PGDM (2021-23)

Exercise on Final Accounts

Q 1 Auto Parts Manufacturing Co Ltd was registered with an Authorized capital of Rs 1000000
divided into shares of Rs 10 each of which 40000 shares had been issued and fully called. The
following is the trial balance extracted on March 31, 2015:

Particulars Amount Amount

Stock-Opening 186000
Manufacturing Wages 109840
Manufacturing Expenses 19240
Purchase and Sales 821000 1170000
Machinery repairs 8610
Carriage Inward 4830
Carriage Outward 9260
Advance paid to Employees 14290
Bank Loan (at 5%) 50000
Interest on Bank Loan 1250
Trade Receivables and Trade Payables 164400 92220
Profit & Loss Account (Past Profits) 8640
Bank Current Account 6860
Cash in hand 1920
Factory Building 64210
Plant and Machinery 78400
Vehicles 12500
Share Capital 400000
Calls in arrears 1800
Electricity Bill Expense 17710
Directors fee & remuneration 12000
Remuneration to Employees 19000
Auditor’s fee 1250
Office Furniture 5000
Commission 8640
Returns (Sales & Purchase) 12640 9790
Goodwill 150000
Total 1730650 1730650

You are required to prepare Income statement for the year end and a Balance Sheet as at that date
after considering the following:
1. The stock was valued at Rs 124840.
2. Depreciation: Plant & Machinery @ 20%; Office Furniture @ 10%; Vehicle @ 20%.
3. Manufacturing Wages Rs 1890 and Office salaries Rs 1200 are outstanding.
4. Interest on Bank Loan is outstanding for 6 months.
5. Electricity Bill Expenses are prepaid by Rs 710
6. Write off Rs 500 as Bad Debts and Provide Rs 8000 on Trade Receivables for doubtful
debts.
7. Provide for taxes amounting to Rs 20000.
Q 2 The Authorized Capital of Rainbow Ltd is Rs 500000 divided in 50000 equity shares of Rs
10 each .The following was the Trial Balance of Rainbow Ltd as on March 31, 2015:

Particulars Amount Amount

Non-Current Investment in shares 50000
Purchases 490500
Selling Expenses 79100
Stock-Opening 145200
Salaries & Wages 61000
Cash in Hand 12000
Interest on Bank Overdraft 7800
Interest on Debentures up to 30/09/14 3750
Trade Receivables & Trade Payables 91600 87850
Property 350000
Furniture 35000
Equity share capital fully paid up 400000
5% mortgage debentures secured on Freehold properties 150000
Income Tax paid in advance 10000
Dividends Received 4250
Profit & Loss a/c 28500
Sales(net) 670350
Bank overdraft secured by hypothecation of stock, Receivables 150000
Technical know how 150000
Audit fees 5000
Total 1490950 1490950

You are required to prepare Income statement for the year end and a Balance Sheet as at that date
after considering the following:
1. Closing Stock was valued at Rs 142500.
2. Depreciation on Furniture to be charged at 10% on written down value.
3. Interest on debentures for the remaining part of year ending 31-03-2015 is outstanding.
4. Provide provision for taxation Rs 4000.
5. Technical knowhow fee is to be written off over a period of 10 years.
6. Salaries and Wages include Rs 10000 as prepaid salary.
7. Provision for Bad debts 2% of trade receivables after charging Rs 2000 as Bad debts.
Q 3 The authorized Capital of Bee Ltd is Rs 500000 divided in 50000 shares of Rs 10 each.
following is the Trial Balance of Bee Ltd as on 31st March 2004:

Particulars Amount Amount

Stock-Opening 75000
Purchases of Raw Material 245000
Wages 30000
Carriage 950
Furniture 17000
Purchase returns 10000
Sales 340000
Discount 3000
Profit & Loss account 15000
Share Capital 100000
Salaries 7500
Rent 4000
Manufacturing expenses 7050
Electricity Expense 9000
Trade Receivables 32500
Plant & Machinery 29000
Cash at Bank 46200
Patents 4800
General Reserve 15500
Trade Payable 24500
Total 508000 508000

