Final Accounts with Adjustments
1. From the following Trial Balance extracted from the books of Sh. Pawan Kumar, prepare a
Trading Account, Profit & Loss Account for the year ended 31 st March, 2023 and a Balance
Sheet as at that date
Dr. Balances (₹) Cr. Balances (₹)
Drawings 1,20,000 Capital 16,00,000
Plant and Machinery 12,00,000 Creditors 2,60,000
Horses and Carts 2,60,000 Sales 8,20,000
Debtors 3,40,000 Bills Payable 2,21,200
Purchases 2,00,000 Interest on Ram's Loan 1,800
Wages 80,000 Rent Received 12,000
Cash at Bank 2,60,000
Salaries 80,000
Repairs 5,000
Stock (1-4-2022) 7,000
Stock (31-3-2023) 92,000
Rent 45,000
Manufacturing expenses 15,000
Bad-Debts 50,000
Carriage 15,000
Income Tax 20,000
Life Insurance Premium 30,000
Loan to Ram at 12% p.a. 20,000
Insurance 12,000
Insurance Prepaid 1,000
29,15,000 29,15,000
Adjustments: (GP – 4,55,000 NP – 81,650 B/S – 20,08,850)
➢ Plant and Machinery includes a new machinery purchased on 1st October, 2022 for ₹ 2,00,000.
➢ Depreciate Plant and Machinery by 10% p.a. and Horses and Carts by 20% p.a.
➢ Salaries for the month of February and March 2023 are outstanding.
➢ Goods worth ₹ 15,000 were sold and dispatched on 27th March but no entry was passed to
this effect.
➢ Make a provision for Doubtful Debts at 5% on Debtors.
2. The following Trial Balance has been extracted from the books of Shri Santosh Kumar as at
31st March, 2023 (GP – 1,50,800; NP – 40,560; B/S – 2,50,260)
Dr. Cr.
Name of the Accounts
(₹) (₹)
Plant and Machinery 1,00,000
Furniture 12,000
Capital Account 1,91,000
Household Expenses 16,000
Sales 4,68,000
Loose Tools 20,000
Goodwill 10,000
Opening Stock (1-4-2022) 20,000
Returns Outward 4,000
Discount 6,000
Purchases 2,12,000
Returns Inwards 8,000
Wages 1,00,000
Salaries 60,000
Outstanding Salaries 5,000
Investments at 10% p.a. 6,000
Interest on Investments 300
Sundry Creditors 24,000
Miscellaneous Receipts 2,000
Carriage Inwards 12,000
General Expenses and Insurance 39,000
Advertisement Expenses 15,000
Postage 4,000
Sundry Debtors 56,000
B. Barua 2,000
Cash Balance 14,000
Bank 3,200
Suspense Account 2,500
7,06,000 7,06,000
The following additional information is available
➢ Stock on 31st March, 2023 was ₹ 30,800.
➢ Depreciation is to be charged on Plant and Machinery at 5% and Furniture at 6%. Loose
Tools are revalued at ₹ 16,000.
➢ Create a provision of 2% for Discount on Debtors.
➢ Salary of ₹ 2,000 paid to Shri B. Barua, a temporary employee, stands debited to his personal
account and it is to be corrected.
➢ Write off 1/5th of advertisement expenses.
➢ You are to prepare Trading and Profit & Loss Account for the year ended 31 st March, 2023
and a Balance Sheet as at that date.
3. Following is the Trial Balance as on 31st March 2023. Prepare Trading and Profit and Loss
Account and Balance Sheet
Debit Credit
Particulars
(₹) (₹)
Stock (1st April 2022) 8,000
Sales 2,20,000
Purchases 1,26,000
Productive Wages 56,500
Salaries 16,000
Stores Consumed 6,050
Carriage 3,050
Rent and Rates 5,200
Insurance 1,320
Machinery 52,000
Building 67,000
Capital less Drawings 1,45,600
Sundry Debtors 44,000
Sundry Creditors 20,000
Secured Loan 15,000
Furniture 3,350
General Expenses 2,600
Cash in hand 1,930
Bad Debts 1,020
Bank 6,580
Total 4,00,600 4,00,600
Additional Information
➢ Stock on 31st March 2023 is ₹ 20,600.
➢ Depreciate machinery @ 10% p.a.
➢ Make a Provision @ 5% for Doubtful Debts.
➢ Provide 2.5% for discount on sundry debtors.
➢ Rent and Rates include security deposit of ₹ 400.
➢ Insurance prepaid ₹ 120. (GP – 41,000; NP – 6,935; B/S – 1,87,535)
4. From the following Trial Balance and other information prepare Trading and Profit and Loss
Account for the year ended 31st March 2023 and Balance Sheet as at that date.
