Practice Worksheet

1..Prepare an accounting equation;

a) Commenced business with cash Rs. 50,000, furniture Rs. 25,000 .

b) opened a bank account in SBI 5,000

c) purchased goods Rs. 10,000 from Ramesh and paid half of the amount.

d) goods sold costing Rs. 4000 at a profit of 10%.

e) depreciate furniture by 10%

f) paid salaries Rs. 3000.

g) received commission Rs. 2000

ans: cash 43400, furniture 22500, bank 5000, stock 6000, capital 71900, creditor 5000

2. prepare bank reconciliation statement:

1. Prepare Bank Reconciliation statement on 31st March 2018 from the following
particulars:
i. R’s overdraft as per the Pass Book Rs.12,000 as on 31st March
ii. On 30th March, Cheques had been issued for Rs.70,000 of which cheques worth
Rs.3,000 only had been encashed up to 31st March.
iii. Cheques amounting to Rs.3,500 had been paid into the bank for collection but of
this only Rs.500 had been credited in the Pass Book.
iv. Bank has charged Rs.500 as interest on overdraft and the intimation of which has
been received on 2nd April 2018.
v. Bank Pass Book shows credit for Rs.1,000 representing Rs.400 Paid by debtor of
R direct into the Bank and Rs.600 collected directly by Bank in respect of interest
on R’s investment. R had no knowledge of these items.
vi. A cheque for Rs.200 has been debited in bank column of Cash Book by R, but it
was not sent to Bank at all. (ans76,300)
3. Prepare double column cash book:
Jan 2023
1 Cash in hand Rs 10,000, bank overdraft Rs.5,000
2 Goods sold to mr. X Rs 3,500
5 Purchased goods for cash Rs. 4,000
10 Deposited into bank Rs. 2000
14 Received cheque from X Rs. 3000 and discount allowed Rs. 500.
15 Salaries paid by cheque Rs, 1000
16 X’s cheque deposited into bank
25 Withdrew from bank : for office Rs. 1000 and for domestic use 500
Ans: cash balance 5000, bank overdraft 2500
4. Z ltd purchased a machinery of Rs 2,50,000 on 1st April 2020. On 1st July 2021
another machinery purchased worth rs. 50,000 . On 1st October 2022 first machinery
which was purchased on 1st april 2020 was sold for Rs 1,75, 500 and on the same
date another machinery was purchased for Rs. 10,000.Prepare Machinery account for
three years . Depreciation is charged at 10% p. a on written down value method.
Books of accounts are closed 31st march every year.( Ans: loss on sale 16875, balance
of 2nd machinery 41625, 3rd 9500)

5. On 1st April 2015 following balances are appearing in the books of accounts of R ltd.

Machinery A/c Rs. 500,000

Provision for depreciation A/c Rs. 1, 45,000
On 1st June 2015 a machinery costing Rs. 150,000 which was purchased on 1st august
2012 has been sold for Rs. 52, 500 and on the same date another machiney purchased
for Rs. 60,000. Prepare machinery a/c , provision for depreciation a/c and machinery
disposal a/c for the year ended 31st march 2016. If machinery is depreciated by 10%
on straight line method.
Ans: balance f machinery a/c 4,10,000, balance provision for depreciation a/c
145,000, loss on sale 55000.
6. Pass rectifying journal entries:
a) Purchases book was carried forward as Rs 1,220 instead of Rs
1,120.
b) Sales return book undercast by Rs 300
c) Goods sold to Manohar for Rs 550 was recorded as Rs 5,500
d) Sales to X Rs 500 were posted to Y ’s account
e) A credit sale of Rs. 2100 to Manish was recorded as sales to sunil.
f) A credit sale of Rs. 24,00 to Anup was recorded as sale to Tanuj as
Rs 4200.
g) . A sum of Rs. 500 collected from singh a debtor, whose dues were
already written off as bad debt, was posted to the credit of singh
account
h) A sum of Rs. 350 owed by ravi was included in the list of sundry
creditors.
i) A credit sale of rs. 1700 to Mohan was recorded in the purchases
book.
7. A) Classifythe following into current assets, non current assets , liquid assets,
current liability , non current liability:
Cash, furniture, goodwill, bank overdraft, debenture, bank loan for 6 months,
prepaid rent, unearned commission, outstanding interest, accrued interest on
investment, stock, bank, bank loan for 36 months, land and building, plant and
machinery, bills payable, bills receivable. Debtors, creditors.

b) calculate closing stock and cost of goods sold.

Opening stock rs 5000, sales Rs 16,000, carriage inward Rs 1000, sales return
Rs 1000, purchases Rs 10,000 purchase return Rs 600. Gross profit 6,000.
Ans cogs 9000, closing stock Rs. 6400
8. following balances have been taken from the trial balance of M/s Runway Shine Ltd.
Prepare a trading and P & L account and a balance sheet as of March 31, 2017.

