest on investment |
|
3,200 |
|
Loan |
|
16,000 |
|
Repairs |
2,400 |
|
|
General expenses |
17,000 |
|
|
Wages and salaries |
28,800 |
|
|
Land and buildings |
2,88,000 |
|
|
Cash in hand |
32,000 |
|
|
Miscellaneous receipts |
|
160 |
|
Sales tax collected |
|
8,350 |
The closing stock is ₹ 30,000.
The trading and profit and loss account and balance sheet for the question are posted below:
|
Trading Account as on March 31, 2017 |
|||||||||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
||||||
|
Particulars |
|
Amount ₹ |
Particulars |
|
Amount ₹ |
||||||||
|
Opening Stock |
|
57,600 |
Sales |
5,60,000 |
|
||||||||
|
Purchases |
3,52,000 |
|
|
Less: Return Inwards |
(9,600) |
5,50,400 |
|||||||
|
|
Less: Return Outwards |
(12,000) |
3,40,000 |
Closing Stock |
|
30,000 |
|||||||
|
Carriage Inwards |
7,000 |
|
|
|
|
||||||||
|
Fuel and Power |
|
24,800 |
|
|
|
|
|||||||
|
Wages and Salaries |
|
28,800 |
|
|
|
|
|||||||
|
Profit and Loss (Gross Profit) |
|
1,22,200 |
|
|
|
|
|||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
5,80,400 |
|
|
|
5,80,400 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Carriage Outwards |
3,360 |
Trading (Gross Profit) |
1,22,200 |
|
Bad Debts |
9,950 |
Interest on Investment |
3,200 |
|
Repairs |
2,400 |
Miscellaneous Receipts |
160 |
|
General Expenses |
17,000 |
|
|
|
Net Profit |
92,850 |
|
|
|
|
1,25,560 |
|
1,25,560 |
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
|||||||
|
Liabilities |
|
Amount ₹ |
Assets |
|
Amount ₹ |
||
|
Capital |
3,48,000 |
|
Land and Building |
|
2,88,000 |
||
|
|
Add: Net Profit |
92,850 |
4,40,850 |
Investment |
|
32,000 |
|
|
|
|
|
|
Debtors |
|
1,31,200 |
|
|
Loan |
|
16,000 |
Closing Stock |
|
30,000 |
||
|
Creditors |
|
48,000 |
Cash in Hand |
32,000 |
|||
|
Sales Tax Collected |
|
8,350 |
|
|
|||
|
|
|
5,13,200 |
|
5,13,200 |
|||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
From the following trial balance of Mr. A. Lal, prepare trading, profit and loss account and balance sheet as on March 31, 2017.
|
Account Title |
Debit Amount ₹ |
Credit Amount ₹ |
|
Stock as on April 01, 2016 |
16,000 |
|
|
Purchases and Sales |
67,600 |
1,12,000 |
|
Returns inwards and outwards |
4,600 |
3,200 |
|
Carriage inwards |
1,400 |
|
|
General expenses |
2,400 |
|
|
Bad debts |
600 |
|
|
Discount received |
|
1,400 |
|
Bank overdraft |
|
10,000 |
|
Interest on bank overdraft |
600 |
|
|
Commission received |
|
1,800 |
|
Insurance and taxes |
4,000 |
|
|
Scooter expenses |
200 |
|
|
Salaries |
8,800 |
|
|
Cash in hand |
4,000 |
|
|
Scooter |
8,000 |
|
|
Furniture |
5,200 |
|
|
Building |
65,000 |
|
|
Debtors and creditors |
6,000 |
16,000 |
|
Capital |
|
50,000 |
The closing stock is ₹ 15,000.
The trading and profit and loss account and balance sheet for the question are posted below:
|
Trading Account as on March 31, 2017 |
|||||||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
||||
|
Particulars |
|
Amount ₹ |
Particulars |
|
Amount ₹ |
||||||
|
Opening Stock |
|
16,000 |
Sales |
1,12,000 |
|
||||||
|
Purchases |
67,600 |
|
|
Less: Sales Return Inwards |
(4,600) |
1,07,400 |
|||||
|
|
Less: Return Outwards |
(3,200) |
64,400 |
Closing Stock |
|
15,000 |
|||||
|
Carriage Inwards |
1,400 |
|
|
|
|
||||||
|
Profit and Loss (Gross Profit) |
|
40,600 |
|
|
|
|
|||||
|
|
|
|
|
|
|
||||||
|
|
|
|
1,22,400 |
|
|
|
1,22,400 |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
General Expenses |
2,400 |
Trading (Gross Profit) |
40,600 |
|
Bad Debts |
600 |
Discount Received |
1,400 |
|
Interest on Bank Overdraft |
600 |
Commission Received |
1,800 |
|
Insurance and Taxes |
4,000 |
|
|
|
Scooter Expenses |
200 |
|
|
|
Salaries |
8,800 |
|
|
|
Net Profit |
27,200 |
|
|
|
|
43,800 |
|
43,800 |
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
|||||||
|
Liabilities |
Amount ₹ |
Assets |
Amount ₹ |
||||
|
Capital |
50,000 |
|
Building |
|
65,000 |
||
|
|
Add: Net Profit |
27,200 |
77,200 |
Furniture |
|
5,200 |
|
|
|
|
|
|
Scooter |
|
8,000 |
|
|
Creditors |
|
16,000 |
Debtors |
|
6,000 |
||
|
Bank Overdraft |
|
10,000 |
Closing Stock |
|
|
15,000 |
|
|
|
|
|
|
Cash in Hand |
|
|
4,000 |
|
|
|
|
1,03,200 |
|
|
|
1,03,200 |
|
|
|
|
|
|
|
|
|
Prepare trading and profit and loss account and balance sheet of M/s Royal Traders from the following balances as on March 31, 2017.
