NCERT Solutions for Class 11 Accountancy Chapter 9 2021: Download PDF

NCERT Solutions for Class 11 Accountancy Chapter 9: We provide NCERT Solutions for Class 11 Accountancy Chapter 9 that are simple to grasp. In the NCERT Solutions For Class 11 Accountancy Chapter 9, our faculty has solved and explained all of the questions in the chapter according to CBSE norms.

To make learning easier, the answers to the questions are supplied in PDF format here. These NCERT Solutions will assist them in thoroughly revising the chapter and achieving good grades in the examinations. 

NCERT Solutions For Class 11 Accountancy Chapter 9 PDF

NCERT solutions for Class 11 Accountancy Chapter 9

 

.pdfobject-container { height: 800px;}
.pdfobject { border: 1px solid #666; }

PDFObject.embed(“https://www.kopykitab.com/blog/wp-content/uploads/2021/07/NCERT-Solutions-for-Class-11-Accountancy-Part-2-Chapter-1.pdf”, “#example1”);

Download the PDF Of NCERT Solutions For Class 11 Accountancy Chapter-9

Click Here

NCERT Solutions For Class 11 Accountancy Chapter 9 : Overview

1.What Are the Financial Statements? What are the Objectives of Financial Statements?

The accounting and financial information pertaining to the business is depicted in the financial statement reports. This statement is used by a company’s administration to interact with external authorities, stakeholders, investors, creditors, and regulatory agencies, among other things.

The following reports are included in these financial statements.

• Profit and loss statement
• Income sheet
• Statement of cash flow
• Balance sheet

Objectives of Preparing Financial Statements

Recording – The fundamental goal of financial statement preparation is to record and summaries a company’s transactions on a regular basis. It is critical to have an entity that monitors the organization’s financial transactions.

Decision-Making – The financial statement helps the organizers to make necessary and relevant strategies and decisions.

Planning- Preparing financial statements assists in identifying financial problems and taking essential actions for the organization’s growth.

Accountability – An organization’s financial statement generates liability, allowing them to examine their performance. Throughout the years.

2. What is a Balance Sheet? What Are the Features of a Balance Sheet?

A balance sheet is a statement consisting of books with balances of commercial and personal accounts, rather than an account like a profit and loss account. A balance sheet is used to keep track of an organization’s capital assets and liabilities. The goal of generating a balance sheet is to reflect the organization’s financial status at a certain date in a fair and accurate manner. When the accounting year concludes, each company generates a balance sheet. The following is a definition of a balance sheet.

It is a record of the owner’s liabilities, assets, and capital as of a certain date. It is a statement that discloses aggregate liabilities, aggregate assets, and aggregate equity of the owner on a particular date. To have a better insight on the topic go through the PDF Of NCERT Solutions For Class 11 Accountancy Chapter 9

The Features of the Balance Sheet Are as Follows.

1. It is not prepared for a complete period but

on a specific date.

2. The balance comprises both sides, assets, and

liabilities, which must be equivalent.

3. It depicts the financial situation of the

business.

4. It is a mere statement and not an account.
5. It has no debit and credit option.
6. Before, the names of the account “to” and “by” were not used.

Access NCERT Solutions For Class 11 Accountancy Chapter 9

1. What are the objectives of preparing financial statements?

Financial statements are prepared with the following objective:

1. Determine the financial position of a business.
2. Ascertain the financial performance of the business.
3. To measure the changes in financial position of a business.
4. To compare financial performance of business both intra and inter farm wise.
5. What is the purpose of preparing trading and profit and loss account?

Trading account is prepared for the following purpose:

1. To determine the gross profit or loss in a financial year or period.
2. Determine the ratio of gross profit to sales.
3. To determine ratio of direct expense to sales.

Profit and Loss account is prepared for the following purpose:

1. Determining net profit or loss incurred by the business
2. To comply with statutory requirements such as Company act or Partnership Act
3. Explain the concept of cost of goods sold.

