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Board Sample paper with Solution Final accounts
Final Account
Q1. Following Trial Balance is extracted from the books of a Merchant on 31st March, 2024. Prepare Trading &Profit & Loss a/c and a Balance Sheet on that date.
| PARTICULARS | AMOUNT Dr. | AMOUNT Cr. |
| Furniture and Fittings | 6,400 | |
| Motor vehicles | 62,500 | |
| Building | 75,000 | |
| Capital | 1,25,000 | |
| Bad debts | 1,250 | |
| Provision for doubtful debts | 2,000 | |
| Debtors & Creditors | 38,000 | 25,000 |
| Stock (1-4-2023) | 34,600 | |
| Purchases & Sales | 54,750 | 1,54,500 |
| Bank overdraft | 28,500 | |
| Sales and Purchase returns | 2,000 | 1,250 |
| Advertisement | 4,500 | |
| Interest | 1,180 | |
| Commission | 3,750 | |
| Cash | 6,500 | |
| Tax and Insurance | 12,500 | |
| General Expenses | 7,820 | |
| Salaries | 33,000 | |
| 3,40,000 | 3,40,000 |
Following adjustments are to be made:-
- Stock on 31st March 2024 was valued at Rs.32,000, and the market value of the same on that date was Rs.40,000
- Provision for discount on Debtors to be maintained @10%
- Salaries Rs.3, 000 and Taxes Rs.1, 200 are outstanding.
- Insurance includes a premium of Rs.1,000 on a policy expiring on September 30, 2024 .
- Bad debts to be written off Rs.1,000 and provide bad debts Reserve @ 5% on debtors.
- Goods costing Rs.5,000 were sent to a customer on “sale on approval basis ” for Rs.6,400 on 29th March 2024 and had been recorded in the books as actual Sales.
- Depreciate Furniture & fittings and motor vehicles @ 20%p.a.
- Final accounts
- Purchases include purchase of furniture Rs.4, 500.
- Sundry creditors include an amount of Rs. 1,000 received from a Mr. S and Credited to his account. The amount was written off as bad debt in the previous year.
- General manager is to be allowed a commission of 5% on Net Profit after charging such commission.
- Goods destroyed by Fire valued at Rs.20,000; Insurance company admitted the claim to the extent of Rs.16,000
- Final accounts
Solution: I
Trading and Profit and Loss account for the Year Ended 30th Sept.2023.
| Particulars | Amount (₹) | Particulars | Amount (₹) | ||
| To Opening stock | 34,600 | By Sales (-) Sales Returns (-) Fur. S/Returns | 1,54,500 2,000 1,52,500 6,400 | 1,46,100 | |
| To Purchases (-) Purchas Returns (-) Furniture | 54,750 1,250 53,500 4,500 | 49,000 | By Closing stock (+) Sales Returns By Goods Destroyed | 32,000 5,000 | 37,000 20,000 |
| To Gross profit c/d | 1,19,500 | _______ | |||
| 2,03,100 | 2,03,100 | ||||
| To Salaries (+) Out Standing | 33,000 3,000 | 36,000 | By Gross profit b/d | 1,19,500 | |
| To Interest | 1,180 | By Commission | 3,750 | ||
| To Tax & Insurance (+) O/S taxes (-) Prepaid Insuranc | 12,500 1,200 13,700 500 | 13,200 | By Bad debts recovered | 1,000 | |
| To Advertisement | 4,500 | ||||
| To Bad Debts (+) Further BD | 1,250 1,000 | 2,250 | By Prov for BD(old) (-) Provision (New) | 2,000 1,530 | 470 |
| To Gen. Expenses | 7,820 | ||||
| To good dest by fire | 4,000 | ||||
| To Discount on Drs | 2,907 | ||||
| To Depreciation on Motor Vehicles Furniture | 12,500 2,180 | 14,680 | |||
| To Comm to GM | 1818 | ||||
| To N/P (Transferred to Capital Account) | 36,365 | ||||
| 1,24,730 | 1,24,720 | ||||
Balance Sheet as on 30th September 2023
| Liabilities | Amount | Assets | Amount | ||
| Capital (+) N/P | 1,25,000 36,365 | 1,61,365 | Furniture & Fix (+) incl in pur (-) Depreciation | 6,400 4,500 10,900 2,180 | 8,720 |
| Creditors (-) Wrongly Included | 25,000 1,000 | 24,000 | Sundry Debtors (-) Sales Ret (-) Bad debts (-) Prov. for BD (-) Prov for discount | 38,000 6,400 31,600 1,000 30,600 1,530 29,070 2,907 | 26,163 |
| Bank Overdraft | 28,500 | Closing stock (+) Returns | 32,000 5,000 | 37,000 | |
| G.M comm. o/s | 1,818 | Cash | 6,500 | ||
| Building | 75,000 | ||||
| O/S Salary O/S taxes | 3,000 1,200 | Motor Vehicle (-) Depreciation | 62,500 12,500 | 50,000 | |
| Prepaid Insurance | 500 | ||||
| Insurance Claim | 16,000 | ||||
| 2,19,883 | 2,19,883 |
Q.II. A) Pass necessary entries to make the following adjustments as on 31st Dec 2022
1) Depreciate at 5% on Office furniture valued at Rs. 8,000.
