NCERT Solutions for Class 11 Accountancy Chapter 9 Financial Statements - II

NCERT
SOLUTIONS
CLASS - 11th

aglase .co

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Class : 11th
Subject : Accountancy
Chapter : 10
Chapter Name : Financial Statements II

Q1 Why is it necessary to record the adjusting entries in the preparation of final accounts?

Answer. Adjustments becomes necessary in respect of certain incomes received in advance or
those which have accrued but are still to be received. Apart from this, there are certain items
which are not recorded on day-to-day basis such as depreciation on fixed assets, interest on
capital, etc. These are adjusted at the time of preparing financial statements. The purpose of
making various adjustments is to ensure that the final accounts reveal the true profit or loss and
the true financial position of the business.

Page : 410 , Block Name : Short Answers

Q2 What is meant by closing stock? Show its treatment in final accounts.

Answer. The closing stock represents the cost of unsold goods lying in the stores at the end of
the accounting period. The adjustment with regard to the closing stock is done by (i) by crediting
it to the trading and profit and loss account, and (ii) by showing it on the asset side of the
balance sheet.

Page : 410 , Block Name : Short Answers

Q3 State the meaning of :

(a)​ ​Outstanding expenses

(b)​ ​Prepaid expenses

(c)​ ​Income received in advance

(d)​ ​Accrued income

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Answer.

(a)​ ​Outstanding expenses : When expenses of an accounting period remain unpaid at the end
of an accounting period, they are termed as outstanding expenses. As they relate to the earning
of revenue during the current accounting year, it is logical that they should be duly charged
against revenue for computation of the correct amount of profit or loss.

(b)​ ​Prepaid expenses : There are several items of expense which are paid in advance in the
normal course of business operations. At the end of the accounting year, it is found that the
benefits of such expenses have not yet been fully received; a portion of its benefit would be
received in the next accounting year. This portion of expense, is carried forward to the next year
and is termed as prepaid expenses.

(c)​ ​Income received in advance : Sometimes, a certain income is received but the whole
amount of it does not belong to the current period. The portion of the income which belongs to
the next accounting period is termed as income received in advance or an Unearned Income.

(d)​ ​Accrued income : certain items of income such as interest on loan, commission, rent, etc.
are earned during the current accounting year but have not been actually received by the end of
the same year. Such incomes are known as accrued income.

Page : 410 , Block Name : Short Answers

Q4 Give the proforma of income statement and balance in vertical form.

Answer.

Income statement for the year ended
Particulars Amount Amount

Sales
Less: sales return
Net sales
Cost of goods sold
Opening stock
Purchases
Less: purchase
return
Carriage inwards

Page 2 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Wages
Cost of goods
available for sale
Less: closing stock
​Gross profit
Operating expenses
Selling expenses
Advertising
Discount
Allowances
Bad debts and
provision
Carriage outwards
Total selling expenses
General and administrative expenses
Salaries
Rent and rates
Insurance
Depreciation
Postage
Repairs
General expenses
Total operating expense
​Net Income from
operations
(operating profit)
Other income ( non operating gains)
Interest earned
Commission earned
Profit on sale of fixed assets
Less: deductions (non operating expenses)
Interest paid
Loss by fire
Net non-operating gains
​Net Income (Net Profit)

Balance sheet as at

Particulars Amount Amount

Current Assets
Cash in hand
Cash at bank
Bills receivable
Accrued income

Page 3 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Debtors
Stock
Prepaid expenses
Total Current Assets
Less: Current Liabilities
Bank overdraft
Outstanding expenses
Bills payable
Trade creditors
Income received in
advance
Total Current Liabilities
Net Working Capital
(Current assets and
current liabilities)
Fixed assets
Furniture and fixtures
Patents
Plant and machinery
Building
Land
Goodwill
Total Fixed Assets
Total assets (after paying
current liabilities)
Capital employed
Long term liabilities
Loan
Mortgage
Total long term liabilities
Net Assets (being the
difference between total
assets and long term
liabilities)
Capital ( Proprietor)
Capital in the beginning
Add: capital introduced during
the current year
Interest on capital
Profit for the current
year
Less: drawings during the
current year
Interest on drawings
Loss for the current
year
Total capital of the proprietor

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

at the end of the year

Page : 410 , Block Name : Short Answers

Q5 Why is it necessary to create a provision for doubtful debts at the time of preparation of final
accounts?

Answer. It is possible that the whole amount of the debtors may not be realised in future.
However, it is not possible to accurately know the amount of such bad debts. Hence, we make a
reasonable estimate of such loss and provide the same. Such provision is called provision for
bad debts and is created by debiting the profit and loss account.

Page : 410 , Block Name : Short Answers

Q6 What adjusting entries would you record for the following :

(a)​ ​Depreciation

(b)​ ​Discount on debtors

(c)​ ​Interest on capital

(d)​ ​Manager’s commission

Answer.

(a)​ ​Depreciation : adjustment journal entry -

Depreciation A/c Dr.

To Fixed Assets A/c

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

The depreciation amount is debited to the Profit and loss account and deducted from the

amount of the fixed asset in the balance sheet.

(b)​ ​Discount on debtors : adjustment journal entry –

Profit and Loss A/c Dr.

To Discount on debtors A/c

The discount amount is debited to the Profit and loss account and deducted from the debtors
account balance in the balance sheet.

(c)​ ​Interest on capital : adjustment journal entry –

Interest on capital A/c Dr.

To Capital A/c

This is shown as an expense on the debit side of the profit and loss account and added to the
capital in the balance sheet.

(d)​ ​Manager’s commission : adjustment journal entry –

Profit and Loss A/c Dr.

To Manager’s commission A/c

It is debited to the profit and loss account and recorded on the liabilities side of the balance
sheet.

Page : 410 , Block Name : Short Answers

Q7 What is meant by provision for discount on debtors?

Answer.​ ​A business enterprise allows discount to its debtors to encourage prompt payments.
Discount likely to be allowed to customers in an accounting year can be estimated and provided
for by creating a provision for discount on debtors. Provision for discount is made on good
debtors which are arrived at by deducting further bad debts and the provision for doubtful debts.

Page 6 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Page : 410 , Block Name : Short Answers

Q8 Give journal entries for the following adjustments :

(a)​ ​Outstanding salary Rs. 3,500

(b)​ ​Rent unpaid for one month at Rs. 6,000 per annum

(c)​ ​Insurance prepaid for a quarter at Rs. 16,000 per annum.

