Average Due Date

1. The followings are the amounts due on different dates in between the same parties:

Amount Due Date

`
500 3rd July
800 2nd August
1,000 11th September
Suggest a date on which all the bills may be paid out without any loss of interest to either party.(Module)
2. The following amounts are due to X by Y. Y wants to pay off (a) on 18th March or (b) on 14th July. Interest rate of
8% p.a. is taken into consideration.

Due Dates `
10th January 500
26th January (Republic Day) 1,000
23rd March 3,000
18th August (Sunday) 4,000

Determine the amount to be paid in (a) and in (b). (Module)

3. Calculate Average Due date from the following information:

Date of the bill Term Amount

`
August 10, 2015 3 months 6,000
October 23, 2015 60 days 5,000
December 4, 2015 2 months 4,000
January 14, 2016 60 days 2,000
March 14, 2016 2 months 3,000
(Assume February of 28 days) (Module)
4. A trader having accepted the following several bills falling due on different dates, now desires to have these bills
cancelled and to accept a new bill for the whole amount payable on the average due date :

Sl. Date of bill Amount Usance of the bill

No.
1 1st March 2016 400 2 months
2 10th March 2016 300 3 months
3 5th April 2016 200 2 months
4 20th April 2016 375 1 month
5 11th May 2016 500 2 months
You are required to find the said average due date. (Module)

5. Two traders X and Y buy goods from one another, each allowing the other one month’s credit. At the end
of 3 months the accounts rendered are as follows:

Goods sold by X to Y Goods sold by Y to X

` `
April 18 60.00 April 23 52.00
 May 15 70.00 May 24 50.00
June 17 80.00
Calculate the date upon which the balance should be paid so that no interest is due either to X or Y.(Module)

6. Manoj had the following bills receivables and bills payable against Sohan. Calculate the average due date, when
the payment can be received or made without any loss of interest.

Date Bills Receivable Tenure Date Bills Payable Tenure

` `
01/06/2016 3,000 3 month 29/05/2016 2,000 2 month
05/06/2016 2,500 3 month 03/06/2016 3,000 3 month
09/06/2016 6,000 1 month 9/06/2016 6,000 1 month
12/06/2016 1,000 2 month
20/06/2016 1,500 3 month
15 August, 2016 was a Public holiday. However, 6 September, 2016 was also declared as sudden holiday.
(Module)

7. Mr. Green and Mr. Red had the following mutual dealings and desire to settle their account on the average due
date:

Purchases by Green from Red: `

6th January, 2016 6,000
2nd February, 2016 2,800
31st March, 2016 2,000
Sales by Green to Red
6th January, 2016 6,600
9th March, 2016 2,400
20th March, 2016 500
You are asked to ascertain the average due date. ( 28 days in feb.) (Module)

8. ` 10,000 lent by Dass Bros. to Kumar & Sons on 1st January, 2011 is repayable in 5 equal annual instalments
commencing on 1st January, 2012. Find the average due date and calculate interest at 5% per annum, which
Dass Bros. will recover from Kumar & Sons. (Module)
9. A and B, two partners of a firm, have drawn the following amounts from the firm in the year ending 31st March,
2015:

A Date B
Date
` `
1st July 500 12th June 1,000
th th
30 September 800 11 August 500
st th
1 November 1,000 9 February 400
28th February 400 7th March 900
Interest at 6% p.a. is charged on all drawings. Calculate interest chargeable by using (i) ordinary system

(ii) Average due date system. (assume 1 year = 365 days) (Module)

10. Mr. Yash and Mr. Harsh are partners in a firm. They had drawn the following amounts from the firm
during the year ended 31.03.2016:
Date Amount Drawn by
` `
 01.05.2015 75,000 Mr. Yash
02.07.2015 20,000 Mr. Yash
15.08.2015 60,000 Mr. Harsh
31.12.2015 50,000 Mr. Harsh
04.03.2016 75,000 Mr. Harsh
31.03.2016 15,000 Mr. Yash

Interest is charged @ 10% p.a. on all drawings. Calculate interest chargeable from each partner by using
Average due date system. (Consider 1st May as base date) (Module)
11. Anand purchased goods from Amirtha, the average due date for payment in cash is 10.08.2016 and the
total amount due is ` 67,500. How much amount should be paid by Anand to Amirtha, if total payment is
made on following dates and interest is to be considered at the rate of 12% p.a.
a. On average due date.
b. On 25th August, 2016.
c. On 30th July, 2016. (Module)
12. Calculate average due date from the following information: (RTP May-18)
Date of bill Term Amount (`)
1st March, 2017 2 months 4,000
10th March, 2017 3 months 3,000
5th April, 2017 2 months 2,000
23rd April, 2017 1 months 3,750
10th May, 2017 2 months 5,000

13. Mehnaaz accepted the following bills drawn by Shehnaaz. On 8th March, 2018 ` 4,000 for 4 months.
On 16th March, 2018 ` 5,000 for 3 months.
On 7th April, 2018 ` 6,000 for 5 months.
On 17th May, 2018 ` 5,000 for 3 months.
He wants to pay all the bills on a single day. Find out this date. Interest is charged @ 18% p.a. and
Mehnaaz wants to save ` 157 by way of interest. Calculate the date on which he has to effect the
payment to save interest of ` 157. (RTP Nov-18 & RTP Nov-19)
14. Ram purchases goods on credit. His due dates for payments were as under:
Transaction ` Due Date
Date
March 5 300 April 08
April 15 200 May 18
May 10 275 June 13
June 5 400 July 10

Calculate Average due date. (RTP May-19)

15. Kiran had accepted bills payable to Heena, falling due on different dates. The details of bills are as
follows:
Date of bill Amount Usance of bill
9th April 2018 ` 3,000 for 4 months
18th April 2018 ` 5,500 for 3 months
25th May 2018 ` 3,000 for 6 months
5th June 2018 ` 6,000 for 3 months
 On 1st July, it was agreed that these bills should be withdrawn and that Kiran should accept on that
day two bills, one for ` 10,000 due in 4 months and the other for the balance with interest, due in 6
months. Calculate the amount of the second bill taking interest @ 10% p.a. Take 365 days in year
2018-2019. (RTP May-20)
16. From the following details calculate the average due date: (RTP May-21)
Date of Bill Amount (`) Usance of Bill
28th January, 2020 2,500 1 month
20th March, 2020 2,000 2 months
12th July, 2020 3,500 1 month
10th August, 2020 3,000 2 months
17. Calculate average due date from the following information: (RTP Nov-21)
Date of bill Term Amount (`)
1st March, 2021 2 months 20,000
10th March, 2021 3 months 15,000
5th April, 2021 2 months 10,000
23rd April, 2021 1 months 18,750
10th May, 2021 2 months 25,000
18. Sunder purchases goods on credit. His due dates for payments were as under:
Transaction Date ` Due Date
March 5 1,200 April 08
April 15 800 May 18
May 10 1,100 June 13
June 5 1,600 July 10
Calculate Average due date. (RTP May-2022)
19. Mr. Alok owes Mr. Chirag ` 650 on 1st January 2018. From January to March, the following further
transactions took place between Alok and Chirag
January 15 Alok buys goods ` 1,200
February 10 Alok buys goods ` 850
March 7 Alok received Cash loan ` 1,500
Alok pays the whole amount on 31st March, 2018 together with interest @ 6% per annum. Calculate the
interest by average due date method. (May-18)
20. Karan purchased goods from Arjun, the average due date for payment in cash is 10.08.23018 and the total
amount due is ` 1,75,800. How much amount should be paid by Karan to Arjun, if total payment is made
on following dates and interest is to be considered at the rate of 15% p.a.
a. On average due due
b. On 28th August, 2018
c. On 29th July, 2018 (Nov-18 & RTP Nov-22)
21. Two Traders Yogesh and Yusuf buy goods from one another, each allowing the others, one month's credit.
At the end of 3 months the accounts rendered are as follows:
Goods sold Goods sold
by Yogesh to by Yusuf to
Yusuf Yogesh
(`) (`)
 April,18 12,000 April, 23 10,600
March, 15 14,000 May, 24 10,000
June, 16 16,000
Calculate the date upon which the balance should be paid so that no interest is due either to Yogesh or Yusuf.
(May-19)
22. The following amounts are due to X by Y. Y wants B to pay on 10th July,2019. Interest rate of 9% p.a. is
taken into consideration.
Due dates `
10th January 750
26th January (Republic Day) 1,200
23rd March 3,300
18th August (Sunday) 4,100
Determine average due date and the amount to be paid on 10th July, 2019. Assume 10th January as base
date. (Nov-19)
23. Rakesh had the following bills receivable and bills payable against Mukesh.
Date Bills Tenure Date Bills Payable Tenure
Receivable
1st June 3,400 3 month 29th May 2,500 2 month
5th June 2,900 3 month 3rd June 3,400 3 month
9th June 5,800 1 month 9th June 5,700 1 month
th
12 June 1,700 2 month
th
20 June 1,900 3 month
15 August was a public holiday. However, 6th September, was also declared as sudden holiday.
th

Calculate the average due date, when the payment can be received or made without any loss of interest to either
party.(Nov-20)
24. Mahesh had the following bill receivables and bills payables against Rajesh. Calculate the average due date, when the
payment can be received or made without any loss of interest.
Date Bills Tenure Date Bills Tenure
Receivable Payable
12-06-20 5,000 3 months 27-05-20 3,700 3 months
10-07-20 6,200 1 month 07-06-20 4,000 3 months
15-07-20 3,500 3 months 10-07-20 5,000 1 month
12-06-20 1,500 2 months
28-06-20 2,500 2 months
15th August, 2020 was Public holiday. However, 10th September, 2020 was alsosuddenly declared as holiday.
(Jan-21)
25. Ramesh lent ` 1,50,000 to Deepak on 1st January, 2016 at the rate of 12% per annum.The loan is repayable as under:
a. ` 10,000 on 1st January, 2017
b. ` 20,000 on 1st January, 2018
c. ` 30,000 on 1st January, 2019
d. ` 40,000 on 1st January, 2020
 e. ` 50,000 on 1st January, 2021
You are required to determine the average due date for settling all the above installments by a single payment and compute
interest. (July-21)
26. Define Average Due Date. List out the various instances when Average Due Date can be used.(IPCC- Practice
Manual)
Answer-In business enterprises, a large number of receipts and payments by and from a single party
may occur at different points of time. To simplify the calculation of interest involved for such
transactions, the idea of average due date has been developed. Average Due Date is a break even
date on which the net amount payable can be settled without causing loss of interest either to the
borrower or the lender.
Few instances where average due date can be used:
(i) Calculation of interest on drawings made by the proprietors or partners of a business firm at several
points of time.
(ii) Settlement of accounts between a principal and an agent.
(iii) Settlement of contra accounts, that is, A and B sell goods to each other on different dates.
27. E owes to F the following amounts:
` 5,000 due on 10th March, 2011
` 18,000 due on 2nd April, 2011
` 60,000 due on 30th April, 2011
` 2,000 due on 10th June, 2011
He desires to make the full payment on 30th June, 2011 with interest at 10% per annum after the average due
date. Find out the average due date and the amount of interest. (IPCC- Practice Manual)
28. Calculate average due date from the following informations: . (IPCC- Practice Manual)
Date of bill Term Amount (`)
1st March, 2011 2 months 4,000
10th March, 2011 3 months 3,000
5th April, 2011 2 months 2,000
20th April, 2011 1 months 3,750
10th May, 2011 2 months 5,000
29. ‘A’ lent ` 25,000 to ‘B’ on 1st January, 2011. The amount is repayable in 5 half-yearly installments
commencing from 1st January, 2012. Calculate the average due date and interest @ 10% per annum.
(IPCC- Practice Manual)
30. Calculate average due date from the following information: (IPCC- Practice Manual)
Date of bill Term Amount (`)
16th August, 2010 3 months 3,000
20th October, 2010 60 days 2,500
14thDecember, 2010 2 months 2,000
24th January, 2011 60 days 1,000
06th March, 2011 2 months 1,500

31. A trader allows his customers, credit for one week only beyond which he charges interest @ 12%
per annum. Anil, a customer buys goods as follows:
Date of Sale/Purchase Amount (`)
January 2, 2012 6,000
 January 28, 2012 5,500
February 17, 2012 7,000
March 3, 2012 4,700
Anil settles his account on 31st March, 2012. Calculate the amount of interest payable by Anil using average
due date method. (IPCC- Practice Manual)
32. From the following details find out the average due date: (IPCC- Practice Manual)
Date of Bill Amount Usance of
(`) Bill
29 January, 2012
th 5,000 1 month
20th March, 2012 4,000 2 months
12th July, 2012 7,000 1 month
10 August, 2012
th 6,000 2 months
33. A and B are partners in a firm and share profits and losses equally. A has withdrawn the following sum
during the half year ending 30th June 2012:
Date Amount (`)
January 15 5,000
February 10 4,000
April 5 8,000
May 20 10,000
June 18 9,000
Interest on drawings is charged @ 10% per annum. Find out the average due date and calculate the interest
on drawings to be charged on 30 th June 2012.(IPCC- Practice Manual)
34. Mr. Black accepted the following bills drawn by Mr. White
Date of Bill Period Amount (`)
09-03-2011 4 months 4,000
16-03-2011 3 months 5,000
07-04-2011 5 months 6,000
18-05-2011 3 months 5,000
He wants to pay all the bills on a single date. Interest chargeable is @ 18% p.a. and Mr. Black
wants to earn ` 150 on account of interest payment. Find out the date on which he has to effect the
payment to earn interest of ` 150. Base date to be taken shall be the earliest due date. (IPCC- Practice
Manual)
35. T owes to K the following amounts:
` 7,000 due on 15th March, 2012
` 12,000 due on 5th April, 2012
` 30,000 due on 25th April, 2012
` 20,000 due on 11th June, 2012
He desires to make the full payment on 30th June, 2012 along with interest @ 10% per annum after the
average due date. Find out the average due date and the amount of interest. Amount of interest may be
rounded off to the nearest rupee. (IPCC- Practice Manual)
36. The following transactions took place between Thick and Thin. They desire to settle their account on
average due date.
Purchases by Thick from Thin (` )
9th July, 2013 7,200
 14th August, 2013 12,200
Sales by Thick to Thin (` )
15th July, 2013 18,000
31st August, 2013 16,500

Calculate Average Due Date and the amount to be paid or received by Thick. . (IPCC- Practice Manual)
37. Kishanlal has made the following sales to Babulal. He allows a credit period of 10 days beyond which
he charges interest @ 12% per annum.
Date of Sales Amount (`)
26.05.14 12,000
18.07.14 18,000
02.08.14 16,500
28.08.14 9,500
09.09.14 15,500
17.09.14 13,500
Babulal wants to settle his accounts on 30-9-2014. Calculate the interest payable by him using Average Due
Date (ADD). If Babulal wants to save interest of `588, how many days before 30.9.2014 does he have to
make payment? Also find the payment date in this case. (IPCC- Practice Manual)
38. From the following details, find out the average due date: (IPCC- Practice Manual)
Date of Bill Amount (`) Usance of Bill
29th January 2014 10,000 1 month
20th March 2014 8,000 2 months
12th July 2014 14,000 1 month
10th August 2014 12,000 2 months

39. Mr. Yash and Mr. Harsh are partners in a firm. They had drawn the following amounts from the firm during the
year ended 31.03.2015:

Date Amount (`) Drawn by

01.05.2014 75,000 Mr. Yash
30.06.2014 20,000 Mr. Yash
14.08.2014 60,000 Mr. Harsh
31.12.2014 50,000 Mr. Harsh
04.03.2015 75,000 Mr. Harsh
31.03.2015 15,000 Mr. Yash
Interest is charged @ 10% p.a. on all drawings. Calculate interest chargeable from each partner by using
Average due date system. (Consider 1st May as base date(IPCC- Practice Manual)
40. Anand purchased goods from Amirtha, the average due date for payment in cash is 10.08.2015 and the
total amount due is ` 67,500. How much amount should be paid by Anand to Amirtha, if total payment is
made on following dates and interest is to be considered at the rate of 12% p.a.
(a) On average due date.
(b) On 25th August, 2015. (c) On 30th July, 2015. (IPCC- Practice Manual)
 Sale or Approval Basis

1. CE sends goods to his customers on Sale or Return basis. The following transactions took place during 2016:

Sept. 15 Sent goods to customers on sale or return basis at cost plus 33 1/3 % ` 1,00,000
Oct. 20 Goods returned by customers ` 40,000
Nov. 25 Received letters of approval from customers ` 40,000
Dec . 31 Goods with customers awaiting approval ` 20,000
CE records sale or return transactions as ordinary sales. You are required to pass the necessary Journal Entries in
the books of CE assuming that accounting year closes on 31st December, 2016.(Module)

2. S. Ltd. sends out its goods to dealers on Sale or Return basis. All such transactions are, however, treated as actual
sales and are passed through the Day Book. Just before the end of the accounting year on 31.03.2016, 200 such
goods have been sent to a dealer at `250 each (cost ` 200 each) on sale or return basis and debited to his account. Of
these goods, on 31.03.2016, 50 were returned and 70 were sold while for the other goods, date of return has not
yet expired. Pass necessary adjustment entries on 31.03.2016. (Module)
3. Caly Company sends out its gas containers to dealers on Sale or Return basis. All such transactions are, however,
treated as actual sales and are passed through the Day Book. Just before the end of the financial year, 100 gas
containers, which cost them ` 900 each have been sent to the dealer on ‘sale or return basis’ and have been
debited to his account at `1,200 each. Out of this only 20 gas containers are sold at `1,500 each. You are required
to pass necessary adjustment entries for the purpose of Profit and Loss Account and Balance Sheet. (Module)
4. E Ltd. sends out its accounting machines costing ` 200 each to their customers on Sales or Return basis. All such
transactions are, however, treated like actual sales and are passed through the Day Book. Just before the end of
the financial year, i.e., on March 24, 2016, 300 such accounting machines were sent out at an invoice price of `
280 each, out of which only 90 accounting machines are accepted by the customers ` 250 each and as to the rest
no report is forthcoming. Show the Journal Entries in the books of the company for the purpose of preparing Final
Accounts for the year ended March 31, 2016. (Module)
5. A sends out goods on approval to few customers and includes the same in the Sales Account. On 31.3.2016, the
Trade receivables balance stood at `1,00,000 which included `7,000 goods sent on approval against which no
intimation was received during the year. These goods were sent out at 25% over and above cost price and were
sent to- Mr. X - ` 4,000 and Mr. Y - ` 3,000. Mr. X sent intimation of acceptance on 30th April and Mr. Y returned
the goods on 10th April, 2016. Make the adjustment entries and show how these items will appear in the
Balance Sheet on 31st March, 2016. Show also the entries to be made during April, 2016. Value of closing
Inventories as on 31st March, 2016 was `60,000. (Module)

6. A firm sends goods on sale or return basis. Customers having the choice of returning the goods within a
month. During May 2016, the following are the details of goods sent:
Date (May) 2 8 12 18 20 27
Customers P B Q D E R
Value (`) 15,000 20,000 28,000 3,000 1,000 26,000
Within the stipulated time, P and Q returned the goods and B, D, and E signified that they have accepted the
goods. Show in the books of the firm, the Sale or Return Account and Customer- P for Sale or Return Account
on 15th June, 2016. (Module)
7. On 31st December, 2016 goods sold at a sale price of ` 3,000 were lying with customer, Ritu to whom these
goods were sold on ‘sale or return basis’ were recorded as actual sales. Since no consent has been received
from Ritu, you are required to pass adjustment entries presuming goods were sent on approval at a profit of
cost plus 20%. Present market price is 10% less than the cost price.
(Module & RTP May-19)
8. X supplied goods on sale or return basis to customers, the particulars of which are as under
 Date of dispatch Party’s name Amount Remarks
`
10.12.2016 M/s. ABC 10,000 No information till 31.12.2016
12.12.2016 M/s. DEF 15,000 Returned on 16.12.2016
15.12.2016 M/s. GHI 12,000 Goods worth ` 2,000 returned on 20.12.2016
20.12.2016 M/s. DEF 16,000 Goods Retained on 24.12.2016
25.12.2016 M/s. ABC 11,000 Good Retained on 28.12.2016
30.12.2016 M/s. GHI 13,000 No information till 31.12.2016

Goods are to be returned within 15 days from the dispatch, failing which it will be treated as sales. The books
of ‘X’ are closed on the 31st December, 2016.
Prepare the following accounts in the books of ‘X’.
(a) Goods on “sales or return, sold and returned day books.
(b) Goods on sales or return total account. (Module ,RTP May -18 , RTP Nov-19 & RTP Nov-20)
9. Mr. Ganesh sends out goods on approval to few customers and includes the same in the Sales Account. On
31.03.2018, the Trade Receivables balance stood at ` 75,000 which included ` 6,500 goods sent on
approval against which no intimation was received during the year. These goods were sent out at 30% over
and above cost price and were sent to-
Mr. Adhitya ` 3,900 and Mr. Bakkiram ` 2,600.
Mr. Adhitya sent intimation of acceptance on 25th April, 2018 and Mr. Bakkiram returned the
goods on 15th April, 2018.
Make the adjustment entries and show how these items will appear in the Balance Sheet as on 31st
March, 2018. Show also the entries to be made during April, 2018. Value of Closing Inventories as on 31st
March, 2018 was ` 50,000.(RTP May-20)
10. X supplied goods on sale or return basis to customers, the particulars of which are as under:
Date of dispatch Party’s Amount ` Remarks
name
10.12.2019 M/s ABC Co. 10,000 No information till 31.12.2019
12.12.2019 M/s DEF Co 15,000 Returned on 16.12.2019
15.12.2019 M/s GHI Co 12,000 Goods worth ` 2,000 returned
on 20.12.2019
20.12.2019 M/s DEF Co 16,000 Goods Retained on 24.12.2019
25.12.2019 M/s ABC Co 11,000 Good Retained on 28.12.2019
30.12.2019 M/s GHI Co 13,000 No information till 31.12.2019
Goods are to be returned within 15 days from the dispatch, failing which it will be treatedas sales. The books of ‘X’ are closed
on the 31st December, 2019. Prepare the following account in the books of ‘X’.
Goods on “sales or return, sold and returned day books”.Goods on sales or return total account. (RTP Nov-20)

11. Ms. Madhu has supplied goods on sale or return basis to customers, the particulars ofwhich are as under.
Date of dispatch Party’s name Amount Remarks
`
01.03.2020 M/s. Piya 20,000 Awaiting approval from customers ason
31.03.2020
 08.03.2020 M/s. Riya 25,000 Returned on 16.03.2020
15.03.2020 M/s. Ciya 24,000 Goods worth ` 4,000 returned on
20.03.2020
19.03.2020 M/s. Diya 22,500 Goods accepted on 24.03.2020
25.03.2020 M/s. Tiya 18,250 Good accepted on 28.03.2020
30.03.2020 M/s. Bhavya 23,000 Awaiting approval from customers ason
31.03.2020

Goods are sent on the terms of 10 days return window from the date of dispatch, failing which it will be treated as sales. The
books of Madhu are closed on the 31st March, 2020.
Prepare the following accounts in the books of Madhu.
(a) Goods on “sales or return, sold and returned day books”.
(b) Goods on sales or return total account. (RTP May-21)
12. On 31st December, 2020 goods sold at a sale price of ` 6,000 were lying with customer, Sapna to whom these goods were sold on
‘sale or return basis’ were recorded as actual sales. Since no consent has been received from Sapna, you are required to
pass adjustment entries presuming goods were sent on approval at a profit of cost plus 20%. Present market price is 10% less
than the cost price. (RTP nov-21)
13. S Ltd. sells goods on Sale or Return basis. Customers having the choice of returning the goods within 15 days. During
April 2021, the following are the details of the goods sent:
Date of dispatch Party’s name Amount `
April 2 M/s G 20,000
4 M/s H 36,000
16 M/s I 50,000
20 M/s J 16,000
24 M/s K 42,000
28 M/s L 60,000
Within the stipulated time G and I returned the goods while H, J and K informed that theyhave accepted the
goods. Prepare the following in the books of ‘S’.
(i) Goods on “sales or return, sold and returned day books”.
(ii) Goods on sales or return total account. (RTP May-22)
14. Mr. Jai sends out goods on approval to few customers and includes the same in the Sales Account. On 31.03.2022,
the Trade Receivables balance stood at
` 1,50,000 which included ` 13,000 goods sent on approval against which no intimation was received during the year.
These goods were sent out at 30% over and above cost price and were sent to-
Mr. Narayan ` 7,800 and Mr. Ram ` 5,200.
Mr. Narayan sent intimation of acceptance on 25 th April,2022 and Mr. Ram returned the goods on 15th April, 2022.
Make the adjustment entries and show how these items will appear in the Balance Sheet as on 31st March,2022. Show also the
entries to be made during April,2022. Value of Closing Inventories as on 31st March,2022 was ` 1,00,000.(RTP Nov-22)
15. Mr. Badhri sends goods to his customers on Sale or Return. The following transactions took place during the
month of December 2017.
December 2nd - Sent goods to customers on sale or return basis at cost plus 25% -` 80,000
December 10th - Goods returned by customers ` 35,000
December 17th - Received letters from customers for approval ` 35,000 December 23rd - Goods with customers
 awaiting approval ` 15,000
Mr. Badhri records sale or return transactions as ordinary sales. You are required to pass the necessary Journal
Entries in the books of Mr. Badhri assuming that the accounting year closes on 31st Dec. 2017. (May-18)
16. Mr. Ganesh sends out goods on approval to few customers and includes the same in the Sales Account. On
31.03.2018, the Trade Receivables balance stood at ` 75,000 which included ` 6,500 goods sent on approval
against which no intimation was received during the year. These goods were sent out at 30% over and
above cost price and were sent to- Mr. Adhitya ` 3,900 and Mr. Bakkiram ` 2,600 Mr. Adhitya sent intimation
of acceptance on 25th April, 2018 and Mr. Bakkiram returned the goods on 15th April, 2018. Make the
adjustment entries and show how these items will appear in the Balance Sheet as on 31st March, 2018. Show
also the entries to be made during April, 2018. Value of Closing Inventories as on 31st March, 2018 was `
50,000.. (Nov-18)
17. A firm sends good on "Sale or Return basis. Customers have the choice of returning the goods within a month.
During May 2018, the following are the details of goods sent
Date (May) 2 8 12 18 20 27
Customers P B Q D E R
Value (`) 17,000 22,000 25,000 5,500 2,000 28,000
Within the stipulated time, P and Q returned the goods and B, D and E signified that they have accepted the
goods. Show in the books of the firm, the Sale or Return Account and Customer Q for Sale or Return Account as
on 15th June 2019. (Nov-19)
18. From the following information show the journal entries in the books of ABC Limitedfor the year ended 31st
March, 2020:
i. 100 units of goods costing ` 500 each sent to XYZ Limited on Sales or Return Basis @ ` 750 per unit. This transaction
was however treated as actual salesin the books of accounts.
ii. Out of the above 100 units, only 60 units were accepted by XYZ Limited during the year @ ` 700 per unit. No
information was received about acceptability of balance units by the year end.(Jan-21)
19. ABC Limited supplied goods on sale or return basis to customers.
Goods are to be returned within 15 days from the date of dispatch, failing which it is treated as sales. The books of BC
Limited are closed on 31st March, 2021. The particulars of the same are as under: (Jul-21)
Date of Dispatch Party Name Amount Remarks
10.03.2021 PQR 25,000 No information till 31.03 .2021
12.03.2021 DEF 15,000 Returned on 16.03.2021
15.03.2021 GHI 40,000 Goods worth ` 8,000 Returned on
20.03.2021
20.03.2021 DEF 10,000 Goods Retained on 24.03.2021
25.03.2021 PQR 22,000 Goods Retained on 28.03.2021
30.03.2021 XYZ 35,000 No information till 31.03.2021
 Bills of Exchange
1. Vijay sold goods to Pritam on 1st September, 2016 for `1,06,000. Pritam immediately accepted a
three months bill. On due date Pritam requested that the bill be renewed for a fresh period of two
months. Vijay agrees provided interest at 9% was paid immediately in cash. To this Pritam was
agreeable. The second bill was met on due date. Give Journal entries in the books of Vijay and Pritam.
(Module)
2. On 1st January, 2016, Ankita sells goods for `5,00,000 to Bhavika and draws a bill at three months for the
amount. Bhavika accepts it and returns it to Ankita. On 1st March, 2016, Bhavika retires her
acceptance under rebate of 12% per annum. Record these transactions in the journals of Ankita and
Bhavika. (Module)

