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T. S. Grewal Solution for Class 11 Commerce Accountancy Chapter 18 - Financial Statements of Sole Proprietorship

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T. S. Grewal Solution for Class 11 Commerce Accountancy Chapter 18 - Financial Statements of Sole Proprietorship Page/Excercise 18.60

Solution PQ 1

Expenditure

Reason

(i) Capital Expenditure

Paid to make an asset ready to use

(ii) Capital Expenditure

Paid to make an asset ready to use

(iii)Revenue Expenditure

Made for the maintenance of asset

(iv)Revenue Expenditure

Part of normal operating cost

(v) Capital Expenditure

Used in business for a number of years

 

Solution PQ 2

Expenditure

Reason

(i) Capital Expenditure

Paid for the acquisition of new asset

(ii) Capital Expenditure

Paid to make the asset ready to use

(iii)Revenue Expenditure

Paid for the running and maintenance of car

(iv)Revenue Expenditure

Paid for the maintenance of Building

(v) Revenue Expenditure

Part of normal operating cost

 

 

Solution PQ 3

Gross Profit

=

Sales + Closing Stock - (Opening Stock + Goods Purchased + Freight and Packing)

 

=

1,90,000 + 30,000 - (25,000 +1,40,000 + 10,000)

 

=

2,20,000 - 1,75,000

 

= 

Rs.45,000 

 Note: Packing Expenses on sales (Rs.6,000) is not a Direct Expense. Thus, it not considered while computing the amount of Gross Profit.

Solution PQ 4

Calculation of amount of Closing Stock 

Gross Profit on cost = 33 %.

Cost = rd.

 Gross Profit on sales =  

And, Sales = Cash Sales + Credit Sales = 60,000+40,000 = Rs.1,00,000

So, Gross Profit =  = Rs.25,000

Cost of Goods Sold = Sales - Gross Profit = 1,00,000 - 25,000 =Rs.75,000

Cost of Goods Sold = Opening Stock + Purchases- Closing Stock

75,000 = 20,000 + 70,000 - Closing Stock

Closing Stock =Rs.15,000

Solution PQ 5

Trading Account

Dr.

 

 

 

 

Cr.

Particulars

 

Rs. 

Particulars

 

Rs. 

To Opening Stock

 

23,000

By Sales

25,400

 

To Purchases

29,000

 

Less : Sales Return

(500)

24,900

Less :Purchases Return

(2,400)

26,600

By Closing Stock

 

47,700

To Carriage Inwards

 

100

 

 

 

To Gross Profit c/d (Bal. Fig.)

 

22,900

 

 

 

 

 

72,600

 

 

72,600

 

 

 

 

 

 

Note: Depreciation is not a Direct Expense. Thus, it not shown in the Trading Account.

Journal

Date

Particulars

 

L.F.

Dr.

Rs. 

Cr.

Rs. 

 

Trading A/c

Dr.

 

52,600

 

 

--------To Opening Stock A/c

 

 

 

23,000

 

--------To Purchases A/c 

 

 

 

29,000

 

--------To Carriage Inwards A/c 

 

 

 

100

 

--------To Sales Return A/c 

 

 

 

500

 

(Being transfer of balances to debit side of trading account)

 

 

 

 

 

 

 

 

 

 

 

Sales A/c

Dr.

 

25,400

 

 

Purchases Return A/c 

Dr. 

 

2,400

 

 

--------To Trading A/c

 

 

 

27,800

 

(Being transfer of balances to credit side of trading account)

 

 

 

 

 

 

 

 

 

 

 

Closing Stock A/c

Dr.

 

47,700

 

 

--------To Trading A/c

 

 

 

47,700

 

(Being recording of closing stock)

 

 

 

 

 

 

 

 

 

 

 

Trading A/c

Dr.

 

22,900

 

 

--------To Profit and Loss A/c

 

 

 

22,900

 

(Being transfer of gross Profit to the Profit and Loss account)

 

 

 

 

 

 

 

 

 

 

 

T. S. Grewal Solution for Class 11 Commerce Accountancy Chapter 18 - Financial Statements of Sole Proprietorship Page/Excercise 18.61

Solution PQ 6

Trading Account

Dr.

 

 

Cr.

Particulars

 Rs. 

Particulars

Rs. 

To Opening Stock

2,00,000

By Sales

14,07,000

To Purchases

8,50,000

By Closing Stock

1,80,000

To Carriage on Purchases

23,000

 

 

To Gross Profit c/d

(Balancing Fig.)

5,14,000

 

 

 

15,87,000

 

15,87,000

 

 

 

 

 

Note: Carriage on Sales and Office Rent are not a Direct Expense. Thus, it is not considered while computing the amount of Gross Profit.