Debit Credit
Heads of Accounts
(₹) (₹)
Sundry Debtors 32,000
Stock (1st April 2022) 22,000
Cash in hand 35
Cash at bank 1,545
Plant and Machinery 17,500
Sundry Creditors 10,650
Trade Expenses 1,075
Sales 1,34,500
Salaries 2,225
Carriage Outwards 400
Rent 900
Bills Payable 7,500
Purchases 1,18,870
Discounts 1,100
Premises 34,500
Capital (1st April 2022) 79,500
Additional Information:
➢ Stock on 31st March 2023 was ₹ 12,450.
➢ Rent was unpaid to the extent of ₹ 85 and ₹ 150 were outstanding for Trade Expenses.
➢ ₹ 400 are to be written off as bad debts out of the above debtors, and 5% is to be provided for
doubtful debts.
➢ Depreciate plant and machinery 10% and premises by 2%.
➢ Manager is entitled a commission of 5% on net profit after charging his commission.
(GP – 6,080; NL – 4,275; B/S – 93,610)
5. The following is the Trial Balance of Pankaj as on 31st March, 2023.
Debit Credit
Name of Account
(₹) (₹)
Wages 10,000
Capital – 43,000
Machinery 50,000 –
Vehicles 10,000 –
Sales returns/Purchase returns 2,000 1,000
Stock 10,000 –
Purchase & Sale 36,000 70,000
Repair 2,000 –
Rent 1,000 -
Provision for doubtful debts – 700
Bad debts 2,400 –
Loan from Bank – 15,000
Interest on Loan 800 –
Cash in Hand 16,000 –
Debtors & Creditors 12,000 15,300
Commission received 7,200
1,52,200 1,52,200
Adjustments
➢ Closing stock was valued at ₹ 12,000.
➢ Wages have been paid for 10 months.
➢ Write off ₹ 500 as further bad debts and provide 5% provision for doubtful debts.
➢ Outstanding interest on loan ₹ 700.
➢ Depreciate machinery @ 5% (GP – 23,000; NP – 20,425; B/S – 96,425)
6. Following are balances from the trial balance of Ritesh Traders as at 31st March 2023
Particulars ₹ Particulars ₹
Opening Stock 5,620 Interest on Securities 6,400
Purchases 1,54,200 Land and Building 10,00,000
Sales 3,74,800 Securities 6,00,000
Wages 1,26,000 Cash in Hand 25,600
Carriage Inward 900 Bank Overdraft 3,40,000
Freight on Purchase 4,900 Discount Allowed 1,500
Salaries 8,000 Discount Received 420
Insurance 2,800 Bill Payable 4,000
Repair to Machinery 1,400 Loan (Cr.) 11,000
Drawings 5,600 Bills Receivable 7,000
Customer's A/c 15,800 Capital Account 13,47,600
Postage 500 Suppliers A/c 40,000
Trade Expenses 1,000 X's Loan (Cr.) 18,600
Plant and Machinery 1,82,000
Prepare Trading and Profit & Loss Account for the year ended 31 st March 2023 and Balance
Sheet as at that date after taking into account the following adjustments
(GP – 1,06,980; NP – 27,930; B/S – 17,83,530)
➢ Closing Stock was valued at ₹ 19,000.
➢ Depreciation to be provided on Land and Building @ 5% p.a. and on Plant & Machinery
@ 10% p.a.
➢ Write off ₹ 2,000 as Bad debt.
➢ Insurance was prepaid ₹ 700.
➢ Create provision for doubtful debts @ 5% on debtors.
➢ Wages include ₹ 4,800 for installation of a new machinery.
7. Prepare Trading and Profit and Loss Account and Balance Sheet from the following Trial
Balance and information as on 31st March, 2023
Debit Credit
Name of Account
(₹) (₹)
Drawings and Capital 15,000 3,25,000
Plant and Machinery 2,00,000 –
Motor Vehicle 1,50,000 –
Return Inward and Outward 25,000 37,000
Stock on 1st April, 2022 82,000 –
Purchases and Sales 4,40,000 6,75,000
Carriage Inward 6,000 –
Trade Expenses 2,500 –
Bad Debts 4,250 –
Provision for Doubtful Debts – 6,000
Commission – 4,000
Rent, Rates & Taxes 12,000 –
Salaries and Wages 24,000 –
Debtors and Creditors 70,000 55,000
Fuel and Water 4,750 –
Cash in Hand 16,500 –
Cash at Bank 50,000 –
Total 11,02,000 11,02,000
Adjustments
➢ Closing Stock was valued at ₹ 1,12,500.
➢ Commission includes ₹ 1,200 being commission received in advance.
➢ Salaries and wages are outstanding for the month of Feb. & March, 2023.
