6 Marks Question

Question 16 Marks

Following is the Trial Balance of Vandana Vohra on 31st March 2013. Draw the final accounts from the balances therefrom.

Name of Account	Debit Amount (Rs.)	Credit Amount (Rs.)
Capital		3,00,000
Stock on 1 st April, 2012	60,000
Cash at bank	20,000
Cash in hand	10,000
Machinery	2,00,000
Furniture	26,000
Purchases	4,00,000
Wages	1,00,000
Carriage inwards	66,000
Salaries	1,40,000
Discount allowed	8,000
Discount received		10,000
Advertising	1,00,000
Office expenses	80,000
Sales		10,00,000
Sundry debtors	1,80,000
Sundry creditors		80,000
	13,90,000 ======	13,90,000 ======

Value of closing stock as on 31st March, 2013 was Rs. 1,00,000.

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Question 26 Marks

From the following balances and adjustments taken from the books of Pankaj & Co., prepare Trading and Profit & Loss Account for the year ending $31^{\text {st }}$ March, 2023 and the Balance Sheet as at that date:

Particulars	₹	Particulars	₹
Capital	65,000	Stock ($1^{\text {st }}$ April, 2022)	32,000
Creditors	36,800	Debtors	12,500
Rent Received	600	Cash at Bank	22,560
Purchases Return	4,000	Drawings	5,000
Sales	2,89,600	Purchases	1,71,000
Provision for Doubtful Debts	600	Carriage Inwards	1,500
Advertisement Expenses	16,050	Wages	23,000
Goodwill	49,000	Power	9,000
Machinery	20,000	Insurance	22,000
Discounts Received	1,800	Salaries	46,390
General Expenses	8,600	Income Tax	5,000
Sales Return	600	Bank Loan	55,000
Discount Allowed	5,000	Interest on Bank Loan	1,500
Patents	2,700

Adjustments:
i. On $31^{\text {st }}$ March, 2023, stock is valued at cost ₹ 23,000 .
ii. A furniture costing ₹ 45,000 was purchased on $1^{\text {st }}$ July, 2022 but it was not recorded in the books as payment was not made for it. Wages ₹ 5,000 were paid for assembling which have been debited to Wages Account.
iii. Provide depreciation on both Machinery and Furniture @10%p.a. and amortise patents by one-third.
iv. Increase Provision for Doubtful Debts to ₹ 2,000 .
v. Carry forward $\frac{2}{3}$ rd Advertisement Expenses as unexpired.
vi. Annual Insurance premium of ₹ 1,200 has been paid up to $30^{\text {th }}$ June, 2023.
vii. Manager is to get $10 \%$ commission on net profit before charging such commission.
viii. A fire broke out on $25^{\text {th }}$ March, 2023 destroying goods costing ₹ 20,000, which were not insured.

Answer

Notes:
1. Cost of goods destroyed is deducted from Purchases.
2. When the goods are not insured, firm has to bear total loss. Amount of such loss is shown in the debit side of Profit \& Loss Account.
3. As there is Net Loss, no commission will be given to the manager.

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Question 36 Marks

How can the profit or loss of a trader be ascertained with the help of a statement of affairs?

Answer

A statement of affairs is a financial statement similar to the balance sheet. It includes assets and liabilities. Just like the balance sheet, assets are on the right side and liabilities on the left. Even though we call it a statement of affairs, it is really TWO sets of data. One set is from the beginning of the year, and the other prepared at the end. This shows the changes in assets and liabilities over the course of the period.

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Question 46 Marks

Karan, a trader, does not keep proper books of account. However, he furnishes you the following particulars:

	$31^{\text {st }}$ March, 2022 (₹)	$31^{\text {st }}$ March, 2023 (₹)
Cash at Bank	4,500	3,000
Cash in Hand	300	4,000
Stock-in-Trade	40,000	45,000
Debtors	12,000	20,000
Office Equipment	5,000	5,000
Sundry Creditors	30,000	20,000
Furniture	4,000	4,000

During the year, Karan introduced ₹ 6,000 as further capital and withdrew ₹ 4,000 as drawings. Write off Depreciation on furniture at 10% and on office equipment at 5%. Prepare a statement showing the profit or loss made by him for the year ended on $31^{\text {st }}$ March, 2023.

Answer

Working Notes:
• Calculation of Depreciation on Office Equipment $=5,000 \times 5 \%=250$
• Calculation of Depreciation on Furniture $=4000 \times 10 \%=400$
• Statement of Affair is made to ascertain the Opening and Closing Capital.
• Above is Net Worth Method of ascertaining the Profit/ Loss in Single Entry System.

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