(d)​ ​Purchase of furniture costing Rs. 7,000 entered in purchase book.

Answer.

Date Particulars L.F. Debit (Rs.) Credit(Rs.)

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

(a) Outstanding salary

Salaries A/c 3,500
Dr.
3,500
To Outstanding salary A/c

(being adjustment entry of outstanding
salary passed)

(b) Rent unpaid for one month

Rent A/c 500
Dr.
500
To Outstanding rent A/c

(being rent outstanding for a month,
(c)
adjusted)
4,000
Insurance prepaid for a quarter
4,000
Prepaid Insurance A/c
Dr.

To Insurance A/c
(d)
(being insurance paid in advance)
7,000
Purchase of furniture entered in purchase
7,000
book

Furniture A/c
Dr.

To Purchases A/c

(being purchase of furniture entered in
purchase book)

Page : 410 , Block Name : Short Answers

Page 8 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Q1 What are adjusting entries? Why are they necessary for preparing final accounts?

Answer. According to accrual concept of accounting, the profit or loss for an accounting year is
not based on the revenues realised in cash and the expenses paid in cash during that year.
There may exist some receipts and expenses in the current year which partially relate to the
previous year or the next year. Also, there may be income and expenses relating to the current
year that still need to be brought into the books of account.

Adjustments becomes necessary in respect of certain incomes received in advance or those
which have accrued but are still to be received. Apart from this, there are certain items which
are not recorded on day-to-day basis such as depreciation on fixed assets, interest on capital,
etc. These are adjusted at the time of preparing financial statements. The purpose of making
various adjustments is to ensure that the final accounts reveal the true profit or loss and the true
financial position of the business.

Page : 411 , Block Name : Long Answers

Q2 What is meant by provision for doubtful debts? How are relevant accounts prepared and
what journal entries are recorded in final accounts? How is the amount for provision for doubtful
debts created?

Answer. It is possible that the whole amount of the debtors may not be realised in future.
However, it is not possible to accurately know the amount of such bad debts. Hence, we make a
reasonable estimate of such loss and provide the same. Such provision is called provision for
bad debts and is created by debiting profit and loss account.

Journal entry for this is :

Profit and Loss A/c Dr.

To Provision for Doubtful Debts A/c

Treatment of Provision for Doubtful Debts in the final accounts can be explained with the help of
an example : let us assume that A feels that 5% of his debtors balance Rs. 15,000 are likely to
default on their payments next year, this implies bad debts of Rs. 750 (5% of 15,000).

The following adjustment entry will be passed:

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Profit and Loss A/c Dr. 750

To provision for doubtful debts A/c 750

Adjustment in the final accounts :

Trading and Profit and Loss Account

Dr. For the year ending Cr.

Particulars Amount(Rs.) Particulars Amount(Rs.)

To provision for doubtful 750
debts

Balance sheet

As at

Liabilities Amount(Rs.) Assets Amount(Rs.)

Debtors 15,000

Less: provision for
doubtful debts
750 14,250

The amount of provision is debited to the profit and loss account and deducted from the debtors
account balance in the balance sheet.

Page : 410 , Block Name : Long Answers

Q3 Show treatment of prepaid expenses, depreciation, closing stock at the time of preparation
of final accounts when :

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

(a)​ ​When given inside the trial balance?

(b)​ ​When given outside the trial balance?

Answer.

● ​Prepaid expense

(a)​ ​When given inside the trial balance : It is recorded on the asset side of the
balance sheet only, it has already been adjusted with the concerned expense.
(b)​ ​When given outside the trial balance :

Profit and loss account
Dr. for the year ending Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)

To concerned
expense
Less: prepaid
expense

Balance sheet
As at
Liabilities Amount(Rs.) Assets Amount(Rs.)

Prepaid expense

● ​Depreciation

(a)​ ​When given inside the trial balance : the amount of depreciation is debited to the
profit and loss account only, it has already been adjusted with the value of the asset.
(b)​ ​When given outside the trial balance :
Profit and loss account
Dr. for the year ending Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)

To depreciation A/c

Balance sheet

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

As at
Liabilities Amount(Rs.) Assets Amount(Rs.)

Fixed asset
Less: depreciation

● ​Closing stock

(a)​ ​When given inside the trial balance : It is shown on the asset side of the balance
sheet only, it has already been adjusted with the purchases account.
(b)​ ​When given outside the trial balance :
Trading account
Dr. For the year ending Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)

By closing stock

Balance sheet
As at
Liabilities Amount(Rs.) Assets Amount(Rs.)

Closing Stock

Page : 411 , Block Name : Long Answers

Q1 Prepare a trading and profit and loss account for the year ending March 31, 2017, from the
balances extracted of M/s Rahul Sons. Also prepare a balance sheet at the end of the year.
Account title Amount(Rs.) Account title Amount(Rs.)
Stock 50,000 Sales 1,80,000
Wages 3,000 Purchases return 2,000
Salary 8,000 Discount received 500
Purchases 1,75,000 Provision for doubtful debts 2,500
Sales return 3,000 Capital 3,00,000
Sundry debtors 82,000 Bills payable 22,000
Discount allowed 1,000 Commission received 4,000
Insurance 3,200 Rent 6,000
Rent, rates and taxes 4,300 Loan 34,800
Fixtures and fittings 20,000
Trade expenses 1,500
Bad debts 2,000

Page 12 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Drawings 32,000
Repairs and Renewals 1,600
Travelling expenses 4,200
Postages 300
Telegram expense 200
Legal fees 500
Bills receivable 50,000
Building 1,10,000
Adjustments :
1. Commission received in advance Rs. 1,000
2. Rent receivable Rs. 2,000
3. Salary outstanding Rs. 1,000 and insurance prepaid Rs. 800
4. Further bad debts Rs. 1,000 and provision for doubtful debts @ 5% on debtors and
discount on debtors @ 2%.
5. Closing stock Rs. 32,000
6. Depreciation on building @ 6% p.a.