➢ Depreciate Plant & Machinery by 15% and Motor Vehicle by 20%.
➢ Write off ₹ 500 as further Bad Debts and maintain provision for doubtful debts at 1%
on debtors. (GP – 2,66,750; NP – 1,66,805; B/S – 5,37,805)
8. The following balances were taken from the books of Shri R. Lal as at 31 st March, 2023
(GP – 53,190; NP – 16,060; B/S – 1,22,950)
Particulars (₹) Particulars (₹)
Capital 1,00,000 Rent (Cr.) 2,100
Drawing 17,600 Railway Freight on sales 16,940
Purchases 80,000 Carriage Inwards 2,310
Sales 1,40,370 Office Expenses 1,340
Purchase Returns 2,820 Printing & Stationery 660
Stock on 1.4.2020 11,460 Postage 820
Bad Debts 1,400 Sundry Debtors 62,070
Bad Debts Provision on 1.4.2022 3,240 Sundry Creditors 18,920
Rates & Insurance 1,300 Cash at Bank 12,400
Discount (Cr.) 190 Cash in Hand 2,210
Bills Receivable 1,240 Office Furniture 3,500
Sales Returns 4,240 Salaries & Commission 9,870
Wages 6,280 Addition to Building 7,000
Building 25,000
Prepare Trading and Profit & Loss A/c and a Balance Sheet as at 31st March, 2023, after keeping
in view the following adjustments
➢ Depreciate old Building at 2.5% and addition to Building at 2% and Office Furniture at 5%.
➢ Write off further Bad-debts ₹ 570.
➢ Increase the Bad-debts Provision to 6% of Debtors.
➢ On 31st March, 2023 ₹ 570 are outstanding for salary.
➢ Rent receivable ₹ 200 on 31st March, 2023.
➢ Interest on capital at 5% to be charged.
➢ Unexpired Insurance ₹ 240.
➢ Stock was valued at ₹ 14,290 on 31st March, 2023.
9. The following is the trial balance of Mr. Amar Chand as at 31st March, 2023
Dr. Cr.
Accounts Title
(₹) (₹)
st
Stock on 1 April, 2022 62,000 -
Purchases and Sales 3,15,000 4,48,000
Returns 3,700 2,500
Sundry Debtors and Creditors 80,000 43,000
Bills Receivable and Payable 12,100 4,300
Drawings and Capital 30,000 2,00,000
Cash in Hand 24,800 -
Balance with Bank of Tokyo 32,800 -
Discount 2,600 3,800
Carriage on Purchases 7,500 -
Carriage on Sales 1,200 -
Bad-Debts 2,400 -
Bad-Debts Provision - 3,000
Furniture on 1st April, 2022 10,000 -
st
New Furniture purchased on 1 January, 2023 6,000 -
Rent 10,000 -
Salaries 25,000 -
Commission - 2,400
Repairs 2,300 -
Insurance (Annual Premium paid on 1st Jan 23) 3,600 -
Salaries Outstanding - 5,000
Sales Van 75,000
Sales Van Expenses 6,000
7,12,000 7,12,000
Taking into account the following adjustments, prepare Trading and Profit & Loss Account and
the Balance Sheet as at 31st March, 2023
➢ Stock on 31st March, 2023 was valued at ₹ 46,000.
➢ Depreciate Furniture at 15% p.a. and Sales Van at 20% p.a.
➢ A sum of ₹ 200 is due for repairs.
➢ Write off ₹ 2,000 as further bad-debts and create a provision for doubtful debts @ 5% on
Debtors. Also provide 2% for discount on Debtors.
➢ Rent is paid at the rate of ₹ 1,000 per month.
➢ Allow 8% interest on Capital and charge ₹ 1,500 as interest on Drawings.
(GP – 1,08,300; NP – 26,293; B/S – 2,65,293)
10. Prepare a trading and profit & loss account of M/s Green Club Ltd. for the year 2023 and a
Balance Sheet as at that date from the following figures taken from their trial balance
(GP – 69,000; NP – 42,565; B/S – 1,47,565)
Debit Balances (₹) Credit Balances (₹)
Opening Stock 1,25,000 Sales 2,50,000
Purchases 35,000 Purchase Return 6,000
Return inward 25,000 Creditors 55,000
Postage 600 Capital 50,000
Salary 12,300 Discount received 1,000
Wages 3,000 Provision for bad debts 4,500
Rent and rates 1,000 Commission received 5,400
Packing and transport 500
General expenses 400
Insurance 4,000
Debtors 50,000
Cash in hand 20,000
Closing Stock 40,000
Machinery 20,000
Lighting 5,000
Discount 3,500
Bad debts 3,500
Investments 23,100
3,71,900 3,71,900
Adjustments
➢ Depreciation charged on Machinery @ 5% p.a.
