Account-11, Practice Answer key-2

B. 1. Following transaction are given : - Started business with cash Rs. 1,00,000 and furniture Rs. 50,000 - Purchased goods worth of Rs. 75,000 on credit. - Wages paid Rs. 10,000 - Sold goods costing Rs. 20,000 for Rs. 25,000 Required : Accounting equation. Solution : Accounting Equation Transaction Assets = Liabilities + Capital Business Started +1,00,000(Cash) 0 1,50,000 +50,000(Furniture) Beginning Equation 1,50,000 0 1,50,000 +75,000(Goods) +75,000(Creditors) Goods Purchased New Equation 2,25,000 75,000 1,50,000 -10,000(Cash) -10,000(Expense Wages paid ) New Equation 2,15,000 75,000 1,40,000 +25,000(Cash) +5,000(Profit) Goods sold on Profit -20,000(Goods) Final Equation 2,20,000 75,000 1,45,000 2. The following transactions are given: - Started business with Rs. 5,00,000 - Purchased machinery from Hari & Co. for Rs. 2,00,000 - Purchased goods worth Rs. 50,000 in cash. - Sold goods worth Rs. 20,000 for Rs. 30,000 Solution: Accounting Equation Transaction Assets = Liabilities + Capital 5,00,000 Business Started +5,00,000(Cash) 0 Beginning Equation 5,00,000 0 5,00,000 Machinery Purchased From Hari & Co. +2,00,,000(Machinery) +2,00,,000(Creditors) 0 2,00,000 5,00,000 Purchased Goods New Equation 7,00,000 -50,000(Cash) 2,00,000 5,00,000 +50,000(Goods) +10,000(Profit) 2,00,000 Goods sold on Profit New Equation 7,00,000 5,10,000 +30,000(Cash) -20,000(Goods) Final Equation 7,10,000

C. 1. Following transaction are Given to you : LF Debit Rs. Credit Rs. - Purchased goods from Susmita Rs. 25,000 25,000 - Sold goods to yogendra Rs. 5,000 - Rent Received Rs. 5,000 24,000 - Cash paid to Susmita Rs. 24,000 in full settlement. 1,000 Required : a. Journal Entries b. Susmita’s Account. JF Amount Solution : 25,000 Journal Entries 25,000 Date Particulars Credit Rs. 50,000 Purchase a/c Dr. 25,000 25,000 15,000 To Susmita a/c Cr. 10,000 (Being goods purchased from Susmita.) Yogendra a/c Dr. To Sales a/c Cr. (Being goods sold to Yogendra.) Cash a/c Dr. To Rent a/c Cr. (Being Rent received.) Susmita a/c Dr. 25,000 To Cash a/c Cr. To Discount Received a/c Cr. (Being cash paid to Susmita and discount received.) Susmita’s Account Dr. Cr. Date Particulars JF Amount Date Particulars 4 To Cash a/c 24,000 1 By Purchase a/c To Discount a/c 1,000 Total 25,000 Total 2. Following transactions are given to you: LF Debit Rs. - Started business with Rs. 50,000 50,000 - Goods Purchased for Rs. 25,000 cash. - Goods sold Rs. 15,000 on cash. 25,000 - Rent paid Rs. 10,000. 15,000 Required : a. Journal Entries b. Cash Account Solution : 10,000 Journal Entries Date Particulars Cash a/c Dr. To Business Capital a/c Cr. (Being Business started with cash.) Goods a/c Dr. To Cash a/c Cr. (Being Goods purchased for cash.) Cash a/c Dr. To Sales a/c Cr. (Being Goods sold for cash.) Rent a/c Dr. To Cash a/c Cr.

