Final Accounts - Class 10 Elements Of Book Keeping And Accountancy - Extra Questions

The profit of a company after operating expenses and all other charges including taxes, interest and depreciation have been deducted from total revenue. It is also called net earnings or net income.

Trading and Profit and Loss Account
as on 31st December,2010
Dr                                                          Cr

Particulars	Amt. (Rs.)	Particular	Amt. (Rs.)
To Opening Stock	50,000	By Sales	3,50,000
To Purchase	1,25,500	(-) Return Inwards	2,000 3,48,000
(-) Return Outwards	2,500 1,23,000	By Closing Stock	40,000
To Carriage Inwards	100
To Power	3,900
To Gross Profit c/d	2,11,000  3,88,000		3,80,000
To Salary and Wages	5,400	By Gross Profit b/d	2,11,000
(+) Outstanding Salary	500 5,900	By Rent	5,000
To General Expenses	2,000	By Interest	2,000
To Insurance	12,400	(+) Interest on Investment	150 2,150
To Bad Debts	2,000
(+)Provision for Bad Debts	1,625 3,625
To Trade Expenses	2,000
(+) Outstanding Trade Expenses	300 2,300
To Depreciation on Building	3,440
To Depreciation on Machinery	1,725
To Lighting and Water	1,200
To Net Profit	1,85,560
	2,18,150		2,18,150

Balance Sheet
as on 31st December, 2010

Liabilities	Amt. (Rs.)	Assets	Amt. (Rs.)
Capital	3,00,000	Loan	3,000
(+) Net Profit (-) Drawings	1,85,560 4,85,560 10,000 4,75,560	(+) Interest @ 15% Motor Vehicle	1,150 3,150 10,500
Creditors	25,000	Cash in Hand Cash at Bank	21,200 12,000
Bills Payable	1,71,700	Freehold Land	3,20,000
Outstanding Trade Expenses	300	Patents	1,20,000
Outstanding Salary	500	Sundry Debtors	32,500
		(+) Provision for Bad Debts	1,625 30,875
		Buildings	86,000
		(-) Depreciation Machinery	3,440 34,500 82,560
		(-) Depreciation Closing Stock	1,725 32,775 40,000
	6,73,060		6,73,060

      Working Note
Interest on Loan = $$3,000 \times \dfrac{15}{100} \times \dfrac{4}{12} = Rs. 150$$

(a)  Cost of goods available for sales which means total goods produced during the year.
Cost of Production  = (opening stock + Purchase + Wages - Purchase Return)
                               = 25,000 + (7,50,000 + 3,00,000) + 1,00,000 - 10,000
                               = Rs. 11,65,000
(b) Cost of goods sold = Cost of Production  - Closing Stock
i.e., 11,65,000 - 30,000 = Rs. 11,35,000
(c)  Gross Profit  For computing gross profit, preparation of Trading account would be appropriate.

Trading and Profit and Loss account is prepared to determine the profit earned or loss sustained by the business enterprise during the accounting period.

Nominal Accounts are those accounts that are not balanced and transferred to trading and profit & loss account, like purchases, manufacturing, administration expenses, etc. Nominal Accounts are accounts related and associated with losses, expenses, income, or gains.

Trading and Profit and Loss Account
as on.....
Dr                                                          Cr

Particulars	Amt. (Rs.)	Particular	Amt. (Rs.)
To Opening Stock	75,550	By Sales	1,00,000
To Purchase	75,000	(-) Return Inwards	6,000 94,000
(-) Return Outwards	4,500 70,50000	By Closing Stock	35,000
	1,46,050	By Gross Loss c/d	17,050 1,46,050
To Gross Loss b/d	17,050	By Discount Received	3,500
To Bad Debts	3,000	By Interest Received	11,260
(+) Bad Debts	1,000	By Interest on Drawings	814
(+) Provisions for Bad Debts	4,950	By Net Loss	27,482
(-) Old Provision	1,500 7,450
To Trade Expenses	2,500
To Printing and Stationery	5,000
To Rent, Rates and Taxes	3,450
(+) Outstanding Rent	200 3,650
To Freight	2,250
To Depreciation on Furniture	775
To Depreciation on Motor Car	2,500
To Discount on Debtors	1,881
	43,056		43,056

