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Home Assignment - Financial Accounting PGPM 2019-20

The clerk has made the following mistakes in preparing the trial balance: 1) Land of Rs. 20,400 has been shown on the credit side instead of the asset side. Land is an asset and should be on the debit side. 2) Capital of Rs. 20,000 has been shown on the debit side instead of the credit side. Capital is a liability/source of funds and should be on the credit side. 3) Drawings of Rs. 5,000 has been shown on the credit side instead of the debit side. Drawings reduce the capital and should be shown on the debit side. The trial balance needs to be corrected by rectifying the above mistakes. Land of Rs. 20,

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92 views

Home Assignment - Financial Accounting PGPM 2019-20

The clerk has made the following mistakes in preparing the trial balance: 1) Land of Rs. 20,400 has been shown on the credit side instead of the asset side. Land is an asset and should be on the debit side. 2) Capital of Rs. 20,000 has been shown on the debit side instead of the credit side. Capital is a liability/source of funds and should be on the credit side. 3) Drawings of Rs. 5,000 has been shown on the credit side instead of the debit side. Drawings reduce the capital and should be shown on the debit side. The trial balance needs to be corrected by rectifying the above mistakes. Land of Rs. 20,

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Sidharth
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© © All Rights Reserved
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Home Assignment – Financial Accounting

PGPM 2019-20

Ques 1: Prepare Joy’s Accounting Equation and answer the questions given at the bottom.

1) Joy started his business on 1 Jan 2017 and invested Rs. 1 lac as capital.
2) He bought Computer and printer for Rs. 40,000.
3) He purchased stock for Rs. 2 lacs for business on credit.
4) He sold goods worth Rs. 1.5 lac for cash.
5) He spent cash Rs. 30,000 on buying furniture for office.
6) He took a long term loan from bank for Rs. 5 lacs @ 8%.
7) He invested part of the bank loan Rs. 2.25 lacs in buying Government Bonds with an annual
return of 12%.
8) He paid dues to his creditors.
9) He purchased stock for Rs. 1 lac on cash.
10) He sold goods amounting to Rs. 50,000 on cash.
11) He paid salaries to staff for Rs. 60,000
12) Salaries payable are Rs.25,000
13) Internet charges payable for Rs. 36,000.
14) Interest paid on bank loan Rs. 20,000 for 6 months.
Questions-

i. Did Joy land up in a bank-overdraft situation while trading. If no, how do you think he
avoided getting into that?
ii. Does the equation balance? Why does that happen?
iii. What is the total of the Assets side and the liability side?

Ques 2: Prepare Zeta Pvt. Ltd.’s Accounting Equation and answer the questions given at the bottom.
1) Zeta started business on 1 Jan 2019 as a Pvt. Ltd. Company and owners invested Rs. 5 lac as
share capital.
2) It bought Property and Plant for Rs. 5 lacs.
3) It purchased stock for Rs. 3 lacs for business on credit.
4) It sold goods worth Rs. 2 lac on credit and Rs. 60,000 in cash.
5) It paid Rs. 58,000 as taxes to the government.
6) It took short term loan from bank for Rs. 4 lacs @ 6%.
7) It paid 80% dues to his creditors.
8) It paid dividend to its shareholders for Rs. 45,000.
9) It charged depreciation for Rs. 68,000 on its Plant and Equipment.
10) Debtors amounting to Rs. 26,000 became bad and refused to pay. This had to be treated as a
loss.
11) Interest was to be paid on bank loan for 6 months but was not paid.
12) Salaries paid for Rs. 84,500.
13) Received cash from Debtors
14) Repaid Rs. 2.5 lacs of bank loan.
Questions-
i. Did ZPL land up in a bank-overdraft situation? How much was the amount?
ii. What is the total of the Assets side and the liability side?

Ques 3. Arrange the following balances taken from the ledger of Robin and Amit and Co. into a trial
balance at 31 March

  Rs.
Cash 9,200
Trade Debtors 15,000
Rent 4,800
Stores 18,000
Salaries Payble 1,500
Insurance 3,600
Other Expenses 5,500
Land 10,000
Depreciation 800
Accumulated depreciation 2,400
Salaries 20,400
Motor Vehicle 4,000
Trade creditors 25,000
Cost of goods sold 54,000
Advance from a customer 1,400
Sales 90,000
Drawings 2,000
wCapital 27,000

Ques 4. The clerk of a firm wrongly prepared the trial balance. You are required to draw up a correct
trial balance stating reasons in brief:

Trial Balance for the Year Ending 31 March 2019

  Debit Balance (Rs) Credit Balance (Rs)


Capital   20,000
Drawings   5,000
Purchases   90,000
Sales 130,000  
Returns inwards 700  
Returns outwards 900  
Carriage inwards 1,100  
Carriage outwards 800  
Duty on purchases 2,000  
opening stock 11,000  
Motor Van   6,000
Salaries   5,000
Rent 2,000  
Taxes 300  
Insurance 600  
Debtors 8,000  
Creditors 6,000  
Cash in hand 500  
cash at bank   2,500
Furniture 1,000  
Land   20,400

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