NCERT Solutions for Class 11 Accountancy Chapter 8 Financial Statements - I

NCERT
SOLUTIONS
CLASS - 11th

aglase .co

Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Class : 11th
Subject : Accountancy
Chapter : 9
Chapter Name : Financial Statements – 1

Q1 What are the objectives of preparing financial statements?

Answer. The basic objectives of preparing financial statements are :

● To present a true and fair view of the financial performance of the business
● To present a true and fair view of the financial position of the business

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Q2 What is the purpose of preparing trading and profit and loss account?

Answer. Trading and Profit and Loss account shows the financial performance in terms of profit
earned or loss sustained during an accounting period. It is also known as income statement. It is
basically a summary of revenue and expenses of the business and calculate the net figure
termed as profit or loss.

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Q3 Explain the concept of cost of goods sold?

Answer. Cost of goods sold is the expenses incurred to make the purchases turn into sales.

Cost of goods sold = opening stock + purchases + direct expenses – closing stock

When there is no opening or closing stock, the total of purchase and direct expenses is taken as
cost of goods sold.

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Page : 352 , Block Name : Short Answers

Q4 What is a balance sheet? What are its characteristics?

Answer. Balance sheet shows the financial position in the form of assets, liabilities and capital,
at a given date.

Characteristics :-

● Balance sheet is prepared on the basis of trial balance and additional information. The
assets reflect the debit balances and liabilities (including capital) reflects credit balances.
● It is prepared at the end of the accounting period after the trading and profit and loss
account has been prepared, they are together known as final accounts.
● It is called a balance sheet because it is a statement of balances of ledger accounts that
has not been transferred to trading and profit and loss account and are to be carried
forward to the next year.
● The total of the two sides of the balance sheet must be equal i.e., Assets = Liabilities +
Capital.

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Q5 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) Expenditures incurred to provide one or 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 .

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Answer. Following are the points of distinction between capital and revenue expenditure :
● Capital expenditure is the expense incurred for procuring fixed assets to be used for long
periods. Revenue expenditure is incurred for the day to day activities of the business that
last only for one accounting period.
● Revenue expenditure matches with the revenue receipts of the accounting period,
capital expenditure does not match with any receipt.
● Revenue expenditure is generally recurring expenditure and capital expenditure is
non-recurring expenditure.

Classification of expenses into capital and revenue expenditure :

(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building
in order to make it usable.- It is a capital expenditure, any expense incurred at the time of
purchase of an asset is taken as capital expenditure.

(b) Expenditures incurred to provide one or more exit in a cinema hall in compliance with a
government order. – it is a capital expenditure as it is non-recurring expenditure.

(c) Registration fees paid at the time of purchase of a building – it is a capital expenditure as it
is incurred at the time of purchase and is non-recurring expenditure.

(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four
years.- it is a revenue expenditure as it is recurring expenditure and is incurred to
maintain/ensure the earning of the enterprise.

(e) Depreciation charged on a plant – it is revenue expenditure as it is recurring in nature

(f) The expenditure incurred in erecting a platform on which a machine will be fixed. – It is
capital expenditure as it is non-recurring and fixed expenditure.

(g) Advertising expenditure, the benefits of which will last for four years . – It is a capital
expenditure as it is non-recurring expenditure.

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Q6 What is an operating profit?

Answer. The profit earned by normal operations and activities of the business is known as
operating profit. It is the excess of operating revenue over operating expenses. Income and
expenses of financial nature are not taken into account while calculating operating profit.

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Therefore, operating profit is profit before interest and tax (EBIT). Abnormal items such as loss
by fire, etc. are also not taken into account. It is calculated as follows :

Operating profit = net profit + non-operating expenses – non-operating incomes

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Q1 What are financial statements? What information do they provide?

Answer. An organization has a large number of stakeholders who are interested in various
aspects of the business, leading to varied informational requirements. It is impossible to
generate information according to the needs of specific user. Thus, the business prepare
financial statements which satisfies the informational needs of all the users.