(Being rent paid.) Cash Account Dr. JF Amount Date Particulars JF Amount Cr. 50,000 15,000 2 By Goods a/c 25,000 Date Particulars 4 By Rent a/c 10,000 25,000 30,000 1 To Business Capital a/c 30,000 By Closing Balance c/d 3 To Sales a/c 25,000 Total Total To opening balance b/d D. 1. Following purchase transaction given to you: Jestha 7 Purchased from Naresh Stores : 50 bags of rice @ Rs. 5,000 per bag. 400 kg of sugar @ Rs. 65 per kg. (Discount received at 5% on rice.) Jestha 15 Purchased from Gopal & Brothers: 500 kgs of Ghee @ Rs. 400 per kg. 200 kgs of Cheese @ 350 per kg. Required : Purchase book. Purchase Book Dat Particulars Invoice No LF Details Rs. Total Rs. e 2/7 Purchase from Naresh Stores: 50X5,000=2,50,000 2,63,500 50 bags of rice @ Rs. 5,000 per bag ​ 12,500 Less : Trade Discount @5% 2,37,500 400 kg of sugar @ Rs. 65 per kg 400X65= 26,000 2/15 Purchase From Gopal & Brothers: 500X400= 2,00,000 500 kgs of Ghee @ Rs. 400 per kg. 200X350= 70,000 2,70,000 200 kgs of Cheese @ 350 per kg. Total 5,33,650 D. 2. Following are the transaction relating to credit sales: I. Sold to Saman Brothers: 10 Tables @ Rs. 1,000 each. 10 Beds @ RS. 5,000 each. Ii. Sold to Paban stores : 5 sofa sets @ Rs. 10,000 each. 10 Beds @ Rs. 5,000 each. Less 10% Trade discount on the transactions. Required : Sales Book. Solution : Sales Book Date Invoice No Particulars LF Details Rs. Total Rs. 3,00,000 2/7 Sold to Saman Brothers: 50X5,000=2,50,000 10X5,000= 50,000 10 Tables @ Rs. 1,000 each. 10 Beds @ Rs. 5,000 each. 2/15 Sold to Paban Stores: 5 sofa sets @ Rs. 10,000 each 5X10,000=50,000

10 Beds @ Rs. 5,000 each. 10X5,000=50,000 90,000 Less : Trade discount 10% 10,000 Total 3,90,000 E.1. Following Cash and bank transactions are given to you : Poush 1 Balance of cash in hand Rs. 30,000 and cash at bank Rs. 1,00,000. Poush 6 A cheque of Rs. 14,500 received from the debtors and settled his account of Rs. 15,000. Poush 10 issued a cheque of Rs. 2,700 in favour of a creditor after receiving discount of 10% Poush 17 cash deposited into bank Rs. 5,000 Poush 25 Paid salary of Rs. 30,000 through cheque. Poush 28 Paid house rent by cash Rs. 10,000 Required : Triple column cash book. Solution: Triple Column Cash Book Date Particulars LF Disc Cash Bank Date Particulars LF Disc Cash Bank . . 9-1 To Balance b/d 30,000 1,00,000 9-10 By Creditors 300 2700 9-6 To Debtors a/c 500 14,500 9-17 By Bank a/c C 5,000 9-25 By Salary a/c 30,000 9-17 To Cash a/c C 5,000 9-28 By house Rent 10,000 By balance c/d 15,000 86,800 500 30,000 1,19,500 300 30,000 1,19,50 0 10-1 To bal b/d 15,000 86,800 E.2. Following transaction are given to you : Magh-1 Opening balance of Cash and Bank are Rs. 60,000 and Rs. 80,000 respectively. Magh-10 Received cash Rs. 27,500 from a debtor and settled his account of Rs. 30,000. Mah-15 Cash withdrawn from bank for office us Rs. 10,000 Magh-20 Paid cash Rs. 24,000 to creditors in full settlement of his account Rs. 25,000. Magh-25 Cash deposited into bank Rs. 9,000 Magh-30 Salary Rs. 25,000 paid by cheque. Required : Triple Column Cash book. Solution: Triple Column Cash Book Date Particulars LF Disc. Cash Bank Date Particulars LF Disc Cash Bank 10-1 To Balance b/d 60,000 80,000 10-15 By Cash a/c C 10,000 10-10 To Debtors a/c 2,500 27,500 10-20 By Creditors a/c 1000 24000 10-15 To Bank a/c C 10,000 10-25 By Bank a/c 9,000 10-25 To Cash a/c C 9,000 10-30 By Salary a/c 25000 10-30 By balance c/d 39500 79,000 2500 97,500 89,000 1000 97,500 89,000 11-1 To bal b/d 39500 79,000

