FYBFM SEM II

FINANCIAL ACCOUNTING II

1. VERTICAL FINANCIAL STATEMENTS

1. Balance sheet of X & Co. as on 31st March, 2015 (Proprietor X)

Liabilities
Proprietors funds:
Capital
Reserves

Long term loans:

Secured
Unsecured
Current liabilities:
Creditors
Provision for taxation

Rs.

Rs.

Assets
Fixed assets:
7,00,000
Land
3,00,000 10,00,000 Buildings
Plant & machinery
Investment
Current assets:
3,00,000
Stock-in-trade:
2,00,000 5,00,000 Raw materials
Stores and spares
Work-in-process
1,00,000
Finished goods
35,000
1,35,000
Debtors
Prepaid expenses
Cash & bank balances
16,35,000 Rs.

Rs.
1,00,000
3,60,000
6,60,000 11,20,000
30,000

50,000
5,000
5,000
1,00,000
1,60,000
3,00,000
20,000
5,000
4,85,000
16,35,000

2. M/S. VENUS MANUFACTURERS Balance sheet as at 31st March, 2015

Liabilities
Outstanding expenses
Sundry creditors
Bills payable
Capital:
Balance
Less: Drawings

Rs.

Rs.
11,700
90,000
60,000

4,40,000
38,000
4,02,000

Add: Net profit for the

year

94,619

4,96,619

Assets
Cash on hand
Cash with bank
Sundry debtors
Bills receivable
Closing stock
Prepaid expenses
(Insurance)
Loose tools

10,000

Less: Depreciation

1,000

Furniture
Less: Depreciation
Plant and machinery
Less: Depreciation
Building
Add: Extension

4,000
400
1,00,000
10,000
50,000
12,000
62,000
2,800

Less: Depreciation

Rs.

1 | Page

6,58,319

Rs.

Land
Rs.

Rs.
1,000
16,000
4,18,019
20,000
20,000
1,500

9,000
3,600
90,000

59,200
20,000
6,58,319

FYBFM SEM II

FINANCIAL ACCOUNTING II

3. Manufacturing, Trading and Profit and Loss account for the year ended 31st March, 2015
Particulars
Rs.
Particulars
Rs.
To Opening stock (Raw materials) 40,000
By Closing stock (Raw materials) 80,000
Add: Purchases
Cost of production c/d
2,42,000
2,05,000
Less:
Returns
2,00,000
5.000
Packing materials *
15,000
Wages
55,000
Carriage inwards
9,000
" Depreciation - plant
3,000
3,22,000
3,22,000
Rs. Opening stock (Finished goods) 10,000
Rs. Sales 4,10,000
To
By
Cost of production for the year 2,42,000
Less: Returns 10.000
4,00,000
b/d
" Gross profit c/d
1,68,000
" Closing stock (Finished goods) 20,000
4,20,000
4,20,000
Rs. Salaries
Rs. Gross profit b/d
To
22,000
By
1,68,000
Insurance
2,500
" Miscellaneous income
5,000
" Rent
7,000
" Printing and stationery
4,000
" Rates and taxes
3,000
" Office expenses
4,000
' Interest and bank charges
8,000
" Salesmens travelling expenses 10,000
" General expenses
1,000
Audit fees
2,000
" Advertisement
6,000
" Legal charges
36,000
" Interest on loan
25,000
" Provision for doubtful debts
7,000
" Depreciation on furniture
1,200
Net profit c/d
34,300
Rs.
1,73,000
Rs.
1,73,000
4. From the particulars given below, prepare in vertical format a statement showing cost of
production and gross profit.
Particulars
Rs.
Purchase of Raw Material
6,000
Opening Stock
Raw Material
6,000
Finished Goods
10,000
Work in Progress
2,000
Carriage on Raw Material
300
Raw Material - Returns
500
Repairs - Plant Machinery
300
Factory Rent and Taxes
500
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FYBFM SEM II
Depreciation Factory Building
Electric Power Consumed
Sales
Manufacturing Wages
Sales - Returns
Depreciation on Plant and Machinery
Factory Insurance
The Closing Stock on 31-12-2014
Raw Material
Work in Progress
Finished Goods