The basic objectives of preparing financial statements are :

● To present a true and fair view of the financial performance of the business
● To present a true and fair view of the financial position of the business

The firm prepares Trading and Profit and Loss account and Balance sheet. The Trading and
Profit and Loss account shows the financial performance in the form of profit earned or loss
sustained by the business. The balance sheet shows the financial position in the form of assets,
liabilities and capital.

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Q2 What are closing entries? Give four examples of closing entries.

Answer. For preparing the final accounts, the balances of all the accounts are transferred so as
to avoid any error in omission or twice entry. Examples of closing entries are :

● Opening stock account, purchases account, wages account, carriage inwards account,
and direct expenses account are closed by transferring to the debit side to the trading
and profit and loss account –
Trading A/c Dr.
To opening stock A/c
To purchases A/c

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To wages A/c
To carriage inwards account
To direct expenses

● The purchase returns or return outwards are closed by transferring its balance to the
purchases account. Following entry is recorded –
Purchase return A/c Dr.
To purchases A/c

● The sales return or return inwards account is closed by transferring its balance to the
sales account –
Sales A/c Dr.
To sales return A/c

● The sales account is closed by transferring its balance to the credit side of the trading
and profit and loss account
Sales A/c Dr.
To Trading A/c

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Q3 Discuss the need for preparing a balance sheet.

Answer. The balance sheet shows the financial position of a company on a particular date by
summarizing the values of asset and liability on that date. The assets reflect debit balance while
the liabilities and capital reflect credit balance. It is prepared at the end of the accounting period
after the trading and profit and loss account has been prepared. It is called a balance sheet
because it is a statement of balances of ledger accounts that have not been transferred to
trading and profit and loss account and are to be carried forward to the next year.

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Q4 What is meant by Grouping and Marshalling of assets and liabilities. Explain the way in
which a balance sheet may be marshalled.

Answer. Preparation and presentation of the financial statements is a matter of concern for the
organisations. The information provided should be useful for the users that is why, it is

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

necessary that the items appearing in the balance sheet are properly grouped and presented in
a particular order.

Grouping of assets and liabilities : The items in the balance sheet can be properly grouped. The
term grouping means putting together items of similar nature under a common heading. For
example, the balance of accounts of cash, bank, debtors, etc. can be grouped and shown under
the heading of ‘current assets’ and the balances of all fixed assets and long-term investment
under the heading of ‘non-current assets’.

Marshalling of assets and liabilities : In a balance sheet, the assets and liabilities are arranged
either in the order of liquidity or permanence. Arrangement of assets and liabilities in a particular
order is known as marshaling.

In case of permanence, the most permanent asset or liability is put on the top in the balance
sheet and there after the assets are arranged in their reducing level of permanence.

In case of liquidity, the order is reversed. The information presented in this manner would
enable the user to have a good idea about the life of the various accounts. The assets account
of the relatively permanent nature would continue in the business for a longer time whereas the
less permanent or more liquid accounts will change their forms in near future and are likely to
become cash or cash equivalent.

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Q1 From the following balances taken from the books of Simmi and Vimmi Ltd. for the year
ending March 31, 2017, calculate the gross profit.
(Rs.)
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

Answer. Trading Account
Dr. For the year ending 31​st​ march 2017 Cr.
Particulars Amount Particulars Amount
To opening stock 15,00,000 By sales 40,00,000
To purchases 15,00,000 By closing stock 2,50,000
To direct expenses 80,000
To gross profit (balancing 11,70,000
figure)

42,50,000 42,50,000

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Q2 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
(Rs)
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

Answer.
(a) Cost of goods available for sale = credit purchase + cash purchases + opening stock +
wages - purchase return
Cost of goods available for sale = 7,50,000 + 3,00,000 + 25000 + 1,00,000 - 10,000
Cost of goods available for sale = Rs. 11,65,000
(b) Cost of goods sold = Cost of goods available for sale – closing stock
Cost of goods sold = 11,65,000 – 30,000
Cost of goods sold = Rs.11,35,000
(c) Gross profit = credit sales + cash sales – sales return – cost of goods sold
Gross profit = 12,00,000 + 4,00,000 – 50,000 – 11,35,000
Gross profit = Rs. 4,15,000