3. Journalise the following transactions in K. Katrak’s books.

a. Katrak’s acceptance to Basu for `2,500 discharged by a cash payment of `1,000 and a new bill for the
balance plus `50 for interest.
b. G. Gupta’s acceptance for `4,000 which was endorsed by Katrak to M. Mehta was dishonoured. Mehta paid`20
noting charges. Bill withdrawn against cheque.
c. D. Dalal retires a bill for `2,000 drawn on him by Katrak for `10 discount.
d. Katrak’s acceptance to Patel for `5,000 discharged by Patel. Mody’s acceptance to Katrak for a similar
amount. (Module)
4. On 1st January, 2016, Vilas draws a bill of exchange for `10,000 due for payment after 3 months on
Eknath. Eknath accepts to this bill of exchange. On 4th March, 2016 Eknath retires the bill of
exchange at a discount of 12% p.a. You are asked to show the journal entries in the books of
Eknath.(Module)
5. On 1st January, 2016, Vilas draws a Bill of Exchange for `10,000 due for payment after 3 months on
Eknath. Eknath accepts to this bill of exchange. On 4th March, 2016. Eknath retires the bill of
exchange at a discount of 12% p.a. You are asked to show the journal entries in the books of
Vilas.(Module)

6. Mr. David draws two bills of exchange on 1.1.2016 for `6,000 and `10,000. The bills of exchange for
`6,000 is for two months while the bill of exchange for `10,000 is for three months. These bills are
accepted by Mr. Thomas. On 4.3.2016, Mr. Thomas requests Mr. David to renew the first bill with
interest at 18% p.a. for a period of two months. Mr. David agrees to this proposal. On 20.3.2016, Mr.
Thomas retires the acceptance for `10,000, the interest rebate i.e. discount being `100. Before the
due date of the renewed bill, Mr. Thomas becomes insolvent and only 50 paise in a rupee could be
recovered from his estate. You are to give the journal entries in the books of Mr. David. (Module)

7. Rita owed `1,00,000 to Siriman. On 1st October, 2016, Rita accepted a bill drawn by Siriman for the
amount at 3 months. Siriman got the bill discounted with his bank for `99,000 on 3rd October, 2016.
Before the due date, Rita approached Siriman for renewal of the bill. Siriman agreed on the
conditions that `50,000 be paid immediately together with interest on the remaining amount at 12%
per annum for 3 months and for the balance, Rita should accept a new bill at three months. These
arrangements were carried out. But afterwards, Rita became insolvent and 40% of the amount could
be recovered from his estate.Pass journal entries (with narration) in the books of
Siriman.(Module)

8. On 1st July, 2016 Gorge drew a bill for `1,80,000 for 3 months on Harry for mutual accommodation.
Harry accepted the bill of exchange. Gorge had purchased goods worth `1,81,000 from Jack on the
same date. Gorge endorsed Harry’s acceptance to Jack in full settlement. On 1st September, 2016,
Jack purchased goods worth `1,90,000 from Harry. Jack endorsed the bill of exchange received from
Gorge to Harry and paid ` 9,000 in full settlement of the amount due to Harry. On 1st October, 2016,
 Harry purchased goods worth `2,00,000 from Gorge. Harry paid the amount due to Gorge by cheque.
Give the necessary Journal Entries in the books of Harry and Gorge.(Module)

9. For the mutual accommodation of ‘X’ and ‘Y’ on 1st April, 2016, ‘X’ drew a four months’ bill on ‘Y’ for
`4,000. ‘Y’ returned the bill after acceptance of the same date. ‘X’ discounts the bill from his bankers
@ 6% per annum and remit 50% of the proceeds to ‘Y’. On due date ‘X’ is unable to send the amount
due and therefore ‘Y’ draws a bill for `7,000, which is duly accepted by ‘X’. ‘Y’ discounts the bill for `6,600
and sends `1,300 to ‘X’. Before the bill is due for payment ‘X’ becomes insolvent. Later 25 paise in a
rupee received from his estate. Record Journal entries in the books of ‘X’. (Module)

10. Anil draws a bill for `9,000 on Sanjay on 5th April, 2016 for 3 months, which Sanjay returns it to Anil
after accepting the same. Anil gets it discounted with the bank for ` 8,820 on 8th April, 2016 and
remits one-third amount to Sanjay. On the due date Anil fails to remit the amount due to Sanjay, but
he accepts a bill for `12,600 for three months, which Sanjay discounts it for ` 12,330 and remits ` 2,220
to Anil. Before the maturity of the renewed bill Anil becomes insolvent and only 50% was realized from
his estate on 15th October, 2016. Pass necessary Journal entries for the above transactions in the
books of Anil.(Module)

11. On 1st January, 2016, A sells goods for `10,000 to B and draws a bill at three months for the amount. B
accepts it and returns it to A. On 1st March, 2016, B retires his acceptance under rebate of 12% per annum.
Record these transactions in the journals of B.(Module)
12. A draws upon B three Bills of Exchange of ` 3,000, ` 2,000 and ` 1,000 respectively. A week later his first bill
was mutually cancelled, B agreeing to pay 50% of the amount in cash immediately and for the balance plus
interest `100, he accepted a fresh Bill drawn by A. This new bill was endorsed to C who discounted the
same with his bankers for `1,500. The second bill was discounted by A at 5%. This bill on maturity was returned
dishonoured (nothing charge being `30). The third bill was retained till maturity when it was duly met. Give
the necessary journal entries recording the above transactions in the books of A. (Module)
13. Journalize the following in the books of Don:
(i) Bob informs Don that Ray’s acceptance for Rs. 3000 has been dishonoured and noting charges are Rs. 40.
Bob accepts Rs. 1000 cash and the balance as bill at three months at interest of 10%. Don accepts from Ray
his acceptance at two months plus interest @ 12%p.a.
(ii) James owes Don ` 3,200; he sends Don’s own acceptance in favour of Ralph for ` 3,160; in full settlement.
(iii) Don meets his acceptance in favour of Singh for ` 4,500 by endorsing John’s acceptance for ` 4,450 in full
settlement.
(iv) Ray’s acceptance in favour of Don retired one month before due date, interest is taken at the rate of 6% p.a.
(Module)
14. Mr. B accepted a bill for ` 10,000 drawn on him by Mr. A on 1st August, 2017 for 3 months. This was for the
amount which B owed to A. On the same date Mr. A got the bill discounted at his bank for ` 9,800.On the
due date, B approached A for renewal of the bill. Mr. A agreed on condition that ` 2,000 be paid immediately
along with interest on the remaining amount at 12% p.a. for 3 months and that for the remaining balance B
should accept a new bill for 3 months. These arrangements were carried through. On 31st December, 2017,
B became insolvent and his estate paid 40%.Prepare Journal Entries in the books of Mr. A (RTP- May 18)
15. Prepare Journal entries for the following transactions in K. Katrak’s books.
a. Katrak’s acceptance to Basu for ` 2,500 discharged by a cash payment of ` 1,000 and a new bill for the
balance plus ` 50 for interest.
b. G. Gupta’s acceptance for ` 4,000 which was endorsed by Katrak to M. Mehta was dishonoured. Mehta
paid ` 20 noting charges. Bill withdrawn against cheque.
c. D. Dalal retires a bill for ` 2,000 drawn on him by Katrak for ` 10 discount.
d. Katrak’s acceptance to Patel for ` 5,000 discharged by Patel Mody’s acceptance to Katrak for a similar
amount. (RTP – Nov 18)
16. Rita owed `1,00,000 to Siriman. On 1st October, 2018, Rita accepted a bill drawn by Siriman for the amount
at 3 months. Siriman got the bill discounted with his bank for `99,000 on 3rd October, 2018. Before the
due date, Rita approached Siriman for renewal of the bill. Siriman agreed on the conditions that `50,000 be
paid immediately together with interest on the remaining amount at 12% per annum for 3 months and for
the balance, Rita should accept a new bill at three months. These arrangements were carried out. But
afterwards, Rita became insolvent and 40% of the amount could be recovered from his estate. Pass journal
entries (with narration) in the books of Siriman. (RTP- May 19)
17. Mr. B accepted a bill for ` 10,000 drawn on him by Mr. A on 1st August, 2017 for 3 months. This was for
the amount which B owed to A. On the same date Mr. A got the bill discounted at his bank for ` 9,800. On
the due date, B approached A for renewal of the bill. Mr. A agreed on condition that ` 2,000 be paid
immediately along with interest on the remaining amount at 12% p.a. for 3 months and that for the
remaining balance B should accept a new bill for 3 months. These arrangements were carried through. On
31st December, 2017, B became insolvent and his estate paid 40%. You are required to prepare Journal
Entries in the books of Mr. A.(RTP Nov-19)
18. On 1st January 2018, Akshay draws two bills of exchange for ` 16,000 and ` 25,000. The bill of exchange for `
16,000 is for two months while the bill of exchange for ` 25,000 is for three months. These bills are accepted
by Vishal. On 4th March, 2018, Vishal requests Akshay to renew the first bill with interest at 15% p.a. for a
period of two months. Akshay agreed to this proposal. On 25 th March, 2018, Vishal retires the acceptance for `
25,000, the interest rebate i.e. discount being ` 250. Before the due date of the renewed bill, Vishal becomes
insolvent and only 50 paisa in a rupee could be recovered from his estate. Show the Journal Entries (with
narrations) in the books of Akshay.(RTP May-20)

19. Rita owed `1,00,000 to Siriman. On 1st October, 2019, Rita accepted a bill drawn by Siriman for the amount at 3 months.
Siriman got the bill discounted with his bank for`99,000 on 3rd October, 2019. Before the due date, Rita approached Siriman
for renewal of the bill. Siriman agreed on the conditions that `50,000 be paid immediately together with interest on the
remaining amount at 12% per annum for 3 months and for the balance, Rita should accept a new bill at three months. These
arrangements were carried out. But afterwards, Rita became insolvent and 40% of the amount could be recovered from his estate.
Pass journal entries (with narration) in the books of Siriman. (RTP Nov-20)
20. Prepare Journal entries for the following transactions in Samarth’s books.
a. Samarth’s acceptance to Aarav for ` 1,250 discharged by a cash payment of ` 500 and a new bill for the balance plus ` 25
for interest.
b. G. Gupta’s acceptance for ` 4,000 which was endorsed by Samarth to Sahni wasdishonoured. Sahni paid ` 20 noting charges. Bill
withdrawn against cheque.
c. Harshad retires a bill for ` 5,000 drawn on him by Samarth for ` 20 discount.
d. Samarth’s acceptance to Patel for ` 19,000 discharged by Sandeep Chadha’sacceptance to Samarth for a similar
amount.(RTP May-21)
21. Prepare Journal entries for the following transactions in David’s books.
a. David’s acceptance to Samuel for ` 5,000 discharged by a cash payment of ` 1,000 and a new bill for the balance plus
` 100 for interest.
b. Samantha’s acceptance for ` 8,000 which was endorsed by David to Flex was dishonoured. Flex paid ` 50 noting charges.
Bill withdrawn against cheque.
c. Simon retires a bill for ` 2,000 drawn on him by David for ` 20 discount.
d. David’s acceptance to Ralph for ` 20,000 discharged by Ralph’s Kent’s acceptance to David for a similar amount.
(RTP Nov-21)
22. On 1st January 2021, Swapnil draws two bills of exchange for ` 32,000 and ` 50,000. The bill of exchange
for ` 32,000 is for two months while the bill of exchange for` 50,000 is for three months. These bills are
accepted by Vishal. On 4th March, 2021, Vishal requests Swapnil to renew the first bill with interest at 15% p.a.
for a period of two months. Swapnil agreed to this proposal. On 25th March, 2021, Vishal retires the
acceptance for ` 50,000, the interest rebate i.e. discount being ` 500. Before the due date of the renewed bill,
 Vishal becomes insolvent and only 50 paisa in a rupee could be recovered from his estate. Show the Journal
Entries (with narrations) in the books of Swapnil.(RTP May-2022)
23. Mr. Tanu accepted a bill for ` 1,00,000 drawn on him by Mr. Manu on 1st August,2021 for 3 months. This was for the
amount which Tanu owed to Manu. On the same date Mr. Manu got the bill discounted at his bank for ` 98,000.
On the due date, Tanu approached Manu for renewal of the bill. Mr. Manu agreed on condition that ` 20,000 be paid
immediately along with interest on the remaining amount at 12% p.a. for 3 months and that for the remaining balance
Tanu should accept a new bill for 3 months. These arrangements were carried through. On 31st December,2021, Tanu
became insolvent and his estate paid 40%. Prepare Journal Entries in the books of Mr. Manu.(RTP Nov-22)
24. On 1st January 2018, Akshay draws two bills of exchange for Rs. 16000 & Rs. 25000. The bill of exchange for Rs.
16000 is for two months while the bill of exchange for Rs. 25000 is for three months. These bills are accepted
by Vishal. On 4th March, 2018 Vishal requests Akshay to renew the first bill with interest @15% p.a. for a period
of two months. Akshay agreed to this proposal. On 25th March, 2018, Vishal retires the acceptance for Rs.
25000, the interest rebate i.e. discount being Rs. 250. Before the due date of the renewed bill, Vishal becomes
insolvent and only 50 paise in a rupee could be recovered from his estate. Show journal entries in the books of
Akshay. (May-2019)
25. Suresh draws a bill for `15,000 on Anup on 15th April, 2020 for 3 months, which is returned by Anup to Suresh after
accepting the same. Suresh gets it discounted with the bank for ` 14,700 on 18th April, 2020 and remits one-third amount to
Anup. On the due date Suresh fails to remit the amount due to Anup, but he accepts bill of ` 17,500 for 3 months, which
Anup discounts for ` 17,100 and remits
` 2,825 to Suresh. Before the maturity of the renewed bill Suresh becomes insolvent and only 50% was realized from his
estate on 31st October,2020. Pass necessary Journal entries for the above transactions in the books of Suresh. (Nov-20)
 Inventories
1. Surekha Ltd deals in 3 products P, Q & R, which are neither similar nor interchangeable. At the end of a financial year, the
Historical Cost and NRV of items of Closing Stock are given below. Determine the value of Closing Stock.
Items Historical Cost (in ` Lakhs) Net Realisable Value (in ` Lakhs)
P 38 42
Q 29 29
R 17 14
2. A manufacturer has the following record of purchases of a condenser, which he uses while manufacturing radio sets:
Date Quantity (units) Price per unit
Dec. 4 900 50
Dec. 10 400 55
Dec. 11 300 55
Dec. 19 200 60
Dec. 28 800 47
2,600

1,600 units were issued during the month of December till 18th December.

3. In the previous example assume that following issues were made during the month of December:
Record of issues
Date Quantity (units)
Dec. 5 500
Dec. 20 600
Dec. 29 500
Total 1,600
4. In the same example of a manufacturer of radio sets given earlier, let us calculate the value of closing inventory using
Average Price Method:
5. On the basis of the data given in illustration 2 and 3, calculate the weighted average price and also the value of closing
inventory by weighted average price method.
6. M/s X, Y and Z are in retail business, following information are obtained from their records for the year ended 31st March,
2020:
Goods received from suppliers
(subject to trade discount and taxes) ` 15,75,500
Trade discount 3% and sales tax 11%
Packaging and transportation charges ` 87,500
Sales during the year ` 22,45,500
Sales price of closing inventories ` 2,35,000

Find out the historical cost of inventories using adjusted selling price method.

7. From the following information, calculate the historical cost of closing inventories using adjusted selling price
method:
`
 Sales during the year 2,00,000
Cost of purchases 2,00,000
Opening inventory Nil
Closing inventory at selling price 50,000

8. From the following particulars ascertain the value of Inventories as on 31st March, 2020:
`
Inventory as on 1.4.2019 1,42,500
Purchases 7,62,500
Manufacturing Expenses 1,50,000
Selling Expenses 60,500
Administrative Expenses 30,000
Financial Charges 21,500
Sales 12,45,000
At the time of valuing inventory as on 31st March, 2019, a sum of ` 17,500 was written off on a particular item, which
was originally purchased for ` 50,000 and was sold during the year for ` 45,000. Barring the transaction relating to this
item, the gross profit earned during the year was 20 percent on sales.

9. A trader prepared his accounts on 31st March, each year. Due to some unavoidable reasons, no inventory taking could
be possible till 15th April, 2020 on which date the total cost of goods in his godown came to` 5,00,000.
The following facts were established between 31st March and 15th April, 2020.
(i) Sales ` 4,10,000 (including cash sales ` 1,00,000)
(ii) Purchases ` 50,340 (including cash purchases ` 19,900)
(iii) Sales Return ` 10,000.
Goods are sold by the trader at a profit of 20% on sales.

You are required to ascertain the value of inventory as on 31st March, 2020.

10. Inventory taking for the year ended 31st March, 2020 was completed by 10th April 2020, the valuation of which showed a inventory
figure of ` 16,75,000 at cost as on the completion date. After the end of the accounting year and till the date of completion of
inventory taking, sales for the next year were made for ` 68,750, profit margin being 33.33 percent on cost. Purchases for the next
year included in the inventory amounted to ` 90,000 at cost less trade discount 10 percent. During this period, goods were added
to inventory at the mark up price of ` 3,000 in respect of sales returns. After inventory taking it was found that there were certain
very old slow-moving items costing ` 11,250, which should be taken at ` 5,250 to ensure disposal to an interested customer. Due to
heavy flood, certain goods costing ` 15,500 were received from the supplier beyond the delivery date of customer. As a result, the
customer refused to take delivery and net realizable value of the goods was estimated to be ` 12,500 on 31st March. Compute the
value of inventory for inclusion in the final accounts for the year ended 30th March, 2020.
11. The following are the details of a spare part of Sriram mills:
1-1-2020 Opening Inventory Nil
1-1-2020 Purchases 100 units @ ` 30 per unit
15-1-2020 Issued for consumption 50 units
1-2-2020 Purchases 200 units @ ` 40 per unit
15-2-2020 Issued for consumption 100 units
20-2-2020 Issued for consumption 100 units

Find out the value of Inventory as on 31-3-2020 if the company follows First in first out basis.
 12. The following are the details of a spare part of Sriram Mills:
1-1-2020 Opening Inventory Nil
1-1-2020 Purchases 100 units @ ` 30 per unit
15-1-2020 Issued for consumption 50 units
1-2-2020 Purchases 200 units @ ` 40 per unit
15-2-2020 Issued for consumption 100 units
20-2-2020 Issued for consumption 100 units

Find out the value of Inventory as on 31-3-2020 if the company follows Weighted Average basis.

13. X who was closing his books on 31.3.2020 failed to take the actual stock which he did only on 9th April, 2020, when it was ascertained by
him to be worth ` 2,50,000. It was found that sales are entered in the sales book on the same day of dispatch and return inwards in
the returns book as and when the goods are received back. Purchases are entered in the purchases day book once the invoices are
received. It was found that sales between 31.3.2020 and 9.4.2020 as per the sales day book are ` 17,200. Purchases between
31.3.2020 and 9.4.2020 as per purchases day book are ` 1,200, out of these goods amounting to ` 500 were not received until after the
stock was taken. Goods invoiced during the month of March, 2020 but goods received only on 4th April, 2020 amounted to ` 1,000.
Rate of gross profit is 33-1/3% on cost. Ascertain the value of physical stock as on 31.3.2020.
14. From the following information, ascertain the value of stock as on 31.3.2020:
`
Value of stock on 1.4.2019 7,00,000
Purchases during the period from 1.4.2019 to 31.3.2020 34,60,000
Manufacturing expenses during the above period 7,00,000
Sales during the same period 52,20,000