FINANCIAL ACCOUNTING II
150
1,000
22,000
2,000
600
400
250
3,000
2,500
10,000

5. Manufacturing, Trading and Profit and Loss Account for the year ended 31st March 2015
Rs.
Rs.
Rs.
Rs.
To Opening stock:
By Cost of production
Raw materials:
40,000
transferred to:
Purchases
11,00,000
Trading a/c
12,30,900
Less: Returns
10,000
10,90,000 Closing stock:
" Wages
72,000
Raw materials
20,000
" Carriage inward
6,000
" Power and fuel
17,200
Water charges "
6,300
Stores
2,000
" Repairs to machinery
3,200
" Depreciation
14,200
(Machinery & factory
assets)
Rs.
12,50,900
Rs.
12,50,900
To Cost of production
12,30,900 By Sales
14,80,000
"b/d
Gross profit c/d
2,35,100
Less: Returns
14,000
14,66,000
Rs.
14,66,000
Rs.
14,66,000
To Salaries
48,000
By Gross profit b/d
2,35,100
" Rent
2,400
" Discount
500
" Advertisement
expenses " Bad debts
5.000
1.000
" Carriage outward
7,600
Printing and
4,000
"stationery
General expense
35,800
" Insurance
6,200
Provision for doubtful
debts
22,450
" Provision for discount
on debtors
8,531
Net profit transferred
to capital a/c
94,619
Rs.
2,35,600
Rs.
2,35,600
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FYBFM SEM II

FINANCIAL ACCOUNTING II

6. Rearrange the following profit and loss account in vertical form.

Profit and loss account for the year ended 31st March 2015
Particulars
Rs.
Particulars
To Opening Stock
40,200
By Sales
19,40,000
Purchases less returns
16,50,260
Less returns 4800
Electricity Power
28,100
Closing stock
Carriage Inward
5,120
Rs.
Wages
35,212
Gross Profit c/d
2,03,408
Rs.
19,59,300
To Rates and taxes
2,500
By Gross profit b/fd
Salaries
38,240
" Bad debts recovered
" Lighting
6,210
" Office rent
6,000
" Travelling expenses of
2,220
salesmen
Insurance
1,000
" Advertising
39,550
" Bad debts
16,050
Discount
5,705
" General expenses
11,265
" Postage and telegram
3,000
" Depreciation:
Plant
3,916
Furniture
1,560
" Audit fees
1,200
Loss on sale of machinery
33,250
" Net profit c/d
33,742
Rs. 2,05,408
Rs.
7. Convert the following final accounts in the vertical form:
Balance Sheet as on 31st March 2015
Liabilities
Rs.
Rs.
Assets
Outstanding
25,100
Cash on hand
expenses
Sundry creditors
69,000
Income receivable
Income reed, in
4,000
Sundry debtors
advance
Bank
overdraft
80,000
Loan to Nayan
Loan from Ganga
80,000
Investments
Capital a/c Balance
2,00,000
Stock
Less: Drawing
38,000
Prepaid expenses
1,62,000
Furniture
Add: Net profit for
Less: Depreciation
the year
20,400
1,82,400
Office equipments
Less: Depreciation
Delivery van
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Rs.

6,000
900
8,000
1,200
24,000

Rs.
19,35,200
24,100
19,59,300

19,59,300
2,03,408
2,000

2,05,408

Rs.
2,000
9,000
97,000
40,000
26,000
1,50,000
2,000
5,100
6,800

FYBFM SEM II

Rs.