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Q3 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.
Rs
Opening stock 50,000
Net sales 11,00,000
Net purchases 6,00,000
Direct expenses 60,000
Administration expenses 45,000

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Selling and distribution expenses 65,000
Loss due to fire 20,000
Closing stock 70,000

Answer.
Gross profit = net sales + closing stock – net purchases – opening stock – direct expenses
Gross profit = 11,00,000 + 70,000 – 6,00,000 – 50,000 – 60,000
Gross profit = Rs. 4,60,000
Operating profit = Gross profit – administration expenses – selling and distribution expenses
Operating profit = 4,60,000 – 45,000 – 65,000
Operating profit = Rs. 3,50,000

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Q4 Operating profit earned by M/s Arora & Sachdeva in 2016-17 was Rs. 17,00,000. Its
non-operating incomes were Rs. 1,50,000 and non-operating expenses were Rs. 3,75,000.
Calculate the amount of net profit earned by the firm.

Answer. Net profit = Operating profit + non-operating income – non-operating expenses
Net profit = 17,00,000 + 1,50,000 – 3,75,000
Net profit = Rs. 14,75,000

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Q5 The following are the extracts from the trial balance of M/s Bhola & sons as on March
31,2014.
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)
Closing stock as on date was valued at Rs. 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 & sons.

Answer.
Journal Entries
Date Particulars L.F. Debit (Rs.) Credit (Rs.)

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

2014 Trading A/c Dr. 10,10,000
31 To Opening stock A/c 2,00,000
march To Purchases A/c 8,10,000
(being balance from purchases and stock
account transferred to the trading account)

31 10,10,000
march 3,00,000
Sales A/c Dr. 13,10,000
Closing Stock A/c Dr.
To Trading A/c
(Being balance from sales and closing stock
31 transferred to trading account) 3,00,000
march 3,00,000

Trading A/c Dr.
To Profit and loss A/c
(Being gross profit transferred to profit and loss
account)

M/s Bhola and Sons
Trading Account
Dr. For the year ending 31​st​ march 2014 Cr.
Particular Amount(Rs.) Particulars Amount(Rs.)
To opening stock 2,00,000 By sales 10,10,000
To purchases 8,10,000 By closing stock 3,00,000
To gross profit c/d 3,00,000

13,10,000 13,10,000

Balance Sheet
As at 31​st​ March,2014
Liabilities Amount(Rs.) Assets Amount(Rs.)
Closing stock 3,00,000

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

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Q6 Prepare trading and profit and loss account and balance sheet as on Mar 31, 2017 :
Account title Amount(Rs.) Account title Amount(Rs.)
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
Opening stock 6,000
Closing stock as on March 31, 2017 Rs. 22,400.

Answer.
Trading and Profit and Loss Account
Dr. For the year ending 31​st​ March 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 6,000 By sales 73,500
To purchases 58,500 By closing stock 22,400
To wages 15,000
To carriage inwards 450
To gross profit c/d 15,950

To rent and taxes By gross profit b/d
To sundry expenses 95,900 95,900
To net profit (transferred to
1,350 15,950
capital account)
600
14,000

15,950 15,950

Balance Sheet
As at march 31, 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Sundry creditors 1,400 Bank 4,500
Bills payable 2,800 Closing stock 22,400
Capital 60,000 Sundry debtors 21,600
Less : drawings 2,700 Machinery 27,000
57,300
Add : net profit ​14,000 71,300

75,500 75,500

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Q7 The following trial balance is 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(Rs.) Account title Account(Rs.)
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

Answer.
Trading and Profit and Loss Account
Dr. For the year ending 31​st​ March 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To purchases 50,000 By sales 80,000
To factory wages 11,000 Less: sales return ​ 1,000 79,000
To coal, gas and water 6,000
To gross profit c/d 12,000

To salaries 79,000 By gross profit b/d 79,000

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To rent By apprenticeship premium
To discount 9,000 12,000
To advertisement 4,000 5,000
To net profit (transferred to 3,000
capital) 500
500

