The document contains 8 questions asking to prepare final accounts (trading account, profit and loss account, balance sheet) for various businesses based on trial balance information and additional adjustments provided. Details include opening/closing stock, purchases, sales, expenses, assets, liabilities, depreciation, provisions etc. to derive the net profit/loss for the year and financial position as on the balance sheet date.
Accounting for Not for Profit OrganisationsPreksha Mehta
In this presentation, you will find notes , accounting treatment and practical questions on the unit Financial Statements of not for profit organisations.
Accounting for Not for Profit OrganisationsPreksha Mehta
In this presentation, you will find notes , accounting treatment and practical questions on the unit Financial Statements of not for profit organisations.
Accounting Cycle - Trial Balance - Easy AccountingFaHaD .H. NooR
Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first step towards the preparation of financial statements. It is usually prepared at the end of an accounting period to assist in the drafting of financial statements. Ledger balances are segregated into debit balances and credit balances. Asset and expense accounts appear on the debit side of the trial balance whereas liabilities, capital and income accounts appear on the credit side. If all accounting entries are recorded correctly and all the ledger balances are accurately extracted, the total of all debit balances appearing in the trial balance must equal to the sum of all credit balances.
Purpose of a Trial Balance
Trial Balance acts as the first step in the preparation of financial statements. It is a working paper that accountants use as a basis while preparing financial statements.
Trial balance ensures that for every debit entry recorded, a corresponding credit entry has been recorded in the books in accordance with the double entry concept of accounting. If the totals of the trial balance do not agree, the differences may be investigated and resolved before financial statements are prepared. Rectifying basic accounting errors can be a much lengthy task after the financial statements have been prepared because of the changes that would be required to correct the financial statements.
Trial balance ensures that the account balances are accurately extracted from accounting ledgers.
Trail balance assists in the identification and rectification of errors.
Limitations of a trial balance
Trial Balance only confirms that the total of all debit balances match the total of all credit balances. Trial balance totals may agree in spite of errors. An example would be an incorrect debit entry being offset by an equal credit entry. Likewise, a trial balance gives no proof that certain transactions have not been recorded at all because in such case, both debit and credit sides of a transaction would be omitted causing the trial balance totals to still agree.
Trial Balance Format
The initial trial balance report contains the following columns:
Account number
Account name
Ending debit balance (if any)
Ending credit balance (if any)
Prepare Balance Sheets and Profit & Loss A/c in IFRS formatBUSYforSMEs
An introductory ebook on IFRS covering the following topics:
What if IFRS?
Why do we need it?
What's in it for us?
Comparison between IFRS and GAAP
How can you prepare IFRS compliant Balance Sheets
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1. Assignment IV – Final Accounts<br />Q.1 From the following information, prepare a Trading Account of M/s. ABC Traders for the year ended March 31, 2009: Rs.<br />Opening Stock1,00,000Purchases6,72,000Carriage Inwards30,000Wages50,000Sales11,00,000Returns inward1,00,000Returns outward72,000Closing stock2,00,000<br />Q.2 Revenue expenses and gross profit balances of M/s ABC Traders for the year ended on March 31, 2009 were as follows:<br />Gross Profit Rs. 4,20,000, Salaries Rs. 1,10,000, Discount (Cr.), Rs. 18,000, Discount (Dr.) Rs. 19,000, Bad Debts Rs. 17,000, Depreciation Rs. 65,000, Legal Charges Rs. 25,000, Consultancy Fees Rs. 32,000, Audit Fees Rs. 1,000, Electricity Charges Rs. 17,000, Telephone, Postage and Telegrams Rs. 12,000, Stationery Rs. 27,000, Interest paid on Loans Rs. 70,000.<br />Prepare Profit and Loss Account of M/s ABC Traders for the year ended on March 31, 2009.<br />Q.3 Mr. X submits you the following information for the year ended March 31, 2009:<br />Rs. Stock as on April 1, 20081,50,000Purchases4,37,000Manufacturing expenses85,000Expenses on sale33,000Expenses on administration18,000Financial charges6,000Sales6,25,000Gross profit is 20% of sales.Compute the net profit of Mr. X for the year ended March 31, 2009. Also prepare Trading & Profit & Loss A/c.<br />Q.4 A book keeper has submitted to you the following trial balance of X wherein the total of debit and credit balances is not equal:<br />ParticularsDebit BalancesRs.Credit BalancesRs.Capital-7,670Cash in hand-30Purchases8,990-Sales-11,060Cash at bank885-Fixtures & fittings225-Freehold premises1,500-Lighting and heating65-Bills receivable-825Returns inwards-30Salaries1,075-Creditors-1,890Debtors5,700-Stock (1.1.2008)3,000-Printing225-Bills payable1,875-Rates, taxes and insurance190-Discounts received445-Discounts allowed-20024,17521,705<br />You are required to:<br />Redraft the Trial Balance correctly.