F. 1. The following information at the end of Magh 2076 is given to you. ● Bank balance as per cash book Rs. 5,000 ● Cheque of Rs. 15,000 issued but presented for payment cheque of Rs. 14,000 til magh. ● Amount of Rs. 1500 wrongly credited in pass book. ● Interest on overdraft charged only by bank Rs. 8,500 ● Amount of Rs. 4,000 directly deposited into the bank by a customer. ● Cheque Amounting Rs. 6,000 was sent into bank for collection but all not collected and credited by bank Rs. 5,000. Required : Bank reconciliation statement on 30 magh 2076. Solution : Bank Reconciliation Statement As on Magh 30th Particulars Details Amount Bank Balance as per Cash Book 5,000 Add: i. Cheque issued but not presented for payment 1,000 6,500 Ii. Amount wrongly credited in pass book 1,500 Iii. Amount directly deposited into bank by a customer 4,000 Less : i. Interest on overdraft charged only by bank 8,500 11,500 Iv. Cheque sent into bank but not collected(6000-5000) 1,000 9,500 Balance as per Pass book 2,000 2. Following information are given.: ● On Falgun, the balance of Bank pass book was Rs. 80,000. On reconciliation with a cash book, following differences are located. ● Cheque issued but not presented for payment Rs. 5,000 ● Cheque sent for collection Rs. 10,000 not deposited by bank. ● Interest on saving account allowed by bank Rs. 800 ● Insurance Rs. 4,000 directly paid by bank. ● Rs. 3,000 directly deposited by customer in bank account but not recorded in cash book. Required : Bank Reconciliation Statement. Solution : Bank Reconciliation Statement As on Falgun 30th Particulars Details Amount Bank Balance as per Pass Book 80,000 Add: ii. Cheque sent for collection but not deposited by bank 10,000 14,000 iv. Insurance directly paid by bank 4,000 Less : i. Cheque issued but not presented for payment 5,000 94,000 Iv. interest on saving allowed by bank 800 8800 V. Directly deposited by customer to the bank 3,000 Balance as per Cash book 85,200

G. 1. On 1st January 2010, ABC company purchased a machine at Rs. 1,00,000. On 1st July 2011 another machine was purchased for Rs. 2,00,000. On 1st July 2012, the company sold the machine purchased on 1st january 2010 for Rs. 65,000. On the same date another machine was purchased at Rs. 1,50,000. The accounts of the company are closed at the end of December each year and depreciation is charged at 15% p.a. On a fixed installment system. Required : Machinery account from 2010 to 2012. Solution : Working Note : Calculation of profit or loss on sale of First Machine: Cost of Machine(2010-01-01) Rs. 1,00,000 Less : Depreciation (15% of Rs. 1,0,000) Rs, ​15,000 Balance 2011-01-01 Rs. 85,000 Less : Depreciation Rs. 1​ 5,000 Balance 2012-01-01 Rs. 70,000 Less: Depreciation for six months Rs. ​ 7,500 Book Value Rs. 62,500 Less : Sales Value Rs. 65,000 Gain on sale of machine Rs. 2,500 Macninery Account Dr. Cr. Date Particulars Amount Date Particulars Amount 2010-01-01 To Bank a/c 1,00,000 2010-12-31 By Depreciation a/c(i) 15,000 2010-12-31 By Closing balance c/d 85,000 2011-01-01 To balance b/d 85,000 2011-12-31 By Depreciation a/c (i) 15,000 2011-07-01 To Bank a/c(ii) 2,00,000 15,000 By Depreciation a/c (ii,6 months) 2,55,000 By Balance c/d 2012-01-01 To Balance b/d 2,55,000 2012-07-01 By Bank a/c(i) 65,000 2012-07-01 To Bank a/c(iii) 1,50,000 2012-12-31 By Depn a/c i-6months 7,500 2012-07-01 To P/L a/c (Gain) 2,500 2012-12-31 By Depn a/c ii 30,000 2012-12-31 By Depn a/c iii(6 months) 11,250 2012-12-31 By Balance c/d 2,93750 4,07,500 4,07,500 2013-01-01 To Open Bal b/d 2,93,750

