Final Accounts: Exam Based Problems and Answers with Adjustments

 

Problem and Solution of Final Accounts with Adjustments

Every business firm prepares final accounts at the end of accounting year; here are the best collections of final accounts with adjustments for board exam.

 

PROBLEMS   AND   ANSWERS

Exam Based Problems and Answers

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 1

 The trail balance of AXN Company Ltd as on 31^st March 2020 as follows:        

Particulars	Amount Dr	Particulars	Amount Cr
Beginning stock	50,000	Share capital Rs 100 each	5,00,000
Purchases	6,60,000	Creditors	60,000
Building	3,00,000	P&L  Appropriation account	40,000
Machinery	50,000	Sales	9,00,000
Investment in shares	2,00,000
Carriage	30,000
Salaries	50,000
Debtors	90,000
Prepaid insurance	10,000
Cash at bank	20,000
Wages	40,000
	15,00,000		15,00,000

Additional information:

a.     Provide depreciation on building at 10% and machinery at 5%

b.    Provision for doubtful debt is to be made at 5% on sundry debtors

c.     Outstanding salaries Rs 5,500

d.    Stock at the end Rs 60,000

e.     The directors proposed 10% dividend on share capital

Required:   (1) Trading account; (2) Profit and loss account; (3) Profit and loss appropriation account;

(4) Balance sheet

 [Answer:  Gross profit = Rs 180,000; Net profit = Rs 87,500; 

Surplus = Rs 77,500; Balance sheet = Rs 693,000;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 2

The trial balance of ACX Company Ltd as on 31^st March 2020 is given below:

Debit	Amount Dr	Credit	Amount Cr
Opening stock	2,00,000	Share capital @ Rs 100	13,00,000
Purchases	6,00,000	P&L appropriation account	1,40,000
Machinery	5,00,000	Sales	12,60,000
Building	10,00,000	Accounts payable	50,000
Accounts receivable	2,90,000	Bank loan	1,50,000
Underwriting commission	10,000	Calls in advance	40,000
Rent	50,000
Salaries	70,000
Carriage	50,000
Wages	80,000
Other indirect expenses	40,000
Goodwill	20,000
Investment	30,000
	29,40,000		29,40,000

Additional information:

a.     Wages of Rs 20,000 still to be paid

b.    Salary includes Rs 20,000 paid in advance

c.     Depreciate machinery by 10% and building Rs 50,000.

d.    Closing stock was valued at Rs 2,00,000

e.     Proposed dividend 10%  on paid up capital

f.       Transfer Rs 50,000 general reserve

Required:   (1) Trading account; (2) Profit and loss account; (3) Profit and loss appropriation account;

(4) Balance sheet

 [Answer:  Gross profit = Rs 5,10,000; Net profit = Rs 2,70,000; 

Surplus = Rs 2,30,000; Balance sheet = Rs 19,70,000;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 3

The trial balance of Prashant Company Limited as on 31^st March 2020:

Particulars	Amount Dr	Particulars	Amount Dr
Machinery	3,50,000	Share capital	5,00,000
Land and building	4,00,000	Profit and loss account	40,000
Investment in debentures	25,000	Reserve fund	98,000
Opening stock	30,000	Creditors	40,000
Cash balance	20,000	Unsecured loan	14,000
Purchase	3,50,000	Sales revenue	7,70,000
Debtors	41,000	Advance commission	10,000
Wages	90,000	Purchase return	2,000
Salaries	95,000
House rent	42,000
Insurance	7,000
Closing stock	24,000
	14,74,000		14,74,000

Additional information:

a.     Provide depreciation at 10% on machinery

b.    Written of Rs 1,000 as bad debts and make a provision for bad debts at 5% on debtors

c.     Provision for tax is to be made at Rs 10,000

d.    Dividend proposed at 10% on share capital

Required:   (1) Trading, Profit and loss account; (3) Profit and loss appropriation account; (4) Balance sheet

[Answer:  Gross profit = Rs 302,000; Net profit = Rs 110,000; 

Surplus = Rs 100,000; Balance sheet = Rs 822,000;

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Final Account: Class 12	http://tiny.cc/e89jkz
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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 4