At the time of valuing stock on 31.3.2019 a sum of ` 60,000 was written off a particular item which was originally purchased for `
2,00,000 and was sold for ` 1,60,000. But for the above transaction the gross profit earned during the year was 25% on cost.
15. The Profit and loss account of Hanuman showed a net profit of ` 6,00,000, after considering the closing stock of ` 3,75,000 on 31st
March, 2020. Subsequently the following information was obtained from scrutiny of the books:
(a) Purchases for the year included ` 15,000 paid for new electric fittings for the shop.
(b) Hanuman gave away goods valued at ` 40,000 as free samples for which no entry was made in the books of accounts.
(c) Invoices for goods amounting to ` 2,50,000 have been entered on 27th March, 2020, but the goods were not included in
stock.
(d) In March, 2020 goods of ` 2,00,000 sold and delivered were taken in the sales for April, 2020.
(e) Goods costing ` 75,000 were sent on sale or return in March, 2020 at a margin of profit of 33-1/3% on cost. Though
approval was given in April, 2020 these were taken as sales for March, 2020.
Calculate the value of stock on 31st March, 2020 and the adjusted net profit for the year ended on that date.
16. Physical verification of stock in a business was done on 23rd June, 2020. The value of the stock was` 48,00,000. The following
transactions took place between 23rd June to 30th June, 2020:
(a) Out of the goods sent on consignment, goods at cost worth ` 2,40,000 were unsold.
(b) Purchases of ` 4,00,000 were made out of which goods worth ` 1,60,000 were delivered on 5th July, 2020.
(c) Sales were ` 13,60,000, which include goods worth ` 3,20,000 sent on approval. Half of these goods were returned
before 30th June, 2020.
(d) Goods are sold at cost plus 25%. However, goods costing ` 2,40,000 had been sold for 1,20,000.
 Determine the value of stock on 30th June, 2020.
17. Closing stock is valued by XYZ Stores on generally accepted accounting principles. Stock taking for the year
ended 31st March, 2017 was completed by 10th April, 2017, the valuation of which showed a stock figure of `
1,67,500 at cost as on the completion date. After the end of the accounting year and till the date of
completion of stock taking, sales for the next year were made for ` 6,875, profit margin being 33.33 percent
on cost. Purchases for the next year included in the stock amounted to ` 9,000 at cost less trade discount 10
percent. During this period, goods were added to stock of the mark up price of ` 300 in respect of sales
returns. After stock taking it was found that there were certain very old slow moving items costing ` 1,125
which should be taken at ` 525 to ensure disposal to an interested customer. Due to heavy floods, certain
goods costing ` 1,550 were received from the supplier beyond the delivery date of customer. As a result,
the customer refused to take delivery and net realizable value of the goods was estimated to be ` 1,250 on
31st March, 2017. You are required to calculate the value of stock for inclusion in the final accounts for the year
ended 31st March, 2017. (RTP May-18)
18. Sky Ltd. keeps no stock records but a physical inventory of stock is made at the end of each quarter and the
valuation is taken at cost. The company’s year ends on 31 st March, 2018 and their accounts have been
prepared to that date. The stock valuation taken on 31st March, 2018 was however, misleading and you
have been advised to value the closing stocks as on 31st March, 2018 with the stock figure as on 31st
December, 2017 and some other information is available to you:
(a) The cost of stock on 31st December, 2017 as shown by the inventory sheet was` 80,000.
(b) On 31st December, stock sheet showed the following discrepancies:
• A page total of ` 5,000 had been carried to summary sheet as ` 6,000.
• The total of a page had been undercast by ` 200.
(c) Invoice of purchases entered in the Purchase Book during the quarter from January to March, 2018
totalled ` 70,000. Out of this ` 3,000 related to goods received prior to 31st December, 2017.
Invoices entered in April 2018 relating to goods received in March, 2018 totalled ` 4,000.
(d) Sales invoiced to customers totalled ` 90,000 from January to March, 2018. Of this ` 5,000 related to
goods dispatched before 31st December, 2017. Goods dispatched to customers before 31st March,
2018 but invoiced in April, 2018 totalled ` 4,000.
(e) During the final quarter, credit notes at invoiced value of ` 1,000 had been issued to customers in
respect of goods returned during that period. The gross margin earned by the company is 25% of cost.
You are required to prepare a statement showing the amount of stock at cost as on 31st March,
2018. (RTP Nov-18)
19. A trader prepared his accounts on 31st March, each year. Due to some unavoidable reasons, no stock taking
could be possible till 15th April, 2018 on which date the total cost of goods in his godown came to ` 50,000.
The following facts were established between 31st March and 15th April, 2018.
(a) Sales ` 41,000 (including cash sales ` 10,000)
(b) Purchases ` 5,034 (including cash purchases ` 1,990)
(c) Sales Return ` 1,000.
(d) On 15th March, goods of the sale value of ` 10,000 were sent on sale or return basis to a customer, the
period of approval being four weeks. He returned 40% of the goods on 10th April, approving the rest;
the customer was billed on 16th April.
(e) The trader had also received goods costing ` 8,000 in March, for sale on consignment basis; 20% of the
goods had been sold by 31st March, and another 50% by the 15th April. These sales are not included in
above sales.
Goods are sold by the trader at a profit of 20% on sales. You are required to ascertain the value of
Inventory as on 31st March, 2018.(RTP May-19)
20. Stock taking of XYZ Stores for the year ended 31st March, 2019 was completed by 10th April, 2019, the
valuation of which showed a stock figure of ` 1,67,500 at cost as on the completion date. After the end of the
 accounting year and till the date of completion of stock taking, sales for the next year were made for `
6,875, profit margin being 33.33 percent on cost. Purchases for the next year included in the stock amounted
to ` 9,000 at cost less trade discount 10 percent. During this period, goods were added to stock of the mark-
up price of ` 300 in respect of sales returns. After stock taking it was found that there were certain very old
slow moving items costing ` 1,125 which should be taken at ` 525 to ensure disposal to an interested
customer. Due to heavy floods, certain goods costing ` 1,550 were received from the supplier beyond the
delivery date of customer. As a result, the customer refused to take delivery and net realizable value of the
goods was estimated to be ` 1,250 on 31st March, 2019. You are required to calculate the value of stock for
inclusion in the final accounts for the year ended 31st March, 2019. Closing stock is valued by XYZ Stores on
generally accepted accounting principles. (RTP Nov-19)
21. Sky Ltd. keeps no stock records but a physical inventory of stock is made at the end of each quarter and the
valuation is taken at cost. The company’s year ends on 31 st March, 2018 and their accounts have been
prepared to that date. The stock valuation taken on 31st March, 2018 was however, misleading and you
have been advised to value the closing stocks as on 31st March, 2018 with the stock figure as on 31st
December, 2017 and some other information is available to you:
(a) The cost of stock on 31st December, 2017 as shown by the inventory sheet was `80,000.
(i) On 31st December, stock sheet showed the following discrepancies:
(a) A page total of ` 5,000 had been carried to summary sheet as ` 6,000.
(b) The total of a page had been undercast by ` 200.
(ii) Invoice of purchases entered in the Purchase Book during the quarter from January to March,
2018 totalled ` 70,000. Out of this ` 3,000 related to goods received prior to 31st December,
2017. Invoices entered in April 2018 relating to goods received in March, 2018 totalled ` 4,000.
(iii) Sales invoiced to customers totalled ` 90,000 from January to March, 2018. Of this
` 5,000 related to goods dispatched before 31st December, 2017. Goods dispatched to
customers before 31st March, 2018 but invoiced in April, 2018 totalled` 4,000.
(iv) During the final quarter, credit notes at invoiced value of ` 1,000 had been issued to customers
in respect of goods returned during that period. The gross margin earned by the company is
25% of cost.
You are required to prepare a statement showing the amount of stock at cost as on 31st March,
2018. Transfer of ownership takes place at the time of delivery of goods.(RTP May-20)
22. A trader prepared his accounts on 31 st March, each year. Due to some unavoidable reasons, no stock taking could be possible till
15th April, 2020 on which date the total cost of goods in his godown came to ` 50,000. The following facts were established
between31st March and 15th April, 2020.
(i) Sales ` 41,000 (including cash sales ` 10,000)
(ii) Purchases ` 5,034 (including cash purchases ` 1,990)
(iii) Sales Return ` 1,000.
(iv) On 15th March, goods of the sale value of ` 10,000 were sent on sale or return basis to a customer, the period of
approval being four weeks. He returned 40% of the goods on 10th April, approving the rest; the customer was
billed on 16th April.
(v) The trader had also received goods costing ` 8,000 in March, for sale on consignment basis; 20% of the goods
had been sold by 31st March, and another50% by the 15th April. These sales are not included in above sales.
Goods are sold by the trader at a profit of 20% on sales.
You are required to ascertain the value of Inventory as on 31st March, 2020. (RTP Nov-20)
23. Closing stock is valued by Zebra Stores on generally accepted accounting principles. Stock taking for the year ended 31st March,
2020 was completed by 10th April, 2020, the valuation of which showed a stock figure of ` 5,02,500 at cost as on the
completion date. After the end of the accounting year and till the date of completion of stock taking, sales for the next year were
 made for ` 20,625, profit margin being 33.33 percent on cost. Purchases for the next year included in the stock amounted to
` 27,000 at cost less trade discount 10 percent. During this period, goods were added to stock of the mark up price of ` 900
in respect of sales returns. After stock taking it was found that there were certain very old slow moving items costing ` 3,375
which should be taken at` 1,575 to ensure disposal to an interested customer. Due to heavy floods, certain goods costing `
4,650 were received from the supplier beyond the delivery date of customer. As a result, the customer refused to take delivery
and net realizable value of the goods was estimated to be ` 3,750 on 31st March, 2020. You are required to calculate the value of
stock for inclusion in the final accounts for the year ended 31st March, 2020 (RTP May-21)
24. Submarine Ltd. keeps no stock records but a physical inventory of stock is made half yearly and the valuation is taken at cost. The
company’s year ends on 31 st March, 2021 and their accounts have been prepared to that date. The stock valuation taken on 31st
March, 2021 was however, misleading and you have been advised to value the closing stocks as on 31st March, 2021 with the
stock figure as on 30th September, 2020 and some other information is available to you:
(a) The cost of stock on 30th September, 2020 as shown by the inventory sheet was` 2,40,000.
(b) On 30th September, stock sheet showed the following discrepancies:
• A page total of ` 15,000 had been carried to summary sheet as ` 16,000.
• The total of a page had been undercast by ` 600.
(c) Invoice of purchases entered in the Purchase Book during the quarter from October,2020 to March,2021
totaled ` 2,10,000. Out of this ` 9,000 related to goods received prior to 30thSeptember, 2020. Invoices entered
in April,2021 relating to goods received in March, 2021 totaled `12,000.
(d) Sales invoiced to customers totaled `2,70,000 from September,2020 to March, 2021. Of this ` 15,000 related to
goods dispatched before 30th September, 2020. Goods dispatched to customers before 31 st March, 2021 but
invoiced in April, 2021 totaled ` 12,000.
(e) During the final quarter, credit notes at invoiced value of ` 3,000 had been issued to customers in respect of goods
returned during that period. The gross margin earned by the company is 25% of cost.
You are required to prepare a statement showing the amount of stock at cost as on31st March, 2021.(RTP Nov-21)
25. A trader prepared his accounts on 31st March, each year. Due to some unavoidable reasons, no stock taking could
be possible till 15th April, 2021 on which date the total cost of goods in his godown came to ` 1,50,000. The
following facts were established between 31st March and 15th April, 2021.
(a) Sales ` 1,23,000 (including cash sales ` 30,000)
(b) Purchases ` 15,102 (including cash purchases ` 5970)
(c) Sales Return ` 3,000.
(d) On 15th March, goods of the sale value of ` 30,000 were sent on sale or return basis to a customer, the
period of approval being four weeks. He returned 40% of the goods on 10th April, approving the rest; the
customer was billed on 16th April.
(e) The trader had also received goods costing ` 24,000 in March, for sale on consignment basis; 20% of the
goods had been sold by 31st March, and another 50% by the 15th April. These sales are not included in
above sales.
Goods are sold by the trader at a profit of 20% on sales.
You are required to ascertain the value of Inventory as on 31st March, 2021.(RTP May-2022)
26. A trader prepared his accounts on 31st March, each year. Due to some unavoidable reasons, no stock taking could be
possible till 15th April,2022 on which date the total cost of goods in his godown came to ` 2,50,000. The following facts
were established between 31st March and 15th April,2022.
(i) Sales ` 2,05,000 (including cash sales ` 50,000)
(ii) Purchases ` 25,170 (including cash purchases ` 9,950)
(iii) Sales Return ` 5,000
(iv) On 15th March, goods of the sale value of ` 50,000 were sent on sale or return basis to a customer, the period of
 approval being four weeks. He returned 40% of the goods on 10th April, approving the rest; the customer was
billed on 16th April.
(v) The trader had also received goods costing ` 40,000 in March, for sale on consignment basis; 20% of the goods
had been sold by 31st March, and another 50% by the 15th April. These sales are not included in above sales.
Goods are sold by the trader at a profit of 20% on sales. You are required to ascertain the value of Inventory as on 31st
March, 2022. (RTP Nov-2022)
27. Raj Ltd. prepared their accounts financial year ended on 31st March 2019. Due to unavoidable circumstances
actual stock has been taken on 10th April 2019, when it was ascertained at ` 1,25,000. It has been found that;
(a) Sales are entered in the Sales Book on the day of dispatch and return inwards in the Returns Inward Book
on the day of the goods received back.
(b) Purchases are entered in the Purchase Book on the day the Invoices are received.
(c) Sales between 1st April 2019 to 9th April 2019 amounting to ` 20,000 as per Sales Day Book.
(d) Free samples for business promotion issued during 1st April 2019 to 9th April 2019 amounting to ` 4,000 at
cost.
(e) Purchases during 1st April 2019 to 9th April 2019 amounting to ` 10,000 but goods amounts to ` 2,000 not
received till the date of stock taking.
(f) Invoices for goods purchased amounting to ` 20,000 were entered on 28th March 2019 but the goods
were not included in stock. Rate of Gross Profit is 25% on cost.
Ascertain the value of Stock as on 31st March 2019.(May-19)
28. Distinguish between Periodic Inventory System and Perpetual Inventory System.(Nov-19)
Answer-
Periodic Inventory System Perpetual Inventory System
1. This system is based o physical It is based on book records.
verification. n
2. This system provides information It provides continuous information
about inventory and cost of goods about inventory and cost of sales.
sold at a particular date
3. This system determines inventory It directly determines cost of goods
and takes cost of goods sold as sold and computes inventory as
residual figure. balancing figure.
4. Cost of goods sold includes loss of Closing inventory includes loss of
goods as goods not in inventory are goods as all unsold goods are
assumed to be sold. assumed to be in Inventory
5. Under this method, inventory Inventory control can be exercised
control is not possible. under this system.
6. This is simpl and less It is costlier method.
syste e
m
expensive.
7. Periodic system requires closure of Inventory can be determined
business for counting of inventory. without affecting the operations of
the business.
29. Physical verification of stock in a business was done on 23rd February, 2020. The value of the stock was ` 28,00,000.
The following transactions took place from 23rd February to 29th February, 2020 :
(a) Out of the goods sent on consignment, goods at cost worth ` 2,30,000 were unsold.
(b) Purchases of ` 3,00,000 were made out of which goods worth ` 1,20,000 were delivered on 5th March, 2020.
 (c) Sales were ` 13,60,000 which include goods worth ` 3,20,000 sent on approval. Half of these goods were returned
before 29th February, 2020, but no information is available regarding the remaining goods.
(d) Goods are sold at cost plus 25%. However goods costing ` 2,40,000 had been sold for ` 1,50,000.
Determine the value of stock on 29th February, 2020. (Nov-20)
30. From the following particulars ascertain the value of inventories as on 31st March, 2020 :
Inventory as on 1st April, 2019 ` 3,50,000
Purchase made during the year ` 12,00,000
Sales ` 18,50,000
Manufacturing Expenses ` 1,00,000
Selling and Distribution Expenses ` 50,000
Administration Expenses ` 80,000
At the time of valuing inventory as on 31st March, 2019, a sum of ` 20,000 was written off on a particular item which
was originally purchased for ` 55,000 and was sold during the year for ` 50,000. (Jan-21)

31. From the following information, calculate the historical cost of closing inventories using adjusted selling price method:
Purchase during the year - ` 5,00,000
Sales during the year - ` 7,50,000

Opening Inventory Nil

Closing Inventory at selling price - ` 1,00,000 (Jul-21)

 CONSIGNMENT

1. Exe sent on 1st July, 2019 to Wye goods costing ` 50,000 and spent ` 1,000 on packing etc. On 3rd July, 2019, Wye received
the goods and sent his acceptance to Exe for ` 30,000 payable at 3 months. Wye spent ` 2,000 on freight and cartage, ` 500
on godown rent and ` 300 on insurance. On 31st December, 2019 he sent his Account Sales (along with the amount
due to Exe) showing that 4/5 of the goods had been sold for ` 55,000. Wye is entitled to a commission of 10%. One of
the customers turned insolvent and could not pay ` 600 due from him. Show the necessary journal entries in the books
of consignor. Also prepare ledger accounts.

2. Exe sent on 1st July, 2019 to Wye goods costing ` 50,000 and spent ` 1,000 on packing etc. On 3rd July, 2019, Wye received
the goods and sent his acceptance to Exe for ` 30,000 payable at 3 months. Wye spent ` 2,000 on freight and cartage, ` 500
on godown rent and ` 300 on insurance. On 31st December, 2019 he sent his Account Sales (along with the amount
due to Exe) showing that 4/5 of the goods had been sold for ` 55,000. Wye is entitled to a commission of 10%. One of
the customers turned insolvent and could not pay ` 600 due from him. Show the necessary journal entries in the
consignee’s book.
3. 1,000 toys consigned by Rosie & Co. of Calcutta to Sahoo of Srinagar at a cost of `150 each. Rosie & Co. paid freight
` 10,000 and insurance ` 1,500. During the voyage 100 toys were totally damaged by fire and had to be thrown
overboard. Sahoo took delivery of the remaining toys and paid `14,400 as customs duty. Sahoo sent a bank draft to
Roy & Co. for `50,000 as advance payment and later sent an account sales showing that 800 toys had been sold at
`220 each. Expenses incurred by Sahoo on go-down rent and advertisement, etc., amounted to `2,000. Sahoo was
entitled to commission of 5 per cent. One of the credit customers could not pay for 5 toys. You are required to prepare
the Consignment Account, Goods sent on consignment, Inventories on consignment account and Sahoo’s a/c in the
books of Rosie & Co., assuming that nothing has been recovered from the insurers due to a defect in the policy.
Sahoo settled his account immediately.

4. Nike sports Co. of New Delhi consigned 100 shoes to Adidas Co. of Ahmedabad costing ` 1,500 each, invoiced at`2,000
each. The consignor paid freight ` 10,000 and insurance in transit ` 1,500. During transit, 10 shoes were totally
damaged. Adidas Co took delivery of remaining shoes and paid ` 1,530 for octroi duty. Adidas co. sent a bank draft to
Nike sports Co. for Rs 50,000 as advance and later on sent an account sales showing that 80 shoes had been sold @
2,200 each. Expenses incurred by Adidas Co. on godown rent were ` 2,000. Adidas Co. is entitled to a commission of 5% on
invoice price and 25% on any surplus of sale price over invoice price. Insurance claim was settled at 14,000. Prepare
consignment account, consignee’s account and the related working notes account in the books of the Nike sports
Co.

5. Miss Rakhi consigned 1,000 radio sets costing `900 each to Miss Geeta, her agent on 1st July, 2020. Miss Rakhi
incurred the following expenditure on sending the consignment.
 Freight `7,650
Insurance `3,250
Miss Geeta received the delivery of 950 radio sets. An account sale dated 30th November, 2020 showed that 750 sets
were sold for `9,00,000 and Miss Geeta incurred `10,500 for carriage.
Miss Geeta was entitled to commission 6% on the sales effected by her. She incurred expenses amounting to`2,500
for repairing the damaged radio sets remaining in the inventories.
Miss Rakhi lodged a claim with the insurance company which was admitted at `35,000. Show the Consignment
Account and Miss Geeta’s Account in the books of Miss Rakhi.
6. Vikram Milk Foods Co. Ltd. of Vikrampur sent to Sunder Stores, Sonepuri 5,000 kgs of baby food packed in 2,000 tins of
net weight 1 kg and 6,000 packets of net weight 1/2 kg for sale on consignment basis. The consignee’s commission
was fixed at 5% of sale proceeds. The cost price and selling price of the product were as under:

1 kg. tin 1/2 kg. packet

` `
Cost Price 10 6
Selling Price 15 7

The consignment was booked on freight “To Pay” basis, and freight charges came to 2% of selling value. One case
containing 50 (1kg. tins) was lost in transit and the transport carrier admitted a claim of `450.

At the end of the first half-year, the following information is gathered from the “Account Sales” sent by the
consignee:

(i) Sale proceeds: 1,500 1 kg. tins

4,000 1/2 kg. packets

(ii) Store rent and insurance charges `600.

Find out the value of closing inventory on consignment. Show the Consignment A/c and the Consignee’s A/c in the
books of Vikram Milk Food Co. Ltd. assuming that theconsignee had paid the amount due from him.

7. Shri Mehta of Mumbai consigns 1,000 cases of goods costing ` 1,000 each to Shri Sundaram of Chennai. Shri
Mehta pays the following expenses in connection with consignment:

Carriage 10,000
Freight 30,000
Loading charges 10,000
Shri Sundaram sells 700 cases at `1,400 per case and incurs the following expenses:
Clearing charges 8,500
Warehousing and storage 17,000
Packing and selling expenses 6,000
It is found that 50 cases have been lost in transit and 100 cases are still in transit. Shri Sundaram is entitled to a
commission of 10% on gross sales. Draw up the Consignment Account and Sundaram’s Account in the
books of Shri Mehta.

8. Ajay of Mumbai consigned to Vijay of Delhi, goods to be sold at invoice price which represents 125% of cost. Vijay is
entitled to a commission of 10% on sales at invoice price and 25% of any excess realised over invoice price. The
 expenses on freight and insurance incurred by Ajay were `10,000. The account sales received by Ajay shows that Vijay
has effected sales amounting to `1,00,000 in respect of 75% of the consignment. His selling expenses to be reimbursed
were ` 8,000. 10% of consignment goods of the value of `12,500 were destroyed in fire at the Delhi godown and the
insurance company paid `12,000 net of salvage. Vijay remitted the balance in favour of Ajay. Prepare consignment
account and the account of Vijay in the books of Ajay along with the necessary calculations.

9. X of Delhi purchased 10,000 metres of cloth for `2,00,000 of which 5,000 metres were sent on
consignment to Y of Agra at the selling price of ` 30 per metre. X paid ` 5,000 for freight and ` 500 for packing etc.
Y sold 4,000 metre at ` 40 per metre and incurred ` 2,000 for selling expenses. Y is entitled to a commission of 5%
on total sales proceeds plus a further 20% on any surplus price realised over ` 30 per metre. 3,000 metres were
sold at Delhi at ` 30 per metre less ` 3,000 for expenses and commission. Owing to fall in market price, the
inventories of cloth in hand is to be reduced by 10%. Prepare the Consignment Account and Trading and Profit &
Loss Account in books of X.
10. D of Delhi appointed A of Agra as its selling agent on the following terms:

Goods to be sold at invoice price or over. A to be entitled to a commission of 7.5% on the invoice price and 20%
of any surplus price realized over invoice price. The principals to draw on the agent a 30 days bill for 80% of the
invoice price. On 1st February, 2020, 1,000 cycles were consigned to A, each cycle costing ` 640 including freight
and invoiced at ` 800. Before 31st March, 2020, (when the principal’s books are closed) A met his acceptance on
the due date; sold off 820 cycles at an average price of ` 930 per cycle, the sale expenses being ` 12,500; and
remittedthe amount due by means of Bank draft.
Twenty of the unsold cycles were shop-spoiled and were to be valued at a depreciation of 50% of cost.
Show by means of ledger accounts how these transactions would be recorded in the books of A and find
out the value of closing inventory with A to be recorded in the books of D at cost.
11. Mr. Y consigned 800 packets of toothpaste, each packet containing 100 toothpastes. Cost price of each packet
was ` 900. Mr. Y Spent ` 100 per packet as cartage, freight, insurance and forwarding charges. One packet was
lost on the way and Mr. Y lodged claim with the insurance company and could get `570 as claim on average
basis. Consignee took delivery of the rest of the packets and spent ` 39,950 as other non-recurring expenses and `
22,500 as recurring expenses. He sold 740 packets at the rate of ` 12 per toothpaste. He was entitled to 2%
commission on sales plus 1% del-credere commission. You are required to prepare Consignment Account.
Calculate the cost of inventories at the end, abnormalloss and profit or loss on consignment.
12. A of Agra sent on consignment goods valued ` 1,00,000 to B of Mumbai on 1st March, 2019. He incurred the
expenditure of ` 12,000 on freight and insurance. A’s accounting year closes on 31st December. B was entitled to
a commission of 5% on gross sales plus a del-credere commission of 3%. B took delivery of the consignment
by incurring expenses of ` 3,000 for goods consigned. On 31.12.2019, B informed on phone that he had sold all
the goods for ` 1,50,000 by incurring selling expenses of ` 2,000. He further informed that only ` 1,48,000 had been
realized and rest was considered irrecoverable, and would be sending the cheque in a day or so for the
amount due along with the accounts sale. On 5.1.2020, A received the cheque for the amount due from B and
incurred bank charges of ` 260 for collecting the cheque. The amount was credited by the bank on 9.1.2020. Write
up the consignment account finding out the profit/loss on the consignment, B’s account, Provision for expenses
account and Bank account in the books of the consignor, recording the transactions upto the receipt and
collection of the cheque.
13. Mr. A of Assam sent on 18th February, 2017 a consignment of 1,000 DVD players to B of
Bengal costing ` 100 each. Expenses of ` 1,500 were met by the consignor. B spent ` 3,000 for
clearance and selling expenses were ` 20 per DVD player. B sold on 15th March, 2017, 600 DVD
players @ ` 160 per DVD player and again on 20th May, 2017, 300 DVD players @ ` 170 each. B is
entitled to a commission of ` 25 per DVD player sold plus ¼ of the amount by which the gross sale
 proceeds less total commission thereon exceeded a sum calculated @ ` 125 per DVD player sold. B
sent the amount due to A on 30th June, 2017. You are required to prepare the consignment account
and B’s account in the books of A. (RTP May-18 , RTP Nov-20)
14. On 1.1.2018, Mr. Jill of Mumbai consigned to Mr. Jack of Chennai goods for sale at invoice price.
Mr. Jack is entitled to a commission of 5% on sales at invoice price and 20% of any surplus price
realized over and above the invoice price. Goods costing ` 1,00,000 were consigned to Chennai at
the invoice price of ` 1,50,000. The direct expenses of the consignor amounted to ` 10,000. On
31.3.2018, an account sales was received by Mr. Jill from Mr. Jack showing that he had effected sales
of ` 1,20,000 in respect of 4/5th of the quantity of goods consigned to him. His actual expenses
were ` 3,000. Mr. Jack accepted a bill drawn by Mr. Jill for` 1,00,000 and remitted the balance due in
cash. You are required to prepare the consignment account and the account of Mr. Jack in the
books of Mr. Jill. (RTP Nov-18)
15. Mr. Green of New Delhi purchased, 10,000 pieces of sarees at ` 100 per saree. Out of these 6,000
sarees were sent on consignment to Mr. White of Calcutta at the selling price of ` 120 per saree.
The consignor paid ` 3,000 for packing and freight. Mr. White sold 5,000 sarees at ` 125 per saree and
incurred ` 1,000 for selling expenses and remitted ` 5,00,000 to New Delhi on account. Mr. White is
entitled to a commission of 5% on total sales plus a further commission at 20% of surplus price
realized over invoice price. You are required to prepare Consignment Account in the books of Mr.
Green and Mr. Green’s account in the books of agent Mr. White. (RTP May-19)
16. Manoj of Noida consigned to Kiran of Jaipur, goods to be sold at invoice price which represents
125% of cost. Kiran is entitled to a commission of 10% on sales at invoice price and 25% of any
excess realised over invoice price. The expenses on freight and insurance incurred by Manoj were `
15,000. The account sales received by Manoj shows that Kiran has effected sales amounting to `
1,50,000 in respect of 75% of the consignment. His selling expenses to be reimbursed were ` 12,000.
10% of consignment goods of the value of`18,750 were destroyed in fire at the Jaipur godown. Kiran
remitted the balance in favour of Manoj. You are required to prepare consignment account in the
books of Manoj along with the necessary calculations. (RTP Nov-19)
17. Ganpath of Nagpur consigns 500 cases of goods costing ` 1,500 each to Rawat of Jaipur. Ganpath
pays the following expenses in connection with the consignment:
Particulars `
Carriage 15,000
Freight 45,000
Loading Charges 15,000
Rawat sells 350 cases at ` 2,100 per case and incurs the following expenses:

Clearing charges 18,000

Warehousing and Storage charges 25,000
Packing and selling expenses 7,000
It is found that 50 cases were lost in transit (which is an abnormal loss) and another 50 cases were in
transit. Rawat is entitled to a commission of 10% on gross sales. Draw up the Consignment Account
and Rawat's Account in the books of Ganpath. (RTP May-20 , May-18)
18. Mr. Divik of Jaipur purchased, 5,000 pieces of sarees at ` 500 per saree. Out of these 3,000 sarees were sent on
consignment to Mr. Manoj of Pillani at the selling price of 600 per saree. The consignor paid ` 30,000 for
packing and freight. Mr. Manoj sold 2,500 sarees at ` 625 per saree and incurred ` 10,000 for selling expenses
and remitted 5,00,000 to Jaipur on account of Mr. Divik. Mr. Manoj is entitled to a commission of 5% on total
sales plus a further commission at 20% of surplus price realized over invoice price. You are required to
 prepare Consignment Account in the books of Mr. Divik and Mr. Divik’s account in the books of agent
Mr. Manoj. (RTP May-21)
19. Shikha of Delhi consigned to Reema of Mumbai, goods to be sold at invoice price which represents 125% of cost. Reema
is entitled to a commission of 10% on sales at invoice price and 25% of any excess realised over invoice price. The
expenses on freight and insurance incurred by Shikha were ` 45,000. The account sales received by Shikha shows that
Reema has effected sales amounting to ` 4,50,000 in respect of 75% of the consignment. Her selling expenses to be
reimbursed were ` 36,000. 10% of consignment goods of the value of ` 56,250 were destroyed in fire at the Mumbai
godown. Reema remitted the balance in favour of Shika. You are required to prepare consignment account in the
books of Shikha along with the necessary calculations. (RTP Nov-21)
20. On 1.1.2021, Mr. Sam of Kerala consigned to Mr. Alex of Chennai goods for sale at invoice price. Mr. Alex is entitled
to a commission of 5% on sales at invoice price and 20% of any surplus price realized over and above the
invoice price. Goods costing ` 5,00,000 were consigned to Chennai at the invoice price of ` 7,50,000. The direct
expenses of the consignor amounted to ` 50,000. On 31.3.2021, an account sales was received by Mr. Sam from Mr. Alex
showing that he had effected sales of ` 6,00,000 in respect of 4/5th of the quantity of goods consigned to him. Mr.
Alex’s direct expenses were ` 15,000. Mr. Alex accepted a bill drawn by Mr. Sam for ` 5,00,000 and remitted the
balance due in cash. You are required to prepare the consignment account and the account of Mr. Alex in the
books of Mr. Sam.(RTP May-2022)

21.
22. Raj of Gwalior consigned 15,000 kgs of Ghee at ` 30 per kg to his agent Siraj at Delhi. He spent ` 5
per kg as freight and insurance for sending the Ghee at Delhi. On the way 100 kgs. of Ghee was lost
due to the leakage (which is to be treated as normal loss) and 400 kgs. of Ghee was destroyed in
transit. ` 9,000 was paid to consignor directly by the Insurance company as Insurance claim. Siraj
sold 7,500 kgs. at ` 60 per kg. He spent ` 33,000 on advertisement and recurring expenses. You are
required to calculate:
(i) The amount of abnormal loss
(ii) Value of stock at the end and
(iii) Prepare Consignment account showing profit or loss on consignment, if Siraj is entitled to 5%
commission on sales (Nov-18)
23. Anand of Bangalore consigned to Raj of Pune, goods to be sold at invoice price which represents
125% of cost. Raj is entitled to a commission of 10% on sales at invoice price and 25% of any excess
realized over invoice price. The expenses on freight and insurance incurred by Anand were ` 12,000.
The account sales received by Anand paid ` 12,000 net of salvage. Raj remitted the balance in favour
of Anand. shows that Raj has effected sales amounting to ` 1,20,000 in respect of 75% of the
consignment. His selling expenses to be reimbursed were ` 9,600 10% of consignment goods of the
value of ` 15,000 were destroyed in fire at the Pune godown and the insurance company You are
required to prepare Consignment Account and ·the account of Raj in the books of Anand along
with the necessary calculations. (Nov-19)
24. Maya consigned 400 boxes of shaving brushes, each box containing 100 shaving brushes. Cost price of each box was `
3,000. Maya spent ` 500 per box as cartage, freight, insurance and forwarding charges. One box was lost on the way
and Maya lodged claim with insurance company and could get 2,700 as claim on average basis. Consignee took delivery
of the rest of the boxes and spent ` 1,99,500 as non recurring expenses and ` 1,12,500 as recurring expenses. He sold 370
boxes at the rate of ` 65 per shaving brush. He was entitled to 2% commission on sales plus 1% del-credere
commission. You are required to prepare Consignment Account. (Nov-20)
25. A Products Limited of Kolkata has given the following particulars regarding tea sent on consignment to C Stores of
Mumbai:
 Cost price Selling price Qty consigned
5 Kg. Tin ` 100 each ` 150 each 1,000 Tins
10 Kg. Tin ` 180 each ` 250 each 1,000 Tins

(i) The consignment was booked on freight "To Pay" basis. The freight was charged @5% of selling value.
(ii) C Stores sold 500, 5 kg Tins and 800, 10 kg Tins. It paid insurance of ` 10,000 andstorage charges of ` 20,000.
(iii) C Stores is entitled to a fixed commission @ 10% on Sales.
(iv) During transit 50 quantity of 5 kg Tin and 20 quantity of 10 kg Tin got damaged andthe transporter paid ` 5,000 as
damage charge. Prepare the Consignment Account in the books of A Products Limited. (Jan-21)
26. Max Chemical Works consigned 700 boxes of medicines to Raja Medical Stores at an invoice price of ` 1,68,000 which
was·20% above the actual cost price and paid ` 14,000 for Insurance and freight. In the course of transit, 50 boxes were lost
and the transporter paid ` 22,000 for the loss. The Consignee took the delivery of the remaining boxes and incurred ` 9,750
for carriage. The Consignee sold 500 boxes for ` 1,60,000 and incurred
` 6,000 for selling expenses. The Consignee is entitled to a commission of 6% on gross sales.
Show the Consignment Account. (Jul-21)
 ACCOUNT CURRENT
1. Prepare Account Current for Nath Brothers in respect of the following transactions with Shyam:
2019 `
September 16 Goods sold to Shyam 200 due 1st Oct.
October 1 Cash received from Shyam 90
October 21 Good purchased from Shyam 500 due 1st Dec.
November 1 Paid to Shyam 330
December 1 Paid to Shyam 330
December 5 Goods purchased from Shyam 500 due 1st Jan.
December 10 Goods purchased from Shyam 200 due 1st Jan.
2020
January 1 Paid to Shyam 600
January 9 Goods sold to Shyam 20 due 1st Feb.

