Grade XI. Accountancy Important Questions. (Financial Statements) #GrowWithGreen

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1 Grade XI Accountancy Important Questions (Financial Statements) #GrowWithGreen

2 Q.1 Show the treatment of Depreciation in the final accounts of the business. The following is an extract of the Trial Balance. Extract of Trial Balance Debit Credit Plant 12,000 Furniture 34,000 Provision for Depreciation on Furniture 2,500 Additional Information: (a) Depreciation on plant was 5% p.a. (b) Depreciation on furniture was 10% p.a. Q.2 From the given below information, calculate the amount of provision for discount on debtors. Also show the relevant items in the final accounts. Extract of Trial Balance Debit Credit Debtors 60,000 Bad Debts 6,000 Provision for Doubtful Debts 2,500 Additional Information: Further bad debts amounted to Rs 5,000. Provision for doubtful debts is to be 5% on Debtors. Create a provision for discount on 8%. Q.3 The stock of goods worth Rs 50,000 was damaged due to fire. The stock was insured by an insurance company. Record the amount of goods lost in the final accounts under different situations given below. Case 1: If the insurance company does not accept the claim of goods lost Case 2: If the insurance company accepts claim of only 40% of goods lost Case 3: If the insurance company accepts the full claim of goods lost Q.4 Use the following information to answer the next question. Purchases Rs 60,000, Opening Stock Rs 25,000, Closing Stock Rs 55,000, Discount (Cr.) Rs 500, Establishment Expenses Rs 500, Freight Rs 3,000, Salaries & Wages Rs 300, Dividend on shares Rs 4,000, Trade Expenses Rs 500, Apprenticeship Premium Rs 3,000. Calculate net profit if rate of gross profit on sale is 25%.

3 Q.5 The following is the Trial Balance of Mr. Jagmohan Lal. You are required to prepare his Financial Statements; Trading Account, and the after considering the adjustments for the year ending 31 March, Trial Balance as on March 31, 2017 Cr. Rs Rs Customer s Accounts 1,32,000 Sales 3,05,000 Purchases 2,38,000 Supplier s Accounts 70,000 Carriage 8,000 Bills Payable 1,500 Stock on April 01, ,000 Capital 2,16,000 Loose Tools 45,000 Rent 400 Leasehold Land(acquired on Apr 1,20,000 10% Bank Loan on Oct. 01, ,000 01, 2016) Discount 8,700 Apprentice Premium 4,000 Cash at Bank 15,000 Provision for Bad Debts 1,600 Fuel, Power and Lighting 5,000 Municipal Taxes 16,500 Wages and Salaries 20,000 Printing and Stationery 2,400 Goods taken by Proprietor for 7,000 Personal use Mr. Aakash 1,500 Income Tax Paid 5,500 Trade Expenses 2,400 Bad Debts 1,000 Interest on Loan 2,500 6,58,500 6,58,500 Additional Information: a. Closing Stock valued at Rs 45,000 b. Municipal Taxes are paid till June 30, c. Further Bad Debts of Rs 500. A Provision for 5% is to be maintained on Debtors. Also, a Provision for discount on debtors should be provided for 2%.

4 d. Remuneration of Rs 1,500 paid to Mr. Aakash was debited to his personal account and it is yet to be corrected. e. Leasehold Land acquired had an unexpired lease of 10 years. f. Unexpired Apprentice Premium is Rs 200. Solutions A.1 Assets Depreciation on: Plant 12,000 Plant 600 Less: Depreciation (600) 11,400 Furniture 3,400 Furniture 34,000 Less: Prov. for Dep. 5,900 28,100 A.2 Assets Bad Debts 6,000 Debtors 60,000 Add: Further Bad Debts 5,000 Less: Further Bad Debts (5,000) Add: New Provision for 2,750 Less: New Provision for (2,750) Doubtful Debts Doubtful Debts Less: Old Provision for Doubtful Debts (2,500) 11,250 Less: Provision for Discount on Debtors (4,180) 48,070 Provision for Discount on Debtors 4,180 Working Notes: Calculation of Provision for Discount on Debtors Rate Provision for Discount on Debtors = of Good Debtors = 52,250 Rs 4, Calculation of of Good Debtors Debtors 60,000 Less: Further Bad Debts (5,000) Less: New Provision for Doubtful Debts* (2,750) of Good Debtors 52,250