3.Costs incurred in production of goods that are sold by company is known as Cost of Goods Sold or COGS

No goods left out: In this case all goods are sold out. Hence, it can be calculated as:

Cost of goods sold = Purchases + Direct Expenses

Presence of a closing stock: There can be some stock that are yet to get sold at the end of accounting period. At that time it can be calculated as:

Cost of goods sold = Purchases + Direct Expenses – Closing Stock

Presence of an Opening stock: Stock that is carried forward at the beginning of the accounting period from the previous accounting period is considered as opening stock and is calculated as:

Cost of goods sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

4. What is a balance sheet? What are its characteristics?

A statement prepared to determine assets and values of a business on a particular date is known as Balance Sheet. Debits represent the assets while credits signify the liabilities.

It has the following characteristics:

1. Reflects financial position of a business.
2. It is dependent on other statements such as trading and P & L account.
3. It is prepared at the end of an accounting period.
4. The balance of both sides should tally.
5. Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure:

(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.

(b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.

(c) Registration fees paid at the time of purchase of a building

(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.

(e) Depreciation charged on a plant.

(f) The expenditure incurred in erecting a platform on which a machine will be fixed.

(g) Advertising expenditure, the benefits of which will last for four years.

Basis of Difference	Capital Expenditure	Revenue Expenditure
Meaning	Expenditure beared for acquiring or improving an asset.	Expenses beared for running daily business activities
Term	Long Term, can span many accounting periods	Short term limited to an accounting period
Benefits	Benefits can be achieved across many accounting periods	Benefits can be availed only in the current year
Nature	Non-recurring	Recurring
Shown in	It is shown in Income Statement and Balance Sheet	It is shown in Income statement

 

(a) Capital expenditure

(b) Revenue expenditure

(c) Capital expenditure

(d) Capital expenditure

(e) Revenue expenditure

(f) Capital expenditure

(g) Deferred revenue expenditure

6. What is an operating profit?

Operating profit referred to as EBIT, is an accounting metric that measures, the profits a company generates from its core business functions. It does not take into account interest deduction and exclusion of tax from calculation. The following equation is used to calculate the operating profit.

The following equation can be used to represent

Operating Profit = Net Profit + Non-Operating Expenses – Non Operating Incomes

Long Answers for NCERT Accountancy Solutions Class 11 Chapter 9

1. What are financial statements? What information do they provide?

Statements that contain financial information about business which can satisfy the information requirements of internal and external users are known as financial statements. It serve as a source of financial information that caters to diverse information requirement of users. It is prepared with the purpose of representing a true and fair view of business.

To do so it requires the creation of three statements namely, trading and profit and loss account and balance sheet.

The financial statements related to gross/net profit or loss, the assets and liabilities. The users of information can be the following:

Current Owners: These internal users would like to know the profits in the previous accounting period and current position of the assets and liabilities.

Government: Government is an external user and want to know the financial position of a business so that stakeholder’s rights are protected.

Prospective Owner: These external users would like to know the past profits and financial position and also the future performance of the business to make an informed decision whether to invest in the business or not

2. What are closing entries? Give four examples of closing entries.

A journal entry that is made at the end of an accounting period that transfers balances from the temporary accounts to a permanent account is known as closing entries. Some examples are here as follows:

1. The purchases returns are closed by transferring the balance in purchases account. Following entries are made:

Purchases return A/c

Dr

To Purchases A/c

2. Sales return account is closed by transfer of balance to sales account. Entries will be

Sales A/c

Dr

To Sales return A/c

3. Purchases account closed by transferring to debit side of trading and P & L Account

Trading A/c

Dr

To Purchases A/c

4. Sales account closed by transferring balance to credit side of trading and P & L account.

Sales A/c

Dr.

To Trading A/c

3. Discuss the need of preparing a balance sheet.

Balance sheet needs to be prepared due to following reasons:

1. To show financial position of business.
2. To show much assets and liabilities a business has
3. It serves as information source for internal and external users
4. It acts as a reference for balances that need to be carried forward
5. To gather an idea about the liquidity of the firm or business
6. Helps management in planning and controlling business operations.
7. What is meant by Grouping and Marshalling of assets and liabilities? Explain the ways in which a balance sheet may be marshalled.

Grouping refers to including assets and liabilities of similar nature under o common heading. For example different types of creditors can be placed in one heading. Similarly work in progress, raw material and finished goods can be placed.

Marshalling refers to arranging of assets and liabilities in order of liquidity and permanence.

In order of Liquidity: It shows how easily an asset can be converted into cash or a liability can be paid off. The asset examples arranged as follows:

1. Cash
2. Bank
3. Debtors

In order of permanence: In this system the most important asset or a liability gets the top position in balance sheet and remaining assets are arranged in reducing level of permanence: For e.g.