17,000 17,000

Balance Sheet
As at 31​st​ March 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 13,000 Petty cash 500
Bank overdraft 1,000 Loan 6,000
Loan 10,000 Debtors 12,000
Capital 20,000 Machinery 5,000
Less: income tax 100 Land and building 10,000
19,900 Furniture 9,900
Less : drawings 1,000
18,900
Add : net profit ​ 500 19,400

43,400 43,400

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Q8 The following id the trial balance of Manju Chawla on March 31, 2017. You are required to
prepare trading and profit and loss account and a balance sheet as on date :
Account title Debit amount Credit
(Rs.) amount (Rs.)
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

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

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
Closing stock Rs. 2,000.
Answer. Trading and Profit and Loss Account
Dr. For the year ending 31​st​ March, 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 10,000 By sales 80,000
To purchases 40,000 Less : returns ​ 200 79,800
Less: returns ​ 600 39,400 By closing stock 2,000
To productive wages 6,000
To dock and clearing charges 4,000
To royalty 4,000
To gross profit c/d 18,400

To donation and charity By gross profit b/d
To delivery van expenses 81,800 By rent from tenants 81,800
To lighting By misc. incomes
To bad-debts
600 18,400
To net profit (transferred to
6,000 2,000
capital)
500 6,000
600
18,700

26,400 26,400

Balance Sheet
As at 31​st​ march, 2017

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 7,000 Cash 3,700
Sales tax collected 1,000 Debtors 6,000
Capital 40,000 Closing stock 2,000
Less: drawings 2,000 Patents 4,000
38,000 Investments 6,000
Add: net profit 18,700 56,700 Land and machinery 43,000

64,700 64,700

*note: there is a trial balance error of Rs. 700 , the cash balance is taken as Rs. 3700 instead of
Rs. 3,000 as given in the balance sheet.

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Q9 The following is the trial balance of Mr. Deepak as on March 31, 2017. You are required to
prepare trading account, profit and loss account and a balance sheet as on date :
Account title Debit Account title Credit
amount(Rs.) amount(Rs.)
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 Purchase 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
Closing stock Rs. 35,000

Answer. In the books of Mr. Deepak
Trading and Profit and Loss Account
Dr. For the year ending 31​st​ march 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

To opening stock 40,000 By sales 4,40,000
To purchases 1,60,000 Less : return ​ 6,000 4,34,000
Less : return ​ 8,000 1,52,000 By closing stock 35,000
To wages 84,000
To carriage inwards 7,200
To factory lighting 2,800
To gross profit c/d 1,83,000

To salaries By gross profit b/d
To carriage outwards By discount received
To insurance 4,69,000 4,69,000
To general expenses
53,000 1,83,000
To rent and taxes
1,600 10,400
To travelling expenses
3,000
To net profit (transferred to
29,000
capital)
14,400
7,400
85,000

1,93,400 1,93,400

Balance Sheet
As at 31​st​ march,2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 50,000 Cash in hand 12,600
Bills payable 3,600 Debtors 1,04,000
Capital 2,50,000 Bills receivable 5,000
Less : drawings 36,000 Closing stock 35,000
2,14,000 Furniture 16,000
Add : net profit ​ 85,000 2,99,000 Plant and machinery 1,80,000

3,52,600 3,52,600

Page : 355 , Block Name : Numerical Questions

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Q10 Prepare trading and profit and loss account and balance sheet from the following
particulars as on March 31,2017.
Account title Debit Credit amount
amount(Rs.) (Rs.)
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
Investments 32,000
Interest on investments 3,200
Loan 16,000
Repairs 2,400
General expenses 17,000
Wages and salaries 28,800
Land and building 2,88,000
Cash in hand 32,000
Miscellaneous receipts 160
Sales tax collected 8,350
Closing stock Rs. 30,000.