➢ Further Bad-debts ₹ 1,500, provision for discount on debtors @ 5% and provision for
Doubtful Debts on debtors @ 6%.
➢ Wages prepaid ₹ 1,000.
➢ Interest on investments @ 5% p.a.
11. From the following Trial Balance extracted from the books of Mr. Karuna Sagar, prepare a
Trading and Profit & Loss A/c for the year ended 31 st March, 2023 and a Balance Sheet as at
that date. (GP – 1,55,100; NP – 50,000; B/S – 2,91,480)
Dr. Balances (₹) Cr. Balances (₹)
Purchases 3,30,000 Sales 5,30,000
Rent Paid 7,480 Returns 8,000
Wages 33,000 Trade Creditors 37,000
Salaries 30,800 Discount 3,000
Power 5,400 Capital 2,00,000
Stock on 1-4-2022 15,000 Miscellaneous Income 3,060
Stock on 31-3-2023 36,000
Charity 500
Debtors 53,000
Furniture 8,000
Motor Car 2,00,000
Motor Car Expenses 18,000
Insurance 3,600
Unexpired Insurance 600
Drawings 5,000
Cash Balance 34,680
7,81,060 7,81,060
Additional Information
➢ Goods Costing ₹ 2,000 were taken away by the proprietor for his personal use and goods
costing ₹ 1,500 were given away as charity.
➢ Expenses for wages, rent and salaries are uniform throughout the year and those for
March have not been paid.
➢ Provide 10% depreciation on Furniture and 20% on Motor Car.
➢ Provide for Manager's Commission at 10% on Net Profit after charging such Commission.
12. The following balances were extracted from the books of Mr. Din Dayal as at 31st March, 2023
Particulars ₹ Particulars ₹
Stock at the beginning 41,000 Purchases 2,20,000
Rent 9,600 Sales 2,80,000
Salary 20,000 Returns (Dr.) 6,000
Bad-Debts 400 Returns (Cr.) 2,000
Provision for Doubtful Debts 3,000 Carriage Inward 3,500
Travelling Expenses 1,400 Carriage Outward 500
Insurance Premium 1,800 Capital 1,75,000
Proprietor's Withdrawals 4,000 Loan (Cr.) 20,000
Telephone Charges 7,300 Debtors 40,000
Printing and Advertising 5,000 Creditors 27,000
Commission (Cr.) 6,000 Investments 5,000
Rent from Sublet 4,800 Interest on Investments 600
Land and Building 1,40,000
Furniture 10,000
Cash 2,900
Prepare Trading and Profit & Loss Account for the year and a Balance Sheet as at 31 st March,
2023, after taking into account the following:
➢ Stock was valued at ₹ 75,000 on 31st March, 2023. You are informed that a fire occurred on
28th March, 2023 in the godown and stock of the value of ₹ 10,000
was destroyed. Insurance Company admitted a claim of 75%.
➢ One-third of the commission received is in respect of work to be done next year.
➢ Create a provision of 5% for Doubtful Debts.
➢ 50% of Printing and Advertising is to be carried forward as a charge in the following year.
➢ ₹ 900 is due for interest on loan.
➢ Provide for manager's Commission at 10% on Net Profit before charging such commission.
(GP – 96,500; NP – 54,000; 2,80,900)
13. From the following information prepare financial Statements of M/s Raj & Bros, for the year
ending March 31st, 2023.
Debit Balances (₹) Credit Balances (₹)
Stock (1-4-2022) 16,800 Capital 78,000
Sales Returns 8,000 Sales 3,09,000
Purchases 2,43,000 Returns Outward 5,700
Freight-in 8,600 Trade Creditors 4,800
Rent and Taxes 5,700 10% Bank Loan (1-7-22) 24,000
Salaries 9,300 Income from Investment 3,600
Trade debtors 24,000 Discount Received 2,250
Bank interest 1,000
Printing and Advertising 14,600
Cash at bank 18,300
Discount Allowed 1,340
Investment 25,000
Furniture 3,800
General Expenses 3,610
Audit Fees 500
Insurance 800
Travelling Expenses 3,000
Plant & Machinery 30,000
Drawings 10,000
4,27,350 4,27,350
Additional Information
➢ Depreciation on Plant and Machinery @ 10% p.a., a Machine has been purchased on July
01, 2022 for ₹ 12,000.
➢ The manager is entitled to a commission of 10% of the net profit before charging such
commission.
➢ Closing stock in trade is valued at ₹ 6,000 (cost); ₹ 6,200 (Market Price).
➢ Rent outstanding ₹ 5,000. (GP – 44,300; NP – 1,620; B/S – 1,04,400)