Balance Sheet
as on....
Liabilities          Amt. (Rs)    Assets            Amt. (Rs)

Capital (-) Net Loss (-) Drawings  Bills Payable  (-) Interest	2,50,000 27,482 2,22,518 13,560 814 2,08,144	Cash in Hand Cash at Bank Investment	36,000 53,000 63,500
Bills Payable	85,550	Motor Car	25,000
Sundry Creditors	25,000	(-) Depreciation @ 10% Furniture and Fixture	2,500 22,500 15,500
Outstanding Rent, Rates and Taxes	200	(-) Depreciation @ 5% Sundry Debtors	775 14,725 1,00,000
		(-) Bad Debts (-) Provision for Bad Debts	1,000 4,950
		(-) Discount on Debt Closing Stock	1,881 92,169 35,000
	3,18,894		3,18,894

Working Note
Sundry Debtors 1,00,000
(-) Further Bad Debts 1,000
                                    99,000
(-) Provision (5%) 4,950
                             94,050
(-) Discount (2%) 1,881
                             92,169

When the total credit side of the trading account is greater than the debit side, it indicates credit balance, which is called gross profit. It is the excess of direct incomes over direct expenses. It is, generally, calculated by deducting the cost of goods sold from the net revenue.

Gross Profit is the difference between revenue and cost of producing goods or services rendered. It is the profit a business makes after covering the expenses required to make their products or provide their services. Formula for calculating Gross Profit is:
Gross Profit = Sales - Cost of Goods Sold

Each monthly payment must be made by a certain date determined by your credit card issuer. 

Particulars	Rs.	Particulars	Rs.
To Cost of Goods Sold	$$22,00,000$$	By Sales	$$45,00,000$$
To Gross Profit c/d	$$23,00,000$$
	$$45,00,000$$		$$45,00,000$$
To Salaries A/c	$$12,00,00      0$$	By Gross Profit b/d	$$23,00,000$$
To General Expenses	$$6,00,000$$	By Other Income	$$45,000$$
To Selling Expenses ($$1\%$$ of $$45,00,000$$)	$$45,000$$
To Commission to Manager(on Net Profit before charging such commission)	$$1,00,000$$
To Net Profit	$$4,00,000$$
	$$23,45,000$$		$$23,45,000$$

Trading and Profit and Loss Account for the year ended ________

	Rs.		Rs.
To Opening Stock	$$20,000$$	By Sales	$$8,00,000$$
To Purchases(Balancing figure)	$$6,80,000$$
To Gross Profit c/d	$$2,00,000$$	By Closing stock	$$1,00,000$$
	$$9,00,000$$		$$9,00,000$$
To Expenses	$$40,000$$	By Gross Profit b/d	$$2,00,000$$
	$$1,60,000$$
	$$2,00,000$$		$$2,00,000$$

Balance Sheet of Sri Ganesh as at _______

Liabilities	Rs.	Assets	Rs.
Capital		Fixed assets	$$10,00,000$$
Opening Balance	$$6,40,000$$
Add: Net Profit	$$1,60,000$$	Closing stock	$$1,00,000$$
	$$8,00,000$$
Current Liabilities	$$16,00,000$$	Other Current assets	$$13,00,000$$
	$$24,00,000$$		$$24,00,000$$