Solution PQ 7

Trading Account

For the year ended March 31,2018

Dr.

 

 

 

 

Cr.

Particulars

 

Rs. 

Particulars

 

Rs. 

To Opening Stock

 

40,000

By Sales

3,80,000

 

To Purchases

4,00,000

 

Less: Return Inwards

(20,000)

3,60,000

Less: Return Outwards

(80,000)

3,20,000

By Closing Stock

 

1,20,000

To Carriage Inwards

 

20,000

 

 

 

To Wages and Salaries

 

50,000

 

 

 

To Gross Profit c/d (Bal. Fig.)

 

50,000

 

 

 

 

 

4,80,000

 

 

4,80,000

Note: According to the Principle of Conservatism, closing stock is valued at Cost or Market Price, whichever is less. Hence, closing stock is valued at Market Price (i.e., Rs.1,20,000)

 

Solution PQ 8

Trading Account

For the year ended March 31,2018

Dr.

 

 

 

Cr.

Particulars

 Rs. 

Particulars

 

Rs. 

To Purchases (Adjusted)

6,60,000

By Sales

 

7,44,000

To Freight and Carriage Inwards

3,600

 

 

 

To Wages

6,000

 

 

 

To Gross Profit c/d (Bal. Fig.)

74,400

 

 

 

 

7,44,000 

 

 

7,44,000

 

Note :

  1. Freight and Carriage Outwards are not a Direct Expense. Thus, it is not recorded in the trading Account.
  2. Adjusted Purchases = Opening Stock + Net Purchases - Closing Stock

Therefore, Closing Stock (Rs.50,400) is not considered while preparing Trading Account.

Solution PQ 9

Trading Account

For the year ended March 31,2018

Dr.

 

 

 

Cr.

Particulars

 Rs. 

Particulars

 

Rs. 

To Opening Stock

 

By Sales

7,00,000

 

Raw Materials

80,000

 

Less: Return Inwards 

(6,000)

6,94,000

Finished Goods

1,40,000

2,20,000

By Closing Stock 

 

 

To Purchases

3,60,000

 

Raw Materials

70,000

 

Less: Return Outwards

(10,000)

3,50,000

Work-in-progress

20,000

 

To Freight Inwards

20,000

Finished Goods

1,10,000

2,00,000

To Wages

1,30,000

 

 

 

To Factory Expenses

90,000

 

 

 

To Gross Profit c/d (Bal. Fig.)

84,000

 

 

 

 

8,94,000

 

 

8,94,000 

 

Note :

Freight Outwards are not a Direct Expense. Thus, it is not recorded in the Trading Account.

 

Solution PQ 10

Trading Account

For the year ended March 31,2018

Dr.

 

 

 

Cr.

Particulars

 Rs. 

Particulars

 

Rs. 

To Purchases (Adjusted)

5,50,000

By Sales

 

6,25,000

To Freight and Carriage Inwards

3,000

 

 

 

To Wages

7,000

 

 

 

To Gross Profit c/d (Bal. Fig.)

65,000

 

 

 

 

6,25,000

 

 

6,25,000

 

Note :

  1. Freight and Carriage Outwards are not a Direct Expense. Thus, it is not recorded in the Trading Account.
  2. Adjusted Purchases = Opening Stock + Net Purchases - Closing Stock

Therefore, Closing Stock (Rs.50,000) is not considered while preparing Trading Account.

T. S. Grewal Solution for Class 11 Commerce Accountancy Chapter 18 - Financial Statements of Sole Proprietorship Page/Excercise 18.62

Solution PQ 11

Calculation of Operating Profit

Operating Profit = Net Profit - Rent Received - Gain of sales of Machine + Interest on Loan + Donation

 = 1,00,000 - 10,000 - 15,000 + 20,000 + 2,000 = Rs.97,000

  Operating Profit = Rs.97,000

Solution PQ 12

Profit and Loss Account

For the year ended March 31,2018

Dr.

 

 

Cr.

Particulars

Rs. 

Particulars

Rs. 

To Salaries and Wages

30,000

By Gross Profit b/d (6,50,000 × 45%)

2,92,500

To Commission Paid

2,000

By Rent Received

17,000

To Postage and Telegram

1,500

By Interest on Investments

15,000

To Insurance

3,000

 

 

To Interest Paid

4,000

 

 

To Carriage Outwards

5,000

 

 

To Advertising

10,000

 

 

To Discount allowed

18,000

 

 

To Bad debts

9,000

 

 

To Brokerage Paid

950

 

 

To Net Profit c/d (Bal. Fig.)

2,41,050

 

 

 

3,24,500

 

3,24,500

 

 

 

 

 

Solution PQ 13

Profit and Loss Account

For the year ended March 31,2018

Dr.