G.2. Wuhan company purchased a vehicle on Jan 1st, 2016 for Rs. 4,00,000. On July 1st 2017 it purchased another vehicle at Rs. 3,00,000. On June 30, 2018 it sold an old vehicle purchased on 2016-1-1 at Rs. 2,30,000. Depreciation is calculated under a straight line method & the rate of depreciation of vehicles is 20%. Accounts are closed on 31st Dec. each year. Prepare the vehicle account from 2016 to 2018. Solution : Working Note : Calculation of Gain or loss on sale of Vehicle Machine purchased 2016-01-01 Rs. 4,00,000 Less : Depreciation (20% of 4,00,000) Rs. 80,000 Balance 2017-01-01 Rs. 3,20,000 Less : Depreciation Rs. 80,000 Balance 2018-01-01 Rs. 2,40,000 Depreciation 6 months Rs. 40,000 Book Value of Vehicle Rs. 2,00,000 Less : Sales Value Rs. 2,30,000 Gain on sale of Vehicle Rs. 30,000 Macninery Account Dr. Particulars Amount Date Particulars Cr. Date 4,00,000 Amount 2016-01-01 To Bank a/c 3,20,000 2016-12-31 By Depreciation a/c(i) 80,000 3,00,000 2016-12-31 By Closing balance c/d 3,20,000 5,10,000 2017-01-01 To balance b/d 30,000 2017-12-31 By Depreciation a/c (i) 80,000 2017-07-01 To Bank a/c(ii) 2017-12-31 30,000 5,40,000 By Depreciation a/c (ii,6 2,10,000 2017-12-31 months) 5,10,000 By Balance c/d 2,30,000 2018-01-01 To Balance b/d 2018-06-30 By Bank a/c(i) 40,000 2012-07-01 To P/L a/c (Gain) 2018-12-31 By Depn a/c i-6months 60,000 2018-12-31 By Depn a/c ii 2,10,000 2018-12-31 By Balance c/d 5,40,000 2013-01-01 To Open Bal b/d

H. 1. Unadjusted trial Balance of a trader is as under: Debit Rs. Credit Rs. 1,50,000 Purchase 80,000 Sales 40,000 70,000 Machinery 50,000 Creditors Debtors 15,000 Capital 2,60,000 Salaries 30,000 Rent 40,000 Furniture 45,000 2,60,000 Additional Information : I. Salaries outstanding Rs. 5,000 Ii. Depreciate machinery @ 10% Required : Adjusted trial balance. Solution : Adjusted Trial Balance S.No. Particulars Unadjusted Trial Balance Adjustment Adjusted Trial Balance 1 Purchase Debit Rs. Credit Rs. Debit Rs. Credit Rs. Debit Rs. Credit Rs. 2 Machinery 3 Debtors 80,000 Ii.5,000 80,000 4 Salaries 50,000 45,000 5 Rent 15,000 I. 5000 15,000 6 Furniture 7 Sales 30,000 1,50,000 35,000 8 Creditors 40,000 40,000 40,000 9 Capital 45,000 70,000 45,000 Adjustments: 1,50,000 Outstanding Salary 40,000 Depreciation on Machinery 70,000 i.5,000 5,000 Ii. 5,000 5,000 2,60,000 2,60,000 10,000 10,000 2,65,000 2,65,000

H. 2. An unadjusted trial balance is provided to you. Particulars Debit Rs. Credit Rs. Bank and cash balance 20,000 75,000 80,000 Purchase 40,000 20,000 Machinery 50,000 1,75,000 Sundry debtors 40,000 Wages and salaries 25,000 Capital Sales creditors 1,75,000 Adjustments a) Depreciate machinery @10% b) Provide 5% provision for bad & Doubtful debts. Required : Adjusted trial balance. Solution : Adjusted Trial Balance S.No. Particulars Unadjusted Trial Balance Adjustment Adjusted Trial Balance 1 Bank & cash Balance Debit Rs. Credit Rs. Debit Rs. Credit Rs. Debit Rs. Credit Rs. 2 Purchase 3 Machinery 20,000 I.5,000 20,000 4 Sundry Debtors 40,000 ii.2,000 40,000 5 Wages and salaries 50,000 45,000 6 Capital 7 Sales 40,000 38,000 8 Creditors 25,000 25,000 9 Adjustments: 75,000 75,000 Depreciation on Machinery Provision for bad & Doubtful 80,000 80,000 Debts 20,000 20,000 1,75,000 1,75,000 I.5,000 7,000 5,000 Ii. 2,000 2,000 7,000 1,75,000 1,75,000 I.1. Trial Balance of a Trader as on 31st Dec 2019 Particulars Debit(Rs.) Credit(Rs.) 8,00,000 Purchase 5,00,000 2,00,000 30,000 Sales 2,30,000 50,000 Capital 30,000 50,000 Opening stock 10,000 38,000 5,000 Carriage inward 1,04,000 Purchase and sales return Carriage outward 4,000 30,000 Sundry debtors 16,000 Creditors 1,00,000 10% Bank loan 61,000 Interest on loan 12,000 Salaries Wages Fixed assets Cash and bank Provision for bad debts Insurance prepaid