Answer. In the books of M/s Rahul sons
Trading and Profit and Loss Account
Dr. For the year ending March 31, 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 50,000 By sales 1,80,000
To purchases 1,75,000 Less: return ​ 3,000 1,77,000
Less: returns ​ 2,000 1,73,000 By closing stock 32,000
To wages 3,000 By gross loss c/d 17,000

To gross loss b/d By discount received
To salary 8,000 2,26,000 By commission received 4,000 2,26,000
Add: outstanding salary 1
​ ,000 17,000 less: advance ​1,000 500
To discount allowed By rent 6,000
To insurance 3,200 9,000 Add: rent receivable ​2,000 3,000
Less: prepaid insurance ​ 800 1,000 By net loss (transferred to
To rent rates and taxes capital) 8,000
To trade expenses 2,400 43,189
To bad debts 2,000 4,300
Add: further bad debt ​1,000 1,500
3,000
Less: old provision 2
​ ,500
500
Add: new provision 4
​ .050
To discount on debtors
To repairs and renewals 4,550
To travelling expense 1,539
To postage 1,600
To telegram expense 4,200
To legal fees 300

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

To depreciation on building 200
500
6,600
54,689 54,689

Balance sheet
As at 31​st​ March 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Outstanding salaries 1,000 Prepaid insurance 800
Advance commission 1,000 Rent receivable 2,000
Bill payable 22,000 Debtors 82,000
Loan 34,800 Less: further bad debts ​ 1,000
Capital 3,00,000 81,000
Less: drawings ​ 32,000 Less: provision for ​ 4,050
2,68,000 doubtful debts
Less: net loss ​ 43,189 2,24,811 76,950
Less: discount on debtors​1,539 75,411
Closing stock 32,000
Bills receivable 50,000
Fixtures and fittings 20,000
Building 1,10,000
Less: depreciation ​ 6,600 1,03,400

2,83,611 2,83,611

Page : 411 , Block Name : Numerical Questions

Q2 Prepare a trading and profit and loss account of M/s Green Club Ltd. for the year ending
March 31, 2017 from the following figures taken from this trial balance :
Account title Amount(Rs.) Account title Amount(Rs.)

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Opening stock 35,000 Sales 2,50,000
Purchases 1,25,000 Purchases return 6,000
Return inwards 25,000 Creditors 10,000
Postage and telegram 600 Bills payable 20,000
Salary 12,300 Discount 1,000
Wages 3,000 Provision for bad debts 4,500
Rent and rates 1,000 Interest received 5,400
Packing and transport 500 Capital 75,000
General expense 400
Insurance 4,000
Debtors 50,000
Cash in hand 20,000
Cash at bank 40,000
Machinery 20,000
Lighting and heating 5,000
Discount 3,500
Bad debts 3,500
Investment 23,100

3,71,900 3,71,900

Adjustments :
1. Depreciation charged on machinery @ 5% p.a.
2. Further bad debts Rs. 1,500, discount on debtors @ 5% and make a provision on
debtors @ 6%.
3. Wages prepaid Rs. 1,000
4. Interest on investment @ 5% p.a.
5. Closing stock Rs. 10,000

Answer. In the books of M/s Green club
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-10 Accountancy

To opening stock 35,000 By sales 2,50,000
To purchases 1,25,000 Less: returns ​ 25,000 2,25,000
Less: returns ​ 6,000 1,19,000 By closing stock 10,000
To wages 3,000
Less: prepaid wages ​1,000 2,000
To gross profit c/d 79,000

To salary By gross profit b/d
To rent and rates By discount
To postage and telegram 2,35,000 By interest received 5,400 2,35,000
To packing and transport 12,300 Add: accrued interest on 1
​ ,155 79,000
To general expense 1,000 investment 1,000
To insurance 600
To lighting and heating 500 6,555
To discount 400
To bad debts 3,500 4,000
Add: further bad debts ​1,500 5,000
5,000 3,500
Less: old provision 4
​ ,500
500
Add: new provision ​2,910
To discount on debtors
To depreciation on machinery
To net profit (transferred to 3,410
capital) 2,280
1,000
52,565

86.,555 86,555

Balance sheet
As at 31​st​ March 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)

Page 16 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Creditors 10,000 Cash in hand 20,000
Bills payable 20,000 Cash at bank 40,000
Capital 75,000 Prepaid wages 1,000
Add: net profit 5
​ 2,565 1,27,565 Accrued interest on investment 1,155
Closing stock 10,000
Debtors 50,000
Less: further bad debts ​ 1,500
48,500
less: Provision for debtors​2,910
45,590
Less: discount on debtors​2,280 43,310
Investment 23,100
Machinery 20,000
Less: depreciation ​ 1,000 19,000

1,57,565 1,57,565

Page : 412 , Block Name : Numerical Questions

Q3 The following balances has been extracted from the trial balance of M/s Runway Shine Ltd.
Prepare a trading and profit and loss account and a balance sheet as on March 31, 2017.
Account title Amount(Rs.) Account title Amount(Rs.)
Purchases 1,50,000 Sales 2,50,000
Opening stock 50,000 Return outwards 4,500
Return inwards 2,000 Interest received 3,500
Carriage inwards 4,500 Discount received 400
Cash in hand 77,800 Creditors 1,25,000
Cash at bank 60,800 Bills payable 6,040
Wages 2,400 capital 1,00,000
Printing and stationery 4,500
Discount 400
Bad debts 1,500
Insurance 2,500
Investment 32,000
Debtors 53,000
Bills receivable 20,000
Postage and telegraph 400
Commission 200
Interest 1,000
Repair 440

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Lighting charges 500
Telephone charges 100
Carriage outwards 400
Motor car 25,000
4,89,440 4,89,440
Adjustments:
1. Further bad debts Rs. 1,000. Discount on debtors Rs. 500and make a provision on
debtors @ 5%.
2. Interest received on investment @ 5%.
3. Wages and interest outstanding Rs. 100 and Rs. 200 respectively.
4. Depreciation charged on motor car @ 5% p.a.
5. Closing stock Rs. 32,500.