1. Debtors
2. Bank
3. Cash

Similarly, liabilities in order of permanence is as follows:

1.Capital

2. Long term loan
3. Creditors

Numerical Answers for NCERT Accountancy Solutions Class 11 Chapter 9

From the following balances taken from the books of Simmi and Vimmi Ltd.

for the year ending March 31, 2017, calculate the gross profit.

₹

Closing stock 2,50,000

Net sales during the year 40,00,000

Net purchases during the year 15,00,000

Opening stock 15,00,000

Direct expenses 80,000

The gross profit is calculated below:

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	15,00,000	Net Sales	40,00,000
Net Purchases	15,00,000	Closing Stock	2,50,000
Direct Expenses	80,000
Gross Profit	11,70,000
	42,50,000		42,50,000

Therefore, the Gross Profit is ₹ 11, 70,000.

2. From the following balances extracted from the books of M/s Ahuja and Nanda. Calculate the amount of:

(a) Cost of goods available for sale

(b) Cost of goods sold during the year

(c) Gross Profit

 

₹

Opening stock 25,000

Credit purchases 7,50,000

Cash purchases 3,00,000

Credit sales 12,00,000

Cash sales 4,00,000

Wages 1,00,000

Salaries 1,40,000

Closing stock 30,000

Sales return 50,000

Purchases return 10,000

1. a) Cost of Goods Sold Available for Sales

Or

Cost of Goods Manufactured = Opening Stock + Net Purchases + Wages

= 25,000 + 10, 40,000 + 1, 00,000

= ₹ 11, 65,000

(b) Cost of Goods Sold = Opening Stock + Net Purchases + Wages – Closing Stock

= 25,000 + 10, 40,000 + 1, 00,000 – 30,000

= ₹ 11, 35,000

Or

Cost of Goods Sold = Net Sales – Gross Profit

= 15, 50,000 – 4, 15,000

= ₹ 11, 35,000

(c)

Trading Account
Dr.				Cr.
Particulars			Amount ₹	Particulars			Amount ₹
Opening Stock			25,000	Sales
Purchases					Add: Credit Sales	12,00,000
	Add: Credit Purchases	7,50,000			Add: Cash Sales	4,00,000
	Add: Cash Purchases	3,00,000				16,00,000
		10,50,000			Less: Sales Return	(50,000)	15,50,000
	Less: Purchases Return	(10,000)	10,40,000
Wages			1,00,000		Closing Stock		30,000
Gross Profit			4,15,000
			15,80,000				15,80,000

3. Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv and Sons for the year ended March 31, 2017.

₹

Opening stock 50,000

Net sales 11,00,000

Net purchases 6,00,000

Direct expenses 60,000

Administration expenses 45,000

Selling and distribution expenses 65,000

Loss due to fire 20,000

Closing stock 70,000

The solution is as follows:

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	50,000	Net Sales	11,00,000
Net Purchases	6,00,000	Closing Stock	70,000
Direct Expenses	60,000
Gross Profit	4,60,000
	11,70,000		11,70,000

 

Operating Profit	=	Sales – (Opening Stock + Net Purchases + Direct Expenses + Administration Expenses + Selling and Distribution Expenses) + Closing Stock
	=	11,00,000 – (50,000 + 6,00,000 + 60,000 + 45,000 + 65,000) + 70,000
	=	₹ 3,50,000

4. Operating profit earned by M/s Arora and Sachdeva in 2016-17 was ₹ 17, 00,000. Its non-operating incomes were ₹ 1, 50,000 and non-operating expenses were ₹ 3, 75,000. Calculate the amount of net profit earned by the firm.

 

Net Profit = Operating Profit + Non-operating Income – Non-operating Expenses

= 17, 00,000 + 1, 50,000 – 3, 75,000

= ₹ 14, 75,000

Net profit earned by M/S Arora and Sachdeva in 2016–17 is ₹ 14, 75,000

5. The following are the extracts from the trial balance of M/s Bhola and Sons as on March 31, 2017

Account title	Debit ₹	Credit ₹
Opening Stock	2,00,000
Purchases	8,10,000
Sales		10,10,000
	10,10,000	10,10,000

 

(Only relevant items)

Closing Stock as on date was valued at ₹ 3, 00,000.