The account is to be prepared upto 1st February. Calculate interest @ 6% per annum. (1 year = 365 days (Module)
2. From the following particulars, make up an Account Current to be rendered by Mr. X to Mr. Y on 31st December, 2020 taking
interest into account at the rate of 18% p.a.
01.07. 2020 Balance owing by Mr. Y ` 600

30.07. 2020 Goods sold to Mr. Y (Credit Period allowed 1 month) ` 300

01.08. 2020 Good purchased from Mr. Y (Credit Period received 1 month) ` 200

01.09. 2020 Cash received from Mr. Y ` 100

01.09. 2020 Mr. Y accepted Mr. X’s Draft at 3 Months date ` 400

You are required to prepare the Account Current according to interest on individual transaction under the Forward and
Backward methods. (Module)
3. From the following particulars prepare the account current to be rendered by Mr. Singh to Mr. Paul as on 31st
August, 2020. Interest must be calculated @ 10% p.a. (1 year = 365 days) (Module)
2020 `
 June 11 Goods sent to Mr. Paul 1,020
June 15 Cash received from Mr. Paul 500
June 20 Goods sent to Mr. Paul 650
July 7 Goods sent to Mr. Paul 700
Aug 8 Cash received from Mr. Paul 1,100

4. Following running transactions took place between Me and You during the month of February, 2020.
Feb 2020 Particulars `
1 Amount payable by You to Me 5,000
5 Sales made by Me to You (invoice dated 07.04.2020) 8,250
8 Received acceptance of You by Me for 3 months 10,000
10 You sold goods to Me (invoice dated 10.3.2020) 11,000
12 Me received cheque from You dated (12.04.2020) 7,500
16 Cash paid by Me to You 2,500
24 Bills receivable accepted by Me from You on account of sale (due date- 5,000
24.03.20)
28 Cash paid by you to me 2500

Prepare account current to be rendered by me to you as on 31st March, 2020 charging interest@12% p.a.

(Module)
5. From the following prepare an account current, to be rendered by Ali to Bali on 31st December, 2020 by means of
products method charging interest @ 8% p.a: (Module)
2020 Particulars `
Oct. 1 Balance due from Bali 2,000
Oct 19 Purchased goods from Bali 3,200
Oct 25 Returned goods to Bali 800
Nov 3 Sold goods to Bali 5,400
Nov 15 Bali accepted a bill drawn by Ali for one month 2,400
Nov. 30 Bills accepted by Bali earlier dishonoured on the due date 3,000
Dec 15 Received cash from Bali 2,000

6. From the following particulars make up an Account Current to be rendered by S. Dasgupta to A.

Halder at31st Dec. reckoning interest at 5% p.a. (assume 1 year = 365 days) (Module)
2019 `
June 30 Balance owing by A. Halder 520
July 17 Goods sold to A. Halder 40
Aug. 1 Cash received from A. Halder 500
Aug. 19 Goods sold to A. Halder 720
Aug. 30 Goods sold to A. Halder 50
Sept. 1 Cash received from A. Halder 400
Sept. 1 A. Halder accepted Dasgupta’s Bill at 3 month date for 300
Oct. 22 Goods bought from A. Halder 20
 Nov. 12 Goods sold to A. Halder 14
Dec. 14 Cash received from A. Halder 50

7. From the following prepare an account current, as sent by A to B on 30th June, 2020 by means of products
method charging interest @ 6% p.a: (Module)
2020 `
Jan. 1 Balance due from B 600
Jan.11 Sold goods to B 520
Jan. 18 B returns Goods 125
Feb 11 B Paid by cheque 400
Feb 14 B accepted a bill drawn by A for one month 300
Apr. 29 Goods sold to B 615
May 15 Received cash from B 700

8. Following transaction took place between X and Y during the month of April, 2020.
April `
1 Amount payable by X to Y 10,000
7 Received acceptance of X to Y for 2 months 5,000
10 Bills receivable (accepted by Y) on 7.2.2020 is honoured on this due date
10 X sold goods to Y (invoice dated 10.5.2020) 15,000
12 X received cheque form Y dated 15.5.2020 7,500
15 Y sold goods to X (invoice dated 15.5.2020) 6,000
20 X returned goods sold by Y on 15.4.2020 1,000
20 Bill accepted by Y is dishonoured on this due date 5,000
You are required to make out an account current by products method to be rendered by X to Y as on 30.4.2020,taking
interest into account @ 10% p.a. (assume 1 year = 365 days) (Module)

9. On 2nd January, 2020 Vinod opened a current account with the Allahabad Bank Limited; and deposited a sum of`
30,000.
He further deposited the following amounts: `
15th January 12,000
12th March 8,000
10th May 16,000
His withdrawals were as follows :
15th February 26,000
10th April 30,000
15th June 14,000

Show Vinod’s a/c in the ledger of the Allahabad Bank. Interest is to be calculated at 5% on the debit balance and 2% on
credit balance. The account to be prepared as on 30th June, 2020. Calculation may be made correct to the nearest
rupee. (assume 1 year = 365 days) (Module)
10. Roshan has a current account with partnership firm. It has debit balance of ` 75,000 as on 01-07-2020. He has further
deposited the following amounts:
Date Amount (`)
 14-07-2020 1,38,000
18-08-2020 22,000
He withdrew the following amounts :
Date Amount (`)
29-07-2020 97,000
09-09-2020 11,000
Show Roshan’s A/c in the ledger of the firm. Interest is to be calculated at 10% on debit balance and 8% on credit balance. You are
required to prepare current account as on 30th September, 2020 by means of product of balances method. (Module)
11. From the following particulars prepare a account current, as sent by Mr. Ram to Mr. Siva as on 31st October 2020 by
means of product method charging interest @ 5% p.a. (Module)

2020 Particulars `
1st July Balance due from Siva 750
15th August Sold goods to Siva 1250
20th August Goods returned by Siva 200
22nd Sep Siva paid by cheque 800
15th Oct Received cash from Siva 500

12. Mr. A owed ` 4,000 on 1st January, 2016 to Mr. X. The following transactions took place between them.
It is agreed between the parties that interest @ 10% p.a. is to be calculated on all transactions.
`
15 January, 2016 Mr. X sold goods to Mr. A 2,230
29 January, 2016 Mr. X bought goods from Mr. A 1,200
10 February, 2016 Mr. A paid cash to Mr. X 1,000
13 March, 2016 Mr. A accepted a bill drawn by Mr. X for one 2,000
month
They agree to settle their complete accounts by one single payment on 15th March, 2016.
Prepare Mr. A in Account Current with Mr. X and ascertain the amount to be paid. Ignore days of grace. (RTP
May-18)
13. From the following particulars prepare an Account Current to be rendered by A to B at 31st December,
reckoning interest @ 10% p.a.

2017 ` 2017 `
July 1 Balance owing 600 Sep B accepted A’s Bill at 3 250
from B t. months date
01
July 17 Goods sold to B 50 Oct.22 Goods bought from B 30
Aug. 1 Cash received 650 Nov. 12 Goods sold to B 20
from B
Aug. 19 Goods sold to B 700 Dec. 14 Cash received from B 80
Aug. 30 Goods sold to B 40
 Sept. 1 Cash received 350
from B
(RTP Nov-18)
14. The following are the transactions that took place between G and H during the period from 1st October,
2017 to 31st March, 2018:
2017 `
Oct.1 Balance due to G by H 3,000
Oct 18 Goods sold by G to H 2,500
Nov. 16 Goods sold by H to G (invoice dated November, 26) 4,000
Dec.7 Goods sold by H to G (invoice dated December, 17) 3,500
2018 `
Jan. 3 Promissory note given by G to H, at three months 5,000
Feb. 4 Cash paid by G to H 1,000
Mar. 21 Goods sold by G to H 4,300
Mar.28 Goods sold by H to G (invoice dated April, 8) 2,700

Draw up an Account Current up to March 31st, 2018 to be rendered by G to H, charging interest at 10% per
annum. Interest is to be calculated to the nearest rupee.

(RTP May-19)

15. Mr. A owed ` 4,000 on 1st January, 2019 to Mr. X. The following transactions took place between them.
It is agreed between the parties that interest @ 10% p.a. is to be calculated on all transactions
`
15 January, 2019 Mr. X sold goods to Mr. A 2,230
29 January, 2019 Mr. X bought goods from Mr. A 1,200
10 February, 2019 Mr. A paid cash to Mr. X 1,000
13 March, 2019 Mr. A accepted a bill drawn by Mr. X for one 2,000
month
They agree to settle their complete accounts by one single payment on 15th March, 2019.
Prepare Mr. A in Account Current with Mr. X and ascertain the amount to be paid. Ignore days of grace.
Assume 1 year = 366 Day. (RTP Nov-19)
16. From the following transactions in the books of Mr. Perfact, prepare an Account Current, by means of
product to be sent by him to Mr. Smart for the quarter ending 31st March, 2019. Interest is to be charged
and/or allowed @ 12% p.a. ( Take 365 days in year)
2019 `
January 1 Balance in Smart’s Account (Credit) 3,500
January 12 Sold goods to Smart (due 1st February) 30,000
January 31 Sold goods to Smart (due 15th February) 27,500
February 15 Cash received 40,000
February 20 Cash received 7,500
March 10 Goods returned by Smart 7,000
March 25 Cash received 6,500
 (RTP May-20)
17. The following are the transactions that took place between G and H during the periodfrom 1st October, 2019 to 31st
March, 2020:
2019 `
Oct.1 Balance due to G by H 3,000
Oct 18 Goods sold by G to H 2,500
Nov. 16 Goods sold by H to G (invoice dated November, 26) 4,000
Dec.7 Goods sold by H to G (invoice dated December, 17) 3,500
2020 `
Jan. 3 Promissory note given by G to H, at three months 5,000
Feb. 4 Cash paid by G to H 1,000
Mar. 21 Goods sold by G to H 4,300
Mar.28 Goods sold by H to G (invoice dated April, 8) 2,700

Draw up an Account Current up to March 31 st, 2020 to be rendered by G to H, charging interest at 10% per annum. Interest is to be
calculated to the nearest rupee .(1 year =365 Days) (RTP Nov-20)
18. On 1st January, 2020, Kamal ’s account in Vimal’s ledger showed a debit balance of` 15,000. The following transactions took
place between Vimal and Kamal during the quarter ended 31st March, 2020:
2020 `
Jan. 11 Vimal sold goods to Kamal 18,000
Jan. 24 Vimal received a promissory note from Kamal due 15,000
after 3 months
Feb. 01 Kamal sold goods to Vimal 30,000
Feb. 04 Vimal sold goods to Kamal 24,600
Feb. 07 Kamal returned goods to Vimal 3,000
March 01 Kamal sold goods to Vimal 16,800
March 18 Vimal sold goods to Kamal 27,600
March 23 Kamal sold goods to Vimal 12,000
Accounts were settled on 31 st March, 2020 by means of a cheque. Prepare an Account Current to be submitted by Vimal to Kamal
as on 31st March, 2020, taking interest into account @ 10% per annum. Calculate interest to the nearest multiple of a rupee. (RTP
May-21)
19. Mr. P owed ` 12,000 on 1st January, 2021 to Mr. Q. The following transactions took place between them. It is agreed
between the parties that interest @ 10% p.a. is to be calculated on all transactions.
`
15 January, 2021 Mr. Q sold goods to Mr. P 6,690
29 January, 2021 Mr. Q bought goods from Mr. P 3,600
10 February, 2021 Mr. P paid cash to Mr. Q 3,000
13 March, 2021 Mr. P accepted a bill drawn by Mr. Q for onemonth 6,000

They agree to settle their complete accounts by one single payment on 15th March,2021.
Prepare Mr. P in Account Current with Mr. Q and ascertain the amount to be paid. Ignore days of grace.
(RTP Nov-21)
20. The following are the transactions that took place between X and Y during the period from 1st October, 2020 to 31st
March, 2021:
2020 `
Oct.1 Balance due to X by Y 3,000
Oct 18 Goods sold by X to Y 2,500
Nov. 16 Goods sold by Y to X (invoice dated November, 26) 4,000
Dec.7 Goods sold by Y to X (invoice dated December, 17) 3,500
2021 `
Jan. 3 Promissory note given by X to Y, at three months 5,000
Feb. 4 Cash paid by X to Y 1,000
Mar. 21 Goods sold by X to Y 4,300
Mar.28 Goods sold by Y to X (invoice dated April, 8) 2,700

Draw up an Account Current up to March 31st, 2021 to be rendered by X to Y, charginginterest at 10% per
annum. Interest is to be calculated to the nearest rupee. (RTP May-2022)

21. From the following prepare an account current, as sent by Avinash to Bhuvanesh on 31st March, 2018 by
means of products method charging interest @ 5% per annum. (May-18)
Date Particulars Amount (`)
2018 January 1 Balance due from Bhuvanesh 1,800
January 10 Sold goods to Bhuvanesh 1,500
January 15 Bhuvanesh returned goods 650
February 12 Bhuvanesh paid by cheque 1,000
February 20 Bhuvanesh accepted a bill drawn by 1,500
Avinash for one month
March 11 Sold goods to Bhuvanesh 720
March 14 Received cash from Bhuvanesh 800

22. From the following particulars prepare an account current, as sent by Mr. AB to Mr. XY as on 31st October,
2018 by means of product method charging interest @ 5% p.a. (Nov-18)

Date Particulars (` )
Date Particulars (`)
1st July Balance due from XY 1,500
20th August Sold goods to XY 2,500
28th August Goods returned by XY 400
25th September XY paid by cheque 1,600
20th October Received cash form XY 1,000
23. Ramesh has a Current Account with Partnership firm. He had a debit balance of` 85,000 as on 01-07-2018.
He has further deposited the following amounts:
Date Amount (`)
14-07-2018 1,23,000
18-08-2018 21,000
He withdrew the following amounts:
Date Amount (`)
29-07-2018 92,000
09-09-2018 11,500
Show Ramesh's A/c in the books of the firm. Interest is to be calculated at 10% on debit balance and 8% on
credit balance. You are required to prepare current account as on 30th September, 2018 by means of product
of balances method. (Nov-19)
24. From the following particulars prepare an account current, as sent by Mr. Raju to Mr. Sunil as on 31st October 2020 by
means of product method charging interest @ 12% p.a. (Nov-20)
2020 Particulars Amount (`)
1st July Balance due from Sunil 840
15th August Sold goods to Sunil 1,310
20th August Goods returned by Sunil 240
22nd September Sunil paid by cheque 830
15th October Received cash from Sunil 560
25. From the following particulars prepare an account current, as sent by Mr. Amit to Mr. Piyush as on 31st December, 2020
by means of product method charging interest @ 8% p.a. (Jan-21)
Date Particulars `
01-09-2020 Balance due from Piyush 900
15-10-2020 Sold goods to Piyush 1,450
20-10-2020 Goods returned by Piyush 250
22-11-2020 Piyush paid by Cheque 1,200
15-12-2020 Received cash from Piyush 600
 BANK RECONCILIATION STATEMENT
1. Messer’s Tall & Short, Faiz Bazar, New Delhi-110002 in account with

Punjab National Bank, Daryaganj, New Delhi-110002

PASS-BOOK

Date Particulars Withdrawals Deposits Dr. or Cr. Balance

` ` `
2019
Jan. 2 By Cash 4,00,000 Cr. 4,00,000
“ 4 To Furniture Dealers Ltd. 60,000 Cr. 3,40,000
“ 4 To Das & Co. 1,25,000 Cr. 2,15,000
“ 10 By J. Johnson & Co.’s 35,000 Cr. 2,50,000
cheque
“ 12 To Roy & James 1,00,000 Cr. 1,50,000
“ 15 By B. Babu & Co’s cheque 76,000 Cr. 2,26,000
“ 16 By Cash 30,000 Cr. 2,56,000
“ 20 To Cash 50,000 Cr. 2,06,000
“ 26 By J. Rai & Bros cheque 43,000 Cr. 2,49,000
“ 31 To Premium paid as per
standing instructions 25,000 Cr. 2,24,000
31 To Bank Charges 1,000 Cr. 2,23,000
31 By Interest collected on 20,000 Cr. 2,43,000
Government Securities

CASH-BOOK (Bank column only)

Date Particulars Amount Date Particulars Amount
` `
2019 2019
Jan. 1 To Cash 4,00,000 Jan. 2 By Furniture
Jan. 2 To J. Johnson & Co. 35,000 Dealers Ltd. 60,000
Jan. 8 To B. Babu& Co. 76,000 Jan. 2 By Roy & James 1,00,000
Jan. 10 To Cash 30,000 Jan. 2 By Das & Co. 1,25,000
Jan. 16 To J. Rai & Bros. 43,000 Jan. 4 By K. Nagpal & Co. 73,000
Jan. 20 To M. Mohan & Co. 1,05,000 Jan. 17 By Cash 50,000
Jan. 22 To N. Nandy & Sons 34,000 Jan. 20 By B. Babu & Co. 78,000
Jan. 31 By Balance c/d 2,37,000
7,23,000 7,23,000
Feb. 1 To Balance b/d 2,37,000

2. From the following particulars, prepare a Bank Reconciliation Statement for Jindal offset Ltd.
(a) Balance as per cash book is ` 2,40,000
(b) Cheques issued but not presented in the bank amounts to ` 1,36,000.
(c) Cheques deposited in bank but not yet cleared amounts to ` 90,000.
(d) Bank charges amounts to ` 300.
(e) Interest credited by bank amounts to ` 1,250.
(f) The balance as per pass book is ` 2,86,950.
3. On 31st March 2019, the Bank Pass Book of Namrata showed a balance of ` 1,50,000 to her credit while
balance as per cash book was ` 1,12,050. On scrutiny of the two books, she ascertained the following
causes of difference:
a. She has issued cheques amounting to ` 80,000 out of which only ` 32,000 were presented for
payment.
b. She received a cheque of ` 5,000 which she recorded in her cash book but forgot to deposit in
the bank.
c. A cheque of ` 22,000 deposited by her has not been cleared yet.
d. Mr. Gupta deposited an amount of ` 15,700 in her bank which has not been recorded by her in Cash
Book yet.
e. Bank has credited an interest of ` 1,500 while charging ` 250 as bank charges.
Prepare a bank reconciliation statement.

4. From the following particulars ascertain the balance that would appear in the Bank Pass Book
of A on 31st December, 2019.
a. The bank overdraft as per Cash Book on 31st December, 2019 ` 6,340.
b. Interest on overdraft for 6 months ending 31st December, 2019 ` 160 is entered in Pass Book.
c. Bank charges of ` 400 are debited in the Pass Book only.
 d. Cheques issued but not cashed prior to 31st December, 2019, amounted to ` 11,68,000.
e. Cheques paid into bank but not cleared before 31st December, 2019 were for ` 22,17,000.
f. Interest on investments collected by the bank and credited in the Pass Book ` 12,00,000.
5. On 30th September, 2019, the bank account of X, according to the bank column of the Cash- Book, was
overdrawn to the extent of ` 4,062. On the same date the bank statement showed a credit balance of `
20,758in favour of X. An examination of the Cash Book and Bank Statement reveals the following:
a. A cheque for ` 13,14,000 deposited on 29th September, 2019 was credited by the bank only on
3rd October, 2019.
b. A payment by cheque for ` 16,000 has been entered twice in the Cash Book.
c. On 29th September, 2019, the bank credited an amount of ` 1,17,400 received from a
customer of X,but the advice was not received by X until 1st October, 2019
d. Bank charges amounting to ` 580 had not been entered in the Cash Book.
e. On 6th September, 2019, the bank credited ` 20,000 to X in error.
f. A bill of exchange for ` 1,40,000 was discounted by X with his bank. This bill was dishonoured
on 28th September, 2019 but no entry had been made in the books of X.
g. Cheques issued upto 30th September, 2019 but not presented for payment upto that date
totalled` 13,26,000.
You are required :

(a) to show the appropriate rectifications required in the Cash Book of X, to arrive at the correct
balance on 30th September, 2019 and
(b) to prepare a bank reconciliation statement as on that date.

6. On 30th December, 2019 the bank column of A. Philip’s cash book showed a debit balance of `
4,610. Onexamination of the cash book and bank statement you find that:
1) Cheques amounting to ` 6,30,000 which were issued to trade payables and entered in the
cash book before 30th December, 2019 were not presented for payment until that date.

2) Cheques amounting to ` 2,50,000 had been recorded in the cash book as having been paid
into thebank on 30th December, 2019, but were entered in the bank statement on1st January,
2020.
3) A cheque for ` 73,000 had been dishonoured prior to 30th December, 2019, but no record of
this factappeared in the cash book.
4) A dividend of ` 3,80,000, paid direct to the bank had not been recorded in the cash book.
5) Bank interest and charges amounting to ` 4,200 had been charged in the bank statement but not
entered in the cash book.
6) No entry had been made in the cash book for a trade subscription of ` 10,000 paid vide
banker’s orderin November, 2019.
7) A cheque for ` 27,000 drawn by B. Philip had been charged to A. Philip’s bank account by
mistake inDecember, 2019.
You are required:

(a) to make appropriate adjustments in the cash book bringing down the correct balance, and
(b) to prepare a statement reconciling the adjusted balance in the cash book with the balance
 shown in the bank statement.
7. From the following information, prepare a Bank reconciliation statement as at 31st December, 2019 for
Messrs New Steel Limited :

(1) Bank overdraft as per Cash Book on 31st December, 2019 22,45,900
(2) Interest debited by Bank on 26th December, 2019 but no advice received 2,78,700
(3) Cheque issued before 31st December, 2019 but not yet presented to Bank 6,60,000
(4) Transport subsidy received from the State Government directly by the Bank 14,25,000
but notadvised to the company
(5) Draft deposited in the Bank, but not credited till 31st December, 2019 13,50,000
(6) Bills for collection credited by the Bank till 31st December, 2019 but no advice 8,36,000
received by the company
(7) Amount wrongly debited to company account by the Bank, for which no 7,40,000
details areavailable

8. The Cash Book of Mr. Gadbadwala shows ` 8,36,400 as the balance at Bank as on 31st
December, 2019, but you find that it does not agree with the balance as per the Bank Pass
Book. On scrutiny, you find the following discrepancies:
a. On 15th December, 2019 the payment side of the Cash Book was undercast by ` 10,000.
b. A cheque for ` 1,31,000 issued on 25th December, 2019 was not taken in the bank column.
c. One deposit of ` 1,50,000 was recorded in the Cash Book as if there is no bank column therein.
d. On 18th December, 2019 the debit balance of ` 15,260 as on the previous day, was brought forward
as credit balance.
e. Of the total cheques amounting to ` 11,514 drawn in the last week of December, 2019,
chequesaggregating ` 7,815 were encashed in December.
f. Dividends of ` 25,000 collected by the Bank and subscription of ` 1,000 paid by it were not recorded
inthe Cash Book.
g. One out-going Cheque of ` 3,50,000 was recorded twice in the Cash Book. Prepare a
Reconciliation Statement.
9. The following are the Cash Book (bank column) and Pass Book of Jain for the months of
March, 2019 and April, 2019:
Cash Book (Bank Column only)
Date Particulars Amount Date Particulars Amount
Dr. Cr.
` `
01/3/2019 To Balance b/d 60,000 03/3/2019 By Cash A/c 2,00,000
06/3/2019 To Sales A/c 3,00,000 07/3/2019 By Modi 60,000
10/3/2019 To Ram 65,000 12/3/2019 By Patil 30,000
18/3/2019 To Singhal 2,70,000 18/3/2019 By Suresh 40,000
25/3/2019 To Goyal 33,000 24/3/2019 By Ramesh 1,50,000
31/3/2019 To Patel 65,000 30/3/2019 By Balance c/d 3,13,000
7,93,000 7,93,000
 Pass Book
Date Particulars Amount Amount Dr. or Balance
Dr. Cr. Cr. `
` `
1/4/2019 By Balance b/d 3,65,000 Cr. 3,65,000
3/4/2019 By Goyal 33,000 Cr. 3,98,000
5/4/2019 By Patel 65,000 Cr. 4,63,000
7/4/2019 To Naresh 2,80,000 Cr. 1,83,000
12/4/2019 To Ramesh 1,50,000 Cr. 33,000
15/4/2019 To Bank Charges 200 Cr. 32,800
20/4/2019 By Usha 17,000 Cr. 49,800
25/4/2019 By Kalpana 38,000 Cr. 87,800
30/4/2019 To Sunil 6,200 Cr. 81,600

Reconcile the balance of cash book on 31/3/2019.

10. When Nikki & Co. received a Bank Statement showing a favourable balance of ` 10,39,200 for
the period ended on 30th June, 2019, this did not agree with the balance in the cash book.
An examination of the Cash Book and Bank Statement disclosed the following :

a. A deposit of ` 3,09,200 paid on 29th June, 2019 had not been credited by the Bank until 1st July,
2019.
b. On 30th March, 2019 the company had entered into hire purchase agreement to pay by bank order a
sum of ` 3,00,000 on the 10th of each month, commencing from April, 2019. No entries had been
made in Cash Book.
c. A customer of the firm, who received a cash discount of 4% on his account of ` 4,00,000 paid the
firma cheque on 12th June. The cashier erroneously entered the gross amount in the bank column of
the Cash Book.
d. Bank charges amounting to ` 3,000 had not been entered in Cash-Book.
e. On 28th June, a customer of the company directly deposited the amount in the bank ` 4,00,000, but no
entry had been made in the Cash Book.
f. ` 11,200 paid into the bank had been entered twice in the Cash Book.
g. A debit of ` 11,00,000 appeared in the Bank Statement for an unpaid cheque, which had been returned
marked ‘out of date’. The cheque had been re-dated by the customer and paid into Bank again on 5th
July, 2019.
Prepare Bank Reconciliation Statement on 30 June, 2019.