 

 

Cr.

Particulars

Rs. 

Particulars

Rs. 

To Rent

5,000

By Gross Profit b/d

1,20,000

To Salary

35,000

By Interest Received

8,000

To Commission Paid

19,000

By Discount Received

6,000

To Interest on Loan

5,000

 

 

To Advertisement

8,000

 

 

To Printing and Stationery

4,000

 

 

To Legal Charges

10,000

 

 

To Bad Debts

2,000

 

 

To Loss by Fire

6,000

 

 

To Depreciation

4,000

 

 

To Net Profit c/d (Bal. Fig.)

36,000

 

 

 

1,34,000

 

1,34,000

 

Solution PQ 14

Balance Sheet

as on March 31,2018

Liabilities

 

Rs. 

Assets

Rs. 

Capital

4,00,000

 

Plant

1,00,000

 

Less: Drawings

(44,000)

 

Furniture

37,000

 

Add: Net Profit

16,600

3,72,600

Closing Stock

1,48,000

General Reserve

 

10,000

Debtors

64,000

Creditors

 

42,000

Cash at Bank

72,000

 

 

 

Cash in Hand

3,600

 

 

4,24,600

 

4,24,600

 

T. S. Grewal Solution for Class 11 Commerce Accountancy Chapter 18 - Financial Statements of Sole Proprietorship Page/Excercise 18.63

Solution PQ 15

(I) Balance sheet in Order of permanence

Balance Sheet

as on March 31,2018

Liabilities

 

 Rs. 

Assets

 

 Rs. 

Capital

1,80,000

 

Goodwill

 

20,000

Less: Drawings

(30,000)

 

Land and Building

 

60,000

Add: Net Profit

92,600

2,42,600

Plant and Machinery

 

40,000

Sundry Creditors

 

63,000

Furniture

 

16,000

Bills Payable

 

10,700

Investment

 

20,000

Liabilities for Expenses

 

1,200

Closing Stock

 

80,000

 

 

 

Sundry Debtors

50,000

 

 

 

 

Less: Provision for Doubtful Debts

(2,500)

47,500

 

 

 

Bills Receivable

 

13,000

 

 

 

Bank

 

20,000

 

 

 

Cash in Hand

 

1,000

 

 

3,17,500

 

 

3,17,500

 

 

 

 

 

 

 

 

(II) Balance Sheet in Order of Liquidity

Balance Sheet

as on March 31,2018

Liabilities

 

Rs. 

Assets

 

Rs. 

Liabilities for Expenses

 

1,200

Cash in Hand

 

1,000

Bills Payable

 

10,700

Bank

 

20,000

Sundry Creditors

 

63,000

Bills Receivable

 

13,000

Capital

1,80,000

 

Sundry Debtors

50,000

 

Less: Drawings

(30,000)

 

Less: Provision for Doubtful Debts

(2,500)

47,500

Add: Net Profit

92,600

2,42,600

Closing Stock

 

80,000

 

 

 

Investment

 

20,000

 

 

 

Furniture

 

16,000

 

 

 

Plant and Machinery

 

40,000

 

 

 

Land and Building

 

60,000

 

 

 

Goodwill

 

20,000

 

 

3,17,500

 

 

3,17,500

 

 

 

 

 

 

 

Solution PQ 16

i. Calculation of Fixed Asset

Fixed Assets =Land + Plant + Furniture + Goodwill

= 20,000 + 32,000 + 8,000 + 20,000 =Rs.80,000

ii. Calculation of Current Assets

Current Assets =Stock + Debtors + Prepaid Expenses

= 48,000 + 36,000 + 400 =Rs.84,400

iii. Calculation of Current Liabilities

Current Liabilities =Creditors + Expenses Accrued + Bank Overdraft + Interest on Loan

= 42,000 + 3,200 +4,800 + 1,000  = Rs.51,000

iv. Calculation of Working Capital

Working Capital = Current Assets - Current Liabilities

= 84,400 - 51,000 = Rs.33,400

 

Solution PQ 17

Financial Statements of Jagat Shah

Trading Account

For the year ended 31st March 2018

Dr.

 

 

 

 

Cr.

Particulars

 

Rs. 

Particulars

 

Rs. 

To Opening Stock

 

1,00,000

By Sales

8,20,000

 

To Purchases

4,00,000

 

Less : Sales Return

(10,000)

8,10,000

Less : Purchases Return

(5,000)

3,95,000

By Closing Stock

 

2,00,000

To Wages

 

1,00,000

 

 

 

To Carriage Inwards

 

5,000

 

 

 

To Gross Profit c/d

(Balancing Fig.)