<br />Prepare a Trading and Profit and Loss Account and a Balance Sheet after taking into account the following adjustments:<br />Stock in hand on 31.12.2008 was valued at Rs. 1,800<br />Depreciate fixtures and fittings by Rs. 25.<br />Rs. 350 was due and unpaid in respect of salaries.<br />Rates and insurance had been in paid in advance to the extent of Rs. 40.<br />Q.5 The following is trial balance extracted from the books of X as on 31 March 2009:<br />Debit AmountRs.Credit AmountRs.Capital Account-1,00,000Plant and Machinery78,000-Furniture 2,000-Purchases and Sales60,0001,27,000Returns1,000750Opening stock30,000-Discount425800Sundry Debtors/Creditors45,00025,000Salaries7,550-Manufacturing wages10,000-Carriage outwards1,200-Provision for doubtful debts-525Rent, rates and taxes10,000-Advertisements2,000-Cash6,900-2,54,0752,54,075<br />Prepare trading and profit and loss account for the year ended 31 March 2009 and a balance sheet on that date after taking into account the following adjustments:<br />Closing stock was valued at Rs. 34,220.<br />Provision for doubtful debts is to be kept at Rs. 500<br />Depreciate plant and machinery @ 10% p.a.<br />The proprietor has taken goods worth Rs. 5,000 for personal use and additionally distributed goods worth Rs. 1,000 as samples.<br />Purchase of furniture Rs. 920 has been passed through purchases book.<br />Q.6 From the following trial balance and other information prepare profit and loss account for the year ended 31 March 2009 and a balance sheet on that date:<br />DebitRs.CreditRs.X’s Capital Account-10,00,000Withdrawals of goods for personal use1,000-Balance at bank1,76,000-Motor Vehicle1,50,000-Debtors and Creditors2,94,0002,30,000Printing and stationery6,600-Gross Profit-5,71,400Provision for doubtful debts-5,000Bad debts11,400-Freehold premises8,00,000-Repairs to Premises47,600-General Reserve-2,00,000Proprietor’s remuneration20,000-Stock2,80,000-Delivery expenses99,000-Administrative expenses1,31,400-Rates and taxes15,000-Drawings 1,00,000-Unpaid wages-1,600Last Year Profit and Loss Account Balance-1,24,00021,32,00021,32,000<br />Adjustments<br />Depreciation on Motor Vehicles @ 50%<br />Creditors include a claim for damages of Rs. 30,000 and which was settled by paying Rs. 20,000.<br />Rates paid in advance Rs. 3,000.<br />Provision for bad debts is to be reduced to Rs. 3,500.<br />The item of repairs to premises includes Rs. 20,000 for acquisition of capital asset.<br />Stock of stationery in hand on 31 March 2009 is Rs. 2,200.<br />Q.7 The following trial balance has been extracted from the books of Ms. X. Prepare the final accounts for the year ended 31 March 2009 and a balance sheet on that date:<br />DebitRs.CreditRs.Drawings35,000-Buildings60,000-Debtors and creditors50,00080,000Returns3,5002,900Purchases and sales3,00,0004,65,000Discount7,1005,100Life insurance3,000-Cash30,000-Stock (opening)12,000-Bad debts5,000-Reserve for bad debts-17,000Carriage inwards6,200Wages27,700Machinery 8,00,000Furniture60,000Salaries 35,000Bank commission2,000Bills receivable/payable60,00040,000Trade expenses/Capital13,5009,00,00015,10,00015,10,000<br />Adjustments: <br />Depreciate building by 5%; furniture and machinery by 10% p.a.<br />Trade expenses Rs. 2,500 and wages Rs. 3,500 have not been paid as yet.<br />Allow interest on capital at 5% p.a.<br />Make provision for doubtful debts at 5%.<br />Machinery includes Rs. 2,00,000 of a machine purchased an 31 December 2008. Wages include Rs. 5,700 spent on the installation of machine.<br />Stock on 31 March 2009 was valued at Rs. 50,000.<br />Q.8 The following is the Trial Balance of X on 31 March 2009:<br />DebitRs.CreditRs.Capital -8,00,000Drawings 60,000-Opening Stock75,000-Purchases15,95,000-Freight on Purchases25,000-Wages (11 months upto 28-2-2009)66,000-Sales-23,10,000Salaries1,40,000-Postage, Telegrams, Telephones12,000-Printing and Stationery 18,000-Miscellaneous Expenses30,000-Creditors-3,00,000Investments1,00,000-Discounts Received-15,000Debtors2,50,000-Bad Debts15,000-Provision for Bad Debts-8,000Building 3,00,000-Machinery5,00,000-Furniture40,000-Commission on Sales45,000-Interest on Investments-12,000Insurance (Year up to 31-7-2009)24,000-Bank Balance1,50,000-34,45,00034,45,000<br />Adjustments:<br />Closing Stock Rs. 2,25,000.<br />Machinery worth Rs. 45,000 purchased on 1-10-08 was shown as Purchases. Freight paid on the Machinery was Rs. 5,000, which is included in Freight on Purchases.<br />Commission is payable at 2½% on Sales.<br />Investments were sold at 10% profit, but the entire sales proceeds have been taken as Sales.<br />Write off Bad Debts Rs. 10,000 and create a provision for Doubtful Debts at 5% of Debtors.<br />Depreciate Building by 2½% p.a. and Machinery and Furniture at 10% p.a. Prepare Trading and Profit and Loss Account for the year ending 31 March 2009 and a Balance Sheet as on that date.<br />