Answer.
Trading and Profit and Loss Account
Dr. For the year ending 31​st​ March 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 57,600 By sales 5,60,000
To purchases 3,52,000 Less: return inwards ​ 9,600 5,50,400
Less: return outwards ​ 12,000 3,40,000 By closing stock 30,000
To wages and salaries 28,800
To carriage inwards 7,000
To fuel and power 24,800
To gross profit c/d 1,22,200

To carriage outwards
To repairs
To general expenses 5,80,400 5,80,400
To bad debts
To net profit (transferred to
capital )

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

3,360 By gross profit b/d 1,22,200
2,400 By interest on investment 3,200
17,000 By miscellaneous receipts 160
9,950
92,850

125,560 125,560

Balance Sheet
As at 31​st​ march 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 48,000 Cash in hand 32,000
Loan 16,000 Closing stock 30,000
Sales tax collected 8,350 Debtors 1,31,200
Capital 3,48,000 Investment 32,000
Add : net profit ​ 92,850 4,40,850 Land and building 2,88,000

5,13,200 5,13,200

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Q11 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
(Rs.) (Rs.)
Stock as on April 01, 2016 16,000
Purchases and sales 67,600 1,12,000
Return 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

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Scooter 8,000
Furniture 5,200
Building 65,000
Debtors and creditors 6,000 16,000
Capital 50,000
Closing stock Rs. 15,000.

Answer. In the books of Mr. A. Lal
Trading and Profit and Loss Account
Dr. For the year ending 31​st​ March 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 16,000 By sales 1,12,000
To purchases 67,600 Less: return inwards ​ 4,600 1,07,400
Less: return outwards ​ 3,200 64,400 By closing stock 15,000
To carriage inwards 1,400
To gross profit c/d 40,600

To salaries By gross profit c/d
To general expenses 1,22,400 By discount received 1,22,400
To bad debts By commission received
To interest on bank overdraft 8,800 40,600
To insurance and taxes 2,400 1,400
To scooter expenses 600 1,800
To Net profit (transferred to 600
capital) 4,000
200
27,200

43800 43,800

Balance Sheet
As at 31​st​ March 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 16,000 Cash in hand 4,000
Bank overdraft 10,000 Closing stock 15,000
Capital 50,000 Debtors 6,000
Add: net profit 2
​ 7,200 77,200 Scooter 8,000
Furniture 5,200
Building 65,000

1,03,200 1,03,200

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Page : 357 , Block Name : Numerical Questions

Q12 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 Rs. Credit balances Rs.
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
Closing stock Rs. 8,000

Answer. In the books M/s. Royal Traders
Trading and Profit and Loss Account
Dr. For the year ending 31​st​ march 2017 Cr.
Particulars Amount (Rs.) Particulars Amount (R.s)
To opening stock 20,000 By sales 2,45,000
To purchases 1,90,000 By closing stock 8,000
To carriage on purchases 1,500 By gross loss c/d 13,500
To wages 55,000

To gross loss b/d By net loss (transferred to
To postages 2,66,500 capital) 2,66,500
To sundry expenses 13,500 20,000
To rent 300
1,700
4,500

20,000 20,000

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Balance sheet
As at 31​st​ March 2017
Liabilities Amount (Rs.) Assets Amount (Rs.)
Creditors 10,000 Cash 5,000
Bills payable 4,000 Bank 10,000
Capital 2,00,000 Closing stock 8,000
Less: drawings 9,000 Debtors 27,000
1,91,000 Machinery 1,00,000
Less: net loss ​ 20,000 1,71,000 Furniture 35,000

1,85,000 1,85,000

Page : 357 , Block Name : Numerical Questions

Q13 Prepare trading and profit and loss account from the following particulars of M/s Neema
Traders as on March 31, 2017.

Account title Debit amount Account title Credit
(Rs.) amount (Rs.)
Buildings 23,000 Sales 1,80,000
Plants 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 debt 250
Postages 300
Discount 1,000
Salaries 3,000
Debtors 3,900
Stock on March 31, 2017 Rs, 16,000.