11. The bank column of cash book of Mukesh was balanced on 31st March, 2019. It showed an overdraft of `
5,000. This did not agree with the balance shown by bank statement of Mukesh. You are required to
prepare a bank reconciliation statement taking the following into account :
a. Cheques issued but not presented for payment till 31.3.2019 ` 12,00,000.
b. Cheques deposited but not collected by bank till 31.3.2019 ` 20,00,000.
c. Interest on term-loan ` 10,00,000 debited by bank on 31.3.2019 but not accounted in Mukesh’s book.
d. Bank charges ` 2,500 was debited by bank during March, 2019 but accounted in the books of
 Mukesh on 4.4.2019.
e. An amount of ` 30,68,000 representing collection of Remesh’s cheque was wrongly credited to
the account of Mukesh by the bank in their bank statement.
12. From the following particulars prepare a bank reconciliation statement as on 31st December 2019:
a. On 31st December, 2019 the cash-book of a firm showed a bank balance of ` 60,000 (debit
balance).
b. Cheques had been issued for ` 15,00,000, out of which cheques worth ` 4,00,000 only were
presented for payment.
c. Cheques worth ` 11,40,000 were deposited in the bank on 28th December, 2019 but had not
been credited by the bank. In addition to this, one cheque for ` 5,00,000 was entered in the
cash book on 30th December, 2019 but was banked on 3rd January, 2020.
d. A cheque from Susan for ` 4,00,000 was deposited in the bank on 26th December 2019 but
was dishonoured and the advice was received on 2nd January, 2020.
e. Pass-book showed bank charges of ` 2000 debited by the bank.
f. One of the debtors deposited a sum of ` 5,00,000 in the bank account of the firm on 20th
December, 2019 but the intimation in this respect was received from the bank on 2nd January,
2020.

g. Bank pass-book showed a credit balance of ` 3,82,000 on 31st December, 2019.

13. According to the cash-book of Gopi, there was a balance of ` 44,50,000 in his bank on 30th June, 2019.
On investigation you find that :
a. Cheques amounting to ` 6,00,000 issued to creditors have not been presented for
payment till the date.
b. Cheques paid into bank amounting to ` 11,05,000 out of which cheques amounting to
` 5,50,000 only collected by the bank up to 30th June 2019.
c. A dividend of ` 40,000 and rent amounting to ` 6,00,000 received by the bank
and entered in the pass-book but not recorded in the cash book.
d. Insurance premium (up to 31st December, 2019) paid by the bank ` 27,000 not
entered in the cash book.
e. The payment side of the cash book had been under casted by ` 5,000.
f. Bank charges ` 1,500 shown in the pass book had not been entered in the cash book.
g. A bill payable of ` 2,00,000 had been paid by the bank but was not entered in
the cash book and bill receivable for ` 60,000 had been discounted with the bank
at a cost of ` 1,000 which had also not been recorded in cash book.
Required:

(a) to make the appropriate adjustments in the cash book, and

(b) to prepare a statement reconciling it with the bank pass book.
14. Prepare a bank reconciliation statement as on 30th September, 2019 from the following particulars:
Particulars `
Bank balance as per pass-book 10,00,000
Cheque deposited into the bank, but no entry was passed in the cash-book 5,00,000
 Cheque received, but not sent to bank 11,20,000
Credit side of the bank column cast short 2,000
Insurance premium paid directly by the bank under the standing advice 60,000
Bank charges entered twice in the cash book 2,000
Cheque issued, but not presented to the bank for payment 5,00,000
Cheque received entered twice in the cash book 10,000
Bills discounted dishonoured not recorded in the cash book. 5,00,000

15. Prepare a bank reconciliation statement from the following particulars on 31st March, 2019:
Particulars `
Debit balance as per bank column of the cash book 37,20,000
Cheque issued to creditors but not yet presented to the bank for payment 7,20,000
Dividend received by the bank but not yet entered in the cash book 5,00,000
Interest allowed by the bank 12,500
Cheques deposited into bank for collection but not collected by bank up to this date. 15,40,000
Bank charges 2,000
A cheque deposited into bank was dishonoured, but no intimation received 3,20,000
Bank paid house tax on our behalf, but no information received from bank in this connection. 3,50,000
16. The Cash-book of M/s ABC shows ` 27,570 as the balance at Bank as on 31st March, 2017. But
this does not agree with balance as per the Bank Statement. On scrutiny following discrepancies
were found:
a. Subsidy ` 10,250 received from the government directly by the bank, but not advised to
the company.
b. On 15th March, 2017 the payments side of the Cash-book was under cast by ` 350.
c. On 20th March, 2017 the debit balance of ` 2,156 as on the previous day, was brought
forward as credit balance in Cash-book.
d. A customer of the M/s ABC, who received a cash discount of 5% on his account of`
2,000, paid to M/s ABC a cheque on 24th March, 2017. The cashier erroneously entered the
gross amount in the Cash-Book.
e. On 10th March, 2017 a bill for ` 5,700 was discounted from the bank, entered in Cash-
book, but proceeds credited in Bank Statement amounted to ` 5,500 only.
f. A cheque issued amounting to ` 1,725 returned marked ‘out of date’. No entry made in
Cash-book.
g. Insurance premium ` 756 paid directly by bank under a standing order. No entry made in
cash-book.
h. A bill receivable for ` 1,530 discounted for ` 1,500 with the bank had been dishonoured
on 30th March, 2017, but advice was received on 1st April, 2017.
i. Bank recorded a Cash deposit of ` 1,550 as ` 1,505.
Prepare Bank Reconciliation Statement on 31st March, 2017. (RTP May-18)

17. Prepare a Bank Reconciliation Statement of Shri Hari as on 31st March, 2018:
a. Balance as per Pass Book is ` 10,000.
b. Bank collected a cheque of ` 500 on behalf of Shri Hari but wrongly credited it to Shri
Hari’s Account (another customer of bank).
 c. Bank recorded a cash deposit of ` 1,589 as ` 1,598.
d. Withdrawal column of the Pass Book undercast by ` 100.
e. The credit balance of ` 1,500 on page 5 was recorded on page 6 as debit balance.
f. The payment of a cheque of ` 350 was recorded twice in the Pass Book.
g. The Pass Book showed a credit for a cheque of ` 1,000 deposited by Shri Hari (another
customer of the bank). (RTP Nov-18)

18. On 30th November, 2018, the Cash Book of Mr. Hari showed an overdrawn position of` 4,480
although his Bank Statement showed only ` 3,200 overdrawn. An examination of the two records
showed the following errors:
a. The debit side of the Cash Book was undercast by ` 400.
b. A cheque for ` 1,600 in favour of Y suppliers Ltd. was omitted by the bank from the
statement, the cheque was debited to another customer’s Account.
c. A cheque for ` 172 drawn for payment of telephone bill was recorded in the Cash Book as `
127 but was shown correctly in the Bank Statement.
d. A cheque for ` 425 from Mr. Pal paid into bank was dishonoured and shown as such on
the Bank Statement, although no entry relating to the dishonoured cheque was made in
the Cash Book.
e. The Bank had debited a cheque for ` 150 to Mr. Hari’s Account by mistake, it should
have been debited by them to Mr. Kar’s Account.
f. A dividend of ` 100 was collected by the bank but not entered in the Cash Book.
g. Cheques totalling ` 1,300 drawn on November was not presented for payment.
h. Cheque for ` 1,200 deposited on 30th November was not credited by the Bank.
i. Interest amounting to ` 300 was debited by the Bank but yet to be entered in the Cash
Book.
You are required to prepare a Bank Reconciliation Statement on 30th November, 2018. (RTP May-19)
19. On 30th September, 2019, the bank account of Neel, according to the bank column of the Cash-
Book, was overdrawn to the extent of ` 8,124. On the same date the bank statement showed a
debit balance of ` 41,516 in favour of Neel. An examination of the Cash Book and Bank Statement
reveals the following:
a. A cheque for ` 26,28,000 deposited on 29th September, 2019 was credited by the bank
only on 3rd October, 2019
b. A payment by cheque for ` 32,000 has been entered twice in the Cash Book.
c. On 29th September, 2019, the bank credited an amount of ` 2,34,800 received from a
customer of Neel, but the advice was not received by Neel until 1st October, 2019.
d. Bank charges amounting to ` 1,160 had not been entered in the Cash Book.
e. On 6th September, 2019, the bank credited ` 40,000 to Neel in error.
f. A bill of exchange for ` 2,80,000 was discounted by Neel with his bank. This bill was
dishonoured on 28th September, 2019 but no entry had been made in the books of Neel.
g. Cheques issued upto 30th September, 2019 but not presented for payment upto that
date totalled ` 26,52,000.
You are required:
(a) to show the appropriate rectifications required in the Cash Book of Neel, to arrive at the
correct balance on 30th September, 2019 and
 (b) to prepare a bank reconciliation statement as on that date. (RTP Nov-19)
20. Prepare a bank reconciliation statement from the following particulars as on 31 st March, 2018.
Particulars (`)
Debit balance as per bank column of the cash book 18,60,000
Cheque issued to creditors but not yet presented to the Bank for 3,60,000
payment
Dividend received by the bank but not entered in the Cash book 2,50,000
Interest credited by the Bank 6,250
Cheques deposited into bank for collection but not collected by 7,70,000
bank up to this date
Bank charges not entered in Cash book 1,000
A cheque deposited into bank was dishonoured, but no intimation 1,60,000
received
Bank paid house tax on our behalf, but no intimation received 1,75,000
from bank in this connection
(RTP May-20)
21. Prepare a Bank Reconciliation Statement of Shri Hari as on 31st March, 2020:
a. Balance as per Pass Book is ` 10,000.
b. Bank collected a cheque of ` 500 on behalf of Shri Hari but wrongly credited it toShri Hari’s Account
(another customer of bank).
c. Bank recorded a cash deposit of ` 1,589 as ` 1,598.
d. Withdrawal column of the Pass Book undercast by ` 100.
e. The credit balance of ` 1,500 on page 5 was recorded on page 6 as debit balance.
f. The payment of a cheque of ` 350 was recorded twice in the Pass Book.
g. The Pass Book showed a credit for a cheque of ` 1,000 deposited by Shri Hari (another customer of the
bank). (RTP Nov-20)
22. From the following information (as on 31.3.2020), prepare a bank reconciliation statement after making necessary
adjustments in the cash book:
Particulars
Bank balances as per the cash book (Dr.) 32,50,000
Cheques deposited, but not yet credited 44,75,000
Cheques issued but not yet presented for payment 35,62,000
Bank charges debited by bank but not recorded in the cash-book 12,500
Dividend directly collected by the bank 1,25,000
Insurance premium paid by bank as per standing instruction notintimated 15,900

Cash sales wrongly recorded in the Bank column of the cash-book 2,55,000
Customer’s cheque dishonoured by bank not recorded in the cash-book 1,30,000
Wrong credit given by the bank 1,50,000

Also show the bank balance that will appear in the trial balance as on 31.3.2020. (RTP May-21)
23.On 31st March, 2021 the pass-book of a trader showed a credit balance of ` 15,65,000 but the passbook balance was
different for the following reasons from the cash book balance:
Cheques issued to ‘X’ for ` 60,000 and to ‘Y’ for ` 3,84,000 were not yet presented forpayment.
 Bank charged ` 350 for bank charges and ‘Z’ directly deposited ` 1,816 into the bankaccount, which were not
entered in the cash book.
Two cheques-one from ‘A’ for ` 5,15,000 and another from ‘B’ for ` 12,500 werecollected in the first week of April,
2021 although they were banked on 25.03.2021.
Interest allowed by bank ` 4,500.
Prepare a bank reconciliation statement as on 31st March, 2021. (RTP Nov-21)
24. From the following particulars of M/s Swapnil enterprises, prepare a Bank reconciliationstatement:
(1) Bank overdraft as per Pass Book as on 31st March, 2021 was ` 8,800
(2) Cheques deposited in Bank for ` 5,800 but only ` 2,000 were cleared till 31stMarch.
(3) Cheques issued were ` 2,500, ` 3,800 and ` 2,000 during the month. Thecheque of ` 5,800 is still with
supplier.
(4) Dividend collected by Bank ` 1,250 was wrongly entered as ` 1,520 in CashBook.
(5) Amount transferred from fixed deposit A/c into the current A/c ` 2,000appeared only in
Pass Book
(6) Interest on overdraft ` 930 was debited by Bank in Pass Book and theinformation was
received only on 3rd April 2021.
(7) Direct deposit by M/s Rajesh Trader ` 400 not entered in Cash Book.
(8) Corporation tax ` 1,200 paid by Bank as per standing instruction appears inPass Book only.
(RTP May-2022)
25.
26. The Bank Pass Book of Account No.5678 of Mrs. Rani showed an overdraft of ` 33,575 on 31st
March 2018. On going through the Pass Book, the accountant found the following:
a. A Cheque of Rs,1,080 credited in the pass book on 28 th March 2018 being dishonoured is
debited again in the pass book on 1st April 2018. There was no entry in the cash book about
the dishonour of the cheque until 15 th April 2018.
b. Bankers had credited her account with ` 2,800 for interest collected by them on her behalf,
but the same has not been entered in her cash book.
c. Out of ` 20,500 paid in by Mrs. Rani in cash and by cheques on 31st March 2018 cheques
amounting to ` 7,500 were collected on 7th April, 2018.
d. Out of Cheques amounting to ` 7,800 drawn by her on 27th March, 2018 a cheque for ` 2,500
was encashed on 3rd April, 2018.
e. Bankers seems to have given here wrong credit for ` 500 paid in by her in Account No. 8765
and a wrong debit in respect of a cheque for ` 300 against her account No.8765.
f. A cheque for ` 1,000 entered in Cash Book but omitted to be banked on 31st March,
2018.
g. A Bill Receivable for ` 5,200 previously dishonoured (Discount ` 200) with the Bank had been
dishounoured but advice was received on 1 st April, 2018.
h. A Bill for ` 10,000 was retired /paid by the bank under a rebate of ` 175 but the full amount of
the bill was credited in the bank column of the Cash Book.
i. A Cheque for ` 2,400 deposited into bank but omitted to be recorded in Cash Book and was
collected by the bank on 31st March, 2018. Prepare Bank Reconciliation Statement as on 31st
March, 2018. (May-18)
27. Prepare a bank reconciliation statement from the following particulars as on 31st March, 2018
Particulars (` )
 Debit balance as per bank column of the cash book 18,60,000
Cheque issued to creditors but not yet presented to the Bank for 3,60,000
payment
Dividend received by the bank but not entered in the Cash book 2,50,000
Interest allowed by the Bank 6,250
Cheques deposited into bank for collection but not collected by 7,70,000
bank up to this date
Bank charges not entered in Cash book 1,000
A cheque deposited into bank was dishonoured, but no intimation 1,60,000
received
Bank paid house tax on our behalf, but no intimation received 1,75,000
form bank in this connection
(Nov-18)
28. Prepare the Bank Reconciliation Statement of M/s. R.K. Brothers on 30th June 2018 from the
particulars given below:
a. The Bank Pass Book had a debit balance of ` 25,000 on 30th June, 2018.
b. A cheque worth ` 400 directly deposited into Bank by customer but no entry was made in
the Cash Book.
c. Out of cheques issued worth ` 34,000, cheques amounting to ` 20,000 only were presented
for payment till 30th June, 2018.
d. A cheque for ` 4,000 received and entered in the Cash Book but it was not sent to the
Bank.
e. Cheques worth ` 20,000 had been sent to Bank for collection but the collection was reported
by the Bank as under.
i. Cheques collected before 30th June, 2018, ` 14,000
ii. Cheques collected on 10th July, 2018, ` 4,000
iii. Cheques collected on 12th July, 2018, ` 2,000.
f. The Bank made a direct payment of ` 600 which was not recorded in the Cash Book.
g. Interest on Overdraft charged by the bank ` 1,600 was not recorded in the Cash Book.
h. Bank charges worth ` 80 have been entered twice in the cash book whereas Insurance
charges for ` 70 directly paid by Bank was not at all entered in the Cash Book.
i. The credit side of bank column of Cash Book was under cast by ` 2,000.(May-19)
29. On 30th September, 2018, the bank account of XYZ, according to the bank column of the cash book,
was overdrawn to the extent of ` 8,062. An examination of the Cash book and Bank Statement
reveals the following:
a. A cheque for ` 11,14,000 deposited on 29th September, 2018 was credited by the bank only
on 3rd October, 2018.
b. A payment by cheque for ` 18,000 has been entered twice in the Cash book.
c. On 29th September, 2018, the bank credited an amount of ` 1,15,400 received from a
customer of XYZ, but the advice was not received by XYZ until 1st October, 2018.
d. Bank charges amounting to ` 280 had not been entered in the cash book.
e. On 6th September 2018, the bank credited ` 30,000 to XYZ in error.
f. A bill of exchange for ` 1,60,000 was discounted by XYZ with his bank. The bill was
dishonoured on 28th September, 2018 but no entry had been made in the books of XYZ.
 g. Cheques issued upto 30th September,2018 but not presented for payment upto that date
totalled ` 13,46,000.
h. A bill payable of ` 2, 00,000 had been paid by the bank but was not entered in the cash
book and bill receivable for ` 60,000 had been discounted with the bank at a cost of `
1,000 which had also not been recorded in cash book.
You are required: To show the appropriate rectifications required in the cash book of XYZ, to arrive at
the correct balance on 30th September, 2018 and to prepare a Bank Reconciliation Statement as on
that date. (Nov-19)
30. On 31-3-2020, Mahesh's Cash Book Showed a Bank overdraft of ` 98,700. On comparison he finds the following
:
a. Out of the total cheques of ` 8,900 issued on 27th March, one cheque of
` 7,400 was presented for payment on 4th April and the other cheque of
` 1,500 handed over to the customer, was returned by him and in lieu of that a new cheque of the same amount
was issued to him on 1st April. No entry for the return was made.
b. Out of total cash and cheques of ` 6,800 deposited in the Bank on 24th March, one cheque of ` 2,600 was
cleared on 3rd April and the other cheque of ` 500 was returned dishonoured by the bank on 4th
April.
c. Bank charges ` 35 and Bank interest ` 2,860 charged by the bank appearing in the passbook are not yet
recorded in the cash book.
d. A cheque deposited in his another account of ` 1,550 wrongly credited to this account by the bank.
e. A cheque of ` 800, drawn on this account, was wrongly debited in another account by the bank.
f. A debit of ` 3,500 appearing in the bank statement for an unpaid cheque returned for being 'out of date'
had been re-dated and deposited in the bank account again on 5th April 2020.
g. The bank allowed interest on deposit ` 1,000.
h. A customer who received a cash discount of 4% on his account of ` 1,00,000 paid a cheque on 20th March,
2020. The cashier erroneously entered the gross amount in the bank column of the Cash Book.
Prepare Bank Reconciliation Statement as on 31-3-2020. (Nov-20)
31. Prepare a Bank Reconciliation Statement from the following particulars as on31st December, 2020 (Jan21)
Particulars `
Bank Balance as per Cash Book (Debit) 1,98,000
Bank Charges debited by the bank not recorded in Cash Book 34,000
Received from debtors vide RTGS on 31st December, 2020 not 1,00,000
recorded in Cash Book
Cheque issued but not presented for payment 45,000
Cheque deposited but not cleared 25,000
Cheque received and deposited but dishonoured. Entry for dishonour not
made in the Cash Book 5,000
Instruction for payment given to the bank on 31st December, 2020 but the 4,000
same effected by the Bank on 01st January, 2021
32. From the following information, ascertain the Cash Book balance of Mr. Bajaj as on31st March, 2021:
a. Debit balance as per Bank Pass Book ` 3,500.
b. A cheque amounting to ` 2,500 deposited on 15th March, but the same was returnedby the Bank on 24th
March for which no entry was passed in the Cash Book.
c. During March, two bills amounting to ` 2,500 and ` 500 were collected by the Bankbut no entry was
made in the Cash Book.
 d. A bill for ` 5,000 due from Mr. Balaji previously discounted for ` 4,800 was dishonored. The Bank debited
the account, but no entry was passed in the Cash Book.
e. A Cheque for ` 1,500 was debited twice in the cash book. (July-21)

Rectification of Errors

1. How would you rectify the following errors in the book of Rama & Co.?
a. The total to the Purchases Book has been undercast by ` 100.
b. The Returns Inward Book has been undercast by ` 50.
c. A sum of ` 250 written off as depreciation on Machinery has not been debited to Depreciation
Account.
d. A payment of ` 75 for salaries (to Mohan) has been posted twice to Salaries Account.
e. The total of Bills Receivable Book ` 1,500 has been posted to the credit of Bills Receivable Account.
f. An amount of `151 for a credit sale to Hari, although correctly entered in the Sales Book, has
beenposted as ` 115.
g. Discount allowed to Satish ` 25 has not been entered in the Discount Column of the Cash Book.
theamount has been posted correctly to the credit of his personal account.
2. The following errors were found in the book of Ram Prasad & Sons. Give the necessary entries to correct them.
a. ` 500 paid for furniture purchased has been charged to ordinary Purchases Account.
b. Repairs made were debited to Building Account for ` 50.
c. An amount of `100 withdrawn by the proprietor for his personal use has been debited to Trade Expenses
Account.
d. `100 paid for rent debited to Landlord’s Account.
e. Salary ` 125 paid to a clerk due to him has been debited to his personal account.
f. ` 100 received from Shah & Co. has been wrongly entered as from Shaw & Co.
g. ` 700 paid in cash for a typewriter was charged to Office Expenses Account.
3. Give journal entries to rectify the following:
a. A purchase of goods from Ram amounting to `150 has been wrongly entered through the Sales Book.
b. A Credit sale of goods amounting `120 to Ramesh has been wrongly passed through the Purchase
Book.
c. On 31st December, 2020 goods of the value of ` 300 were returned by Hari Saran and were taken
 inventory on the same date but no entry was passed in the books.
d. An amount of ` 200 due from Mahesh Chand, which had been written off as a Bad Debt in a previous
year, was unexpectedly recovered, and had been posted to the personal account of Mahesh Chand.
e. A Cheque for ` 100 received from Man Mohan was dishonoured and had been posted to the debit of
Sales Returns Account.
4. Correct the following errors (i) without opening a Suspense Account and (ii) opening a Suspense Account:
a. The Sales Book has been totalled `100 short.
b. Goods worth `150 returned by Green & Co. have not been recorded anywhere.
c. Goods purchased `250 have been posted to the debit of the supplier Gupta & Co.
d. Furniture purchased from Gulab & Bros, `1,000 has been entered in Purchases Day Book.
e. Discount received from Red & Black `15 has not been entered in the Discount Column of the Cash Book.
f. Discount allowed to G. Mohan & Co. `18 has not been entered in the Discount Column of the Cash
Book. The account of G. Mohan & Co. has, however, been correctly posted.
5. Correct the following errors found in the books of Mr. Dutt. The Trial Balance was out by ` 493 excess credit.
The difference thus has been posted to a Suspense Account.
a. An amount of `100 was received from D. Das on 31st December, 2020 but has been omitted to enter in
the Cash Book.
b. The total of Returns Inward Book for December has been cast `100 short.
c. The purchase of an office table costing ` 300 has been passed through the Purchases Day Book.
d. ` 375 paid for Wages to workmen for making show-cases had been charged to “Wages Account”.
e. A purchase of ` 67 had been posted to the trade payables’ account as ` 60.
f. A cheque for ` 200 received from P. C. Joshi had been dishonoured and was passed to the debit of
“Allowances Account”.
g. ` 1,000 paid for the purchase of a motor cycle for Mr. Dutt had been charged to “Miscellaneous Expenses
Account”.
h. Goods amounting to `100 had been returned by customer and were taken in to inventory, but no entryin
respect there of, was made into the books.
i. A sale of ` 200 to Singh & Co. was wrongly credited to their account. Entry was made correctly madein
sales book.
6. The following errors, affecting the account for the year 2020 were detected in the books of Jain Brothers, Delhi:
a. Sale of old Furniture ` 150 treated as sale of goods.
b. Receipt of ` 500 from Ram Mohan credited to Shyam Sunder.
c. Goods worth ` 100 brought from Mohan Narain have remained unrecorded so far.
d. A return of ` 120 from Mukesh posted to his debit.
e. A return of ` 90 to Shyam Sunder posted as ` 9 in his account.
f. Rent of proprietor’s residence, ` 600 debited to rent A/c.
g. A payment of ` 215 to Mohammad Sadiq posted to his credit as `125.
h. Sales Book added ` 900 short.
i. The total of Bills Receivable Book ` 1,500 left unposted.
You are required to pass the necessary rectifying entries and show how the trial balance would be affected by the
errors.

7. Write out the Journal Entries to rectify the following errors, using a Suspense Account.
a. Goods of the value of ` 100 returned by Mr. Sharma were entered in the Sales Day Book and posted
therefrom to the credit of his account;
b. An amount of `150 entered in the Sales Returns Book, has been posted to the debit of Mr. Philip, who
returned the goods;
c. A sale of ` 200 made to Mr. Ghanshyam was correctly entered in the Sales Day Book but wrongly posted
to the debit of Mr. Radheshyam as ` 20; and
d. The total of “Discount Allowed” column in the Cash Book for the month of September, 2020 amountingto
` 250 was not posted.
8. Mr. Roy was unable to agree the Trial Balance last year and wrote off the difference to the Profit and Loss Account
of that year. Next Year, he appointed a Chartered Accountant who examined the old books and found the
following mistakes:
a. Purchase of a scooter was debited to conveyance account `3,000.
b. Purchase account was over-cast by `10,000.
c. A credit purchase of goods from Mr. P for ` 2,000 was entered as a sale.
d. Receipt of cash from Mr. A was posted to the account of Mr. B ` 1,000.
e. Receipt of cash from Mr. C was posted to the debit of his account, ` 500.
f. ` 500 due by Mr. Q was omitted to be taken to the trial balance.
g. Sale of goods to Mr. R for ` 2,000 was omitted to be recorded.
h. Amount of ` 2,395 of purchase was wrongly posted as ` 2,593.
Mr. Roy used 10% depreciation on vehicles. Suggest the necessary rectification entries.