$$1$$. Fixed Asset is Rs. $$10,00,000$$
Fixed Assets/Capital$$=5/4$$
Therefore, Capital-Rs. $$10,00,000\times 4/5=$$Rs. $$8,00,000$$.
$$2$$. Capital is $$\dfrac{1}{2}$$ of Total Liabilities
Therefore Liabilities$$=$$Rs. $$8,00,000\times 2=$$Rs. $$16,00,000$$
$$3$$. Net Profit is $$1/5$$ of Capital
Therefore Net Profit$$=$$Rs. $$8,00,000\times 1/5=$$Rs. $$1,60,000$$
$$4$$. Net Profit is $$20\%$$ of Sales
Therefore Sales$$=$$Rs. $$1,60,000\times 100/20=$$Rs. $$8,00,000$$
$$5$$. Gross Profit Ratio$$=25\%$$ of Sales
Therefore, Gross Profit$$=$$Rs. $$8,00,000\times 25\%=$$Rs. $$2,00,000$$
$$6$$. Stock Turnover Ratio(i.e., Cost of sales/Average Inventory) is $$10$$
Cost of Sales$$=$$Sales$$-$$Gross Profit
$$=$$Rs. $$8,00,000-$$Rs. $$2,00,000$$
$$=$$Rs. $$6,00,000$$
Therefore Average Inventory$$=$$Rs. $$6,00,000/10=$$Rs. $$60,000$$
$$7$$. Closing Stock is Rs. $$1,00,000$$
Average Inventory$$=$$Rs. $$60,000$$
Therefore, Opening Stock$$=($$Rs. $$60,000\times 2)$$-Rs. $$1,00,000=$$Rs. $$20,000$$
$$8$$. Fixed Assets is Rs. $$10,00,000$$
Fixed Assets/Total Current Assets$$=5/7$$
Therefore, Total Current Assets is $$10,00,000\times 7/5=$$Rs. $$14,00,000$$
Closing Stock$$=$$Rs. $$1,00,000$$
Therefore other Current Assets$$=$$Rs. $$13,00,000$$.

Trading and Profit and Loss Account
as on 31st December,2010
Dr        Cr

Particulars	Amt. (Rs.)	Particular	Amt. (Rs.)
To Opening Stock	35,000	By Sales	2,50,000
To Purchase	1,25,000	(-) Sales Return	25,000 2,25,000
(-) Purchase		By Closing Stock	10,000
Return	6,000 1,19,000
To Wages	3,000
(-) Prepaid Wages	1,000 2,000
To Gross Profit c/d	79,000  2,35,000		2,35,000
To Salary	12,300	By Gross Profit b/d	79,000
To Postage and Telegram	600	By Accrued Interest on Investment	1,155
To Rent and Rates	1,000	By Discount	1,000
To Packing and Transport	500	By Interest Received	5,400
To General Expenses	400
To Insurance	4,000
To Lighting and Heating	5,000
To Discount	3,500
To Bad Debts	3,500
(+) Further Bad
Debts	1,500
(+) New Provisions	2,910
(-) Old Provision	4,500
(+) Discount	2,280 5,690
To Depreciation on Machinery	1,000
To Net Profit	52,565
	86,555		86,555

Balance Sheet

Liabilities	Amt. (Rs.)	Assets	Amt. (Rs.)
Capital	75,000	Investment	23,100
(+) Net Profit	52,565 1,27,565	Accrued Interest	1,155 24,255
Creditors	10,000	Closing Stock	10,000
Bills Payable	20,000	Prepaid Wages	1,000
		Machinery	20,000
		(-) Depreciation @ 5%	1,000 19,000
		Cash in Hand	20,000
		Cash at Bank	40,000
		Debtors	50,000
		(-) Bad Debts	1,500 48,500
		(-) New Provision	2,910 45,590
		(-) Discount	2,280 43,310
	1,57,565		1,57,565

Working Note
Sundry Debtors                50,000
(-) Further Bad Debts       1,500
                                         48,500
(-) Provision (6%)             2,910  
                                         45,590
(-) Discount (5%)               2,280
                                          43,310.