The Trial Balance of ABC Company Limited as on 31^st March 2020 is given below:

Particulars	Amount Dr	Particulars	Amount Cr
Opening stock	1,50,000	Sales	12,00,000
Purchase	7,60,000	Creditors	20,000
Carriage	30,000	Bank loan	60,000
Debtors	1,80,000	P/L appropriation account	20,000
Building	4,00,000	Share capital:
Machinery	1,50,000	7000 ordinary share of Rs 100 each	7,00,000
Bank balance	30,000
Investment in shares	90,000
Preliminary expenses	10,000
Wages	50,000
Salaries	1,50,000
	20,00,000		20,00,000

Additional information:

a.     Stock at close Rs 80,000.

b.    Outstanding salaries Rs10,000.

c.     Depreciate: building 5% and machinery Rs 15,000.

d.    Provide 10% on debtors for doubtful debts.

e.     Proposed dividend @ 10% on share capital.

Required:   (1) Trading and Profit and loss account; (2) Profit and loss appropriation account; (3) Balance sheet  

 [Answer:  Gross profit = Rs 290,000; Net profit = Rs 77,000; 

Surplus = Rs 27,000; Balance sheet = Rs 887,000;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 5

The trial balance of KK Company Ltd as on 31^st March 2020 is given below:

Debit	Amount	Credit	Amount
Equipment	5,50,000	Share capital @ Rs 100	6,00,000
Land and building	6,00,000	Reserve fund	1,48,000
Opening stock	30,000	Profit and loss account	53,000
Salary	1,45,000	Creditors	84,000
Purchase	4,00,000	Sales	9,20,000
Wages	1,40,000	Advance house rent	20,000
Debtors	1,36,000	10% Debenture	3,00,000
Interest paid	15,000
Audit fee	7,000
Sundry expenses	5,000
Cash balance	7,000
Investment in government bond	30,000
Underwriting commission	10,000
Closing stock	50,000
	21,25,000		21,25,000

Additional information:

1.    Out of advance house rent received Rs 10,000 is treated as income

2.    Wages paid in advance Rs 5,000

3.    Provision for tax is to be made at Rs 7,000

4.    Provide depreciation at 10% on equipment

5.    Dividend proposed at 5% on share capital

Required:   (1) Trading account; (2) Profit and loss account; (3) Profit and loss appropriation account;

(4) Balance sheet

 [Answer: Gross profit = Rs 3,55,000; Net profit = Rs 1,16,000;  Surplus =  Rs 1,39,000;

Balance sheet = Rs 13,33,000; *Closing stock is shown only in balance sheet;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 6

The trial balance of ABC Company Ltd as on 31^st March 2020:

Debit	Amount Dr	Credit	Amount Cr
Opening stock	20,000	Paid up capital:
Purchases	3,20,000	(5,000 shares @ Rs 80)	4,00,000
Wages	70,000	Sales	4,25,000
Salary	50,000	Purchase return	10,000
Discount	3,000	Discount and commission	4,000
Sundry debtors	25,000	Sundry creditors	20,000
Machinery	1,75,000	Short term loan	50,000
Land and building	2,25,000	Provision for doubtful debts	1,000
Vehicles	75,000	P&L appropriation account	1,50,000
Furniture	20,000
Tax paid of last year	5,000
Cash at bank	30,000
Carriage	7,000
Sundry expenses	15,000
Rent and rates	15,000
Advance salary	5,000
	10,60,000		10,60,000

Additional information:

a.     Closing stock Rs 25,000

b.    Depreciation: land and building 5%, machinery and furniture 10%

c.     Transfer Rs 20,000 to general reserve

d.    Provide 10% of dividend of paid up capital

e.     Wages outstanding Rs 5,000

Required:   (1) Trading account; (2) Profit and loss account; (3) Profit and loss appropriation account;

(4) Balance sheet

 [Answer: Gross profit = Rs 38,000; Net loss = Rs 70,750;

Surplus = Rs 14,250; Balance sheet = Rs 5,49,250;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 7

The trial balance of AM Company Ltd as on 31^st December 2019 is given below:

Debit	Amount Dr	Credit	Amount Cr
Salaries	50,000	Gross profit	1,50,000
Rent	40,000	Share capital @ Rs 100	4,00,000
Discount	5,000	10% debenture	1,00,000
Machinery	2,00,000	Commission	15,000
Debtors	50,000	Transfer fee	10,000
Land and building	3,00,000	Profit and loss account	50,000
Advertisement	20,000	Creditors	85,000
Closing stock	80,000	Provision for bad debts	10,000
Bad debts	2,000
Cash and bank	23,000
Goodwill	40,000
Insurance	10,000
	8,20,000		8,20,000

Additional information:

1.    Outstanding rent for two months

2.    Provision for bad debts to be maintained at 5%

3.    Appreciate land and building by 10%, depreciate machinery by 15%

4.    Transfer to general reserve Rs 5,000

5.    Provide 10% dividend on paid up capital

Required:   (1) Profit and loss account

             (2) Profit and loss appropriate account; (3) Balance sheet

[Answer:  Net profit = Rs 37,500;  Surplus = Rs 42,500;

Balance sheet = Rs 690,500; *Outstanding rent = Rs 8,000

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 8

The trial balance of AP Limited Company as on 31 March 2020 is given below:

Particulars	Amount Dr	Particulars	Amount Cr
Opening stock	3,00,000	Sales	20,19,000
Purchases	9,00,000	8% Debentures	3,00,000
10% Investment (1st Jan)	3,00,000	Creditors	35,000
Fixed assets	7,00,000	Interest on investment	20,000
Debtors	1,10,000	Profit and loss account	1,30,000
Wages	2,00,000	Share capital @ Rs 100	5,00,000
Salary	3,00,000	Wages outstanding	10,000
House rent	1,10,000
Bad debts	10,000
Interest on debenture	24,000
Carriage outward	25,000
Custom duty	5,000
Cash balance	20,000
Advance house rent paid	10,000
	30,14,000		30,14,000

Additional information:

a.     Value of closing stock Rs 2,50,000

b.    Depreciation on fixed assets is to be charged at 10%

c.     Make provision for doubtful debts at 5%

d.    Proposed dividend on capital at 10%

e.     Stock worth Rs 50,000 is lost by fire and insurance company admitted the claim in full.

Required:   (1) Trading account; (2) Profit and loss account; (3) Profit and loss appropriation account;

(4) Balance sheet

 [Answer: Gross profit = Rs 9,14,000; Net profit = Rs 3,99,500;

Surplus = Rs 4,79,500; Balance sheet = Rs 13,74,500;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 9

The trial balance of BC Limited Company as on 31 March 2020 is given below:

Particulars	Amount Dr	Particulars	Amount Cr
Opening stock	1,00,000	Sales	28,00,000
Purchases	15,00,000	Creditors	1,00,000
Wages	1,50,000	10% Debentures	4,00,000
Sales return	20,000	General reserve	1,50,000
Salary	5,50,000	Share capital @ Rs 100	14,00,000
House rent	1,50,000	P&L account	2,40,000
Bad debts	10,000	Interest payable	10,000
Interest on debenture	30,000
Insurance	40,000
Fixed assets	22,00,000
Debtors	2,00,000
Preliminary expenses	30,000
Cash balance	1,20,000
	51,00,000		51,00,000

Additional information:

·          Closing stock valued Rs 225,000

·          Appreciate fixed assets at 10%

·          Preliminary expenses to be written off by Rs 10,000

·          Bad debt provision to be made at 5%

·          Proposed dividend on share capital at 5%

Required:   (1) Trading account; (2) Profit and loss account; (3) Profit and loss appropriation account; (4) Balance sheet

 [Answer: Gross profit = Rs 12,55,000; Net profit = Rs 6,75,000;

Surplus = Rs 845,000; Balance sheet = Rs 29,75,000;

*No adjustment on interest of debentures

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 10

The trial balance of BC Limited Company as on 31 March 2020 is given below:

Particulars	Amount Dr	Particulars	Amount Cr
Opening stock	30,000	Sales	6,50,000
Purchases	3,50,000	Share capital @ Rs 100	4,00,000
Rent	20,000	10% Debentures	1,00,000
Wages	50,000	Creditors	30,000
Calls in arrears	10,000	Provision for bad debts	6,000
Carriage	20,000	P&L account	34,000
Salaries	60,000
Interest on debenture	5,000
Debtors	90,000
Machinery	1,50,000
Land and building	3,00,000
General expenses	35,000
Bad debts	5,000
Goodwill	50,000
Cash and bank	45,000
	12,20,000		12,20,000