You are required to record the necessary journal entries and show how the above items will appear in the trading and profit and loss account and balance sheet of M/s Bhola and Sons.

Books of M/s Bhola and Sons Journal
Date		Particulars		L.F.	Debit Amount ₹	Credit Amount ₹
2017
Mar.31	Trading A/c		Dr.		10,10,000
		To Opening Stock A/c				2,00,000
		To Purchases A/c				8,10,000
	(Balances from Purchases Account and Stock Account transferred to Trading Account)
Mar.31	Sales A/c		Dr.		10,10,000
	Closing Stock A/c				3,00,000
		To Trading A/c				13,10,000
	(Balance from sales and closing stock transferred to Trading Account)
Mar.31	Trading A/c		Dr.		3,00,000
		To Profit and Loss (Gross Profit) A/c				3,00,000
	(Balance of Trading Account (gross profit) transferred to Profit and Loss Account)

 

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	2,00,000	Sales	10,10,000
Purchases	8,10,000	Closing Stock	3,00,000
Profit and Loss A/c – Gross Profit	3,00,000
	13,10,000		13,10,000

 

Balance Sheet as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
		Closing Stock	3,00,000

6. Prepare trading and profit and loss account and balance sheet, as on March 31, 2017:

Account Title	Amount ₹	Account Title	Amount ₹
Machinery	27,000	Capital	60,000
Sundry debtors	21,600	Bills payable	2,800
Drawings	2,700	Sundry creditors	1,400
Purchases	58,500	Sales	73,500
Wages	15,000
Sundry expenses	600
Rent and taxes	1,350
Carriage inwards	450
Bank	4,500
Openings stock	6,000

 

Closing stock, as on March 31, 2017 ₹ 22,400

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	6,000	Sales	73,500
Purchases	58,500	Closing Stock	22,400
Wages	15,000
Carriage Inwards	450
Profit and Loss (Gross Profit)	15,950
	95,900		95,900

 

Profit and Loss Account as on March 31, 2017
Dr.		Cr.
Particulars	Amount ₹		Particulars	Amount ₹
Sundry Expenses	600		Trading (Gross Profit)	15,950
Rent and Taxes	1,350
Net Profit	14,000
	15,950			15,950

 

Balance Sheet as on March 31, 2017
Liabilities			Amount ₹	Assets	Amount ₹
Capital		60,000		Fixed Assets
	Add: Net Profit	14,000		Machinery	27,000
		74,000
	Less: Drawings	2,700	71,300	Current Assets
				Bank	4,500
Sundry Creditors			1,400	Closing Stock	22,400
Bills Payable			2,800	Sundry Debtors	21,600
			75,500		75,500

7.The following trial balance is extracted from the books of M/s Ram on March 31, 2017. You are required to prepare trading and profit and loss account and the balance sheet as on date:

 

Account title	Amount ₹	Account title	Amount ₹
Debtors	12,000	Apprenticeship premium	5,000
Purchases	50,000	Loan	10,000
Coal, gas and water	6,000	Bank overdraft	1,000
Factory wages	11,000	Sales	80,000
Salaries	9,000	Creditors	13,000
Rent	4,000	Capital	20,000
Discount	3,000
Advertisement	500
Drawings	1,000
Loan	6,000
Petty cash	500
Sales return	1,000
Machinery	5,000
Land and building	10,000
Income tax	100
Furniture	9,900

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017
Dr.						Cr.
Particulars					Amount ₹	Particulars			Amount ₹
Purchases					50,000	Sales		80,000
Coal, Gas and Water					6,000		Less: Sales Return	1,000	79,000
Factory Wages					11,000
Profit and Loss (Gross Profit)					12,000
					79,000				79,000

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Salaries	9,000	Trading (Gross Profit)	12,000
Rent	4,000	Apprenticeship Premium	5,000
Discount	3,000
Advertisement	500
Net Profit	500
	17,000		17,000

 

Balance Sheet as on March 31, 2017
Liabilities			Amount ₹	Assets			Amount ₹
Capital		20,000		Machinery			5,000
	Add: Profit and Loss (Net Profit)	500		Land and Building			10,000
		20,500		Furniture			9,900
	Less: Drawings	(1,000)		Loan (Given)			6,000
	Less: Income Tax	(100)	19,400	Debtors			12,000
				Petty Cash			500
Loan (Taken)			10,000
Creditors			13,000
Bank Overdraft			1,000
			43,400				43,400