Trading and Profit and Loss Account
as on 31st December,2011
Dr                                                          Cr

Particulars	Amt. (Rs.)	Particular	Amt. (Rs.)
To Opening Stock	25,000	By Sales	2,76,000
To Purchase	1,80,000	(-) Return Inwards	7,000 2,69,000
(-) Return Outwards	2,000 1,78,000	By Closing Stock	45,000
To Wages	10,000
To Gross Profit c/d	1,01,000 3,14,000		3,14,000
To Bad Debts	1,000	By Gross Profit b/d	1,01,000
To Trade Expenses	2,400	By Provision for Bad Debts	4,000
To Printing and Stationery	2,000	By Interest	2,000
To Rent, Rates and Taxes	5,000	(-) New Provision	1,600 2,400
To Freight	4,000
To Discount Allowed	2,000
To Depreciation on Furniture and Fixture	1,000
To Depreciation on Plant Machinery	(4,200 + 900) 5,100
To Depreciation on Motor Car	5,100
To Manager's Commission	6,891
To Net Profit c/d	68,909
	1,03,400		1,03,400

Working Note
1. Depreciation on Plant and Machinery Rs. 30,000 Machinery was purchased on 1 July, 2011. Hence, Dep on 70,000 (1,00,000  - 30,000) @ 6% = 4,200 and Dep on 36,000 @ 6% for six months = 900 = Rs.15,100
2. Profit Before Manager's Commission = (1,03,400 27,600) = 75,800
Manager is entitled to a commission @10% on the new profit after charging such commission = $$[75,800 \times  \dfrac{10}{11}] = Rs. 6,891$$

Balance Sheet
as on 31st December, 2011

Liabilities	Amt. (Rs.)	Assets	Amt. (Rs.)
Capital	2,00,000	Sundry Debtors	80,000
(+) Net Profit (-) Drawings	68,909 2,68,909 20,000 2,48,909	(-) Provisions for Bad Debts	1,600 78,400
Bank Overdraft Creditors	12,000 60,000	Furniture and Fixture	20,000
Bills Payable	15,400	(-) Depreciation @ 5%	1,000 19,000
Manager's Commission Outstanding	6,891	Plants and Machinery	1,00,000
		(-) Depreciation @ 6% (4,200 + 900)	51,000 94,900
		Motor Car	51,000
		(-) Depreciation @ 10 %	5,100 45,900
		Cash in Hand	6,000
		Bills Receivable	14,000
		Investments	40,000
		Closing Stock	45,000
	3,43,200		3,43,200

      

                            BALANCE SHEET As On 31st March 2017

S. No.	Particulars	Note No.	31.3.17	31.3.16
1. 2. 3.	EQUITY and LIABILITIES Shareholder's funds a) Share Capital b) Reserves and Surplus Non Current Liabilities Long term Borrowings (5% Debentures) Current Liabilities a) Trade Payables b) Other Current Liabilities c) Short term Provisions	1        2       3       4        5       6	500000 190000 160000 60000 48000 12000
	TOTAL		970000
1. 2.	ASSETS Non Current Assets Fixed Assets Current Assets a) Inventories b) Trade Receivables c) Cash and Bank Balance		730000 50000 20000 170000
	TOTAL		970000

Notes To Accounts:

Particulars	Amount	Amount
1. Share Capital Authorized Capital ........ Equity Shares @ Rs. 100  Issued Capital ........ Equity Shares @  Rs. 100   Subscribed Capital Subscribed and Fully Paid Up  5000 Equity Shares @ 10 Rs. 100	( ___ ) ( ___ )	( ___ ) ( ___ ) 500000
2. Reserves and Surplus less: Underwriting Commission	200000 (10000)	190000
3. Long term Borrowings 5 % Debentures		160000
4. Trade Payables Creditors  Bills Payable		40000 20000
5. Other Current Liabilities Current Maturity of Long Term Debts- 5% Debentures Interest accrued and Due on  5% Debentures		40000 8000
6. Short term Provisions Proposed Dividend		12000