Financial Statements – With Adjustments — Account STD 11 Commerce — Question

From the following figures prepare the Trading and Profit and Loss Account for the year ended 31st March, 2019 and the Balance Sheet as at that date:

Adjustments:

1. Commission include ₹ 1,600 being commission received in advance.
2. Write off ₹ 2,000 as further Bad-debts and maintain Bad-debts provision at 5% on debtors.
3. Expenses paid in advance are: Wages ₹ 5,000 and Insurance ₹ 1,200.
4. Rent and Salaries have been paid for 11 months.
5. Loan from X has been taken at 18% p.a. interest.
6. Depreciate furniture by 15% p.a. and Motor Car by 20% p.a.
7. Closing Stock was valued at ₹ 60,000.

Sharma & Co. whose books are closed on 31st March, purchased a machinery for ₹ 1,50,000 on 1st April, 2016, Additional machinery was acquired for ₹ 50,000 on 1st October, 2016. Certain machinery which was purchased for ₹ 50,000 on 1st October, 2016 was sold for ₹ 40,000 on 30th September, 2018.
Prepare the Machinery Account and Accumulated Depreciation Account for all the years up to the year ended 31st March, 2019. Depreciation is charged @ 10% p.a. on Straight Line Method. Also, show the Machinery Disposal Account.

Pass the necessary Journal entries to rectify the following errors:

1. Credit sale of ₹ 850 to Kishan was posted to Krishan's Account.
2. Cash sale of ₹ 850 to Meenu was posted to the credit of Meena.
3. Amount of ₹ 1,500 withdrawn from bank by the proprietor for his personal use was debited to Purchases Account.
4. Credit sale of old furniture to Mohan for ₹ 1,700 was posted as ₹ 7,100.
5. Credit sale of old furniture to Babu Ram for ₹ 3,000 was credited to Sales Account.
6. Cheque of ₹ 1,280 received from Farid was dishonoured and has been posted to the debit of Sales Return Account.

From the following balances extracted from the book of M/s Manju Chawla n March 31, 2017. You are requested to prepare the trading and profit and loss account and a balance sheet as on this date.

Closing stock was ₹ 2,000.

1. Interest on drawings @ 7% and interest on capital @ 5%.
2. Land and Machinery is depreciated at 5%.
3. Interest on investment @ 6%.
4. Unexpired rent Rs.₹ 100.
5. Charge 5% depreciation on furniture.

Pass the rectifying entries for the following:

1. Sales of goods ₹ 6,000 to Madan were recorded as ₹ 600 in the Sales Book.
2. Credit purchase of goods from Mohan amounting to ₹ 2,000 has been wrongly passed through the Sales Book.
3. Return of goods worth ₹ 500 by a customer was entered in ‘Purchases Return Book’.
4. Cheque of ₹ 400 received from Ranjan was dishonoured and debited to the Discount Account.
5. Bill for ₹ 820 received from Ramesh for repair of machinery was entered in the Purchases Book as ₹ 720.

Distinguish between Capital Expenditure and Revenue Expenditure.

Bring out the relationship between MIS and AIS.

The following are the balances extracted from the books of Mr. A. Mukhopadhyay. Prepare a Trial Balance as on 31st March, 2019:

On checking the Bank Pass Book it was found that it showed an overdraft of ₹ 5,220 as on 31st March, 2019, while as per Ledger it was different. The following differences were noted:

1. Cheques deposited but not yet credited by the bank ₹ 6,000.
2. Cheques dishonoured and debited by the bank but not given effect to it in the Ledger ₹ 800.
3. Bank charges debited by the bank but Debit Memo not received from the bank ₹ 50.
4. Interest on overdraft excess credited in the Ledger ₹ 200.
5. Wrongly credited by the bank to account, deposit of some other party ₹ 900.
6. Cheques issued but not presented for payment ₹ 400.