You are required to prepare Income statement for the year end and a Balance Sheet as at that date
after considering the following:
1. Stock as on 31st March 2004 is Rs 88000.
2. Provide for Income Tax at 20%.
3. Depreciate Plant & Machinery at 15%; Furniture at 10%; and Patents at 5%.
4. On March 31, 2004 outstanding rent amounted to Rs 800 and Salaries Rs 900.
5. Provide Rs 510 for doubtful debts.
Q4. Xeta Ltd is registered with Authorised capital of Rs 100, 00,000 divided into 1000000
shares of Rs 10 each. The following is the trial balance extracted as on 31st March, 2015:

Particulars Amount Amount

Building 3200000
Current Investments 376000
Furniture 144000
Cash in Hand & at bank 220000
Trade Receivable & Trade Payables 1876000 1222400
Repairs 34400
Purchases & Sales 8600000 13137800
Advertisement Expenses 101600
Carriage Inward 148000
Insurance Expenses 196000
General expenses 172000
Debenture Interest 280000
Advance to Directors 500000
Land 1700000
Plant & Machinery 5124000
Non-Current Investments 196000
Manufacturing Expenses 457000
Patents 395200
Goodwill 640000
Sales Return & Purchase Return 280000 200000
Audit Fee 40000
Salaries 928000
Stock Opening 1904000
Share Capital 8000000
General Reserve 600000
14% Debentures 4000000
Profit & Loss A/c 352000
Total 2751220 27512200
0

You are required to prepare Income statement for the year end and a Balance Sheet as at that date
after considering the following:
1. Stock as on 31.3.2015 – Rs 1768000.
2. The debentures were issued on 1st April, 2014 and the interest has been paid till Sep
30, 2014. Six Months Interest is outstanding.
3. Depreciation was to be provided as follows:
Building 5%; Plant & Machinery 15%; Furniture 10%.
4. Patents useful life is 10 years.
Q5. Following Trial Balance as at March 31, 2012 has been prepared from the Accounts Books
of Mahesh Foods Ltd. You are required to make an Income Statement and a Balance Sheet as on
that date after taking into consideration the additional information.

Particulars Amount Dr Amount Cr

Share Capital 2400000
Cash in Hand 37200
Repairs & Maintenance-Plant 51600
General Reserve 600000
P&L Account-past profits 1060000
Opening inventory 1602000
Plant & Machinery 2580000
Trade Payables 1840000
Land 480000
Furniture 73200
Trade Receivables 1040000
Rent 131800
Advance to Vendors 27600
Advances from Customers 300000
Power & Fuel 152800
Travelling & Conveyance – Sales Staff 94600
Auditors Fee 39000
Cash at Bank 248000
Advance to Staff 31800
Other Income 372600
Purchases 19020000
Sales 25380000
Building 444600
Salaries 5985000
Investments in Govt Securities 268400
Bank Overdraft – Indian Bank – Secured 400000
Bank Interest 45000
TOTAL 32352600 32352600

Additional Information:
1. The closing stock is valued at Rs 5250000.
2. Depreciation is to be charged, Plant & Machinery @ 14%; Furniture @ 18% and Building @
10%.
3. Create Provision for Bad Debts as 2% of Trade Receivables.
4. Prepaid Rent Rs 7500.
5. Other Income due but not received Rs 57500.
6. Provide for Income Tax @ 35%.
Q6. NOVA Manufacturing Co Ltd is registered with Authorized Capital of 200000 shares of Rs
10 each. Followings are the balances available as on March 31, 2020: (10 Marks)
PARTICULARS Amount PARTICULARS Amount
Stock Opening – Raw Material 250000 Share Capital 1600000
Non-Current Investment 150000 Sales 2025800
Sales Returns 80000 Purchase Returns 84000
Purchases of Raw Material 1164000 Trade Payables 116000
Carriage Inward 27800 Bank Loan – Long Term 40000
Rent Expenses 12000 8% Debentures 400000
Trade Receivables 540000 Dividend Received 15000
Interest on Bank Loan 4000
Advertisement Expenses 24000
Interest on Debentures 16000
Cash at Bank 21000
Furniture & Fittings 175000
Audit Fee 11400
Insurance Premium Expenses 7400
Travelling Expenses 7200
Cash in hand 115400
Salaries 137550
Wages 54050
Building 550000
Goodwill 84000
Plant & Machinery 850000
Total 4280800 Total 4280800