Total 11,35,000 11,35,000 Adjustments : a. Closing stock Rs. 2,50,000 B. Prepaid wages Rs. 4,000 c. interest on loan outstanding Rs. 1,000. d. Insurance prepaid written off Rs. 10,000 e. Create provision for Bad and doubtful debts @ 5% on debtors after writing up bad debts Rs.4,000. f. Depreciation fixed assets @ 10% g. Depreciation fixed assets @ 10% h. Outstanding salary Rs. 6,000. Required : i. Trading and Profit & Loss a/c ii. Balance sheet as on 31st Dec 2019. Trading Account For the year ended 31st Dec 2019 Dr. Cr. Particulars Amount Particulars Amount To Opening Stock 2,30,000 By Sales 8,00,000 To Purchases 5,00,000 4,70,000 Less : Sales Return 10,000 7,90,000 30,000 2,50,000 Less : Purchase Return 30,000 By Closing Stock 12,000 To Carriage inward 2,98,000 To Wages : 16,000 Less: Pre Paid Wages: 4,000 To Gross Profit 10,40,000 10,40,000 Profit & Loss Account Cr. For the year ended 31st Dec 2019 Amount Dr. Amount Particulars Particulars To Carriage outward 38,000 By Gross Profit 2,98,000 By Provision for bad debt 5,000 To Interest on load : 4,000 5,000 Add : Outstanding 1,000 36,000 4,000 To Salaries 30,000 5,000 10,000 Add Outstanding : 6,000 10,000 To Bad Debt To Provision for bad debt To Depn on fixed assets To Insurance To Gross Profit c/d 1,95,000 Assets 3,03,000 Capital & Liabilities Amount Balance Sheet For the year ended 31st Dec 2019 Amount Capital : 2,00,000 Fixed Assets : 1,00,000 Less : Drawing ,000 Less Depn 10% 10,000 90,000 61,000 Add : Net Profit 1,95,000 3,95,000 Cash at Bank 50,000 95,000 10% Loan Debtors : 1,04,000 2,000 50,,000 2,50,000 Creditors 1,000 Less Bad Debt 4,000 4,000 6,000 Interest outstanding Less Prov for bad debt : 5,000 Salary outstanding Prepaid Insurance Closing Stock Prepaid Wages 5,02,000 5,02,000

I. 2. The following is the trial Balance of a firm for the year ended Ashad : Debit Rs. Credit Rs. Building 3,24,000 Capital 6,00,000 Drawing 75,000 12% Loan 50,000 Furniture 30,000 Sales 6,00,000 Plant & Machinery 90,000 Commission 4,000 Purchases 3,25,000 Creditors 75,000 Beginning stock 1,75,000 Bills payable 60,000 Wages 50,000 Provision for bad debt 3,000 Insurance 10,000 Debtors 1,50,000 Cash in bank 15,000 Bills receivable 60,000 Salaries 75,000 Advertisement 10,000 Interest paid 3,000 13,92,000 13,92,000 Additional information : i. Closing stock Rs. 1,70,000 ii. Bad debts R. 10,000 iii. Increase the provision for bad debt to rs. 5,000 from Rs. 3,000 iv. Wages outstanding Rs. 10,000 v. accrued interest on loan for six months. vi. Depreciate furniture and plant and machinery @10% per annum. vii. Insurance prepaid Rs. 3,000 Required : a. Trading account b. Profit and loss account c. Balance sheet as at ending date of ashad. Solution : Trading Account For the year ended 31st Asar Dr. Cr. Particulars Amount Particulars Amount To Begining Stock 1,75,000 By Sales 6,00,000 3,25,000 By Closing Stock 1,70,000 To Purchases 60,000 To Wages : 50,000 2,10,000 Add : Outstanding :10,000 To Gross Profit 7,70,000 7,70,000 Profit & Loss Account For the year ended 31st Asar Dr. Amount Particulars Cr. Particulars 7,000 By Gross profit Amount To Insurance : 10,000 75,000 By Commission 10,000 By provision for bad debt 2,10,000 Less : Prepaid 3,000 4,000 6,000 3,000 Salaries : 10,000 5,000 Advertisement : 12,000 Interest Paid : 3,000 Add : Accured 3,000 Bad Debts To Provision for bad debts To Depreciation