5 Rate 5 *New Provision for Doubtful Debts = of Debtors = (60,000 5,000) Rs 2, Note 1: Provision for doubtful debts is created on the debtors after deducting the amount of further bad debts. Note 2: Provision for discount on debtors is created on the amount of good debtors i.e. after deducting the amount of further bad debts and also the new provision for doubtful debts. A.3 Case 1: If the insurance company does not accept the claim of goods lost Trading Account Cr. Goods lost by fire 50,000 Goods lost by fire 50,000 Case 2: If the insurance company accepts claim of only 40% of goods lost Trading Account Cr. Goods lost by fire 50,000 Goods lost by fire 50,000 Less: Claim Received (20,000) 30,000 Liabilities Assets Current Assets Claim due from Insurance Co. 20,000 Case 3: If the insurance company accepts the full claim of goods lost Trading Account Cr. Assets Goods lost by fire 50,000 Current Assets Claim due from Insurance Co. 50,000

6 A.4 Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses Closing Stock = 25, , ,000 55,000 = Rs 33,000 Rate of gross profit on sale 25% (given) Gross Profit on cost = 1 3 ( 1 of sale = of cost ) 1 Gross Profit 33,000 = 11,000 3 Net Profit = Gross Profit Indirect Expenses + Indirect Incomes = 11, , ,000 = Rs 17,200 A.5 Financial Statement of Mr. Jagmohan Lal Trading Account for the year ended March 31, 2017 Cr. Opening Stock 28,000 Sales 3,05,000 Purchases 2,38,000 Closing Stock 45,000 Wages and Salaries 20,000 Add: Remuneration to Mr. 1,500 21,500 Aakash Carriage 8,000 Fuel, Power and Lightening 5,000 Gross Profit (Balancing Figure) 49,500 3,50,000 3,50,000 for the year ended March 31, 2017 Cr.

7 Discount Allowed 8,700 Gross Profit 49,500 Municipal Taxes 16,500 Rent 400 Less: Prepaid taxes (3,300) 13,200 3 Apprentice Premium 4,000 (16,500 ) 15 Printing and Stationery 2,400 Less: Unexpired 200 3,800 Bad Debts 1,000 Add: Further bad-debts 500 Add: New Provision for 6,575 Bad Debts Less: Old Provision for 6,475 (1,600) Bad Debts Interest on Loan 2,500 Add: Outstanding Interest 500 3,000 Discount on Debtors 2,499 Trade Expenses 2,400 Depreciation on Leasehold Land 12,000 Net Profit (Balancing Figure) 3,026 53,700 53,700 as on March 31, 2017 Liabilities Assets Capital 2,16,000 Fixed Assets Add: Net Profit 3,026 Leasehold Land 1,20,000 Less: Drawings (12,500) 2,06,526 Less: Depreciation (12,000) 1,08,000 Loose Tools 45,000 10% Bank Loan 60,000 Current Assets Add: Outstanding ,500 Interest Closing Stock 45,000 Current Liabilities Debtors 1,32,000 Creditors 70,000 Less: Further Bad debts (500) Bills Payable 1,500 Less: Provision for bad (6,575) and doubtful debts Unexpired Apprentice Premium 200 Less: Discount on (2,499) 1,22,426

8 Debtors Prepaid Municipal Taxes 3,300 Cash at Bank 15,000 3,38,726 3,38,726 Working Notes: Calculation of Interest on Loan for 6 months= of Loan = 60, = Rs 3, Calculation of Outstanding Interest on Loan Interest on Loan due = 3,000 Less: Interest already Paid = 2,500 Interest Outstanding on Loan = Rs 500

INTERNATIONAL INDIAN SCHOOL RIYADH

INTERNATIONAL INDIAN SCHOOL RIYADH ACCOUNTANCY WORK SHEET 8 CLASS 11 CHAPTER: FINANCIAL STATEMENTS Q.1 Find out (a) Cost of goods sold (b) Closing Stock. Opening Stock 15,000 Sales 1350,000 Purchases 1050,000