Answer. In the books of M/s Runway Shine Ltd.
Trading and profit and Loss Account
Dr. For the year ending March 31, 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 50,000 By sales 2,50,000
To purchases 1,50,000 Less: return ​ 2,000 2,48,000
Less: return outwards ​ 4,500 1,45,500 By closing stock 32,500
To wages 2,400
Add: outstanding wages ​ 100 2,500
To carriage inwards 4,500
To gross profit c/d 78,000

To carriage outwards By gross profit b/d
To printing and stationery By discount received
To discount 2,80,500 By interest received 3,500 2,80,500
To bad debts 1,500 Add: accrued interest on
Add: further bad debt ​1,000 investment 1
​ ,600
2,500
Add: provision on debtor 2 ​ ,600
To discount on debtors
To insurance
To postage and telegraph
To commission
To interest 1,000
Add: outstanding repair ​ 200
To repair
To lighting charges
To telephone charges
To depreciation on motor car
To net profit (transferred to
capital)

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

400 78,000
4,500 400
400

5,100

5,100
500
2,500
400
200

1,200
440
500
100
1,250
66,010

83,500 83,500

Balance sheet
As at 31t March 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Wages outstanding 100 Cash in hand 77,800
Interest outstanding 200 Cash at bank 60,800
Creditors 1,25,000 Closing stock 32,500
Bills payable 6,040 Accrued interest on investment 1,600
Capital 1,00,000 Debtors 53,000
Add: net profit ​ 66,010 1,66,010 Less: further bad debts ​ 1,000
52,000
Less: provision on debtor​2,600
49,400
Less: discount on debtors​ 500 48,900
Bills receivable 20,000
Investment 32,000
Motor car 25,000

Page 19 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Less: depreciation ​ 1,250 23,750

2,97,350 2,97,350

Page : 413 , Block Name : Numerical Questions

Q4 From the following Trial balance, you are required to prepare trading and profit and loss
account for the year ending March 31, 2017 and balance sheet as on that date.
Particulars Amount(Rs.) Particulars Amount(Rs.)
Opening stock 25,000 Sales 7,00,000
Furniture 16,000 Creditors 72,500
Purchases 5,55,300 Bank overdraft 50,000
Carriage inwards 4,700 Provision for bad and doubtful 2,100
Bad debts 1,800 debts
Wages 52,000 Discount 500
Debtors 80,000 Capital 2,00,000
Sales return 15,000 Purchases return 20,000
Rent 24,000
Miscellaneous expenses 3,400
Salaries 68,000
Cash 8,900
Drawings 14,000
Building 1,60,000
Advertising 10,000
Interest on bank overdraft 7,000
Adjustments :
1. Closing stock valued at Rs. 36,000
2. Private purchases amounting to Rs.5,000 debited to purchases account.
3. Provision for doubtful debts @ 5% on debtors
4. Sign board costing Rs. 4,000 included in advertising
5. Depreciate furniture by 10%

Answer.
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-10 Accountancy

To opening stock 25,000 By sales 7,00,000
To purchases 5,55,300 Less: returns ​ 15,000 6,85,000
Less: returns ​ 20,000 By closing stock 36,000
5,35,300
Less: drawings ​ 5,000 5,30,300
To wages 52,000
To carriage inwards 4,700
To gross profit c/d 1,09,000

To salaries By gross profit b/d
To rent By discount
To miscellaneous expense 7,21,000 By net loss (transferred to 7,21,000
To bad debts 1,800 capital)
Add: new provision ​4,000 68,000 1,09,000
5,800 24,000 500
less: old provision 2
​ ,100 3,400 2,000
To advertising 10,000
Less: sign board ​4,000
To interest on bank overdraft
To depreciation on furniture 3,700
(10% of 20,000)
6,000
7,000
2,000

1,13,700 1,13,700

Balance sheet
As at March 31, 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)

Page 21 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Creditors 72,500 Cash 8,900
Bank overdraft 50,000 Closing stock 36,000
Capital 2,00,000 Debtors 80,000
Less: drawing ​ 14,000 Less: provision for ​ 4,000 76,000
1,86,000 debtors
Less: purchases ​ 5,000 Furniture 16,000
1,81,000 Add: sign board ​ 4,000
Less: net loss ​ 4,600 1,76,400 20,000
Less depreciation ​ 2,000 18,000
Building 1,60,000

2,98,900 2,98,900

Page : 414 , Block Name : Numerical Questions

Q5 From the following information prepare trading and profit and loss account of M/s Indian
sports house for the year ending March 31, 2017.
Account title Amount(Rs.) Account title Amount(Rs.)
Drawings 20,000 Capital 2,00,000
Sundry debtors 80,000 Return outwards 2,000
Bad debts 1,000 Bank overdraft 12,000
Trade expenses 2,400 Provision for bad debts 4,000
Printing and stationery 2,000 Sundry creditors 60,000
Rent rates and taxes 5,000 Bills payable 15,400
Freight 4,000 Sales 2,76,000
Return inwards 7,000
Opening stock 25,000
Purchases 1,80,000
Furniture and fixtures 20,000
Plant and machinery 1,00,000
Bills receivable 14,000
Wages 10,000
Cash in hand 6,000
Discount allowed 2,000
Investments 40,000
Motor car 51,000
5,69,400 5,69,400
Adjustments :
1. Closing stock was Rs.45,000.
2. Provision for doubtful debts is to be maintained @ 2% on debtors.

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

3. Depreciation charged on : furniture and fixtures @5%, plant and machinery @6% and
motor car @ 10%.
4. A machine of Rs. 30,000 was purchased on October 01,2016.
5. The manager is entitled to a commission of @10% of the net profit after charging such
commission.

Answer. In the books of Indian Sports house
Trading and Profit and Loss Account
Dr. For the year ending March 31, 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 25.000 By sales 2,76,000
To purchases 1,80,000 Less: returns ​ 7,000 2,69,000
Less: returns ​ 2,000 1,78,000 By closing stock 45,000
To wages 10,000
To gross profit c/d 1,01,000

To trade expenses By gross profit b/d
To rent rates and taxes By old provision for doubtful
3,14,000 3,14,000
To printing and stationery debts 4,000
2,400 Less: bad debts 1,01,000
To freight 1,000
To discount allowed 5,000 Less: new provision ​1,600
To depreciation: 2,000
Furniture and fixtures 1,000 4,000
2,000 1,400
Plant and machinery 5,100
Motor car ​5,100
To manager’s commission
To net profit (transferred to
capital) 11,200
6,891
68,909

1,02,400 1,02,400

Balance sheet
As at March 31, 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)