To Net Profit c/d 92,000 2,17,000 2,17,000 Balance Sheet For the year ended 31st Asar Amount 3,24,000 Capital & Liabilities Amount Assets 27,000 81,000 Capital : 6,00,000 6,17,000 Building 50,000 1,35,000 Less : Drawing 75,000 75,000 Furniture : 30,000 15,000 60,000 60,000 Add : Net Profit 92,000 10,000 Less Depn : 3000 1,70,000 3,000 3,000 12% Loan Plant & Machinery : 90,000 8,15,000 8,15,000 Creditors Less Depn : 9,000 Bills Payable Debtors : 1,50,000 Outstanding Wages Less Bad Debt 10,000 Interest on loan accured Less Prov for bad debt : 5,000 Cash at bank Bills receivable Closing Stock Prepaid Insurance

J. 1. Balance sheet of a sport club as on 01-01-2075 Liabilities Amount Rs. Assets Amount Rs. Capital fund 45,000 Land & Building 30,000 O/S House rent 5,000 Sport equipment 11,000 5,000 Advance subscription 3,000 Furniture 7,000 cash and bank 53,000 Total 53,000 Total Receipt and Payment A/C for the year 2075 Receipts Amount(Rs.) Payments Amount Rs. Opening balance 7,000 Salaries 30,000 Subscription 26,000 House rent 17,000 Donation 30,000 Furniture(2075-01-01) 10,000 Receipt form concert 12,000 Concert expenses 6,000 Other expenses 1,500 Audit fee 2,500 Closing balance 8,000 Total 75,000 Total 75,000 Additional information : a. Outstanding salary Rs. 6,000 Cr. b. Outstanding subscription for 2075 Rs. 8,000 Amount C. Half of the donation is to be capitalized. d. Depreciate furniture @ 10% p.a. Amount Required : a. Income & Expenditure a/c. b. Balance sheet as on 31st Chaitra 2075. Solution : Income & Expenditure Account of A Sport Club For the year ended 31st Chaitra 2075 Dr. Expenditure Amount Income Balance Sheet of A Sport Club For the year ended 31st Chaitra 2075 Liabilities Amount Assets J.2. The following balance sheet and receipts and payments account of a club are given. Balance Sheet of a Club as on Chaitra 31, 2069 Capital/Liabilities Amount Rs. Assets Amount Rs.

Capital Fund 32,400 Books 20,000 Total 32,400 Furniture 8,500 Subscription Receivables 350 Advance Rent 360 Cash in hand 3,190 Total 32,400 Receipts and Payments account of Chaitra 31st, 2070 Receipts Amount Rs. Payments Rs. Balance of cash b/d 3,190 Rent 1680 Entrance fees 550 Wages 2,450 Subscriptions 18,000 Electricity charges 720 Donations 1,650 Book purchased 2,480 Life member fees 2,500 Office expenses 4,500 Interest on fixed deposits 240 Fixed deposit 12,000 Proceeds from tournament 2,320 Tournament 2,020 expenses 2,600 Cash in hand Total 28,450 Total 28,450 Additional information : Cr. 1. Subscriptions outstanding for the year Rs. 550 Amount 2. Advance rent paid Rs. 360 3. Provide depreciation @10% on furniture 18,200 550 Required : a) income and expenditure account b) Balance sheet as on 31st chaitra 2070 1,650 Solution : 240 2,320 Income & Expenditure Account of A Club For the year ended 31st Chaitra 2070 22,960 Dr. Amount 22,480 Expenditure Amount Income 7650 2600 To Rent 1,680 By Subscriptions : 18,000 360 12,000 Add : Advance rent last year : 360 Add :outstanding this year : 550 550 45,640 Less : Advance rent this year : 360 1,680 Less : Outstanding last year:350 2,450 To Wages By Entrance fees 720 To Electricity Charges 4,500 By Donations 2,020 To Office expenses By interest on Fixed deposit 850 To Tournament Expenses 10,740 By Tournament proceeds To Depn on furnicture To Surplus 22,960 Balance Sheet of A Club For the year ended 31st Chaitra 2070 Liablities Amount Assets Capital Fund : 32,400 Books (20,000+2,480) Add : Life membership fees : 2,500 Furniture : 8500 Less Depn: 850 Add Surplus : 10,740 45,640 Cash in hand Advance Rent paid Fixed Deposit Subscription due 45,640