4,40,500

FINANCIAL ACCOUNTING II
Less: Depreciation
2,400
21,600
Plant and machinery 90,000
Less: Depreciation
9,000
81,000
Rs.
4,40,500

Trading and Profit and Loss for the year ended 31st March 2015
Particulars
Rs.
Rs.
Rs.
6,20,000
Gross sales
Less: Returns
12,000
6,08,000
Net sales
Less: Cost of goods sold
Opening stock
80,000
Add: Purchases
3,70,000
Less: Returns
10,000
3,60,000
Wages
1,10,000
Add: Outstanding
10,000
1,20,000
Power and Fuel
44,000
Add: Outstanding
4,000
48,000
Carriage inwards
20,000
6,28,000
Less: Closing Stock
1,50,000
4,78,000
1,30,000
Gross Profit
Less: Operating Expenses
(1) Administrative Expenses:
Salaries
42,000
Rent
24,000
Insurance
12,000
Bank charges
500
78,500
(II) Selling and Distribution Expenses:
31,000
Salesmens
Commission
Carriage
Outward
14,000
Bad Debts
4,000
Provision for Bad Debts
7,000
Discount
1,000
57,000

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FYBFM SEM II

FINANCIAL ACCOUNTING II

8. Convert the following final accounts in the vertical format

Rs.
Rs.
To Opening stock of
60,000
By Cost of production
work-in-progress
c/d
" Closing
" Raw materials
Closing
stockstock
of of
work-in-progress
consumed:
Opening stock
1,20,000
Add: Purchases 1,95,000
Less: Returns 12,000
1,83,000
3,03,000
Less: Closing stock
90,000
2,13,000
" Carriage inward
1,500
" Wages
73,500
" Salary to factory staff
9,600
Motive power
9,000
" Factory taxes
3,600
Factory insurance
4,500
Less: Prepaid
900
3,600
Rs.
3,73,800
To Opening stock
By Sales
of finished goods
2,10,000
Less: Returns
" Cost of production b/d
3,49,800
Closing stock of
finished goods
" Gross profit c/d
3,14,700
Less: Goods sold but not
adjusted
Rs.
8,74,500
To Advertisement
By Gross profit b/d
expenses
1,800
" Discount
" Salary
10,800
" Discount on creditors
' Bank charges
300
" Provision for doubtful
" Discount
2,400
debts
" Office rent
10,800
Insurance and taxes
6,900
" Miscellaneous expenses
3,300
" Printing and stationery
4,200
' Interest on capital
37,500
" Discount on debtors
1,197
" Net profit transferred to
2,41,851
capital a/c
Rs.
3,21,048

6 | Page

Rs.

Rs.
3,49,800
24,000

Rs.
6,90,000
5,100
1,95,000

3,73,800

5,400
Rs.

1,89,600
8,74,500
3,14,700
1,800
1,098

6,84,900

3,450

Rs.

3,21,048

FYBFM SEM II
Liabilities
Bills payable
Sundry creditors
Add: Endorsed bill
dishonoured

FINANCIAL ACCOUNTING II
Rs.

Rs.
15,000

36,600
6,000
42,600

Less: Discount
@ 3% on Rs. 36,600
Capital
Less: Drawings
Add: Interest on capital
Net profit for the year

1,098
7,50,000
21,000
7,29,000
37,500
2,41,851

Assets
Cash in hand
Bank of India
Bills receivable
Sundry debtors
Add: Endorsed bill
dishonoured

41,502
Less: Provision for
doubtful debts

Rs.

63,000
6,000
69,000
3,450
65,550

Less: Provision for

discount

1,197

64,353

Closing stock:
Raw materials
Finished goods
Work-in-progress

90,000
1,89,600
24,000

3,03,600

Rs.

900
36,000
30,000
3,60,000
1,50,000
10,64,853

10,08,351

Prepaid factory
insurance
Furniture
Patents
Plant & machinery
Building
Rs.

7 | Page

Rs.
4,100
1,03,000
12,900

10,64,853