Prepare a Balance Sheet and Statement of Profit & Loss from the above data after taking into
consideration following additional information:

1. Closing Stock Rs 1042500.

2. Six months debenture interest is outstanding.
3. Depreciation – Building 2.5%; Plant & Machinery 2%
4. Dividend due but not received Rs 55000.
5. Prepaid Salaries Rs 30000.
Q7. Following Trial Balance as at March 31, 2020 has been prepared from the Accounts Books
of CICO STEELS Ltd. You are required to make Statement of Profit & Loss and a Balance Sheet
as on that date after taking into consideration the additional information.

Particulars Amount Amount

Share Capital 5000000
Cash in Hand 74400
Repairs & Maintenance-Plant 103200
General Reserve 3320000
Opening inventory 3204000
Plant & Machinery 5160000
Trade Payables 3680000
Land 1060000
Furniture 146400
Trade Receivables 2180000
Rent 263600
Advance to Vendors 55200
Advances from Customers 600000
Power & Fuel 305600
Travelling & Conveyance – Sales Staff 189200
Auditors Fee 78000
Cash at Bank 496000
Advance to Staff 63600
Other Income 745200
Purchases 38040000
Sales 50760000
Building 889200
Salaries 11970000
Investments in Govt Securities 536800
Bank Overdraft – Indian Bank – Secured 800000
Bank Interest 90000
TOTAL 64905200 64905200

Additional Information:
1. The closing stock is valued at Rs 13800000.
2. Depreciation – Plant & Machinery – 2.5%, Building – 2%.
3. Other Income due not received Rs 54800.
4. Provision for Bad debts 2% of trade receivables after charging Rs 2000 as Bad debts.
5. Provision for Taxation 20% of PBT.
Q 8 .The Calcutta Engineering Co Ltd has an authorized Capital of Rs 3000000 divided into
300000 shares of Rs 10 each. Company has issued 200000 shares @ Rs 10 each.

Particulars Amount(Dr) Amount(Cr)

Land & Building 900000
Plant & Machinery 1656000
Office Equipment 94000
Furniture & Fittings 85000
Patents & Trademark 25000
Cash in hand & Bank 155000
Non-Current Investments 98800
Motor Vehicles 30000
Trade Receivables 344000
Goodwill 160000
Trade Payables 306000
General Reserves 150000
P&L Account 115000
Bank overdraft 111800
Purchase and Returns 2400000 50000
Sales and Returns 70000 3778000
Advertising Expenses 25400
Legal Charges 10000
Carriage Inward 37000
salaries 232000
Rent 30000
Insurance Premium Expense 19000
Share Capital 2000000
6% Debentures of Rs 100 each 1000000
Opening stock 476000
Manufacturing Expenses 28000
Trade Expenses 15000
Repairs to Building 30000
Repairs to Machinery 5600
Sales & Distribution Expenses 35000
Advances to Vendors 700000
Other Income 150000
Total 7660800 7660800

Additional Information is available as follows:

1. Stock closing was Rs 542000.
2. Other Income due not received Rs 80000.
3. Debenture Interest outstanding for a year; Salary prepaid 30000; Insurance Premium Exp
prepaid Rs 9000.
4. Make a provision for Tax 20% of PBT.