Page 23 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Bills payable 15,400 Cash in hand 6,000
Sundry creditors 60,000 Closing stock 45,000
Bank overdraft 12,000 Sundry debtors 80,000
Capital 2,00,000 Less: provision ​ 1,600 78,400
Less: drawings ​ 20,000 Bills receivable 14,000
1,80,000 Investments 40,000
Add: net profit ​ 68,909 2,48,909 Furniture and fixtures 20,000
Manager’s commission 6,891 Less: depreciation ​ 1,000 19,000
outstanding Plant and machinery 1,00,000
Less: depreciation ​ 5,100 94,900
Motor car 51,000
Less: depreciation ​ 5,100 45,900

3,43,200 3,43,200

Working note :
1. Calculation of depreciation on plant and machinery
Depreciation on machinery worth Rs. 70,000 for one year @ 6% 4,200
Add depreciation on machine of Rs. 30,000 for 6 months @ 6% 900
Total depreciation 5,100
2. Calculation of manager’s commission
Net profit before calculation of this commission = 75,800
net profit before commission * percentage of commission Manager’s
commission = ____________________________________________________
100 + percentage of commission

Page : 415 , Block Name : Numerical Questions

Q6 Prepare the trading and profit and loss account and a balance sheet of M/s Shine Ltd. from
the following particulars.
Account title Amount(Rs.) Account title Amount(Rs.)

Page 24 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Sundry debtors 1,00,000 Bills payable 85,550
Bad debts 3,000 Sundry creditors 25,000
Trade expense 2,500 Provision for bad debts 1,500
Printing and stationery 5,000 Return outwards 4,500
Rent, rates and taxes 3,450 Capital 2,50,000
Freight 2,250 Discount received 3,500
Sales return 6,000 Interest received 11,260
Motor car 25,000 Sales 1,00,000
Opening stock 75,550
Furniture and fixture 15,500
Purchases 75,000
Drawings 13,560
Investments 65,500
Cash in hand 36,000
Cash at bank 53,000

4,81,310 4,81,310
Adjustments :
1. Closing stock was valued Rs. 35,000
2. Depreciation charged on furniture and fixture @ 5%.
3. Further bad debts Rs. 1,000. Make provision for bad debts @5% on sundry debtors.
4. Depreciation charged on motor car @ 10%.
5. Interest on drawing @ 6%
6. Rent, rates and taxes was outstanding Rs. 200.
7. Discount on debtors 2%.

Answer. In the books of M/s Shine Ltd
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 75,550 By sales 1,00,000
To purchases 75,000 Less: returns ​ 6,000 94,000
Less: returns ​ 4,500 70,500 By closing stock 35,000
By gross loss c/d 17,050

To gross loss b/d By discount received
To trade expense 1,46,050 By interest received 1,46,050
To printing and stationery By interest on drawing
To rent, rates and taxes 3,450 By net loss ( transferred to
Add: outstanding rent ​ 200 capital)

Page 25 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

To freight 17,050 3,500
To bad debts 3,000 2,500 11,260
Add: further bad debts 1
​ ,000 5,000 814
4,000 27,482
Less: old provision 1
​ ,500 3,650
2,500 2,250
Add: new provision 4
​ ,950
To discount on debtors
To depreciation:
Furniture and fixture 775
Motor car ​2,500
7,450
1,881

3,275

43,056 43,056

Balance sheet
As at 31​st​ march 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Outstanding rent 200 Cash in hand 36,000
Bills payable 85,550 Cash at bank 53,000
Sundry creditors 25,000 Closing stock 35,000
Capital 2,50,000 Sundry debtors 1,00,000
Less: drawing ​ 13,560 Less: further bad debts 1,000
2,36,440 Less: provision for bad 4,950
Less: interest on drawings​ 814 debts
2,35,626 Less: discount on debtors​1,881 92,169
Less: net loss ​ 27,482 2,08,144 Investments 65,500
Furniture and fixture 15,500
Less: depreciation ​ 775 14,725
Motor car 25,000
Less: depreciation ​ 2,500 22,500
3,18,894 3,18,894

Page 26 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Page : 416 , Block Name : Numerical Questions

Q7 Following balances have been extracted from the trial balance of M/s Keshav Electronics
Ltd. You are required to prepare the trading and profit and loss account and a balance sheet as
on March 31, 2017.
Account title Amount(Rs.) Account title Amount(Rs.)
Opening stock 2,26,000 Sales 6,80,000
Purchases 4,40,000 Return outwards 15,000
Drawings 75,000 Creditors 50,000
Buildings 1,00,000 Bills payable 63,700
Motor vans 30,000 Interest received 20,000
Freight inwards 3,400 Capital 3,50,000
Sales return 10,000
Trade expense 3,300
Heat and power 8,000
Salary and wages 5,000
Legal expense 3,000
Postage and telegram 1,000
Bad debts 6,500
Cash in hand 79,000
Cash at bank 98,000
Sundry debtors 25,000
Investments 40,000
Insurance 3,500
Machinery 22,000

11,78,700 11,78,700
The following additional information is available :
1. Stock on March 31, 2017 was Rs. 30,000.
2. Depreciation is to be charged on building at 5% and on motor van at 10%.
3. Provision for doubtful debts is to be maintained at 5% on sundry debtors.
4. Unexpired insurance was Rs. 600.
5. The manager is entitled to a commission @ 5% on net profit after charging such
commission.

Answer. In the books of M/s Keshav Electronics Ltd
Trading and profit and loss account
Dr. For the year ending March 31, 2017 Cr.

Page 27 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 2,26,000 By sales 6,80,000
To purchases 4,40,000 Less: return inwards ​ 10,000 6,70,000
Less: return outwards ​ 15,000 4,25,000 By closing stock 30,000
To freight inwards 3,400
To heat and power 7,000
To gross profit c/d 37,600

To salary and wages By gross profit b/d
To trade expense By interest received
7,00,000 7,00,000
To legal expense
To postage and telegram 5,000 37,600
To bad debts 3,300 20,000
To provision for doubtful debts 3,000
To insurance 3,500 1,000
Less: unexpired insurance ​ 600 6,500
To depreciation: 1,250
Building 5,000
Motor van 3
​ ,000 2,900
To O/S manager’s commission
To net profit (transferred to
capital) 8,000
1,269
25,381

57,600 57,600

Balance sheet
As at March 31, 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)

Page 28 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Creditors 50,000 Cash in hand 79,000
Bills payable 63,700 Cash at bank 98,000
Capital 3,50,000 Prepaid insurance 600
Less: drawings ​ 75,000 Closing stock 30,000
2,75,000 Sundry debtors 25,000
Add: net profit ​ 25,381 3,00,381 Less: provision ​ 1,250 23,750
Outstanding manager’s 1,269 Investments 40,000
commission Buildings 1,00,000
Less: depreciation ​ 5,000 95,000
Motor van 30,000
Less: depreciation ​ 3,000 27,000
Machinery 22,000