K.1. On Baisakh 1, 2074 provision for bad and doubtful debt accounts showed a credit balance of Rs. 10,000, bad debts during the year was Rs. 2.000. Sundry debtor balance on Chaitra 30, 2074 was Rs. 50,000 maintaining provision for bad and doubtful debts @5% on a debtor. Required : Provision for bad and doubtful debt account. Solution : Provision For Bad and Doubtful Debts Account Date Particulars JF Amount Date Particulars JF Amount 2,000 74.1.1 By balance b/d 10,000 To Bad debts a/c 2 500 To Balance c/d 5,500 10,000 (5% of Rs. 50,000) To Profit & Loss a/c 10,000 (Balancing figure) K.2. Following information are provided : i. Opening provision for doubtful debts Rs. 5,000 ii. Bad debts written off during the year Rs. 3,000 iii. Sundry debtors at the end of the year Rs. 1,50,000 iv. The provision doubtful is to be maintained at 5% on sundry debtors. Required : Provision for doubtful debts account. Solution : Provision For Doubtful Debts Account Date Particulars JF Amount Date Particulars JF Amount 5,000 To Bad debts a/c 3,000 74.1.1 By balance b/d 5,500 To Balance c/d 7,500 By profit & Loss a/c (5% of Rs. 1,50,000) 10,500 10,500 L. 1. Mr. Rohit , who keeps his books of account under a single entry system. Started business within own building of Rs. 1,50,000 and bank balance of Rs. 50,000 on 1st Baisakh 2070. On 31s chaitra 2070 his financial position depicts as under : Sundry debtors Rs. 15,000 Cash at bank Rs. 30,000 Stock in trade Rs. 25,000 Creditors payable Rs. 30,000 Drawing during the year Rs. 18,000 Additional information : i. Further investment Rs. 25,000 ii. Depreciate building @ 10% p.a. Required : a) Statement of affairs at close b) Statement of profit and loss Solution : Closing statements of Affairs Liablities Amount Assets Amount Creditors payable 30,000 Building 1,50,000 Capital (Balancing figure) 1,90,000 Sundry debtors 15,000 Stock in trade 25,000 Cash at bank 30,000 2,20,000 2,20,000 Statement for Profit & Loss

For the year ended 31st Chaitra 2070 Amount Particulars 1,90,000 18,000 Closing capital 2,08,000 Add : Drawing 2,00,000 25,000 Less : Opening capital (17,000) Additional Capital Net income before adjustments 15,000 32,000 Less : Adjustments Depreciation on building (10% of 1,50,000) Net loss during the year L.2. Miss Rajani Rai started business with Rs. 35,000. Her position of assets and liabilities at the end of year are as follows. Cash Rs. 7,000 DebtorsRs. 15,000 Stock Rs. 30,000 Furniture Rs. 20,000 Creditors Rs. 10,000 Bank Loan Rs. 15,000 Drawing during the year Rs. 5,000. Bad debts Rs. 1,000. Depreciate Furniture by 10%. Required : a) Closing statement of affairs b) Statement of profit and Loss. Solution : Closing statements of Affairs Liablities Amount Assets Amount Creditors 10,000 Furnicture 20,000 Bank Loan 15,000 Debtors 15,000 Capital (Balancing figure) 47,000 Stock 30,000 Cash 7,000 72,000 72,000 Statement for Profit & Loss For the year ended 31st Chaitra 2070 Particulars Amount Closing capital 47,000 Add : Drawing 5,000 Less : Opening capital 52,000 35,000 Net income before adjustments 17,000 Less : Adjustments 1,000 Bad Debts 200 15,800 Depreciation on Furnicture (10% of 20,000) Net loss during the year M.2. Prepare journal entries on the basis of the following transaction given from District post office , Kaski