9. The trial balance of Mr. W & H failed to agree and the difference `20,570 was put into suspense pending investigation
which disclosed that:
a. Purchase returns day book had been correctly entered and totalled at `6,160, but had not been posted to the
ledger.
b. Discounts received `1,320 had been debited to discounts allowed.
c. The Sales account had been under added by `10,000.
d. A credit sale of `1,470 had been debited to a customer account at `1,740.
e. A vehicle bought originally for `7,000 four years ago and depreciated to `1,200 had been sold for `1,500 in the
beginning of the year but no entries, other than in the bank account had been passed through the books.
f. An accrual of `560 for telephone charges had been completely omitted.
g. A bad debt of `1,560 had not been written off and provision for doubtful debts should have been maintained at 10% of
Trade receivables which are shown in the trial balance at `23,390 with a credit provision for bad debts at
`2,320.
h. Tools bought for `1,200 had been inadvertently debited to purchases.
i. The proprietor had withdrawn, for personal use, goods worth `1,960. No entries had been made in the books.
You are required to give rectification entries without narration to correct the above errors before preparing annual
 accounts.
10. On going through the Trial balance of Ball Bearings Co. Ltd. you find that the debit is in excess by `150. This was credited to
“Suspense Account”. On a close scrutiny of the books the following mistakes were noticed:
a. The totals of debit side of “Expenses Account” have beeen cast in excess by ` 50.
b. The “Sales Account” has been totalled in short by `100.
c. Supplier account has been overcast by 225.
d. The sale return of `100 from a party has not been posted to that account though the Party’saccount has been
credited.
e. A cheque of `500 issued to the Suppliers’ account (shown under Trade payables) towards hisdues has been
wrongly debited to the purchases.
f. A credit sale of `50 has been credited to the Sales and also to the Trade receivables Account.
You are required to
(i) Pass necessary journal entries for correcting the above;
(ii) Show how they affect the Profits; and
(iii) Prepare the “Suspense Account” as it would appear in the ledger.
11. Mr. A closed his books of account on September 30, 2020 in spite of a difference in the trial balance. The difference was
`830 the credits being short; it was carried forward in a Suspense Account. In 2021 following errors were located:
a. A sale of `2,300 to Mr. Lala was posted to the credit of Mrs. Mala.
b. The total of the Returns Inward Book for July, 2020 `1,240 was not posted in the ledger.
c. Freight paid on a machine `5,600 was posted to the Freight Account as `6,500. 10%Depreciation is
charge on this machines.
d. White carrying forward the total in the Purchases Account to the next page, `65,590 was writteninstead of `56,950.
e. A sale of machine on credit to Mr. Mehta for `9,000 on 30th sept. 2020 was not entered in thebooks at all. The
book value of the machine was `6,750.
Pass journal entries to rectify the errors. Have you any comments to make?
12. A merchant’s trial balance as on June 30, 2020 did not agree. The difference was put to a SuspenseAccount. During the
next trading period, the following errors were discovered:
a. The total of the Purchases Book of one page, `4,539 was carried forward to the next page as
`4,593.
b. A sale of `573 was entered in the Sales Book as `753 and posted to the credit of the customer.
c. A return to a creditor, `510 was entered in the Returns Inward Book; however, the creditor’saccount was
correctly posted.
d. Cash received from C. Dass, `620 was posted to the debit of G. Dass.
e. Goods worth `840 were despatched to a customer before the close of the year but no invoice was made out.
f. Goods worth `1,000 were sent on sale or return basis to a customer and entered in the Sales Book. At the close of
the year, the customer still had the option to return the goods. The sale price was 25% above cost.
You are required to give journal entries to rectify the errors in a way so as to show the current year’s profit or loss
correctly.
13. The following errors were committed by the Accountant of Geete Dye-Chem.
a. Credit sale of ` 400 to Trivedi & Co. was posted to the credit of their account.
b. Purchase of ` 420 from Mantri & Co. passed through Sales Day Book as ` 240 How would you
rectify the errors assuming that :
(a) they were detected before preparation of Trial Balance.
(b) they were detected after preparation of Trial Balance but before preparing Final
Accounts, the difference was taken to Suspense A/c.
(c) they were detected after preparing Final Accounts. (RTP May-18)
14. Classify the following errors under the three categories – Errors of Omission, Errors of Commission and
Errors of Principle.
a. Sale of furniture credited to Sales Account.
b. Purchase worth ` 4,500 from M not recored in subsidiary books.
c. Credit sale wrongly passed through the Purchase Book.
d. Machinery sold on credit to Mohan recorded in Journal Proper but omitted to be posted.
e. Goods worth ` 5,000 purchased on credit from Ram recorded in the Purchase Book as ` 500.
(RTP Nov-18)
15. Write out the Journal Entries to rectify the following errors, using a Suspense Account.
a. Goods of the value of `10,000 returned by Mr. Sharma were entered in the Sales Day Book and
posted therefrom to the credit of his account;
b. An amount of `15,000 entered in the Sales Returns Book, has been posted to the debit of Mr.
Philip, who returned the goods;
c. A sale of `20,000 made to Mr. Ghanshyam was correctly entered in the Sales Day Book but
wrongly posted to the debit of Mr. Radheshyam as `2,000;
d. Bad Debts aggregating `45,000 were written off during the year in the Sales ledger but were not
adjusted in the General Ledger; and
e. The total of “Discount Allowed” column in the Cash Book for the month of September, 2018
amounting to `25,000 was not posted. (RTP May-19)
16. The following errors were committed by the Accountant of Geete Dye-Chem.
a. Credit sale of ` 400 to Trivedi & Co. was posted to the credit of their account.
b. Purchase of ` 420 from Mantri & Co. passed through Sales Day Book as `240 How would you
rectify the errors assuming that :
(a) they are detected before preparation of Trial Balance.
(b) they are detected after preparation of Trial Balance but before preparing Final Accounts,
the difference was taken to Suspense A/c.
(c) they are detected after preparing Final Accounts. (RTP Nov-19)
17. The following mistakes were located in the books of a concern after its books were closed and a
Suspense Account was opened in order to get the Trial Balance agreed:
a. Sales Day Book was overcast by ` 1,000.
b. A sale of ` 5,000 to X was wrongly debited to the Account of Y.
c. General expenses ` 180 was posted in the General Ledger as ` 810.
d. A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by P.
e. Legal Expenses ` 1,190 paid to Mrs. Neetu was debited to her personal account.
 f. Cash received from Ram was debited to Shyam ` 1,500.
g. While carrying forward the total of one page of the Purchases Book to the next, the amount of
` 1,235 was written as ` 1,325.
Find out the amount of the Suspense Account and Pass entries (including narration) for the
rectification of the above errors in the subsequent year’s books. (RTP May-20)

18. The following errors were committed by the Accountant of Geete Dye-Chem.
a. Credit sale of ` 400 to Trivedi & Co. was posted to the credit of their account.
b. Purchase of ` 420 from Mantri & Co. passed through Sales Day Book as ` 240

How would you rectify the errors assuming that :

(a) they were detected before preparation of Trial Balance.
(b) they were detected after preparation of Trial Balance but before preparingFinal Accounts, the difference
was taken to Suspense A/c.
(c) they were detected after preparing Final Accounts. (RTP Nov-20)
19. Write out the Journal Entries to rectify the following errors, using a SuspenseAccount.
a. Goods of the value of `5,000 returned by Mr. Sharma were entered in theSales Day Book and posted
therefrom to the credit of his account;
b. An amount of `7,500 entered in the Sales Returns Book, has been posted tothe debit of Mr. Hari, who
returned the goods;
c. A sale of `20,000 made to Mr. Amit was correctly entered in the Sales DayBook but wrongly posted to the
debit of Mr. Sumit as ` 2,000;
d. Bad Debts aggregating `15,000 were written off during the year in the Salesledger but were not adjusted in
the General Ledger; and
e. The total of “Discount Allowed” column in the Cash Book for the month ofSeptember, 2020 amounting to
`12,500 was not posted. (RTP May-21)
20. Classify the following errors under the three categories – Errors of Omission, Errorsof Commission and Errors of Principle.
a. Sale of furniture credited to Sales Account.
b. Machinery sold on credit to Mohan recorded in Journal Properly but omitted tobe posted.
c. Goods worth ` 5,000 purchased on credit from Ram recorded in the PurchaseBook as ` 500.
d. Purchase worth ` 4,500 from Mr. X not recorded in subsidiary books.
e. Credit sale wrongly passed through the Purchase Book. (RTP Nov-21)
21. The books of accounts of Dime Ltd. for the year ending 31.3.2021 were closed with a difference in books carried
forward. The following errors were detected subsequently:
a. Return outward book was under cast by ` 100.
b. ` 1,500 being the total of discount column on the credit side of the cash book was not posted.
c. ` 6,000 being the cost of purchase of office furniture was debited to PurchaseA/c.
d. A credit sale of ` 760 was wrongly posted as ` 670 to the customers’ A/c. inthe sales ledger.
e. The Sales of ` 10,000 was omitted to be recorded.Pass rectification entries
in the next year.(RTP May-2022)
22.
23. Give journal entries (narrations not required) to rectify the following:
a. Purchase of Furniture on credit from Nigam for ` 3,000 posted to Subham account as ` 300.
 b. A Sales Return of ` 5,000 to Jyothy was not entered in the financial accounts though it was duly
taken in the stock book.
c. Investments were sold for ` 75,000 at a profit of ` 15,000 and passed through Sales account.
d. An amount of ` 10,000 withdrawn by the proprietor (Darshan) for his personal use has been
debited to Trade Expenses account. (May-18)
24. Miss Daisy was unable to agree the Trial Balance last year and wrote off the difference to the profit and
loss account of that year. On verifying the old books by a Chartered Accountant next year, the following
mistakes were found.
a. Purchase account was undercast by ` 8,000.
b. Sale of goods to Mr. Rahim for ` 2,500 was omitted to be recorded.
c. Receipt of cash from Mr. Asok was posted to the account of Mr. Anbu ` 1,200.
d. Amount of ` 4,167 of sales was wrongly posted as ` 4,617.
e. Repairs to Machinery was debited to Machinery Account ` 1,800.
f. A credit purchase of goods from Mr. Paul for ` 3,000 entered as sale.
Suggest the necessary rectification entries. (May-18)
25. The following mistakes were located in the books of a concern after its books were closed and a
Suspense Account was opened in order to get the Trial Balance agreed:
a. Sales Day Book was overcast by ` 1,000.
b. A sale of ` 5,000 to X was wrongly debited to the Account of Y.
c. General expenses ` 180 was posted in the General Ledger as ` 810.
d. A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by P.
e. Legal Expenses ` 1,190 paid to Mrs. Neetu was debited to her personal account.
f. Cash received from Ram was debited to Shyam ` 1,500.
g. While carrying forward the total of one page of the Purchases Book to the next, the amount of `
1,235 was written as ` 1,325.
Find out the nature and amount of the Suspense Account and Pass entries (including narration) for the
rectification of the above errors in the subsequent year’s books. (Nov-18)
26. Give journal entries (with narrations) to rectify the following errors located in the books of a Trader
after preparing the Trial Balance:
a. An amount of ` 4,500 received on account of Interest was credited to Commission account.
b. A sale of ` 2,760 was posted from Sales Book to the Debit of M/s Sobhag Traders at
` 2,670

c. ` 35,000 paid for purchase of Air conditioner for the personal use of proprietor debited to
Machinery A/c.
Goods returned by customer for ` 5,000. The same have been taken into stock but no entry passed in the
books of accounts. (May-19)
27. Correct the following errors (i) without opening a Suspense Account and (ii) with opening a Suspense
Account:
(1) The sales book has been totalled ` 2,100 short.
(2) Goods worth ` 1,800 returned by Gaurav & Co. have not been recorded anywhere.
(3) Goods purchased ` 2,250 have been posted to the debit of the supplier Sen Brothers.
(4) Furniture purchased from Mary Associates, ` 15,000 has been entered in the purchase Daybook.
(5) Discount received from Black and White ` 1,200 has not been entered in the books.
 (6) Discount allowed to Radhe Mohan & Co. ` 180 has not been entered in the Discount Column of
the Cashbook. The account of Radhe Mohan & Co. has, however, been correctly posted.(Nov-19)
28. M/s. Applied Laboratories were unable to agree the Trial Balance as on 31 st March, 2020 and have raised a suspense account
for the difference. Next year the following errors were discovered:
a. Repairs made during the year were wrongly debited to the building A/c - ` 12,500.
b. The addition of the 'Freight' column in the purchase journal was short by ` 1,500.
c. Goods to the value of ` 1,050 returned by a customer, Rani & Co., had been posted to the debit of Rani & Co. and
also to sales returns.
d. Sundry items of furniture sold for ` 30,000 had been entered in the sales book, the total of which had been posted
to sales account.
e. A bill of exchange (received from Raja & Co.) for ` 20,000 had been returned by the bank as. dishonoured and had
been credited to the bank and debited to bills receivable account. You are required to pass journal entries to
rectify the above mistakes. (Nov-20)
29. Mr. Joshi's trial balance as on 31st March, 2020 did not agree. The difference was put to a Suspense Account. During the
next trading period, the following errors were discovered:
a. The total of the Purchases Book of one page, ` 5,615 was carried forward to thenext page as ` 6,551.
b. A sale of ` 281 was entered in the Sales Book as ` 821 and posted to the credit ofthe customer.
c. A return to creditor, ` 295 was entered in the Returns Inward Book; however, thecreditor's account was
correctly posted.
d. Cash received from Senu, ` 895 was posted to debit of Sethu.
e. Goods worth ` 1,400 were dispatched to a customer before the close of the year but no invoice was made
out.
f. Goods worth ` 1,600 were sent on sale or return basis to a customer and entered in the Sales Book at the close of
the year, the customer still had the option to return the goods. The gross profit margin was 20% on Sale.
g. ` 600 due from Mr. Q was omitted to be taken ·to the trial balance.
h. Sale of goods to Mr. R for ` 3,000 was omitted to be recorded. (Jan-21)
30. Mr. Ratan was unable to agree the Trial Balance last year and wrote off the difference to the Profit and Loss Account of that
year. Next year, he appointed a Chartered Accountant who examined the old books and found the following mistakes:
a. Purchase of a scooter was debited to conveyance account ` 30,000. Mr. Ratancharges 10% depreciation on
scooter.
b. Purchase account was over cast by ` 1,00,000.
c. A credit purchase of goods from Mr. X for ` 20,000 was entered as sale.
d. Receipt of cash from Mr. Anand was posted to the account of Mr. Bhaskar ` 10,000.
e. Receipt of cash from Mr. Chandu was posted to the debit of his account, ` 5,000.
f. ` 5,000 due by Mr. Ramesh was omitted to be taken to the Trial Balance.
g. Sale of goods to Mr. Ram for ` 20,000 was omitted to be recorded.
h. Amount of ` 23,950 of purchase was wrongly posted as ` 25,930. Suggest the necessary rectification entries.
(Jul-21)
 COMPANY ACCOUNTS
UNIT–2: ISSUE, FORFEITURE AND RE-ISSUE OF SHARES
1. A company had an authorised capital of `10,00,000 divided into 1,00,000 equity shares of `10
each. It decided to issue 60,000 shares for subscription and received applications for 70,000
shares. It allotted 60,000 shares and rejected remaining applications. Upto 31-3 -2017, it has
demanded or called `9 per share. All shareholders have duly paid the amount called, except
one shareholder, holding 5,000 shares who has paid only `7 per share .Prepare a balance
sheet assuming there are no other details.(Module)

2. A company invited applications for 10,000 equity shares of `50 each payable on application
`15, on Allotment ` 20, on first and final call `15. Applications are received for 10,000 shares
and all the applicants are allotted the number of shares they have applied for and installment
money was duly received by the company. Show Journal entries in the books of the
company.(Module)

3. On 1st April, 2017, A Ltd. issued 43,000 shares of ` 100 each payable as follows:

` 20 on application;

` 30 on allotment;

` 25 on 1st October, 2017; and

` 25 on 1st February, 2018.

By 20th May, 40,000 shares were applied for and all applications were accepted. Allotment was
made on 1st June. All sums due on allotment were received on 15th July; those on 1st call were
received on 20th October. Journalise the transactions when accounts were closed on 31st
March, 2018. (Module)
4. Pant Ltd. invited applications for 50,000 equity shares at `50 each, which are payable as on
application `20, on allotment `10 and on first and final call `20. The company received
applications for 60,000 shares. The directors accepted application for 50,000 shares and
rejected the rest. Show Journal entries if company refunded the application money to
rejected applicants and allotment money was received for 45,000 shares (Module).

5. The Delhi Artware Ltd. issued 50,000 equity shares of ` 100 each and 1,00,000 preference shares
of ` 100 each. The Share Capital was to be collected as under:

Equity Shares Preference Shares

` `
On Application 25 20
On Allotment 20 30
First Call 30 20
Final Call 25 30

All these shares were subscribed. Final call was received on 42,000 equity shares and 88,000
preference shares. Prepare the cash book and journalise the remaining transactions in the
books of the company. (Module)

6. On 1st October, 2017 Pioneer Equipment Limited received applications for 2,50,000 Equity
Shares of ` 100 each to be issued at a premium of 25 per cent payable as :
On Application ` 25

On Allotment `75 (including premium)

Balance Amount on Shares As and when required

The shares were allotted by the Company on October 20, 2017 and the allotment money was
duly received on October 31, 2017. Record journal entries in the books of the company to
record the transactions in connection with the issue of shares. (Module)

7. JHP Limited is a company with an authorised share capital of `10,00,000 in equity shares of `10
each, of which 6,00,000 shares had been issued and fully paid on 30th June, 2016. The
company proposed to make a further issue of 1,00,000 of these `10 shares at a price of `14
each, the arrangements for payment being:
(a) ` 2 per share payable on application, to be received by 1st July, 2016;
(b) Allotment to be made on 10th July, 2016 and a further ` 5 per share (including the
premium) to be payable;
(c) The final call for the balance to be made, and the money received by 30th April, 2017.
Applications were received for 3,55,000 shares and were dealt with as follows:
(i) Applicants for 5,000 shares received allotment in full;
(ii) Applicants for 30,000 shares received an allotment of one share for every two applied for;
no money was returned to these applicants, the surplus on application being used to
reduce the amount due on allotment;
(iii) Applicants for 3,20,000 shares received an allotment of one share for every four applied
for; the money due on allotment was retained by the company, the excess being returned
to the applicants; and
(iv) the money due on final call was received on the due date.
 You are required to record these transactions (including cash items) in the Journal of
JHP Limited. (Module)

8. Shreyas Ltd. did not receive the first call on 10,000 equity shares @ ` 3 per share which was due
on 1.7.2016. This amount was received on 1.4.2017. Open Calls in arrears account and
journalise the entries in the books of the company on 1.7.2016 and 1.4.2017. Also show an
extract of Balance Sheet on 31.3.2017.(Module)

9. Rashmi Limited issued at par 1,00,000 Equity shares of `10 each payable `2.50 on application;
`3 on allotment; ` 2 on first call and balance on the final call. All the shares were fully subscribed.
Mr. Nair who held 10,000 shares paid full remaining amount on first call itself. The final call
which was made after 3 months from first call was fully paid except a shareholder having
1000 shares who paid his due amount after 2 months along with interest on calls in arrears.
Company also paid interest on calls in advance to Mr. Nair. Give journal entries to record these
transactions.(Module)

10. A Ltd forfeited 30,000 equity shares of `10 fully called-up, held by Mr. X for non-payment of
final call @ `4 each. However, he paid application money @ `2 per share and allotment money
@ `4 per share. These shares were originally issued at par. Give Journal Entry for the
forfeiture.(Module)

11. X Ltd forfeited 20,000 equity shares of ` 10 each, ` 8 called-up, for non-payment of first call
money @ ` 2 each. Application money @ ` 2 per share and allotment money @ ` 4 per share
have already been received by the company. Give Journal Entry for the forfeiture (assume
that all money due is transferred to Calls-in-Arrears Account).(Module)

12. X Ltd. forfeited 5,000 equity shares of `100 each fully called-up which were issued at a premium
of 20%. Amount payable on shares were: on application `20; on allotment `50 (including
premium); on First and Final call `50. Only application money was paid by the shareholders in
respect of these shares. Pass Journal Entries for the forfeiture.(Module)

13. Mr. Shami has applied for 1,000 shares of Company XYZ Ltd. paying application money @ ` 2
per share but has been allotted only 600 shares. The shares have a face value of `10 and a
premium of ` 2 per share, which are payable as: on Allotment- ` 5 (including premium) and on
final call ` 5. Now in case Mr. Shami doesn't pay allotment money and final call and his shares
are forfeited, then following entry will be passed on forfeiture.(Module)

14. Mr. Long who was the holder of 2,000 preference shares of `100 each, on which ` 75 per share has
been called up could not pay his dues on Allotment and First call each at ` 25 per share. The
Directors forfeited the above shares and reissued 1500 of such shares to Mr. Short at ` 65 per
share paid-up as `75 per share. Give Journal Entries to record the above forfeiture and re-
issue in the books of the company.(Module)

15. Beautiful Co. Ltd issued 30,000 equity shares of `10 each payable as `3 per share on
Application, `5 per share (including `2 as premium) on Allotment and `4 per share on Call. All
the shares were subscribed. Money due on all shares was fully received except from Ram,
holding 500 shares, who failed to pay the Allotment and Call money and Shyam, holding 1,000
shares, who failed to pay the Call Money. All those 1,500 shares were forfeited. Of the shares
forfeited, 1,250 shares (including whole of Ram’s shares) were subsequently re-issued to Jadu
as fully paid up at a discount of ` 2 per share. Pass the necessary entries in the Journal of the
company to record the forfeiture and re-issue of the share. Also prepare the Balance Sheet of
the company.(Module)
16. X Co. Ltd. was incorporated with an authorized share capital of 90,000 equity shares of ` 10
each. The company purchased land and buildings from Y Co. Ltd for ` 4,00,000 payable in fully
paid-up shares of the company. The balance of the shares were issued to the public, which
were fully subscribed and paid for. You are required to pass Journal Entries and to prepare the
Balance Sheet.(Module)

17. A holds 2000 shares of Rs. 10 each on which he has paid Rs.2 as application money. B holds 4000
shares of Rs. 10 each on which he has paid Rs.2 per share as application money and Rs. 3 per share as
allotment money. C holds 3000 shares of Rs.10 each and has paid Rs. 2 on application, Rs. 3 on
allotment and Rs.3 for the first call. They all fail to pay their arrears on the second and final call and the
directors, therefore forfeited their shares. The shares are re-issued subsequently for Rs. 12 per share
fully paid. Journalise the transaction relating to the forfeiture and re-issue.(Module)

18. B Ltd. issued 20,000 equity shares of `100 each at a premium of `20 per share payable as follows: on
application `50; on allotment `50 (including premium); on final call `20. Applications were received for
24,000 shares. Letters of regret were issued to applicants for 4,000 shares and shares were allotted
to all the other applicants. Mr. A, the holder of 150 shares, failed to pay the allotment and call money,
the shares were forfeited. Show the Journal Entries and Cash Book in the books of B Ltd.(Module)
19. A limited Company, with an authorized capital of ` 20,00,000 divided into shares of ` 100 each, issued
for subscription 10,000 shares payable at ` 25 per share on application, ` 30 per share on allotment, `20
per share on first call three months after allotment and the balance as and when required.
The subscription list closed on January 31, 2016 when application money on 10,000 shares was
duly received and allotment was made on March 1, 2016. The allotment amount was received in full
but, when the first call was made, one shareholder failed to pay the amount on 1,000 shares held by
him and another shareholder with 500 shares paid the entire amount on his shares. Give journal entries
in the books of the Company to record these share capital transactions assuming that all amounts due
were received within one month of the date they were called. (Module)
20. X Ltd. invited applications for 10 lakhs shares of ` 100 each payable as follows :
On Application 20
On Allotment (on 1st May, 2016) 30
On First Call (on 1st Oct., 2016) 30
On Final Call (on 1st Feb., 2017) 20
All the shares were applied for and allotted. A shareholder holding 20,000 shares paid the whole of the
amount due along with allotment. Journalise the transactions, assuming all sums due were received.
Interest was paid to the shareholder concerned on 1st February, 2017. (Module)

21. Pihu Limited issued at par 2,00,000 Equity shares of ` 10 each payable ` 2.50 on application; ` 3 on
allotment; ` 2 on first call and balance on the final call. All the shares were fully subscribed. Mr. Pal who
held 20,000 shares paid full remaining amount on first call itself. The final call which was made after 3
months from first call was fully paid except a shareholder having 2,000 shares who paid his due
amount after 2 months along with interest on calls in arrears. Company also paid interest on calls in
advance to Mr. Pal. You are required to prepare journal entries to record these transactions.(RTP
May18)
22. Mr. Hello who was the holder of 4,000 preference shares of ` 100 each, on which ` 75 per share has
been called up could not pay his dues on Allotment and First call each at ` 25 per share. The Directors
forfeited the above shares and reissued 3,000 of such shares to Mr. X at ` 65 per share paid-up as
`75 per share. You are required to prepare journal entries to record the above forfeiture and re-
issue in the books of the company. (RTP May 18)
23. On 1st April, 2017, Pehal Ltd. issued 64,500 shares of ` 100 each payable as follows:
` 30 on application, ` 30 on allotment, ` 20 on 1st October, 2017; and ` 20 on 1st February,
2018. By 20th May, 60,000 shares were applied for and all applications were accepted. Allotment
 was made on 1st June. All sums due on allotment were received on 15th July; those on 1st call were
received on 20th October. You are required to prepare the Journal entries to record the transactions
when accounts were closed on 31st March, 2018.(RTP Nov-18)

24. Mr. P who was the holder of 2,500 preference shares of ` 100 each, on which ` 70 per share has been
called up could not pay his dues on Allotment and First call each at ` 20 per share. The Directors
forfeited the above shares and reissued 2,000 of such shares to Mr. Q at ` 60 per share paid-up as `
70 per share. You are required to prepare the Journal Entries to record the above forfeiture and re-
issue in the books of the company. (RTP Nov-18)
25. Konica Limited registered with an authorised equity capital of ` 2,00,000 divided into 2,000 shares of
` 100 each, issued for subscription of 1,000 shares payable at ` 25 per share on application, ` 30 per
share on allotment, ` 20 per share on first call and the balance as and when required. Application
money on 1,000 shares was duly received and allotment was made to them. The allotment
amount was received in full, but when the first call was made, one shareholder failed to pay the
amount on 100 shares held by him and another shareholder with 50 shares, paid the entire amount on
his shares. The company did not make any other call. Give the necessary journal entries in the books
of the company to record these transactions. (RTP May -19)
26. Kumar who was the holder of 4,000 preference shares of ` 100 each, on which ` 75 per share has been
called up could not pay his dues on Allotment and First call each at ` 25 per share. The Directors
forfeited the above shares and reissued 3,000 of such shares to Lal at ` 65 per share paid-up as ` 75 per
share. Give Journal Entries to record the above forfeiture and re-issue in the books of the
company.(RTP May-19)
27. On 1st April, 2017, Pehal Ltd. issued 64,500 shares of ` 100 each payable as follows:
` 30 on application, ` 30 on allotment, ` 20 on 1st October, 2017; and ` 20 on 1st February,
2018. By 20th May, 60,000 shares were applied for and all applications were accepted. Allotment
was made on 1st June. All sums due on allotment were received on 15 th July; those on 1st call were
received on 20th October. You are required to prepare the Journal entries to record the transactions
when accounts were closed on 31st March, 2018.(RTP Nov-19)
28. Mr. Hello who was the holder of 4,000 preference shares of ` 100 each, on which ` 75 per Mr.
Hello who was the holder of 4,000 preference shares of ` 100 each, on which ` 75 per share has
been called up could not pay his dues on Allotment and First call each at` 25 per share. The Directors
forfeited the above shares and reissued 3,000 of such shares to Mr. X at ` 65 per share paid-up as
`75 per share. (RTP Nov-19)
29. Bhagwati Ltd. invited applications for issuing 2,00,000 equity shares of ` 10 each. The
amounts were payable as follows:
On application - ` 3 per share
On allotment - ` 5 per share On first and final
call - ` 2 per share
Applications were received for 3,00,000 shares and pro-rata allotment was made to all the
applicants. Money overpaid on application was adjusted towards allotment money. B, who was
allotted 3,000 shares, failed to pay the first and final call money. His shares were forfeited. Out of
the forfeited shares, 2,500 shares were reissued as fully paid -up @` 6 per share. Pass necessary
Journal entries to record the above transactions in the books of Bhagwati Ltd.
( May-19 & RTP May-20)
30. Piyush Limited is a company with an authorized share capital of ` 2,00,00,000 in equity shares of ` 10
each, of which 15,00,000 shares had been issued and fully paid on 30th June, 2017. The company
proposed to make a further issue of 1,30,000 shares of` 10 each at a price of ` 12 each, the
 arrangements for payment being:
a. ` 2 per share payable on application, to be received by 1 st July, 2017;
b. Allotment to be made on 10th July, 2017 and a further ` 5 per share (including the premium) to be
payable;
c. The final call for the balance to be made, and the money received by 30th April, 2018.
Applications were received for 4,20,000 shares and were dealt with as follows:
(1) Applicants for 20,000 shares received allotment in full;
(2) Applicants for 1,00,000 shares received an allotment of one share for every two applied for; no
money was returned to these applicants, the surplus on application being used to reduce the
amount due on allotment;
(3) Applicants for 3,00,000 shares received an allotment of one share for every five shares applied
for; the money due on allotment was retained by the company, the excess being returned to the
applicants; and
(4) The money due on final call was received on the due date.
You are required to record these transactions (including cash items) in the journal of Piyush limited.
(May 18 & RTP May-20)
31. Konica Limited registered with an authorised equity capital of ` 2,00,000 divided into 2,000 shares of ` 100 each,
issued for subscription of 1,000 shares payable at ` 25 per share on application, ` 30 per share on allotment, ` 20 per
share on first call and the balance as and when required. Application money on 1,000 shares was duly received and
allotment was made to them. The allotment amount was received in full, but when the first call was made, one
shareholder failed to pay the amount on 100 shares held by him and another shareholder with 50 shares, paid the
entire amount on his shares. The company did not make any other call. Give the necessary journal entries in the books
of the company to record these transactions. (RTP Nov-20)
32. Alankit Limited issued at par 2,00,000 Equity shares of ` 100 each payable ` 25 on application; ` 30 on allotment; ` 20
on first call and balance on the final call. All the shares were fully subscribed. Mr. Dhawan who held 40,000 shares
paid full remaining amount on first call itself. The final call which was made after 3 months from first call was fully paid
except a shareholder having 4,000 shares who paid his due amount after 2 months along with interest on calls in
arrears. Company also paid interest on calls in advance to Mr. Dhawan.
You are required to prepare journal entries to record these transactions. (RTP May-21)
33. Samuel who was the holder of 12,000 preference shares of ` 100 each, on which ` 75 per share has been called up
could not pay his dues on Allotment and First call each at
` 25 per share. The Directors forfeited the above shares and reissued 10,000 of such shares to Mr. Robort at ` 65 per share
paid-up as `75 per share. You are required to prepare journal entries to record the above forfeiture and re-issue in the
books of the company. (RTP May-21)
34. On 1st April, 2020, States Ltd. issued 1,80,000 shares of ` 10 each payable as follows:
` 2 on application, ` 3 on allotment, ` 2 on First call 1st October, 2020; and ` 3 on Final call 1st February, 2021.
By 20th May, 1,50,000 shares were applied for and all applications were accepted. Allotment was made on 1st June.
All sums due on allotment were received on 15 th July; those on 1st call were received on 20th October. You are required
to prepare the Journal entries to record the transactions when accounts were closed on 31 st March, 2021.(RTP Nov-21)
35. Mr. Samphat who was the holder of 12,000 preference shares of ` 100 each, on which
` 60 per share has been called up could not pay his dues on Allotment and First call each at ` 20 per share. The
Directors forfeited the above shares and reissued 10,000 of such shares to Mr. Sushil at ` 50 per share paid-up as `60
per share. You are required to prepare journal entries to record the above forfeiture and re-issue in the books of the
company.(RTP Nov-21)
36. On 1st June, 2020, Suraj Ltd. issued 43,000 shares of ` 100 each payable as follows:
 ` 20 on application;
` 20 on allotment;
First call of ` 30 on 1st Dec, 2020; and
Second and final call of ` 30 on 1st March, 2021.
By 20th July, 40,000 shares were applied for and all applications were accepted. Allotment was made on 1st
Aug. All sums due on allotment were received on 15th Sept; those on 1st call were received on 20th Dec.
You are required to journalise the transactions when accounts were closed on 31st March, 2021(RTP
May-2022)
37. Delta Ltd. forfeited 600 shares of ` 10 each issued at a premium of 10% to W for non- payment of first and final
call money of ` 3 (including ` 1 premium). At different intervals of time out of these 400 shares were re-issued
to Z, credited as fully paid for ` 9 per share and 100 shares were re-issued to X as ` 10 paid up for ` 11 per
share. Record the journal entries for forfeiture and reissue of shares. (RTP May-2022)
38. Give necessary journal entries for the forfeiture and re-issue of shares:
(I) X Ltd. forfeited 300 shares of ` 10 each fully called up, held by Ramesh for non- payment of
allotment money of ` 3 per share and final call of ` 4 per share. He paid the application money of `
3 per share. These shares were re-issued to Suresh for ` 8 per share.