4,15,350 4,15,350

Page : 417 , Block Name : Numerical Questions

Q8 From the following balances extracted from the books of Raga Ltd. prepare a trading and
profit and loss account for the year ending March 31, 2017 and a balance sheet as on that date.
Account title Amount(Rs.) Account title Amount(Rs.)
Drawings 20,000 Sales 2,20,000
Land and buildings 12,000 Capital 1,10,110
Plant and machinery 40,000 Discount 1,260
Carriage inwards 100 Apprenticeship premium 5,230
Wages 500 Bills payable 1,28,870
Salary 2,000 Purchases return 10,000
Sales return 200
Bank charges 200
Coal, gas and water 1,200
Purchases 1,50,000
Trade expenses 3,800
Stock (opening) 76,800
Cash at bank 50,000
Rates and taxes 870
Bills receivable 24,500
Sundry debtors 54,300
Cash in hand 30,000
4,66,470 4,66,470
The additional information is as under :
1. Closing stock was valued at the end of the year Rs. 20,000

Page 29 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

2. Depreciation on plant and machinery charged at 5% and land and building at 10%.
3. Discount on debtors at 3%.
4. Make a provision at 5% on debtors for doubtful debts.
5. Salary outstanding was Rs. 100 and wages prepaid was Rs. 40.
6. The manager is entitled to a commission of 5% of net profit after charging such
commission.

Answer. In the books of Raga ltd.
Trading and Profit and Loss Account
Dr. For the year ending March 31, 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 76,800 By sales 2,20,000
To purchases 1,50,000 Less: return ​ 200 2,19,800
Less: returns ​ 10,000 1,40,000 By closing stock 20,000
To wages 500
Less: prepaid wages ​ 40 460
To carriage inwards 100
To coal gas and water 1,200
To gross profit c/d 21,240

To salary 2,000 By gross profit b/d
Add: outstanding salary ​ 100 By apprentice premium
To bank charges By discount
2,39,800 2,39,800
To trade expense
To rates and taxes 21,240
2,100 5,230
To provision on debtors
200 1,260
To discount on debtors
3,800
To depreciation :
870
Plant and machinery 2,000
2,715
Land and building ​1,200
1,548
To O/s manager’s commission
To net profit (transferred to
capital)
3,200
633
12,664

27,730 27,730

Balance sheet

Page 30 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

As at 31​st​ march 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Bills payable 1,28,870 Cash in hand 30,000
Outstanding salary 100 Cash at bank 50,000
Outstanding manager’s 633 Closing stock 20,000
commission Prepaid wages 40
Capital 1,01,110 Bills receivable 24,500
Less: drawings 20,000 Sundry debtors 54,300
81,110 Less: provision 2,715
Add: net profit 12,664 93,774 Less: discount on debtors1,548 50,037
Land and building 12,000
Less: depreciation 1,200 10,800
Plant and machinery 40,000
Less: depreciation 2,000 38,000

2,23,377 2,23,377

Page : 418 , Block Name : Numerical Questions

Q9 From the following balances of M/s Jyoti Exports, prepare trading and profit and loss
account for the year ended March 31. 2017 and balance sheet as on this date.
Account title Amount(Rs.) Account title Amount(Rs.)
Sundry debtors 9,600 Sundry creditors 2,500
Opening stock 22,800 Sales 72,670
Purchases 34,800 Purchases return 2,430
Carriage inwards 450 Bills payable 15,600
Wages 1,770 Capital 42,000
Office rent 820
Insurance 1,440
Factory rent 390
Cleaning charges 940
Salary 1,590
Building 24,000
Plant and machinery 3,600
Cash in hand 2,160
Gas and water 240
Octroi 60
Furniture 20,540
Patents 10,000
1,35,200 1,35,200

Page 31 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Closing stock Rs.10,000.
1. To provision for doubtful debts is to be maintained at 5 percent on sundry debtors.
2. Wages amounting to Rs.500 and salary amounting to Rs. 350 are outstanding.
3. Factory rent prepaid Rs. 100.
4. Depreciation charged on Plant and machinery @ 5% and Building @ 10%
5. Outstanding insurance Rs.100.

Answer. In the books of M/s Jyoti Exports
Trading and profit and loss account
Dr. For the year ending March 31, 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 22,800 By sales 72,670
To purchases 34,800 By closing stock 10,000
Less: return ​ 2,430 32,370
To wages 1,770
Add: outstanding wages ​ 500 2,270
To factory rent 390
Less: prepaid rent 1
​ 00 290
To carriage inwards 450
To gas and water 240
To octroi 60
To cleaning charges 940
To gross profit c/d 23,250

To salary 1,590 By gross profit b/d
Add: outstanding salary ​ 350
To office rent
To insurance 1,440 82,670 82,670
Add:outstanding insurance​100
To provision for doubtful debts 23,250
To depreciation :
Plant and machinery 180 1,940
Building ​2,400 820
To net profit (transferred to
capital) 1,540
480

2,580
15,890

Page 32 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

23,250 23,250

Balance sheet
As at march 31, 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Outstanding wages 500 Cash in hand 2,160
Outstanding salary 350 Prepaid factory rent 100
Outstanding insurance 100 Closing stock 10,000
Sundry creditors 2,500 Sundry debtors 9,600
Bills payable 15,600 Less: provision ​ 480 9,120
Capital 42,000 Building 24,000
Add: net profit 1
​ 5,890 57,890 Less: depreciation ​ 2,400 21,600
Plant and machinery 3,600
Les: depreciation ​ 180 3,420
Furniture 20,540
patents 10,000

76,940 76,940

*in NCERT book the net profit is Rs. 15,895 and balance sheet total Rs. 76,945. But according
to the solution net profit is Rs. 15,890 and balance sheet total is Rs. 76,940.