|
Debit Balances |
Amount ₹ |
Credit Balances |
Amount ₹ |
|
Stock |
20,000 |
Sales |
2,45,000 |
|
Cash |
5,000 |
Creditors |
10,000 |
|
Bank |
10,000 |
Bills payable |
4,000 |
|
Carriage on purchases |
1,500 |
Capital |
2,00,000 |
|
Purchases |
1,90,000 |
|
|
|
Drawings |
9,000 |
|
|
|
Wages |
55,000 |
|
|
|
Machinery |
1,00,000 |
|
|
|
Debtors |
27,000 |
|
|
|
Postage |
300 |
|
|
|
Sundry expenses |
1,700 |
|
|
|
Rent |
4,500 |
|
|
|
Furniture |
35,000 |
|
|
The closing stock is ₹ 8,000.
The trading and profit and loss account and balance sheet are prepared below:
|
Trading Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Opening Stock |
20,000 |
Sales |
2,45,000 |
|
Purchases |
1,90,000 |
Closing Stock |
8,000 |
|
Carriage on Purchases |
1,500 |
Profit and Loss (Gross Loss) |
13,500 |
|
Wages |
55,000 |
|
|
|
|
|
|
|
|
|
2,66,500 |
|
2,66,500 |
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Trading (Gross Loss) |
13,500 |
|
|
|
Postage |
300 |
|
|
|
Sundry Expenses |
1,700 |
|
|
|
Rent |
4,500 |
Net Loss |
20,000 |
|
|
|
|
|
|
|
20,000 |
|
20,000 |
|
|
|
|
|
|
Balance Sheet of M/s Royal Traders as on March 31, 2017 |
|||||||
|
Liabilities |
Amount ₹ |
Assets |
Amount ₹ |
||||
|
Capital |
2,00,000 |
|
Machinery |
|
1,00,000 |
||
|
|
Less: Net Loss |
(20,000) |
|
Furniture |
|
35,000 |
|
|
|
Less: Drawings |
(9,000) |
1,71,000 |
Debtors |
|
27,000 |
|
|
|
|
|
|
Closing Stock |
|
8,000 |
|
|
Creditors |
|
10,000 |
Bank |
|
10,000 |
||
|
Bills Payable |
|
4,000 |
Cash |
|
|
5,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,85,000 |
|
|
|
1,85,000 |
|
|
|
|
|
|
|
|
|
From the following balances of M/s Nilu Sarees as on March 31, 2017, prepare trading and profit and loss accounts and balance sheet as on date.
|
Account Title |
Debit Amount ₹ |
Account Title |
Credit Amount ₹ |
|
Opening stock |
10,000 |
Sales |
2,28,000 |
|
Purchases |
78,000 |
Capital |
70,000 |
|
Carriage inwards |
2,500 |
Interest |
7,000 |
|
Salaries |
30,000 |
Commission |
8,000 |
|
Commission |
10,000 |
Creditors |
28,000 |
|
Wages |
11,000 |
Bills payable |
2,370 |
|
Rent and taxes |
2,800 |
|
|
|
Repairs |
5,000 |
|
|
|
Telephone expenses |
1,400 |
|
|
|
Legal charges |
1,500 |
|
|
|
Sundry expenses |
2,500 |
|
|
|
cash in hand |
12,000 |
|
|
|
Debtors |
30,000 |
|
|
|
Machinery |
60,000 |
|
|
|
Investments |
90,000 |
|
|
|
Drawings |
18,000 |
|
|
The closing stock, as on March 31, 2017, is ₹ 22,000.