(II) X Ltd. forfeited 200 shares of ` 10 each (` 7 called up) on which Naresh had paid application and
allotment money of ` 5 per share. Out of these, 150 shares were re- issued to Mahesh as fully paid
up for ` 6 per share.
(III) X Ltd. forfeited 100 shares of ` 10 each (` 6 called up) issued at a discount of 10% to Dimple on
which she paid ` 2 per share. Out of these, 80 shares were re-issued to Simple at ` 8 per share
and called up for ` 6 share.(Nov 18)
39. B Limited issued 50,000 equity shares of ` 10 each payable as ` 3 per share on application, ` 5 per
share (including ` 2 as premium) on allotment and ` 4 per share on call. All these shares were
subscribed. Money due on all shares was fully received except from X, holding 1000 shares who
failed to pay the allotment and call money and Y, holding 2000 shares, failed to pay the call
money. All those 3,000 shares were forfeited. Out of forfeited shares, 2,500 shares (including
whole of X's shares) were subsequently re-issued to Z as fully paid up at a discount of ` 2 per share.
Pass necessary journal entries in the books of B limited. Also prepare Balance Sheet and notes to
accounts of the company. (Nov-19)
40. ABC Limited issued 20,000 equity shares of ` 10 each payable as:
` 2 per share on application
` 3 per share on allotment
` 4 per share on first call
` 1 per share on final call
All the shares were subscribed. Money due on all shares was fully received except for Mr. Bird, holding 300 shares,
who failed to pay first call and final call money. All these 300 shares were forfeited. The forfeited shares of Mr. Bird
were subsequently re-issuedto Mr. John.as fully paid up at a discount of ` 2 per share. (Nov-20)
41. A Limited is a company with' an authorised share capital of ` 1,00,00,000 in equity shares of ` 10 each, of which
6,00,000 shares had been issued and fully paid up on 31st March, 2020. The company proposes to make a further issue
of 1,35,000 of these ` 10 shares at a price of ` 14 each, the arrangement of payment being :
a. ` 2 per share payable on application, to be received by 31st May, 2020;
b. Allotment to be made on 10th June, 2020 and a further ` 5 per share (including the premium to be payable);
c. The final call for the balance to be made, and the money received by 31st December, 2020.
 Applications were received for 5,60,000 shares and dealt with as follows:
(1) Applicants for 10,000 shares received allotment in full;
(2) Applicants for 50,000 shares received allotment of 1 share for every 2 applied for; no money was returned to these
applicants, the surplus on application being used to reduce the amount due on allotment;
(3) Applicants for 5,00,000 shares 'received an allotment of 1 share for every 5 shares applied for; the money due on
allotment was retained by the company, the excess being returned to the applicants; and
(4) The money due on final call was received on the due date.
You are required to record these transactions (including bank transactions) in the Journal Book of A Limited.(Jan-21)
42. X Limited invited applications for issuing 75,000 equity shares of ` 10 each at a premium of ` 5 per share. The total
amount was payable as follows:
a. ` 9 per share (including premium) on application and allotment
b. Balance on the First and Final Call
Applications for 3,00,000 equity shares were received. Applications for 2,00,000 equity shares were rejected and money
refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made. The
amount was duly received except on 1,500 shares applied by Mr. Raj. His shares were forfeited. The forfeited shares were re-
issued at a discount of ` 4/- per share.
Pass necessary journal entries· for the above transactions in the books of X Limited.(Jul-21)
 COMPANY ACCOUNTS
UNIT – 3: ISSUE OF DEBENTURES
1. Amol Ltd. issued 40,00,000, 9% debentures of ` 50 each, payable on application as per term mentioned in the prospectus
and redeemable at par any time after 3 years from the date of issue. Record necessary entries for issue of
debentures in the books of Amol Ltd.

2. Atul Ltd. issued 1,00,00,000, 8% debenture of `100 each at a discount of 10% redeemable at par at the end of10th
year. Money was payable as follows :
` 30 on application

` 60 on allotment

Record necessary journal entries regarding issue of debenture.

3. Koinal Chemicals Ltd. issued 15,00,000, 10% debenture of `50 each at premium of 10%, payable as `20 on
application and balance on allotment. Debentures are redeemable at par after 6 years. All the money due on
allotment was called up and received. Record necessary entries when premium money is included in application money.
4. Modern Equipments Ltd. issued 4,00,000, 12% debentures of ` 100 payable as follows :On
application ` 30

On allotment ` 70
The debenture were fully subscribed and all the money was duly received. As per the terms of issue, debentures are
redeemable at `110 per debenture. Record necessary entries regarding issue of debentures.

5. Agrotech Ltd. issued 150 lakh 9% debentures of `100 each at a discount of 6%, redeemable at a premium of 5%
after 3 years payable as : `50 on application and ` 44 on allotment. Record necessary journal entries for issue of
debentures.

6. Simmons Ltd. issued 1,00,000, 12% Debentures of `100 each at par payable in full on application by 1st April,
Application were received for 1,10,000 Debentures. Debentures were allotted on 7th April. Excess money refunded
on the same date. You are required to pass necessary Journal Entries (including cash transactions) in the books of
the company.

7. X Ltd. issued 1,00,000 12% Debentures of `100 each at a discount of 10% payable in full on application by 31st May, 2020.
Applications were received for 1,20,000 debentures. Debentures were allotted on 9th June, 2020. Excess money was
refunded on the same date. Pass necessary Journal Entries. Also show necessary ledger accounts.

8. X Ltd. obtains a loan from IDBI of `1,00,00,000, giving as collateral security of `1,50,00,000 (of ` 10 each), 14%, First
Mortgage Debentures.
9. Taking the same information of the illustration 8, the entry on issue will be as follows :

SHRIKANT KARWA’S CLASSES Page 67

 In the Books of X Ltd.
Journal
Date Particulars ` `
Debentures Suspense A/c Dr. 1,50,00,000
To 14% First Mortgage Debentures A/c 1,50,00,000
(Being the issue of ` 15,00,000 debentures @ `10 collaterally as perBoard’s
Resolution No…dated…)

10. X Company Limited issued 10,000 14% Debentures of the nominal value of `50,00,000 as follows:
c. To sundry persons for cash at 90% of nominal value of `25,00,000.
d. To a vendor for purchase of fixed assets worth `10,00,000 – `12,50,000 nominal value.
e. To the banker as collateral security for a loan of `10,00,000 – `12,50,000 nominal value.

Pass necessary Journal Entries.

11. HDC Ltd issues 1,00,000, 12% Debentures of `100 each at `94 on 1st January, 2020. Under the terms of issue, the
debentures are redeemable at the end of 5 years from the date of the issue. Calculate the amount of discount to be
written-off in each of the 5 years.
12. HDC Ltd. issues 2,00,000, 12% Debentures of `10 each at `9.40 on 1st January, 2020. Under the terms of issue, 1/5th of
the debentures are annually redeemable by drawings, the first redemption occurring on 31st December, 2020.
Calculate the amount of discount to be written-off from 2020 to 2024.

13. A company issued 12% debentures of the face value of `10,00,000 at 10% discount on 1-1-2017. Debenture interest
after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the
debentures were to be redeemed after the expiry of five year period at 5% premium.
Pass journal entries for the accounting year 2020.
14. Country Crafts Ltd. issued 1,00,000, 8% debentures of ` 100 each at premium of 5% payable fully on application and redeemable at
premium of ` 10 Pass necessary journal entries at the time of issue.

15. Koinal Chemicals Ltd. issued 20,00,000, 10% debentures of `50 each at premium of 10%, payable as` 20 on application and
balance on allotment. Debentures are redeemable at par after 6 years. All the money due on allotment was called up and received.
Record necessary entries when premium money is included in allotment money.
16. Kapil Ltd. issued 50,000, 12% Debentures of `100 each at a premium of 10% payable in full on application by 1st March,
2020. The issue was fully subscribed and debentures were allotted on 9th March, 2020.

Pass necessary Journal Entries (including cash transactions).

17. On 1st April 2020 Sheru Ltd. issued 1,00,000 12% debentures of `100 each at a discount of 5%, redeemable on 31 March 2025.
Issue was oversubscribed by 20,000 debentures, who were refunded their money. Interest is paid annually on 31 March. You
are required to prepare:

SHRIKANT KARWA’S CLASSES Page 68

 a. Journal Entries at the time of issue of debentures.

b. Discount on issue of Debenture Account

c. Interest account and Debenture holder Account assuming TDS is deducted @ 10%.
18. Riya Limited issued 20,000 14% Debentures of the nominal value of `1,00,00,000 as follows:
a. To sundry persons for cash at 90% of nominal value of ` 50,00,000.
b. To a vendor for purchase of fixed assets worth ` 20,00,000 – ` 25,00,000 nominal value.
c. To the banker as collateral security for a loan of ` 20,00,000 – ` 25,00,000 nominal value.
You are required to prepare necessary journal entries Journal Entries. (RTP May-18)
19. A Ltd. issued 3,50,000, 12% Debentures of `100 each at par payable in full on application by 1st April,
Application were received for 3,85,000 Debentures. Debentures were allotted on 7th April. Excess money
refunded on the same date. You are required to prepare necessary Journal Entries (including cash
transactions) in the books of the company. (RTP Nov-18)
20. Suvidha Ltd. purchased machinery worth `1,98,000 from Hemant Ltd. The payment was made by issue of
12% debentures of `100 each. Pass the necessary journal entries for the purchase of machinery and issue
of debentures when: (i) Debentures are issued at par; (ii) Debentures are issued at 10% discount; and (iii)
Debentures are issued at 10% premium (RTP May-19)
21. Pihu Ltd. issued 50,00,000, 9% debentures of ` 100 each at a discount of 10% redeemable at par at the
end of 10th year. Money was payable as follows :
` 40 on application
` 50 on allotment
You are required to give necessary journal entries regarding issue of debenture. (RTP Nov-19)
22. Pure Ltd. issues 1,00,000 12% Debentures of ` 10 each at ` 9.40 on 1st January, 2018. Under the terms of
issue, the Debentures are redeemable at the end of 5 years from the date of issue.
Calculate the amount of discount to be written-off in each of the 5 years. (RTP May-20 & Nov-18)
23. A Ltd. issued 3,50,000, 12% Debentures of `100 each at par payable in full on application by 1st April, Application were
received for 3,85,000 Debentures. Debentures were allotted on 7th April. Excess money refunded on the same date. You are
required to prepare necessary Journal Entries (including cash transactions) inthe books of the company. (RTP Nov-20)
24. Priya Ltd. issued 25,00,000, 12% debentures of ` 10 each at a discount of 10%redeemable at par at the end of 10th
year. Money was payable as follows :
` 4 on application
` 5 on allotment
Record necessary journal entries regarding issue of debenture. (RTP May-21)
25. Avantika Ltd. purchased machinery worth `9,90,000 from Avneet Ltd. The payment was made by issue of 10% debentures of
`100 each. Pass the necessary journal entries for the purchase of machinery and issue of debentures when: (i) Debentures
are issued at par; (ii) Debentures are issued at 20 % discount; and (iii) Debentures are issued at 20% premium. (RTP Nov-21)

26. On 1st April 2020, XY Ltd. took over assets of `4,50,000 and liabilities of 60,000 of Himalayan Ltd. for the purchase

SHRIKANT KARWA’S CLASSES Page 69

 consideration of ` 4,40,000. It paid the purchase consideration by issuing 8% debenture of ` 100 each at 10% premium on
same date. XY Ltd. issued another 3000, 8% debenture of ` 100 at discount of 10% redeemable at premium of 5 % after 5
years. According to the terms of the issue ` 30 is payable on application and the balance on the allotment on debentures. It
has been decided to write off the entire loss on issue of discount in the current year itself.
You are required to pass the journal entries in the books of XY Ltd. for the financial year 2020-21 (RTP May-2022)
27.
28. On 1st January 2018·Ankit Ltd. issued 10% debentures of the face value of ` 20,00,000 at 10% discount.
Debenture interest after deducting tax at source @10% was payable on30th June and 31st December every
year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.
Pass necessary journal entries for the accounting year 2018 (May-19)
29. Y Company Limited issue 10,000 12% Debentures of the nominal value of ` 60,00,000as follows :
a. To a vendor for purchase of fixed assets worth ` 13,00,000 - ` 15,00,000 nominalvalue.
b. To sundry persons for cash at 90% of nominal value of ` 30,00,000.
c. To the banker as collateral security for a loan of ` 14,00,000 - ` 15,00,000 nominalvalue,
You are required to pass necessary Journal Entries. (Nov-20)

SHRIKANT KARWA’S CLASSES Page 70

 PREPARTION OF FINALACCOUNTS OF
SOLE PROPRIETORS
UNIT – 1 FINAL ACCOUNTS OF NON-MANUFACTURING ENTITIES
1. Trial Balance for the financial year (FY) ended 31st March 2020 of M/s Deepakshi shows following details:

Particulars Debit (`) Credit (`)

Purchase & Sales 10,00,000 12,00,000
Debtors & Creditors 5,00,000 4,00,000
Opening Stock 2,00,000
Closing Stock 3,00,000
Other Expenses & Incomes 7,00,000 9,00,000
Fixed Assets & Long Term Liabilities 25,00,000 6,00,000
Capital 21,00,000
52,00,000 52,00,000

Additional Information: Creditors balance as on 1st April, 2019 is ` 3,00,000.You are required to calculate cost of
goods sold and amount paid to creditors during the year

2.
`
Opening Inventory 1,00,000
Purchases 6,72,000
Carriage Inwards 30,000
Wages 50,000
Sales 11,00,000
Returns inward 1,00,000
Returns outward 72,000
Closing Inventory 2,00,000

Required
From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March,
2020 and Pass necessary closing entries in the journal proper of M/s. ABC Traders

3. Revenue, Expenses and Gross Profit Balances of M/s ABC Traders for the year ended on 31st March
2020 were as follows:

SHRIKANT KARWA’S CLASSES Page 71

 Gross Profit ` 4,20,000, Salaries ` 1,10,000, Discount (Cr.), ` 18,000, Discount (Dr.) ` 19,000, Bad Debts

` 17,000, Depreciation ` 65,000, Legal Charges ` 25,000, Consultancy Fees ` 32,000, Audit Fees ` 1,000, Electricity
Charges `17,000, Telephone, Postage and Telegrams ` 12,000, Stationery ` 27,000, Interest paid on Loans `
70,000.

Required
Prepare Profit and Loss Account of M/s ABC Traders for the year ended on 31st March, 2020. Show necessary
closing entries in the Journal Proper of M/s. ABC Traders also.

4. On 1st April 2020 provision for Doubtful Debts existed at ` 40,000. Trade receivables on 31.03.2020 were `
15,00,000; bad debts totalled ` 1,00,000. It is required to write off the bad debts and create a provision equal to
5% of the Trade receivables’ balances. Show how you would compute the amount debited to the Profit and Loss
Account.
5. The following is the Trial Balance of C. Wanchoo on 31st Dec. 2020.
Trial Balance on 31st December, 2020

Particulars ` `
Capital Account 10,00,000
Inventory Account 2,00,000
Cash in hand 1,44,000
Machinery Account 7,36,000
Purchases Account 18,20,000
Wages Account 10,00,000
Salaries Account 10,00,000
Discount Allowed A/c 50,000
Discount Received A/c 30,000
Sundry Office Expenses Account 6,00,000
Sales Account 50,00,000
Sums owing by customer (Trade receivables) 8,50,000
Trade payables (sums owing to suppliers) 3,70,000
Total 64,00,000 64,00,000
Value of Closing Inventory on 31st March, 2020 was ` 2,70,000

Prepare closing entries for the above items and Prepare Trading and Profit and Loss Account.

6. Given below Trial Balance of M/s Dayal Bros. as on 31st March, 2020 :
Particulars Debit Balances Credit Balances
` `
Capital A/c 7,00,000
Land and Building 3,00,000
14% Term Loan 4,00,000
Loan from M/s. D & Co. 4,60,000

SHRIKANT KARWA’S CLASSES Page 72

 Trade receivables 4,20,000
Cash in hand 20,000
Inventories in Trade 6,00,000
Furniture 2,00,000
Trade payables 40,000
Advances to Suppliers 1,00,000
Net Profit 1,00,000
Drawings 60,000
17,00,000 17,00,000

Required
Prepare Balance Sheet as on 31st March, 2020.

7. The balance sheet of Thapar on 1st April, 2019 was as follows:

Liabilities Amount Assets Amount
` `
Trade payables 15,00,000 Plant & Machinery 30,00,000
Expenses Payable 1,50,000 Furniture & Fixture 3,00,000
Capital 50,00,000 Trade receivables 14,00,000
Cash at Bank 6,50,000
Inventories 13,000,000
66,50,000 66,50,000
During 2019-20, his Profit and Loss Account revealed a net profit of ` 18,30,000. This was after allowing for the
following :

(a) Rent received from property let out ` 3,00,000.

(b) Depreciation on Plant and Machinery @ 10% and on Furniture and Fixtures @ 5%.
(c) A provision for Doubtful Debts @ 5% of the trade receivables as at 31st March, 2020.
But while preparing the Profit and Loss Account he had forgotten to provide for (1) outstanding expenses totaling`
1,80,000 and (2) prepaid insurance to the extent of ` 20,000. His current assets and liabilities on 31st March,
2020 were: Inventories ` 14,50,000; Trade receivables` 20,00,000; Cash at Bank ` 10,35,000 and Trade payables
` 11,40,000.During the year he withdrew ` 6,00,000 for domestic use.

Required
Draw up his Balance Sheet at the end of the year.

8.
Balance Sheet as at 31st March, 2020
Liabilities ` Assets `
Mahendra & Sons 5,60,000 Cash in hand 43,000
Capital 20,00,000 Cash at Bank 2,67,500
Trade receivables 7,49,500

SHRIKANT KARWA’S CLASSES Page 73

 Closing Inventory 9,00,000
Machinery and Equipment 6,00,000
25,60,000 25,60,000
From the above given balance sheet prepare the relevant opening entry.

9. Shri Mittal gives you the following Trial Balance and some other information:
Trial Balances as on 31st March, 2020
Particulars Dr. Cr.
` `
Capital 8,70,000
Purchases and Sales 6,05,000 12,10,000
Opening Inventory 72,000
Trade receivables and Trade payables 90,000 1,70,000
14% Bank Loan (loan taken at year end) 2,00,000
Overdrafts (overdraft taken at year end) 1,12,000
Salaries 2,70,000
Advertisements 1,10,000
Other expenses 60,000
Returns 40,000 30,000
Furniture 4,50,000
Building 8,90,000
Cash in Hand 5,000
25,92,000 25,92,000

Closing Inventory on 31st March, 2020 was valued at ` 1,00,000.

Required
Prepare final accounts of Shri Mittal for the year ended 31st March, 2020.

10. Mr. Mohan gives you the following trial balance and some other information:
Particulars ` `
Capital 6,50,000
Sales 9,70,000
Purchases 4,30,000
Opening Inventory 1,10,000
Freights Inward 40,000
Salaries 2,10,000
Other Administration Expenses 1,50,000
Furniture 3,50,000
Trade receivables and Trade payables 2,10,000 1,90,000
Returns 20,000 12,000

SHRIKANT KARWA’S CLASSES Page 74

 Discounts 19,000 9,000
Bad Debts 5,000
Investments in Government Securities 1,00,000
Cash in Hand and Cash at Bank 1,87,000
18,31,000 18,31,000
Other Information:
(i) Closing Inventory was ` 1,80,000;
(ii) Depreciate Furniture @ 10% p.a.
Required
Prepare Trading and Profit and Loss Account for the year ended on 31.3.2020 and Balance Sheet of
Mr. Mohan as on that date.

11. The Balance Sheet of Mr. Popatlal, a merchant on 31st March, 2020 stood as below:

Liabilities Amount Assets Amount

` `
Capital 2,40,000 Fixed Assets 1,25,600
Trade payables 1,64,000 Inventories 2,06,400
Bank Overdraft 1,46,000 Trade receivables 1,88,000
Less: Provision (6,200) 1,81,800
Cash 36,200
5,50,000 5,50,000

Required

Show opening journal entry on 1st April, 2020 in the books of Mr. Popatlal.

12. The following is the schedule of balances as on 31.3.20 extracted from the books of Shri Gavaskar, who carries on
business under the same name and style of Messrs Gavaskar Viswanath & Co., at Bombay:

Particulars Dr. Cr.

` `
Cash in hand 14,000
Cash at bank 26,000
Sundry Debtors 8,60,000
Stock on 1.4.2019 6,20,000
Furniture & fixtures 2,14,000
Office equipment 1,60,000
Buildings 6,00,000

SHRIKANT KARWA’S CLASSES Page 75

 Motor Car 2,00,000
Sundry Creditors 4,30,000
Loan from Viswanath 3,00,000
Provision for bad debts 30,000
Purchases 14,00,000
Purchase Returns 26,000
Sales 23,00,000
Sales Returns 42,000
Salaries 1,10,000
Rent for Godown 55,000
Interest on loan from Viswanath 27,000
Rates & Taxes 21,000
Discount allowed to Debtors 24,000
Discount received from Creditors 16,000

Freight on purchases 12,000

Carriage Outwards 20,000
Drawings 1,20,000
Printing and Stationery 18,000
Electricity Charges 22,000
Insurance Premium 55,000
General office expenses 30,000
Bad Debts 20,000
Bank charges 16,000
Motor car expenses 36,000
Capital A/c 16,20,000

TOTAL 47,22,000 47,22,000

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2020 and the Balance Sheet as at that
date after making provision for the following:

1. Depreciate: (a) Building used for business by 5 percent; (b) Furniture and fixtures by 10 percent; One steel
table purchased during the year for ` 14,000 was sold for same price but the sale proceeds were wrongly
credited to Sales Account; (c) Office equipment by 15 percent; Purchase of a typewriter during the year for `
40,000 has been wrongly debited to purchase; and (d) Motor car by 20%.
2. Value of stock at the close of the year was ` 4,40,000.

SHRIKANT KARWA’S CLASSES Page 76

 3. Two month’s rent for godown is outstanding.
4. Interest on loan from Viswanath is payable at 12 percent per annum, this loan was taken on 1.5.2019.
5. Provision for bad debts is to be maintained at 5 percent of Sundry Debtors.
6. Insurance premium includes ` 40,000 paid towards proprietor’s life insurance policy and the balance of the
insurance charges cover the period from 1.4.2019 to 30.6.2020.
13. Crimpson Ltd.’s profit and loss account for the year ended 31st March, 2020 includes the following information:

(i) Depreciation 57,500

(ii) Bad debts written off 21,000
(iii) Increase in provision for doubtful debts 18,000
(iv) Proposed dividend 15,000
(v) Retained profit for the year 20,000
(vi) Liability for tax 4,000

Required
State which one of the items (i) to (vi) above are – (a) transfer to provisions; (b) transfer to reserves; and (c)
neither related to provisions nor reserves.