Additional information:

a.     Closing stock valued Rs 50,000

b.    Provision for bad debt to be made at 5%

c.     Prepaid rent Rs 2,000

d.    Wages due Rs 10,000

e.     Transfer to general reserve Rs 20,000

f.       Proposed dividend 10% on paid−up capital

Required:   (1) Trading account; (2) Profit and loss account; (3) Profit and loss appropriation account; (4) Balance sheet

 [Answer: Gross profit = Rs 240,000; Net profit = Rs 113,500;

Surplus = Rs 88,500; Balance sheet = Rs 682,500;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 11

The following are the ledger balances of ABC Company Ltd. Authorized and issued capital 5,000 shares of Rs 100 each

Name of ledgers	Amount		Name of ledgers	Amount
Paid up capital Rs 80 per share	4,00,000		Wages	20,000
Calls in arrear	5,000		Carriage inwards	5,000
10% mortgage debenture	1,00,000		Office salaries	30,000
Sundry creditors	40,000		Rent and rates	15,000
Bills payable	20,000		Bad debts	1,000
Land and building	2,00,000		Provision for bad debts (Cr)	1,000
Plant and machinery	2,00,000		Sundry expenses	5,000
Furniture	50,000		Carriage outward	1,000
Investment in shares	50,000		Audit fees	6,000
Sundry debtors	60,000		Debentures interest	10,000
Cash at bank	93,000		Employee bonus	10,000
Sales	3,80,000		bade debts recovered	5,000
Stock on (1st April)	50,000		Discount and commission earned	10,000
Sales return	5,000		Purchase	1,50,000

Additional information:

a.	Provide 10% depreciation on plant and machinery and furniture.
b.	A fire broke out in the factory and destroyed material worth of Rs 10,000 but insurance company accepted claim of Rs 5,000 only.
c.	Outstanding office salaries amounted to Rs 5,000.
d.	Provide 5% reserve for doubtful debts.
e.	The directors decided to transfer Rs 20,000 and Rs 15,000 on reserve fund and assets replacement fund respectively.
f.	Stock was valued Rs 25,000 on 31 March 2020.

Required:   (1) Trading & Profit and loss account; (2) Profit and loss appropriation account; (3) Balance sheet

 [Answer: Gross profit = Rs 1,85,000; Net profit = Rs 85,000;

Surplus = Rs 10,000; Balance sheet = Rs 6,55,000]

*Suspense Rs 10,000 in liabilities

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 12

The trial balance of ABC Manufacturing Company Ltd at the end of December is as under:

Particulars	Amount Dr	Particulars	Amount Cr
Building	50,000	Reserve for doubtful debts	2,000
Plant and machinery	40,000	Reserve fund	13,000
Account receivable	10,000	P&L appropriation account	15,000
Cash at bank	25,000	Account payable	20,000
Beginning inventory	10,000	Share capital of Rs 10 each fully paid	1,00,000
Material purchase	30,000	Sales	1,00,000
Wages	30,000
Fuel, power etc.	5,000
Carriage on material purchase	2,000
Sundry expenses	8,000
Salaries and benefits	30,000
Bad debts	2,000
Employee bonus	8,000
	2,50,000		2,50,000

Additional information:

·          Appreciate building by 20%

·          Provide depreciation on plant and machinery by 10%.

·          Provision for bad debts is to be maintained at 15%.

·          Ending inventories were valued at Rs 20,000.

·          Outstanding salaries and benefits amounted to Rs 5,000.

·          Wages include Rs 5,000 paid for installation of plant and machinery.

·          The directors decided to pay 10% dividend on paid-up share

·          Transfer Rs 7,000 to the reserve fund.

Required:   (1) Trading account; (2) Profit and loss account; (3) Profit and loss appropriation account;

(4) Balance sheet

[Answer: Gross profit = Rs 48,000; Net profit = Rs 1,000;

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