Page : 419 , Block Name : Numerical Questions

Q10 the following balances have been extracted from the books of M/s Green House for the
year ended March 31, 2017, prepare trading and profit and loss account and balance sheet as
on this date.
Account title Amount(Rs.) Account title Amount(Rs.)
Purchases 80,000 Capital 2,10,000
Bank balance 11,000 Bills payable 6,500
Wages 34,000 Sales 2,00,000
Debtors 70,300 Creditors 50,000
Cash in hand 1,200 Return outwards 4,000
Legal expenses 4,000
Building 60,000
Machinery 1,20,000
Bills receivable 7,000

Page 33 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Office expenses 3,000
Opening stock 45,000
Gas and fuel 2,700
Freight and carriage 3,500
Factory lighting 5,000
Office furniture 5,000
Patent right 18,800
4,70,500 4,70,500
Adjustments :
(a) Machinery is depreciated at 10% and building depreciated at 6%.
(b) Interest on capital @ 4%.
(c) Outstanding wages Rs. 50.
(d) Closing stock Rs. 50,000.

Answer. In the books of M/s Green house
Trading and profit and loss account
Dr. For the year ending March 31, 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To opening stock 45,000 By sales 2,00,000
To purchases 80,000 By closing stock 50,000
Less: return outwards ​ 4,000 76,000
To wages 34,000
Add: outstanding wages ​ 50 34,050
To gas and fuel 2,700
To freight and carriage 3,500
To factory lighting 5,000
To gross profit c/d 83,750

To legal expense By gross profit b/d
To office expense
To depreciation :
Machinery 12,000 2,50,000 2,50,000
Building ​3,600 4,000 83,750
To interest on capital 3,000
To net profit (transferred to
capital)
15,600
8,400
52,750

83,750 83,750

Balance sheet
As at 31​st​ march 2017

Page 34 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Liabilities Amount(Rs.) Assets Amount(Rs.)
Outstanding wages 50 Cash in hand 1,200
Creditors 50,000 Bank balance 11,000
Bills payable 6,500 Debtors 70,300
Capital 2,10,000 Bills receivable 7,000
Add: interest on capital 8,400 Closing stock 50,000
Add: net profit ​ 52,750 2,71,150 Office furniture 5,000
Patent rights 18,800
Building 60,000
Less: depreciation ​ 3,600 56,400
Machinery 1,20,000
Less; depreciation ​ 12,000 1,08,000

3,27,700 3,27,700

Page : 420 , Block Name : Numerical Questions

Q11 From the following balances extracted from the books of M/s Manju Chawla on March 31,
2017. You are requested to prepare the trading and profit and loss account and a balance sheet
as on this date.
Account title Amount (Rs.) Amount (Rs.)
Opening stock 10,000
Purchases and sales 40,000 80,000
Returns 200 600
Wages 6,000
Doc and clearing charges 4,000
Lighting 500
Misc. incomes 6,000
Rent 2,000
Capital 40,000
Drawings 2,000
Debtors and creditors 6,000 7,000
Cash 3,000
Investment 6,000
Patent 4,000
Land and machinery 43,000
Donation and charity 600
Sales tax collected 1,000
Furniture 11,300
1,36,600 1,36,600
Closing stock Rs.2,000.

Page 35 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

(a) Interest on drawing 7% and interest on capital @ 5%.
(b) Land and machinery is depreciated at 5%.
(c) Interest on investment @ 6%.
(d) Unexpired rent Rs. 100
(e) Charge 5% depreciation on furniture.

Answer. In the books of M/s Manju Chawla
Trading and profit and loss account
Dr. For the year ending March 31, 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: return ​ 600 39,400 By closing stock 2,000
To wages 6,000
To dock and clearing charges 4,000
To lighting 500
To gross profit c/d 21,900
81,800 81,800
To donation and charity By gross profit b/d
600 21,900
To interest on capital By misc. incomes
2,000 6,000
To depreciation By rent 2,000
Land and machinery 2,150 Less: advance rent ​ 100
1,900
Furniture ​ 565 By interest on drawings
2,715 140
To net profit (transferred to By accrued interest on
24,985 360
capital ) investment

30,300 30,300

Balance sheet
As at 31​st​ March 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)

Page 36 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Creditors 7,000 Cash 3,000
Advance rent 100 Accrued interest on investment 360
Sales tax collected 1,000 Closing stock 2,000
Capital 40,000 Debtors 6,000
Les: drawings 2,000 Investment 6,000
less: interest on drawing ​ 140 Patent 4,000
37,860 Land and machinery 43,000
Add: interest on capital 2,000 Less: depreciation ​ 2,150 40,850
Add: net profit 2
​ 4,985 64,845 Furniture 11,300
Less: depreciation ​ 565 10,735

72,945 72,945

Page : 421 , Block Name : Numerical Questions

Q12 The following balances were extracted from the books of M/s Panchsheel Garments on
March 31, 2017.
Account title Amount(Rs.) Account title Amount(Rs.)
Opening stock 16,000 Sales 1,12,000
Purchases 67,600 Return outwards 3,200
Return inwards 4,600 Discount 1,400
Carriage inwards 1,400 Bank overdraft 10,000
General expense 2,400 Commission 1,800
Insurance 4,000 Creditors 16,000
Scooter expenses 200 Capital 50,000
Salary 8,800
Cash in hand 4,000
Scooter 8,000
Furniture 5,200
Buildings 65,000
Debtors 6,000
Wages 1,200
1,94,400 1,94,400
Prepare a trading and profit and loss account for the year ended March 31, 2017 and a balance
sheet as on that date.
(a) Unexpired insurance Rs. 1,000
(b) Salary due but not paid Rs. 1,800
(c) Wages outstanding Rs. 200.
(d) Interest on capital 5%.
(e) Scooter is depreciated @ 5%.
(f) Furniture is depreciated @ 10%.

Page 37 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

(g) Closing stock was Rs. 15,000.