14. From the following particulars extracted from the books of Ganguli, prepare trading and profit and lossaccount
and balance sheet as at 31st March, 2020 after making the necessary adjustments:
` `
Ganguli’s capital account (Cr.) 5,40,500 Interest received 7,250
Stock on 1.4.2019 2,34,000 Cash with Traders Bank Ltd. 40,000
Sales 14,48,000 Discounts received 14,950
Sales return 43,000 Investments (at 5%) as on 1.4.2019 25,000
Purchases 12,15,500 Furniture as on 1-4-2019 9,000
Purchases return 29,000 Discounts allowed 37,700
Carriage inwards 93,000 General expenses 19,600
Rent 28,500 Audit fees 3,500
Salaries 46,500 Fire insurance premium 3,000
Sundry debtors 1,20,000 Travelling expenses 11,650
Sundry creditors 74,000 Postage and telegrams 4,350
Loan from Dena Bank Ltd. (at 12%) 1,00,000 Cash in hand 1,900
Interest paid 4,500 Deposits at 10% as on 1-4-2019 (Dr.) 1,50,000
Printing and stationery 17,000 Drawings 50,000
Advertisement 56,000

Adjustments:

SHRIKANT KARWA’S CLASSES Page 77

 (1) Value of stock as on 31st March, 2020 is ` 3,93,000. This includes goods returned by customers on 31st March, 2020 to
the value of ` 15,000 for which no entry has been passed in the books.
(2) Purchases include furniture purchased on 1st January, 2020 for `10,000.
(3) Depreciation should be provided on furniture at 10% per annum.
(4) The loan account from Dena bank in the books of Ganguli appears as follows:

` `
31.3.2020 To Balance c/d 1,00,000 1.4.2019 By Balance b/d 50,000
31.3.2020 By Bank 50,000
1,00,000 1,00,000

(5) Sundry debtors include ` 20,000 due from Robert and sundry creditors include ` 10,000 due to him.
(6) Interest paid include ` 3,000 paid to Dena bank.
(7) Interest received represents ` 1,000 from the sundry debtors (due to delay on their part) andthe balance on
investments and deposits.
(8) Provide for interest payable to Dena bank and for interest receivable on investments and deposits.
(9) Make provision for doubtful debts at 5% on the balance under sundry debtors. No such provision need to be made for the
deposits.
15. Sengupta & Co. employs a team of eight workers who were paid `30,000 per month each in the year ending 31st March, 2019. At
the start of financial year 2019-2020, the company raised salaries by 10%to `33,000 per month each.
On October 1, 2019 the company hired two trainees at salary of `21,000 per month each. The work force are paid salary on the
first working day of every month, one month in arrears, so that the employees receive their salary for January on the first
working day of February etc. You are required to calculate:
(i) Amount of salaries which would be charged to the profit and loss for the year ended 31st March, 2020.
(ii) Amount actually paid as salaries during 2019-20
(iii) Outstanding Salaries as on 31st March, 2020.
16. You are required, prepare a Trading and Profit and Loss Account for the year ending 31st March, 2020 and a
Balance Sheet as on that date from the Trial Balance given below:
Particulars ` Particulars `
Debit Balance:
Trade receivables 3,50,000 Salaries 2,20,000
Inventory 1st April, 2019 5,00,000 Purchases 12,50,00
Cash in Hand 5,60,000 Plant and Machinery 15,70,000
Wages 3,00,000 Credit Balance:
Bad Debts 50,000 Capital 25,00,000
Furniture and Fixtures 1,50,000 Trade payables 9,00,000
Depreciation 1,50,000 Sales 17,00,000

SHRIKANT KARWA’S CLASSES Page 78

 On 31st March, 2020 the Inventory was valued at `10,00,000.
17. Mr. Kotriwal is engaged in business of selling magazines. Several of his customers pay money in advance for
subscribing his magazines. Information related to year ended 31st March 2020 has been given below:
On 1.4.2019 he had a balance of ` 2,00,000 advance from customers of which ` 1,50,000 is related to year 2019-20 while
remaining pertains to year 2020-21. During the year 2019-20 he made cash sales of` 5,00,000. You are required to compute:
(i) Total income for the year 2019-20.
(ii) Total money received during the year if the closing balance in advance from customers account is ` 1,70,000.
18. Mr. Birla is a proprietor engaged in business of trading electronics. An excerpt from his Trading & P&Laccount is as follows:
Trading and P&L A/c for the year ended 31st March, 2020
Particulars ` Particulars `
To Cost of Goods Sold 45,00,000 By Sales C
To Gross Profit c/d D
F F
To Rent A/c 26,00,000 By Gross Profit b/d D
To Office Expenses 13,00,000 By Miscellaneous Income E
To Selling Expenses B
To Commission to Manager (on Net Profit 2,00,000
before charging such commission)
To Net Profit A
G 60,00,000

Commission is charged at the rate of 10%.

Selling Expenses amount to 1% of total sales.

You are required to compute the missing figures. (Module)

19. The following are the balances as at 31st March, 2017 extracted from the books of Mr. XYZ.
` `
Plant and Machinery 19,550 Bad debts recovered 450
Furniture and Fittings 10,250 Salaries 22,550
Bank Overdraft 80,000 Salaries payable 2,450
Capital Account 65,000 Prepaid rent 300
Drawings 8,000 Rent 4,300
Purchases 1,60,000 Carriage inward 1,125
Opening Stock 32,250 Carriage outward 1,350
Wages 12,165 Sales 2,15,300
Provision for doubtful 3,200 Advertisement Expenses 3,350
debts
Provision for Discount on Printing and Stationery 1,250

SHRIKANT KARWA’S CLASSES Page 79

 debtors 1,375 Cash in hand 1,450
Sundry Debtors 1,20,000 Cash at bank 3,125
Sundry Creditors 47,500 Office Expenses 10,160
Bad debts 1,100 Interest paid on loan 3,000
Additional Information:
1. Purchases include sales return of ` 2,575 and sales include purchases return of` 1,725.
2. Goods withdrawn by Mr. XYZ for own consumption ` 3,500 included in purchases
3. Wages paid in the month of April for installation of plant and machinery amounting to ` 450
were included in wages account.
4. Free samples distributed for publicity costing ` 825.
5. Create a provision for doubtful debts @ 5% and provision for discount on debtors @ 2.5%.
6. Depreciation is to be provided on plant and machinery @ 15% p.a. and on furniture and fittings @
10% p.a.
7. Bank overdraft is secured against hypothecation of stock. Bank overdraft outstanding as on
31.3.2017 has been considered as 80% of real value of stock (deducting 20% as margin) and after
adjusting the marginal value 80% of the same has been allowed to draw as an overdraft.
8. Prepare a Trading and Profit and Loss Account for the year ended 31st March, 2017, and a Balance
Sheet as on that date. (RTP-MAY 18)

20. The following is the trial balance of Hari as at 31st December, 2017

Dr. Cr.
` `
Hari’s capital account - 76,690
Stock 1st January, 2017 46,800 -
Sales - 3,89,600
Returns inward 8,600 -
Purchases 3,21,700 -
Returns outward - 5,800
Carriage inwards 19,600 -
Rent & taxes 4,700 -
Salaries & wages 9,300 -
Sundry debtors 24,000 -
Sundry creditors - 14,800
Bank loan @ 14% p.a. - 20,000
Bank interest 1,100 -
Printing and stationary expenses 14,400 -
Bank balance 8,000 -

SHRIKANT KARWA’S CLASSES Page 80

 Discount earned - 4,440
Furniture & fittings 5,000 -
Discount allowed 1,800 -
General expenses 11,450 -
Insurance 1,300 -
Postage & telegram expenses 2,330 -
Cash balance 380 -
Travelling expenses 870 -
Drawings 30,000 _______
5,11,330 5,11,330

The following adjustments are to be made:

(1) Included amongst the debtors is ` 3,000 due from Ram and included among the creditors ` 1,000
due to him.
(2) Provision for bad and doubtful debts be created at 5% and for discount @ 2% on sundry debtors.
(3) Depreciation on furniture & fittings @ 10% shall be written off.
(4) Personal purchases of Hari amounting to ` 600 had been recorded in the purchases day book.
(5) Interest on bank loan shall be provided for the whole year.
(6) A quarter of the amount of printing and stationary expenses is to be carried forward to the next
year.
(7) Credit purchase invoice amounting to ` 400 had been omitted from the books. (8) Stock
on 31.12.2017 was ` 78,600.
Prepare (i) Trading & profit and loss account for the year ended 31.12.2017 and (ii) Balance sheet as on
31st December, 2017. (RTP NOV-18)
21. The following is the Trial Balance of T on 31st March, 2018 :
Dr. Cr.
` `
Capital - 6,00,000
Drawings 70,000 -
Fixed Assets (Opening) 1,40,000 -
Fixed Assets (Additions 01.10.2018) 2,00,000 -
Opening Stock 60,000 -
Purchases 16,00,000 -
Purchases Returns - 69,000
Sales - 22,00,000
Sales Returns 99,000 -
Debtors 2,50,000 -

SHRIKANT KARWA’S CLASSES Page 81

 Creditors - 2,20,000
Expenses 50,000 -
Fixed Deposit with Bank 2,00,000 -
Interest on Fixed Deposit - 20,000
Cash - 8,000
Suspense A/c - 2,000
Depreciation 14,000 -
Rent (17 months upto 31.8.2018) 17,000 -
Investments 12% (01.8.2017) 2,50,000 -
Bank Balance 1,69,000 -
31,19,000 31,19,000
Stock on 31st March, 2018 was valued at ` 1,00,000. Depreciation is to be provided at 10% per annum on
fixed assets purchased during the year. A scrutiny of the books of account revealed the following matters :
(i) ` 20,000 drawn from bank was debited to Drawings account, but out of this amount withdrawn `
12,000 was used in the business for day-to-day expenses.
(ii) Purchase of goods worth ` 16,000 was not recorded in the books of account upto 31.03.2018, but the
goods were included in stock.
(iii) Purchase returns of ` 1,000 was recorded in Sales Return Journal and the amount
was correctly posted to the Party’s A/c on the correct side.
(iv) Expenses include ` 6,000 in respect of the period after 31st March, 2018.
Give the necessary Journal Entries in respect of (i) to (iv) and prepare the Final Accounts for the year
ended 31st March, 2018.(RTP MAY-19)
22. The following are the balances as at 31st March, 2019 extracted from the books of Mr. XYZ.
` `
Plant and Machinery 19,550 Bad debts recovered 450
Furniture and Fittings 10,250 Salaries 22,550
Bank Overdraft 80,000 Salaries payable 2,450
Capital Account 65,000 Prepaid rent 300
Drawings 8,000 Rent 4,300
Purchases 1,60,000 Carriage inward 1,125
Opening Stock 32,250 Carriage outward 1,350
Wages 12,165 Sales 2,15,300
Provision for doubtful 3,200 Advertisement Expenses 3,350
debts
Provision for Discount on Printing and Stationery 1,250
debtors 1,375 Cash in hand 1,450
Sundry Debtors 1,20,000 Cash at bank 3,125
Sundry Creditors 47,500 Office Expenses 10,160

SHRIKANT KARWA’S CLASSES Page 82

 Bad debts 1,100 Interest paid on loan 3,000
Additional Information:
1. Purchases include sales return of ` 2,575 and sales include purchases return of
` 1,725.
2. Goods withdrawn by Mr. XYZ for own consumption ` 3,500 included in purchases.
3. Wages paid in the month of April for installation of plant and machinery amounting to ` 450
were included in wages account.
4. Free samples distributed for publicity costing ` 825.
5. Create a provision for doubtful debts @ 5% and provision for discount on debtors @ 2.5%.
6. Depreciation is to be provided on plant and machinery @ 15% p.a. and on furniture and fittings @
10% p.a.
7. Bank overdraft is secured against hypothecation of stock. Bank overdraft outstanding as on
31.3.2019 has been considered as 80% of real value of stock (deducting 20% as margin) and after
adjusting the marginal value 80% of the same has been allowed to draw as an overdraft.
Prepare a Trading and Profit and Loss Account for the year ended 31st March, 2019, and a Balance
Sheet as on that date. Also show the rectification entries.(RTP NOV-19)
23. The following are the balances extracted from the books of Shri Raghuram as on 31.03.2018, who carries
on business under the name and style of M/s Raghuram and Associates at Chennai
Particulars Debit (`) Credit (`)
Capital A/c 14,11,400
Purchases 12,00,000
Purchase Returns 18,000
Sales 15,00,000
Sales Returns 24,000
Freight Inwards 62,000
Carriage Outwards 8,500
Rent of Godown 55,000
Rates and Taxes 24,000
Salaries 72,000
Discount allowed 7,500
Discount received 12,000
Drawings 20,000
Printing and Stationery 6,000
Insurance premium 48,000
Electricity charges 14,000
General expenses 11,000
Bank charges 3,800
Bad debts 12,200
Repairs the Motor vehicle 13,000

SHRIKANT KARWA’S CLASSES Page 83

 Interest on loan 4,400
Provision for Bad-debts 10,000
Loan from Mr. Rajan 60,000
Sundry creditors 62,000
Motor vehicles 1,00,000
Land and Building 5,00,000
Office equipment 2,00,000
Furniture and Fixtures 50,000
Stock as on 31.03.2017 3,20,000
Sundry debtors 2,80,000
Cash at Bank 22,000
Cash in Hand 16,000
Total 30,73,400 30,73,400
Prepare Trading and Profit and Loss Account for the year ended 31.03.2018 and the Balance Sheet as at that
date after making provision for the following:
(a) Depreciate Building by 5%, Furniture and Fixtures by 10%, Office Equipment by 15% and Motor Car
by 20%.
(b) Value of stock at the close of the year was ` 4,10,000.
(c) One month rent for godown is outstanding.
(d) Interest on loan from Rajan is payable @ 10% per annum. This loan was taken on 01.07.2017
(e) Provision for bad debts is to be maintained at 5% of Sundry debtors.
(f) Insurance premium includes ` 42,000 paid towards proprietor's life insurance policy and the
balance of the insurance charges cover the period from 01.04.2017 to 30.06.2018.(RTP MAY-20)
24. The following is the Trial Balance of T on 31st March, 2019 :
Dr. Cr.
` `
Capital - 6,00,000
Drawings 70,000 -
Fixed Assets (Opening) 1,40,000 -
Fixed Assets (Additions 01.10.2019) 2,00,000 -
Opening Stock 60,000 -
Purchases 16,00,000 -
Purchases Returns - 69,000
Sales - 22,00,000
Sales Returns 99,000 -
Debtors 2,50,000 -
Creditors - 2,20,000
Expenses 50,000 -

SHRIKANT KARWA’S CLASSES Page 84

 Fixed Deposit with Bank 2,00,000 -
Interest on Fixed Deposit - 20,000
Cash - 8,000
Suspense A/c - 2,000
Depreciation 14,000 -
Rent (17 months upto 31.8.2019) 17,000 -
Investments 12% (01.8.2018) 2,50,000 -
Bank Balance 1,69,000 -
31,19,000 31,19,000
Stock on 31st March, 2019 was valued at ` 1,00,000. Depreciation is to be provided at 10% per annum on fixed assets
purchased during the year. A scrutiny of the books of account revealed the following matters :
(i) ` 20,000 drawn from bank was debited to Drawings account, but out of this amountwithdrawn ` 12,000 was used in the
business for day-to-day expenses.
(ii) Purchase of goods worth ` 16,000 was not recorded in the books of account upto 31.03.2019, but the goods were
included in stock.
(iii) Purchase returns of ` 1,000 was recorded in Sales Return Journal and the amountwas correctly posted to the Party’s
A/c on the correct side.
(iv) Expenses include ` 6,000 in respect of the period after 31st March, 2019.
Give the necessary Journal Entries in respect of (i) to (iv) and prepare the Final Accounts for the year ended 31st March,
2019. (RTP NOV-20)
25. The following is the trial balance of Manan as at 31st March 2020
Dr. Cr.
` `
Manan’s capital account - 1,53,380
Stock 1st April, 2019 93,600 -
Sales - 7,79,200
Returns inward 17,200 -
Purchases 6,43,400 -
Returns outward - 11,600
Carriage inwards 39,200 -
Rent & taxes 9,400 -
Salaries & wages 18,600 -
Sundry debtors 48,000 -
Sundry creditors - 29,600
Bank loan @ 14% p.a. - 40,000
Bank interest 2,200 -
Printing and stationary expenses 28,800 -
Bank balance 16,000 -

SHRIKANT KARWA’S CLASSES Page 85

 Discount earned - 8,880
Furniture & fittings 10,000 -
Discount allowed 3,600 -
General expenses 22,900 -
Insurance 2,600 -
Postage & telegram expenses 4,660 -
Cash balance 760 -
Travelling expenses 1740 -
Drawings 60,000 _______
10,22,660 10,22,660
The following adjustments are to be made:
(1) Included amongst the debtors is ` 6,000 due from Rahul and included among thecreditors ` 2,000 due to him.
(2) Provision for bad and doubtful debts be created at 5% and for discount @ 2% onsundry debtors.
(3) Depreciation on furniture & fittings @ 10% shall be written off.
(4) Personal purchases of Manan amounting to ` 1200 had been recorded in thepurchases day book.
(5) Interest on bank loan shall be provided for the whole year.
(6) A quarter of the amount of printing and stationary expenses is to be carried forwardto the next year.
(7) Credit purchase invoice amounting to ` 800 had been omitted from the books.
(8) Stock on 31st March 2020 was ` 1,57,200.
Prepare (i) Trading & profit and loss account for the year ended 31.3.2020 and (ii)Balance sheet as on 31st March,
2020. (RTP MAY-21)
26. The following are the balances as at 31st March, 2021 extracted from the books ofMr. Satender.
` `
Plant and Machinery 78,200 Bad debts recovered 1800
Furniture and Fittings 41,000 Salaries 90,200
Bank Overdraft 3,20,000 Salaries payable 9,800
Capital Account 2,60,000 Prepaid rent 1,200
Drawings 32,000 Rent 17,200
Purchases 6,40,000 Carriage inward 4,500
Opening Stock 1,29,000 Carriage outward 5,400
Wages 48,660 Sales 8,61,200
Provision for doubtful debts 12,800 Advertisement Expenses 13,400
Provision for Discount on debtors 5,500 Printing and Stationery 5,000
Sundry Debtors 4,80,000 Cash in hand 5,800
Sundry Creditors 1,90,000 Cash at bank 12,500
Bad debts 4,400 Office Expenses 40,640
Interest paid on loan 12,000

SHRIKANT KARWA’S CLASSES Page 86

 Additional Information:
1. Purchases include sales return of ` 10,300 and sales include purchases return of
` 6,900.
2. Goods withdrawn by Mr. Satender for own consumption ` 14,000 included inpurchases.
3. Wages paid in the month of April for installation of plant and machinery amountingto ` 1,800 were included in
wages account.
4. Free samples distributed out of purchases for publicity costing ` 3,300.
5. Create a provision for doubtful debts @ 5% and provision for discount on debtors@ 2.5%.
6. Depreciation is to be provided on plant and machinery @ 20% p.a. and on furniture and fittings @ 10% p.a.
7. Bank overdraft is secured against hypothecation of stock. Bank overdraft outstanding as on 31.3.2020 has been
considered as 80% of real value of stock (deducting 20% as margin) and after adjusting the marginal value 80% of the
same has been allowed to draw as an overdraft.
Prepare a Trading and Profit and Loss Account for the year ended 31st March, 2021, and a Balance Sheet as on that date.
Also show the rectification entries. (RTP NOV-21)
27. Mr. Bansal submitted to you the following trial balance, which he has not been able to agree. Rewrite the trial balance and
prepare trading and profit and loss account for the year ended 31.3.2021 and a balance sheet as on that date after giving
effect to the undermentioned adjustments:
Particulars Dr. Cr.
` `
Capital - 16,000
Opening stock 17,500 -
Closing stock - 18,790
Drawings 3,305 -
Returns inward - 550
Carriage inward 1,240 -
Deposit with X - 1,400
Returns outward 840 -
Carriage outward - 725
Rent paid 800 -
Rent outstanding 150 -
Purchases 13,000 -
Sundry debtors 5,000 -
Sundry creditors - 2,200
Furniture 1,500 -
Sales - 29,000
Wages 850 -
Cash 1,370 -
Advertisement __950 _____
46,505 68,665

SHRIKANT KARWA’S CLASSES Page 87

 Adjustments:
1. Write off ` 600 as bad debt and make a provision for doubtful debts at 5% onbalance sundry debtors.
2. Stock valued at ` 2,000 was destroyed by fire on 25th March,2021, but insurance company admitted a claim for `
1,500 only and paid the sum in April,2021.
3. Depreciation to be provided on furniture at 10% per annum(RTP May-2022)
28. The following are the balances extracted from the books of Shri Raghuram as on 31.03.2018, who carries on
business under the name and style of M/s Raghuram and Associates at Chennai:
Particulars Debit (`) Credit (`)
Capital A/c 14,11,400
Purchases 12,00,000

Purchase Returns 18,000

Sales 15,00,000
Sales Returns 24,000

Freight Inwards 62,000

Carriage Outwards 8,500

Rent of Godown 55,000

Rates and Taxes 24,000

Salaries 72,000

Discount allowed 7,500

Discount received 12,000

Drawings 20,000

Printing and Stationery 6,000

Insurance premium 48,000

Electricity charges 14,000

General expenses 11,000

Bank charges 3,800

Bad debts 12,200

Repairs the Motor vehicle 13,000

Interest on loan 4,400

Provision for Bad-debts 10,000

Loan from Mr. Rajan 60,000
Sundry creditors 62,000
Motor vehicles 1,00,000

Land and Buildings 5,00,000

Office equipment 2,00,000

Furniture and Fixtures 50,000

Stock as on 31.03.2017 3,20,000

SHRIKANT KARWA’S CLASSES Page 88

 Sundry debtors 2,80,000

Cash at Bank 22,000

Cash in Hand 16,000

Total 30,73,400 30,73,400

Prepare Trading and Profit and Loss Account for the year ended 31.03.2018 and the Balance Sheet as at that
date after making provision for the following:
(a) Depreciate Building by 5%, Furniture and Fixtures by 10%, Office Equipment by 15% and Motor Car by
20%.
(b) Value of stock at the close of the year was ` 4,10,000.
(c) One month rent for godown is outstanding.
(d) Interest on loan from Rajan is payable @ 10% per annum. This loan was taken on 01.07.2017
(e) Reserve for bad debts is to be maintained at 5% of Sundry debtors.
Insurance premium includes ` 42,000 paid towards proprietor's life insurance policy and the balance of
the insurance charges cover the period from 01 04.2017 to 30.06.2018. (MAY-18)
29. Mr. Fazhil is a proprietor in business of trading. An abstract of his Trading and P&L account is as follows:
Trading and P&L A/c for the year ended 31st March, 2018

Particulars (`) Particulars (`)

To Cost of Goods sold 22,00,000 By Sales 45,00,000
To Gross Profit C/d ? 45,00,000
By Gross Profit B/d ?
To Salaries paid 12,00,000 By Other Income 45,000
To General Expenses 6,00,000
To Selling Expenses ?
To Commission to Manager
(On net profit before charging
such commission) 1,00,000
To Net Profit ?
? ?
Selling expenses amount to 1% of total Sales.
You are required to compute the missing figures. (Nov-18)
30. Following particulars are extracted from the books of Mr. Sandeep for the year ended 31st December,
2018.
Particulars Amount Particulars Amount
Debit Balances: ` Credit Balances: `
Cash in hand 1,500 Capital 16,000
Purchase 12,000 Bank overdraft 2,000
Sales return 1,000 Sales 9,000

SHRIKANT KARWA’S CLASSES Page 89

 Salaries 2,500 Purchase return 2,000
Tax and Insurance 500 Provision for Bad debts 1,000
Bad debts 500 Creditors 2,000
Debtors 5,000 Commission 500
Investments 4,000 Bills payable 2,500
Opening stock 1,400
Drawings 2,000
Furniture 1,600
Bills receivables 3,000
35,000 35,000
Other information :
(i) Closing stock was valued at ` 4,500
(ii) Salary of ` 100 and Tax of ` 200 are outstanding whereas insurance ` 50 is prepaid.
(iii) Commission received in advance is ` 100.
(iv) Interest accrued on investment is ` 210
(v) Interest on overdraft is unpaid ` 300
(vi) Reserve for bad debts is to be kept at ` 1,000
(vii) Depreciation on furniture is to be charged @ 10%
You are required to prepare the final accounts after making above adjustments.(May-19)
31. Mr. Shyamal runs a factory, which produces detergents. Following details were available in respect of his
manufacturing activities for the year ended 31-03-2019. ·

Opening work-in-progress (9000 units) 26,000

Closing work-in-progress (14,000 units) 48,000
Opening inventory of Raw Materials 2,60,000
Closing inventory of Raw Materials 3,20,000
Purchases 8,20,000
Hire charges of Machinery @ ` 0.70 per unit manufactured
Hire charges of factory 2,60,000
Direct wages-contracted@ ` 0.80 per unit manufactured
and @ ` 0.40 per unit of closing W.I.P.
Repairs and maintenance 1,80,000
Units produced - 5,00,000 units

You are required to prepare a Manufacturing Account of Mr. Shyamal for the year ended 31-03-2019.
(Nov-19)
32. The balance sheet of Mittal on 1st January, 2018 was as follows
Liabilities Amount ` Assets Amount `
Trade payables 16,00,000 Plant & Machinery 31,00,000

SHRIKANT KARWA’S CLASSES Page 90

 Expenses payable 2,50,000 Furniture & Fixture 4,00,000
Capital 51,00,000 Trade receivables 14,50,000
Cash at bank 7,00,000
Inventories 13,00,000
69,50,000 69,50,000
During 2018, his profit and loss account revealed a net profit of ` 15,10,000. This was after allowing for
the following:
(i) Interest on capital @ 6% p.a.
(ii) Depreciation on plant and machinery @ 10% p.a. and on Furniture and Fixtures @ 5% p.a..
(iii) A provision for Doubtful debts @ 5% of the trade receivables as at 31st December 2018.
But while preparing the profit and loss account he had forgotten to provide for (1) outstanding expenses
totalling ` 1,85,000 and (2) prepaid insurance to the extent of ` 25,000.
His current assets and liabilities on 31st December, 2018 were: Trade receivables
` 21,00,000; Cash at bank ` 5,20,000 and Trade payables ` 13,84,000. During the year he withdrew `
6,20,000 for domestic use. Closing inventories is equal to net trade receivables at the year-end.
You are required to draw up revised Profit and Loss account and Balance Sheet at the end of the year.
(Nov-19)
33. Max & Co. employs a team of 9 workers who were paid ` 40,000 per month each in the year ending 31st December, 2018. At the
start of 2019, the company raised salaries by 10% to ` 44,000 per month each.
On 1 July, 2019 the company hired 2 trainees at salary of ` 21,000 per month each. The work force are paid salary on the first
working day of every month, one month in arrears, so that the employees receive their salary for January on the first
working day of February, etc.
You are required to calculate :
a. Amount of salaries which would be charged to the profit and loss account for theyear ended 31st December, 2019.
b. Amount actually paid as salaries during 2019.
c. Outstanding salaries as on 31st December, 2019.(Nov-20)
34. Karuna decided to start business of fashion garments under the name of M/s. Designer Wear on 1st April, 2020. She had a saving
of about ` 10,00,000. She invested ` 3,00,000 out of her savings and borrowed equal amount from bank. She purchased a
commercial space for ` 5,00,000 and further spent ` 1,00,000 on its renovation to make it ready for business.

Loan and interest repaid by her in the first year are as follows:
30th June, 2020 - ` 15,000 principal+ ` 9,000 interest

30th September, 2020 - ` 15,000 principal+ ` 8,550 interest

31st December, 2020 - ` 15,000 principal+ ` 8,100 interest

31st March, 2021 - ` 15,000 principal+ ` 7,650 interest.

In view of further capital requirement, she transferred ` 2,00,000 from her saving bank account to the bank account of the
business. She paid security deposit of ` 7,000 for telephone connection. Furniture of ` 10,000 was purchased, All payments were
made by cheque and all receipts in cash were deposited in the bank. At the end of the year, her business showed the

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 following results:
Particulars Amount Particulars Amount
Total Sales 20,00,000 Total Purchases 17,00,000
Electricity Expenses paid 40,000 Telephone Charges 50,000
Cartage Outwards 60,000 Travelling Expenses 45,000
Entertainment Expenses 5,000 Maintenance Expenses 25,000
Misc. Expenses 15,000 Electricity Expenses Payable 20,000
Other Information:
(i) She withdrew ` 5,000 by cheque each month for her personal expenses.
(ii) Depreciation on building @ 5% p.a. and oil furniture @ 10% p.a.
(iii) Closing stock in hand as on 31st March, 2021: ` 5,50,000
Prepare trading account, profit and loss account for the year ended 31-3-2021 and Balance Sheet as on that date.(July-21)

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