ASSIGNMENT - 1

FINANCIAL REPORTING AND STATEMENTS ANALYSIS

1. Deluxe company purchased a furniture worth Rs.80,000 on 1st April 2009 and
additional furniture on 1st October 2009 worth Rs.60,000.
They charged depreciation at 15% p.a. on fixed instalment basis.
On 1st October 2011 they sold out furniture for Rs.60,000 which was purchased on 1 st
April 2009.
Prepare furniture account and depreciation account for the year 2009-10,2010-11 and
2011-12 assuming that the financial year closes on 31st March every year.
2. M/s Siddhivinayak Traders purchased machinery on 1st April, 2001, costing
Rs.1,12,000. On the same date Traders spent Rs.3,000 for its installation. On 1 st Oct.,
2001 additional machinery was purchased for Rs.80,000.
The machinery costing Rs.70,000 on 1st April, 2001 was sold out on 30 th Sept., 2003
for Rs.52,500. On the same date a new machinery costing Rs.84,000 was purchased.
Every year on 31st March, depreciation was charged at 10% p.a. on the cost price of
machinery.
Prepare : Machinery A/c for three years, i.e., 2001-02, 2002-03 and 2003-04 in the
books of the firm.

3. M/s Jalaram Mill, Mul, showed a debit balance of Rs.32,000 to the machinery A/c on
1st April, 2001 (Original cost of the Machinery was Rs.40,000). On 1 st October, 2001
the Mill bought additional machinery for Rs.15,000 and spent Rs.1,000 for its
installation.
One more machinery costing Rs.20,000 was purchased on 31st March, 2003.
Depreciation is charged on 31st March, every year at 10% p.a. under the Diminishing
Balance Method. On 31st March, 2004, the machinery which was purchased on 1 st
October, 2001 was sold for Rs.12,000.
Prepare Machinery A/c and Depreciation A/c for the years 2001-2002, 2002-2003 and
2003-2004
 4. From the following Trial balance, prepare final accounts for the year ended 31 st
March, 2001after considering the given adjustments:
Trial Balance as on 31st March, 2001
Particulars Debit Rs. Particulars Credit
Rs.
Cash 12,180 Sales 2,98,780
Purchases 1,40,675 Creditors 76,800
Returns inwards 1,680 Capital 3,03,000
Wages 40,480 Returns outwards 4,500
Debtors 44,500
Fuel 4,975
Drawing 15,000
Carriage on Sales 3,200
Carriage on Purchases 2,040
Opening stock 65,750
Building 1,30,000
Freehold land 1,10,000
Machinery 87,000
Salaries (for 11 months up to Feb. 2001) 16,500
Sundry expenses 2,500
Insurance 6,600

6,83,080 6,83,080

Adjustments:
1) The closing stock was originally valued at Rs.44,000.
2) Machinery is to be depreciated @ 10%.
3) An amount of Rs.1,500 is to be written off as bad debts.
4) A provision for bad debts is to be created at 5% on the debtors.
5) Outstanding wages are amounted to Rs.520.
6) Insurance is paid up to 30th September, 2001.
7) Goods worth Rs.5,000 are withdrawn by the proprietor for personal use.
8) Goods worth Rs.4,000 are distributed as free samples.
 5. From the following Trial balance and adjustment, prepare trading and profit & loss
accounts for the year ended 31st March, 2006 and a balance sheet as on that date:
Trial Balance as on 31st March, 2006
Particulars Amount Rs. Particulars Amount Rs.
Opening stock 40,000 Sales 2,52,000
Bills receivable 8,800 Discount 400
Purchases 1,90,000 Creditors 64,000
Returns 6,000 Bank Loan 52,000
Salaries 10,000 Capital 1,00,000
Carriage outwards 1,400 Reserve for doubtful debts 3,000
Wages 24,000 Bills payable 7,500
Insurance 1,600 General reserve 2,000
Postage 800
Debtors 70,400
Furniture 20,000
Cash at bank 13,800
Machinery 80,000
Printing & Stationary 1,600
Drawings 11,000
Bad debts 1,500

4,80,900 4,80,900

Adjustments:
1) The closing stock was valued at Rs.36,000.
2) Machinery was to be depreciated by @ 10% and furniture valued at Rs.17,500 at the
end of the year.
3) The outstanding expenses were wages Rs.2000 and salaries Rs.930.
4) Goods worth Rs.2,000 were purchased and received on 29 th March but the purchase
invoice was omitted to be recorded in accounts book.
5) A provision for discount on sundry creditors at 2% and a provision for bad debts on
sundry debtors at 5% were to be created.
6) Insurance was prepaid to the extent of Rs.300.
7) Goods of Rs.2,000 have been distributed as free samples during the year.
8) Interest on bank loan was to be payable @ 18% p.a. for the current accounting year.
 6. From the following Trial balance and the undernoted adjustments, prepare final
accounts for the year ended 31st March, 2003:
Particulars Debit Rs. Particulars Credit
Rs.
Opening stock 68,000 Sales 2,06,300
Purchases 1,46,000 Interest Received 1,180
Carriage inwards 3,000 Bank overdraft 32,000
Machinery 1,80,000 Sundry Creditors 29,820
Commission 2,000 Capital 2,20,000
Insurance 4,500
Salaries 11,000
Carriage on Sales 2,000
Bad debts 4,000
Bank charges 450
Cash 4,350
Drawing 12,000
Sundry Debtors 45,000
Office expenses 7,000

4,89,300 4,89,300

Trial Balance as on 31st March, 2003

Adjustments:
1) The cost price and the market value of the closing stock on hand were Rs.40,000 and
Rs.42,000 respectively.
2) Salaries Rs.1,000 were outstanding at the end of the year.
3) A credit sale of Rs.1,000 was not recorded thought the goods were delivered.
4) A provision for bad debts was to be created at 5% of the debtors.
5) No record was made of goods of Rs.600 taken by the proprietor for his personal use.
6) Insurance was prepaid to the extent of Rs.300.
7) Goods purchased for Rs.4,000 were omitted from accounts books.
8) Machinery was to be depreciated by @ 10%.

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