Answer. In the books of M/s Panchsheel Garments
Trading and profit and loss account
Dr. for the year ended 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 wages 1,200
Add : outstanding wages ​ 200 1,400
To carriage inwards 1,400
To gross profit c/d 39,200

To salary 8,800 By gross profit b/d
Add: outstanding salary ​1,800 Commission
To general expenses 1,22,400 Discount 1,22,400
To scooter expense
To insurance 4,000 39,200
Less: prepaid insurance​1,000 10,600 1,800
To depreciation: 2,400 1,400
Scooter 400 200
Furniture 5
​ 20
To interest on capital 3,000
To net profit (transferred to
capital)
920
2,500
22,780

42,400 42,400

Balance sheet
As at March 31, 2017
Liabilities Amount(Rs.) Assets Amount(Rs.)
Outstanding salary 1,800 Cash in hand 4,000
Outstanding wages 200 Prepaid insurance 1,000
Bank overdraft 10,000 Closing stock 15,000
Creditors 16,000 Debtors 6,000
Capital 50,000 Furniture 5,200

Page 38 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Add: interest on capital 2,500 Less: depreciation ​ 520 4,680
Add: net profit ​22,780 75,280 Scooter 8,000
Less: depreciation ​ 400 7,600
Building 65,000
1,03,280 1,03,280

Page : 422 , Block Name : Numerical Questions

Q13 Prepare the trading and profit and loss account and balance sheet of M/s Control Device
India on March 31, 2017 from the following balance as on that date.
Account title Debit Credit
amount(Rs.) amount(Rs.)
Drawings and capital 19,530 67,500
Purchases and sales 45,000 1,12,500
Salary and commission 25,470 1,575
Carriage 2,700
Plant and machinery 27,000
Furniture 6,750
Opening stock 42,300
Insurance premium 2,700
Interest 7,425
Bank overdraft 24,660
Rent and taxes 2,160
Wages 11,215
Returns 2,385 1,440
Carriage outwards 1,485
Debtors and creditors 36,000 58,500
General expenses 6,975
Octroi 530
Investment 41,400
2,73,600 2,73,600
Closing stock was valued Rs. 20,000
(a) Interest on capital @ 10%
(b) Interest on drawings @ 5%
(c) Wages outstanding Rs. 50.
(d) Outstanding salary Rs. 20
(e) Provide a depreciation @ 5% on plant and machinery.
(f) Make a 5% provision on debtors

Answer. In the books of M/s Control Device India
Trading and profit and loss account
Dr. For the year ending March 31, 2017 Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)

Page 39 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

To opening stock 42,300 By sales 1,12,500
To purchases 45,000 Less: returns ​ 2,835 1,10,115
Less: returns ​ 1,440 43,560 By closing stock 20,000
To carriage 2,700
To wages 11,215
Add: outstanding wages ​ 50 11,265
To octroi 530
To gross profit c/d 29,760

To salary 25,470 By gross profit b/d
Add: outstanding salary ​ 20 By commission
To insurance premium By interest on drawings
To rent and taxes 1,30,115 By interest 1,30,115
To carriage outwards By net loss (transferred to 29,760
To general expenses 25,490 capital) 1,575
To provision on debtors 2,700 977
To depreciation on plant and 2,160 7,425
machinery 1,485 8,973
To interest on capital 6,975
1,800
1,350

6,750

48,710 48,710

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

Page 40 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Outstanding wages 50 Closing stock 20,000
Outstanding salary 20 Debtors 36,000
Creditors 58,500 less: provision on debtors​ 1,800 34,200
Bank overdraft 24,660 investments 41,400
Capital 67,500 plant and machinery 27,000
Less: drawings (19,530) less: depreciation ​ 1,350 25,650
Interest on drawing (977) furniture 6,750
Net loss (​ 8,973)
38,020
Add: interest on capital ​6,750 44,770

1,28,000 1,28,000

Page : 423 , Block Name : Numerical Questions

Q14 The following balances appeared in the trial balance of M/s Kapil Traders as on March 31,
2017.
Rs.
Sundry debtors 30,500
Bad debts 500
Provision for doubtful debts 2,000
The partners of the firm agreed to record the following adjustments in the books of the firm:
further bad debts Rs. 300. Maintain provision for bad debts 10%. Show the following
adjustments in the bad debts account provision account, debtors account, profit and loss
account and balance sheet.

Answer. In the books of M/s Kapil Traders
Dr. Profit and loss account Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
To bad debts 500
Add: further bad debts 300
800
Add: new provision 3,020
3,820
Less: old provision 2,000 1,820

Balance sheet
Liabilities Amount(Rs.) Assets Amount(Rs.)
Sundry debtors 30,500
Less: further bad debt 300

Page 41 of 43 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

30,200
Less: provision 3,020 27,180

Dr. Debtor’s account Cr.
Date Particulars Amount(Rs.) Date Particulars Amount(Rs.)
2017 To balance b/d 30,500 2017 By further bad debts 300
March March By provision for 3,020
31 31 doubtful debts
By balance c/d 27,180

30,500 30,500

Dr. Bad debts account Cr.
Date Particulars Amount(Rs.) Date Particulars Amount(Rs.)
2017 To balance b/d 500 2017 By provision for 800
31 mar To sundry debtors 300 31 mar doubtful debts

800 800

Dr. Provision for doubtful debts account Cr.
Date Particulars Amount(Rs.) Date Particulars Amount(Rs.)
2017 To bad debts 800 2017 By balance b/d 2,000
31 mar To balance b/d 3,020 31 mar By profit and loss A/c 1,820
(bal. fig.)

3,820 3,820

Page : 423 , Block Name : Numerical Questions

Q15 Prepare bad debts account, provision for account, profit and loss account and balance
sheet from the following information as on March 31, 2017
Debtors 80,000
Bad debts 2,000
Provision for doubtful debts 5,000

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Book Name : Accountancy-II Ncert Solutions | Chapter-10 Accountancy

Adjustments : Bad debts Rs. 500, provision for debtors @ 3%.

Answer.
Dr. Profit and loss account Cr.
Particulars Amount(Rs.) Particulars Amount(Rs.)
By provision for bad debts (old
provision) 5,000
Less: bad debts 2,000
Less: further bad debts 500
less: new provision 2,385 115

Balance sheet
Liabilities Amount(Rs.) Assets Amount(Rs.)
Sundry debtors 80,000
Less: further bad debts 500
less:provision on debtors​2,385 77,115

Dr. Bad debts account Cr.
Date Particulars Amount(Rs.) Date Particulars Amount(Rs.)
2017 To balance b/d 2,000 2017 By provision for 2,500
31 mar To sundry debtors 500 31 mar doubtful debts

2,500 2,500

Dr. Provision for doubtful debts Cr.
Date Particulars Amount(Rs.) Date Particulars Amount(Rs.)
2017 To bad debts 2,500 2017 By balance b/d 5,000
31 mar To sundry debtors 2,385 31 mar
To profit and loss a/c 115
(bal. fig.)

5,000 5,000

Page : 243 , Block Name : Numerical Questions

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