|
Trading Account of M/s Nilu Sarees as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Opening Stock |
10,000 |
Sales |
2,28,000 |
|
Purchases |
78,000 |
Closing Stock |
22,000 |
|
Carriage Inwards |
2,500 |
|
|
|
Wages |
11,000 |
|
|
|
Profit and Loss (Gross Profit) |
1,48,500 |
|
|
|
|
|
|
|
|
|
2,50,000 |
|
2,50,000 |
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Salaries |
30,000 |
Trading (Gross Profit) |
1,48,500 |
|
Commission |
10,000 |
Interest |
7,000 |
|
Rent and Taxes |
2,800 |
Commission |
8,000 |
|
Repairs |
5,000 |
|
|
|
Telephone Expenses |
1,400 |
|
|
|
Legal Charges |
1,500 |
|
|
|
Sundry Expenses |
2,500 |
|
|
|
Net Profit |
1,10,300 |
|
|
|
|
|
|
|
|
|
1,63,500 |
|
1,63,500 |
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
|||||||
|
Liabilities |
Amount ₹ |
Assets |
Amount ₹ |
||||
|
Capital |
70,000 |
|
Machinery |
60,000 |
|||
|
|
Add: Net Profit |
1,10,300 |
|
Investments |
90,000 |
||
|
|
|
1,80,300 |
|
Debtors |
30,000 |
||
|
|
Less: Drawings |
(18,000) |
1,62,300 |
Closing Stock |
22,000 |
||
|
|
|
|
|
Cash in Hand |
12,000 |
||
|
Creditors |
|
28,000 |
|
|
|||
|
Bills Payable |
|
2,370 |
|
|
|||
|
Suspense |
|
21,330 |
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
||
|
|
|
|
2,14,000 |
|
2,14,000 |
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
Prepare the trading and profit and loss accounts of M/s Sports Equipments for the year ended March 31, 2017, and the balance sheet as on the same date.
|
Account Title |
Debit Amount ₹ |
Credit Amount ₹ |
|
Opening stock |
50,000 |
|
|
Purchases and sales |
3,50,000 |
4,21,000 |
|
Sales returns |
5,000 |
|
|
Capital |
|
3,00,000 |
|
Commission |
|
4,000 |
|
Creditors |
|
1,00,000 |
|
Bank overdraft |
|
28,000 |
|
Cash in hand |
32,000 |
|
|
Furniture |
1,28,000 |
|
|
Debtors |
1,40,000 |
|
|
Plants |
60,000 |
|
|
Carriage on purchases |
12,000 |
|
|
Wages |
8,000 |
|
|
Rent |
15,000 |
|
|
Bad debts |
7,000 |
|
|
Drawings |
24,000 |
|
|
Stationery |
6,000 |
|
|
Travelling expenses |
2,000 |
|
|
Insurance |
7,000 |
|
|
Discount |
5,000 |
|
|
Office expenses |
2,000 |
|
The closing stock as on March 31, 2017, is ₹ 2,500.
The trading and profit and loss account and balance sheet are prepared below:
|
Trading Account as on March 31, 2017 |
||||||||
|
Dr. |
|
|
|
Cr. |
||||
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|||||
|
Opening Stock |
|
|
50,000 |
Sales |
4,21,000 |
|
||
|
Purchases |
|
|
3,50,000 |
|
Less: Sales Return |
5,000 |
4,16,000 |
|
|
Carriage on Purchases |
|
|
12,000 |
Closing Stock |
2,500 |
|||
|
Wages |
8,000 |
Profit and Loss (Gross Loss) |
1,500 |
|||||
|
|
|
|
4,20,000 |
|
4,20,000 |
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Profit and Loss Account as on March 31, 2017 |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
|
Trading (Gross Loss) |
1,500 |
Commission |
4,000 |
|
Rent |
15,000 |
Net Loss |
41,500 |
|
Bad Debts |
7,000 |
|
|
|
Stationery |
6,000 |
|
|
|
Travelling Expenses |
2,000 |
|
|
|
Insurance |
7,000 |
|
|
|
Discount |
5,000 |
|
|
|
Office Expenses |
2,000 |
|
|
|
|
|
|
|
|
|
45,500 |
|
45,500 |
|
|
|
|
|
|
Balance Sheet as on March 31, 2017 |
||||||||
|
Liabilities |
|
Amount ₹ |
Assets |
|
Amount ₹ |
|||
|
Capital |
3,00,000 |
|
Plants |
|
60,000 |
|||
|
|
Less: Net Loss |
(41,500) |
|
Furniture |
|
1,28,000 |
||
|
|
Less: Drawings |
(24,000) |
2,34,500 |
Debtors |
|
1,40,000 |
||
|
|
|
|
|
Closing Stock |
|
2,500 |
||
|
Creditors |
|
1,00,000 |
Cash in Hand |
|
32,000 |
|||
|
Bank Overdraft |
|
28,000 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,62,500 |
|
|
|
3,62,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