Page 20 of 25 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Answer. In the books of M/s. Neema Traders
Trading and Profit and Loss Account
Dr. For the year ending 31​st​ March 2017 Cr.
Particulars Amount (Rs.) Particulars Amount(Rs.)
To opening stock 9,000 By sales 1,80,000
To purchases 1,64,000 Less: returns ​ 1,820 1,78,180
Less: returns ​ 1,910 1,62,090 By closing stock 16,000
To carriage inwards 1,000
To wages 3,300
To Gross profit c/d 18,790

To salaries By gross profit b/d
To insurance
1,94,180 1,94,180
To interest
To bad debts 3,000 18,790
To postage 1,610
To discount 1,100
To net profit (transferred to 250
capital) 300
1,000
11,530

18,790 18,790

Balance sheet
As at 31​st​ March 2017
Liabilities Amount (Rs.) Assets Amount (Rs.)
Creditors 8,000 Closing stock 16,000
Bills payable 2,520 Debtors 3,900
Loan 8,000 Machinery 2,10,940
Bank overdraft 4,720 Buildings 23,000
Capital 2,36,000 Plant 16,930
Add: net profit ​ 11,530 2,47,530
2,70,770 2,70,770

Page : 358 , Block Name : Numerical Questions

Page 21 of 25 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Q14 From the following balances of M/s Nilu Sarees as on March 31, 2017. Prepare trading and
profit and loss account and balance sheet as on date.
Account title Amount (Rs.) Account title Amount (Rs.)
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
Investment 90,000
Machinery 60,000
Drawings 18,000

Closing stock as on March 31, 2017 Rs. 22,000.

Answer. In the books of M/s. Nilu Sarees
Trading and profit and loss account
Dr. For the year ending 31​st​ march 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 10,000 By sales 2,28,000
To purchases 78,000 By closing stock 22,000
To carriage inwards 2,500
To wages 11,000
To gross profit c/d 1,48,500

To salaries By gross profit b/d
To commission 2,50,000 By interest 2,50,000
To rent and taxes By commission
To repairs
To telephone expenses
To legal charge
To sundry expense
To net profit (transferred to
capital)

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Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

30,000 1,48,500
10,000 7,000
2,800 8,000
5,000
1,400
1,500
2,500
1,10,300

163,500 1,63,500

Balance sheet
As at 31​st​ March 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 28,000 Cash in hand 12,000
Bills payable 23,700 Debtors 30,000
Capital 70,000 Closing stock 22,000
Less: drawings 18,000 Machinery 60,000
52,000 Investments 90,000
Add: net profit 1
​ ,10,300 1,62,300

2,14,000 2,14,000

Page : 358 , Block Name : Numerical Questions

Q15 Prepare trading and profit and loss account of M/s Sports Equipments for the year ended
March 31, 2017 and the balance sheet as on that date :
Account title Debit amount Credit Amount
(Rs.) (Rs.)
Opening stock 50,000
Purchases and sales 3,50,000 4,21,000
Sales return 5,000
Capital 3,00,000
Commission 4,000
Creditors 1,00,000
Bank overdraft 28,000
Cash in hand 32,000

Page 23 of 25 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Furniture 1,28,000
Debtors 1,40,000
Plants 60,000
Carriage on purchase 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
Closing stock as on March 31, 2017 Rs. 2,500.

Answer. In the books of M/s. Sports Equipment
Trading and Profit and Loss Account
Dr. For the year ending 31​st​ March 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 50,000 By sales 4,21,000
To purchases 3,50,000 Less: returns 5,000 4,16,000
To carriage on purchases 12,000 By closing stock 2,500
To wages 8,000 By gross loss c/d 1,500

To gross loss b/d By commission
To rent 4,20,000 By net loss (transferred to 4,20,000
To bad debts 1,500 capital ) 4,000
To stationery 15,000 41,500
To travelling expenses 7,000
To insurance 6,000
To discount 2,000
To office expenses 7,000
5,000
2,000

45,500 45,500

Page 24 of 25 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-9 Accountancy

Balance sheet
As at 31​st​ march 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Creditors 1,00,000 Cash in hand 32,000
Bank overdraft 28,000 Debtors 1,40,000
Capital 3,00,000 Closing stock 2,500
Less: drawings 24,000 Furniture 1,28,000
2,76,000 Plants 60,000
Less: net loss ​ 41,500 2,34,500

3,62,500 3,62,500

Page : 359 , Block Name : Numerical Questions

Page 25 of 25 Aglasem Schools