LOVELY PROFESSIONAL UNIVERSITY

Form/LPUO/AP-3

HOMEWORK NO 2

School: Lovely School of Hospitality Department: Management

Name of the faculty member Avinash Kaur
Course No: MGT 415 Course Title: Basic Accounting and Finance
Class: MSc Term: 2nd & 4th Section: V8002 & V8902 Batch: 2009&10
Max. Marks Fifteen Date of Allotment: 07.02.11 Date of Submission: 21.02.11
(HW-5 & Test-10)

1. Answer the following:-

a) The following data is available from the books of Ashmeet for the year 2005:
Opening stock Rs. 10,000; Purchases Rs.50,000; Direct Expenses Rs. 20,000; Closing Stock
Rs. 20,000 and Sales of Rs. 1,50,000. Calculate Cost of goods sold and Gross profit.

b) The following information is extracted from the books of Mr. Suresh for the year 2006:
Opening stock Rs. 80,000; Sales of Rs. 2, 50,000; Carriage Inward Rs. 10,000 Sales Returns
Rs. 12,000, Gross profit on sales Rs. 75,000; Purchases Rs.1,00,000; Purchases Returns Rs.
1,00,000. Determine: (a) Cost of goods sold and (b) Closing Stock.

2. Prepare trading and profit and loss account and balance sheet from the following trial balance of Mr.
M. Madhan, as at 31-12-2006 :

Closing Stock as on 31-12-2006 is Rs. 90,000

3. From the following trial balance as on 31-3-2007, prepare trading account, profit and loss account for
the year ended 31st March, 2007 and a balance sheet as on that date :

Adjustments :
(i) Value of closing stock Rs. 25,000.
(ii) Depreciate machinery @ 10 %.
(iii) Salaries outstanding Rs. 4,000.
(iv) Prepaid insurance Rs. 150
(v) Create a provision of 6 % for bad and doubtful debts on sundry debtors.

4. From the following balances as at 31-03-2008 of a trader, prepare a Trading and Profit and Loss
account and Balance sheet after taking consideration the adjustments given at the end:

Debit Balances Rs. Credit Balances Rs.

Salaries 5,500 Creditors 9,500
Rent 1,300 Sales 42,000
Cash 2,000 Capital 60,000
Debtors 40,000 Loans 10,000
Trade Expenses 600
Purchases 25,000
Bank 5,600
Building 30,000
Stock 7,000
Carriage 500
Advertisement 1,500
Import Duty 1,100
Telephone Bill 800
Insurance 600

Total 1,21,500 1,21,500

 Adjustments:-
(i) Closing stock amounted to Rs. 10,000.
(ii) One month salary is outstanding.
(iii) One month rent has been paid in advance.
(iv) Provide 5 per cent for doubtful debts.
(v) Charge depreciation on Building @ 5% p.a.

5. Following is the trial balance of Mr. Harish and adjustments are also given below:-

Adjustments :

(i) Closing stock Rs. 35,000.

(ii) Depreciate plant and machinery by 10 % and land and buildings by 5 %.
(iii) Provide Rs. 1,500 as outstanding wages.
(iv) Advance rent paid Rs. 450
(v) Write off further bad debts Rs 200
(vi) Provide for 5 % on debtors as reserve for bad debts.

You are required to prepare Trading and Profit and loss account and Balance Sheet for the year ending
31-3-2009.
 6. The following is the Trial Balance of Shri Om, as on March 31, 2010. You are required to prepare the
Trading and Profit and Loss Account for the year ended 31st March, 2010 and a Balance Sheet as on
that date after making the necessary adjustments:

Particulars Debit Credit

(Rs.) (Rs.)
Sundry Debtors/Creditors……………………………. 5,00,000 2,00,000
Wages………………………………………………….. 1,00,000 1,00,000
Carriage Outwards……………………………………. 1,10,000 1,10,000
Carriage Inwards……………………………………. 50,000 50,000
General Expenses…………………………………… 70,000 70,000
Cash Discounts……………………………………… 20,000 20,000
Bad Debts……………………………………………… 10,000 10,000
Motor Car……………………………………………… 2,40,000 2,40,000
Printing and Stationary……………………………… 40,000 40,000
Furniture and Fittings…………………………………. 1,10,000 1,10,000
Advertisement…………………………………………. 85,000 85,000
Insurance………………………………………………. 45,000 45,000
Salesman’s commission…………………………….. 87,500 87,500
Postage and Telephone……………………………… 57,500 57,500
Salaries……………………………………………… 1,60,000 1,60,000
Rates and Taxes…………………………………….. 35,000 35,000
Capital Account………..………………………….. 14,43,000
Purchases/Sales……………………………………... 15,50,000 19,87,500
Stock on 1-4-2009…………………………………... 2,50,000 2,50,000
Cash at Bank………………………………………… 90,000 60,000
Cash in hand ……………………………………….. 20,500 20,500

36,30,500 36,30,500

The following adjustments are to be made:

a) Stock as 31st March, 2010 was valued at Rs. 7,25,000
b) Debtors include Rs. 25,000 bad debts.
c) A Provision for Doubtful Debts is to be created to the extent of 5% on Sundry Debtors.
d) Depreciate- Furniture and Fittings by 10%, Motor Car by 20%.
e) Printing and stationary expenses amounting to Rs. 5,000 are outstanding.
f) Prepaid insurance amounted to Rs. 1500.

Note: Assignment will not be accepted after the date of Submission and Zero marks will be awarded.

Date: Sig. of Faculty member

Remarks by HOD (Mandatory)

Sig. of HOD with date

Remarks by HOS (Mandatory)

Sig. of HOS with date