 

4,10,000

 

 

 

 

 

10,10,000

 

 

10,10,000

 

 

 

 

 

 

 

 

Profit and Loss Account

For the year ended 31st March 2018

Dr.

 

 

Cr.

Particulars

Rs. 

Particulars

 Rs. 

To Salaries

60,000

By Gross Profit b/d

4,10,000

To General Expenses

20,000

 

 

To Rent

50,000

 

 

To Carriage outwards

20,000

 

 

To Advertising

20,000

 

 

To Net Profit c/d

(Balancing Fig.)

2,40,000

 

 

 

4,10,000

 

4,10,000

 

 

 

 

 

Balance sheet

as on 31st March 2018

Liabilities

 

Rs.

Assets

 

Rs.

Capital

3,60,000

 

Fixed Assets

 

 

Less : Drawings

(40,000)

 

Machinery

 

70,000

Add : Net Profit

2,40,000

5,60,000

Current Assets

 

 

Current Liabilities

 

 

Closing Stock

 

2,00,000

Creditors

 

50,000

Debtors

 

3,00,000

 

 

 

Cash

 

40,000

 

 

6,10,000

 

 

6,10,000

 

 

 

 

 

 

 

T. S. Grewal Solution for Class 11 Commerce Accountancy Chapter 18 - Financial Statements of Sole Proprietorship Page/Excercise 18.64

Solution PQ 18

Trading Account

Dr.

 

 

Cr.

Particulars

Rs. 

Particulars

Rs. 

To Opening Stock

2,00,000

By Sales

14,50,000

To Purchases

9,50,000

By Closing Stock

30,000

To Wages

5,00,000

By Gross Loss c/d

(Balancing Fig.)

1,85,000

To Carriage

15,000

 

 

 

16,65,000

 

16,65,000

 

 

 

 

Profit and Loss Account

Dr.

 

 

Cr.

Particulars

Rs. 

Particulars

 Rs. 

To Gross Loss b/d

1,85,000

 

 

To Rent

45,000

By Net Loss c/d

(Balancing Fig.)

2,50,000

To Sundry Expenses

20,000

 

 

 

2,50,000

 

2,50,000

 

 

 

 

Balance Sheet

Liabilities

 

Rs. 

Assets

 

Rs. 

Capital

10,00,000

 

Fixed Assets

 

 

Less : Drawings

(90,000)

 

Machinery

 

3,50,000

Less :Net Loss

(2,50,000)

6,60,000

Current Assets

 

 

Current Liabilities

 

 

Closing Stock

 

30,000

Creditors

 

1,40,000

Debtors

 

2,70,000

 

 

 

Bank

 

1,50,000

 

 

8,00,000

 

 

8,00,000

 

 

 

 

 

 

 

Solution PQ 19

Financial Statement of Dass

Trading Account

For the year ended March 31,2018

Dr.

 

 

 

 

Cr.

Particulars

 

Rs. 

Particulars

 

 Rs. 

To Stock

 

1,76,000

 

 

 

To Purchase

6,83,000

 

By Sales

9,20,000

 

Less : Return Outwards

(22,000)

6,61,000

Less: Return Inwards

(13,000)

9,07,000

To Carriage Inwards

 

24,000

By Closing Stock

 

2,40,000

To Gross Profit c/d

(Balancing Fig.)

 

2,86,000

 

 

 

 

 

11,47,000

 

 

11,47,000

 

 

 

 

 

 

 

 

Profit and Loss Account

For the year ended March 31,2018

Dr.

 

 

Cr.

Particulars

Rs. 

Particulars

Rs. 

To Rent, Rates and Taxes

22,000

By Gross Profit b/d

2,86,000

To Discount

37,500

 

 

To Printing

7,200

 

 

To Insurance

5,000

 

 

To Travelling Expenses

14,000

 

 

To Postage and telegram

6,200

 

 

To Miscellaneous Expenses

9,000

 

 

To Bad Debts

4,000

 

 

To Net Profit c/d

(Balancing Fig.)

1,81,100

 

 

 

2,86,000

 

2,86,000

 

 

 

 

 

Balance Sheet

as on March 31,2018

Liabilities

 

 Rs. 

Assets

 

 Rs. 

Capital

5,25,000

 

Fixed Assets

 

 

Less : Drawings

(19,100)

 

Business Premises

 

3,90,000

Add : Net Profit

1,81,100

6,87,000

Office Furniture

 

15,000

Loan from Sahil

 

50,000

Current Assets

 

 

Current Liabilities

 

 

Closing Stock

 

2,40,000

Creditors

 

1,28,000

Debtors

 

2,20,000

 

 

8,65,000

 

 

8,65,000

 

 

 

 

 

 

 

Solution PQ 20

Financial Statement of Anand

Trading Account