a) Received Bank order of Rs. 1,00,000 and Budget release order of Rs. 1,20,000 b) NRB cheque of Rs. 40,000 for salary of the month after deduction of Rs. 10,000 for provident fund and RS. 5,000 for income tax. c) Mr. Basnet presented a bill of Furnicture of Rs. 28,000 and his advance is cleared. d) Machinary of Rs. 50,000 purchased through cheque. Solution : Journal Voucher(Goshwara Voucher) Code Particulars LF BH No Debit Rs. Credit Rs. No a Dr. Nepal Rastra Bank 1,00,000 Dr. Revloving fund 20,000 b Cr. Budget Release (Being bank order and buget release order received.) 1,20,000 c d Dr. BE Salary 21111 55,000 Cr. Provident fund Cr. Income Tax 10,000 Cr. Nepal Rastra Bank 5,000 Being salary is distributed after deducting necessary items.) 40,000 Dr. BE Furnicture 29311 28,000 Cr. Furnicture Purchase Advance, Mr. Basnet (Being Mr. Basnet’s furnicture purchase advance is cleared.) 28,000 Dr. BE Machinery 29511 50,000 Cr. NRB (Being a cheque is issued to purchase machinery.) 50,000 N.1. Following particular information of expenditure relating a government office are given below: Shrawan 1: received a bank order and budget released order letter for the amount equal to 1/6th of last year annual expenditure or Rs. 9,00,000 Shrawan 5: issued a cheque of Rs. 5,000 as advance to purchase office supplies. Shrawan 15: issued a cheque of Rs. 40,000 to purchase furniture. Shrawan 25: issued a cheque of Rs. 4,000 to purchase stationary. Shrawan 28: issued a cheque for salary of Rs. 60,000 for the month of Shrawan after deducting provident fund of Rs. 14,000 and income tax Rs. 3,000. Required : Post the transaction into the bank cash book. M.2. following transaction are given to you : Bhadra 1: Opening bank balance Rs. 50,000 Bhadra 11: Bank order of Rs. 1,10,000 received which was equal to last month's real expenses. Bhadra 25: Cycle for postman purchased worth 15,000 Bhadra 30: Total salary of Bhadra Rs. 77,000 out of which Rs. 14,000 for providend fund, Rs 3,000 for income tax and Rs 5,000 for providend fund loan is deducted. And cheque issued for the remaining amount. Required : Prepare Bank Cash Book O.1. Following information are given : Budget Head Annual Expenditure Expenditure up Budget (Rs.) of Magh(Rs.) to Poush(Rs.) Salary 3,00,000 25,000 1,75,000 Allowance 5,000 1,000 3,000 TADA for transfer 30,000 5,000 15,000 Office operating materials 22,000 3,000 16,000 Furniture 50,000 10,000 30,000 Machinery 1,50,000 - 1,00,000

Total 5,57,000 44,000 3,39,000 Additional information : i. Total revolving fund released Rs. 4,00,000 Ii. Petty cash fund balance Rs. 800 Required : Monthly expenditure report. O.2. Following transactions are provided : Annual Budget Heads Expenses till Expenses of allotment Chaitra Baisakh 2,00,000 Salary 1,50,000 30,000 10,000 Dearness Allowance 7,000 1,000 50,000 House Rent 40,000 4,000 40,000 Office Expenses 35,000 2,000 60,000 Furniture 30,000 10,000 3,60,000 Total 2,62,000 47,000 Additional information : i. Total revolving fund release Rs. 3,20,000 Ii. Advance to be cleared Rs. 3,000 Iii. Petty cash fund balance Rs. 500 Iv. Loans to be received Rs. 2,000 Prepare : Statement of expenditure for the month of Baisakh showing the bank balance and net expenses. P. 1. Following errors are found after preparation of Trial balance. i. Wages of installing machinery Rs. 1,000/- entered in wages A/C. ii. Goods purchased Rs. 600/- from Keiki were entered as sales to her. iii. Amount of Rs. 2,000/- paid to Mr. Lalit correctly entered in a cash account but credited it to Lalit’s A/C. Required : Prepare account for rectification of errors. P.2. The following errors were located before the preparation of trial balance. i. Purchase of Rs. 3,000 from Mr. A was recorded as sales to him. ii. Salary paid Rs. 2,500 to Prakash has been wrongly debited to his account. iii. A Sales of goods worth Rs. 675 to Rekha was posted as Rs .567 in account. Required : Entries for rectification. Have the best Preparation ! THE END