2) The insurance premium has been paid for the year ending on 31St March next Rs.2,400
3) The telephone rent for one year was paid on last 30th April Rs.300.
4) Interest on capital at 6% p.a is to be allowed. Capital in the beginning was Rs.3,00,000.
5) The following outstanding liabilities for expenses are to be provided for viz. wages Rs.300, Salaries Rs.305, Trade Expenses Rs.215.
6) An unsold machinery appearing in the books at Rs. 5,000 is exchanged for a new machinery of Rs.5,000. The old machinery has been valued at Rs.800 for exchange purpose.
Final accounts
7) Interest on Drawings at 6% p.a is to be allowed. Drawings Rs.1,00,000.
8) Mr X who owes us Rs.50,000 have become insolvent and only 50% of the amount due is received.
9) Sold private car for Rs.4,000 and bought a New Car with the proceeds for business plus Rs.5,000 from office cash.
10) Goods worth Rs.10,000 destroyed by fire have been partly insured and the insurance Company admitted the claim for Rs.6,000
Solution
| Dt | Particulars | L/F | Dr.Amt | Cr.Amt |
| 1 | Depreciation a/c………… Dr To Furniture | 400 | 400 | |
| 2 | Prepaid Insurance a/c…. Dr To Insurance | 600 | 600 | |
| 3 | Rent a/c…………………………Dr To Rent Outstanding | 225 | 225 | |
| 4 | Interest on Capital a/c….Dr To Capital | 18,000 | 18,000 | |
| 5 | Wages a/c………………………Dr To Wages Outstanding | 300 | 3900 | |
| Salaries a/c……………………Dr To Salaries Outstanding | 305 | 305 | ||
| Trade Expenses a/c…………Dr To Tr. Expenses Outstanding | 215 | 215 |
| 6 | New Machinery A/c…….. Dr To Old Machinery To Profit & Loss A/c | 5,000 | 800 4,200 | |||
| 7 | Drawings a/c…………………..Dr To Interest on Drawings ( 1,00,000 x 6/100 x 6/12) | 3,000 | 3,000 | |||
| 8 | Cash a/c…………………………Dr Bad Debts a/c……………….Dr To Mr.X | 25,000 25,000 | 50,000 | |||
| 9 | Car a/c………………………….Dr To Capital To Cash | 9,000 | 4,000 5,000 | |||
| 10 | Insurance Co a/c…………Dr Loss by fire a/c………….Dr To Purchases | 6,000 4,000 | 10,000 | |||
Q.II.B) From the following particulars prepare a bank reconciliation statement as on 31-05-2016 of M/s GVK learning co-ordinates. Final accounts
- (i) Bank Overdraft as per cash book as on 31-05-2016 was Rs.60, 000.
- (ii) Interest on overdraft for six months ending 31-05-2016 Rs.2,000 debited in the pass book only
- (iii) Cheques issued but not presented in the bank up to 31-05-16 Rs.15,000
- (iv) cheques deposited into bank but not realized as on 31-05-2016 Rs.25,000
- (v) Interest on investments collected by bank entered into pass book only amounted to Rs.18,000
- (vi) Customer directly deposited in the bank Rs.35,000
Solution:
Bank Reconciliation Statement as on 31st May 2016
| Overdraft as per Cash book | 60,000 | |
| Add : (ii) Interest on overdraft, debited in passbook | 2,000 | |
| (iv)Cheques deposited but not credited | 25,000 | 27,000 |
| 87,000 | ||
| Less: (iii) Cheques issued but not presented in the bank | 15,000 | |
| (v) Interest collected and entered in pass book only | 18,000 | |
| (vi) Customer directly deposited in the bank | 35,000 | 68,000 |
| Overdraft Balance as per Pass Book | 19,000 |
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