Account Title Amount Account Title Amount

₹
₹

Purchases 1,50,000 Sales 2,50,000

Opening stock 50,000 Return outwards 4,500

Return inwards 2,000 Interest received 3,500

Carriage inwards 4,500 Discount received 400

Cash in hand 77,800 Creditors 1,25,000

Cash at bank 60,800 Bill payable 6,040

Wages 2,400 Capital 1,00,000

Printing and Stationery 4,500

Discount 400

Bad debts 1,500

Insurance 2,500

Investment 32,000

Debtors 53,000

Bills receivable 20,000

Postage and Telegraph 400

interest 200
commission 1,000

Repair 440

Lighting Charges 500

Telephone charges 100

Carriage outward 400

Motor car 25,000

4,89,440 4,89,440

Adjustments

1. Further bad debts ₹ 1,000. and make a provision on debtors @ 5%.

2. Interest received on investment @ 5%.
3. Wages and repairs outstanding ₹ 100 and ₹ 200, respectively.
4. Depreciation charged on motor car @ 5% p.a.
5. Closing Stock ₹ 32,500.
6. Commission paid in advance Rs.500
Ans gross profit 78000, net profit 63510, balance sheet 296750

9.From the following information, prepare the trading and profit and loss account for M/s
Indian sports house for the year ending March 31, 2017.

Account Title Amount Account Title Amount

₹
₹

Drawings 20,000 Capital 2,00,000

Sundry debtors 80,000 Return outwards 2,000

Bad debts 1,000 15% loan( 1st july 2016) 12,000

Trade Expenses 2,400 Provision for bad debts 4,000

Printing and Stationery 1000 Sundry creditors 60,000

Interest on loan 1000

Rent Rates and Taxes 5,000 Bills payable 15,400

Freight 4,000 Sales 2,76,000

Return inwards 7,000

Opening stock 25,000

Purchases 1,80,000

Furniture and Fixture 20,000

Plant and Machinery 1,00,000

Bills receivable 14,000

Wages 10,000

Cash in hand 6,000

Discount allowed 2,000

Investments 40,000

Motor car 51,000

5,69,400 5,69,400

The closing stock was valued at ₹ 45,000. where as its net realisable value id Rs 50,000
1. Provision for doubtful debts is maintained at 2% of debtors.
2. Depreciation is charged on: furniture and fixture at 5%, plant and machinery at 6%
and motor cars at 10%.
3. Goods worth Rs. 5000 distributed as free sample

4. The manager is entitled to receive a commission of 10% of the net profit before
charging such a commission.
Ans gross profit 102000, net profit 67095, balance sheet 3,42,300

10. Manveer started a business on April 01 2016, with a capital amounting to

Rs. 4 50,000. On March 31, 2017, his firm’s position was as below :
Cash Rs 99000, bills receivable Rs 75,000, plant Rs 48,000, Furniture and Fixtures rs
1,80,000, Debtor Rs 50,000.

He borrowed Rs 45,000 from his friend Susheel on that date. He withdrew ₹ 8,000 per
month for household purposes and invested additional capital Rss 20,000. Furniture is
depreciated by 10%. Ascertain the profit or loss for this year ended March 31, 2017.

Ans closing capital 389000, profit 15,000

9. Pass necessary journal entries:

a) Pass journal entries for the following transactions in the books of Sahil Ltd. assuming
that both parties belong to the same state and CGST @6% and SGST @6% are levied:
1. Purchased goods for ₹1,80,000 from Akanksha & Co.
2. Sold goods for ₹3,50,000 to Nupur Store.
3. Returned goods to Akanksha & Co. for ₹20,000.
4. Nupur Store returned goods for ₹16,000.
5. Paid for Printing and Stationary ₹10,000.
6. Goods withdrawn by the proprietor for personal use ₹40,000.
7. Goods destroyed by fire ₹30,000.
b) i) salaries paid Rs. 5000 out of this 2000 is relayed to next year.
ii) commission received Rs 500
iii) On 1st April 2023, Vinod started business with cash ₹1,00,000, furniture ₹2,00,000, and
Building ₹10,00,000.
iv) On 1st April 2023, Mohan’s Books of Account shows Cash ₹16,000, Stock ₹54,000,
Debtors 47000 furniture 42000 creditiors 37000
v) Sold goods to Ankit for ₹30,000 at a cash discount of 10% and received a cheque for
the full amount deposited into the bank the same day.

Vi the Bank charged interest for ₹500.

Vii) Machinery bought for ₹5,00,000 and paid ₹25,000 for its installation.
Viii Goods worth ₹3,00,000 were destroyed by fire, and the insurance company paid a
claim for 60% amount.