8. The following is the trial balance of Manju Chawla on March 31, 2017. You are required to prepare trading and profit and loss account and a balance sheet as on date:

Account title	Debit Amount ₹		Credit Amount ₹
Opening stock	10,000
Purchases and sales	40,000		80,000
Returns	200		600
Productive wages	6,000
Dock and Clearing charges	4,000
Donation and charity	600
Delivery van expenses	6,000
Lighting	500
Sales tax collected			1,000
Bad debts	600
Misc. incomes			6,000
Rent from tenants			2,000
Royalty	4,000
Capital			40,000
Drawings	2,000
Debtors and Creditors	6,000		7,000
Cash	3,000
Investment	6,000
Patents	4,000
Land and Machinery	43,000

 

Closing stock ₹ 2,000.

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017
Dr.				Cr.
Particulars			Amount ₹	Particulars			Amount ₹
Opening Stock			10,000	Sales		80,000
Purchases		40,000			Less: Sales Returns	(200)	79,800
	Less: Purchases Returns	(600)	39,400
Productive Wages			6,000	Closing Stock			2,000
Dock and Clearing Charges			4,000
Royalty			4,000
Profit and Loss (Gross Profit)			18,400
			81,800				81,800

 

Profit and Loss Account as on March 31, 2017
Dr.		Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Donation and Charity	600	Trading (Gross Profit)	18,400
Delivery Van Expenses	6,000	Misc. Incomes	6,000
Lighting	500	Rent from Tenants	2,000
Bad Debts	600
Net Profit	18,700
	26,400		26,400

 

Balance Sheet as on March 31, 2017
Liabilities					Amount ₹	Assets			Amount ₹
Capital			40,000			Patents			4,000
	Add: Profit and Loss (Net Profit)			18,700		Land and Machinery			43,000
			58,700			Investment			6,000
	Less: Drawings		(2,000)		56,700	Debtors			6,700
						Cash			3,000
Sales Tax Collected					1,000	Closing Stock			2,000
Creditors					7,000
					64,700				64,700

9. The following is the Trial Balance of Mr. Deepak as on March 31, 2017. You are required to prepare trading account, profit and loss account and a balance sheet as on date:

 

Account title	Debit Amount ₹	Account title	Credit Amount ₹
Drawings	36,000	Capital	2,50,000
Insurance	3,000	Bills payable	3,600
General expenses	29,000	Creditors	50,000
Rent and taxes	14,400	Discount received	10,400
Lighting (factory)	2,800	Purchases return	8,000
Travelling expenses	7,400	Sales	4,40,000
Cash in hand	12,600
Bills receivable	5,000
Sundry debtors	1,04,000
Furniture	16,000
Plant and Machinery	1,80,000
Opening stock	40,000
Purchases	1,60,000
Sales return	6,000
Carriage inwards	7,200
Carriage outwards	1,600
Wages	84,000
Salaries	53,000

 

Closing stock ₹ 35,000.

The trading account, profit and loss account and a balance sheet are prepared below:

Trading Account as on March 31, 2017
Dr.					Cr.
Particulars			Amount ₹	Particulars				Amount ₹
Opening Stock			40,000	Sales			4,40,000
Purchases		1,60,000				Less: Sales Return	6,000	4,34,000
	Less: Purchases Return	(8,000)	1,52,000	Closing Stock				35,000
Lighting (Factory)			2,800
Carriage Inwards			7,200
Wages			84,000
Profit and Loss (Gross Profit)			1,83,000
			4,69,000					4,69,000

 

Profit and Loss Account as on March 31, 2017
Dr.					Cr.
Particulars			Amount ₹	Particulars				Amount ₹
Insurance			3,000	Trading (Gross Profit)				1,83,000
General Expenses			29,000	Discount Received				10,400
Rent and Taxes			14,400
Travelling Expenses			7,400
Carriage Outwards			1,600
Salaries			53,000
Net Profit			85,000
			1,93,400					1,93,400

 

Balance Sheet as on March 31, 2017
Liabilities			Amount ₹	Assets	Amount ₹
Capital		2,50,000		Plant and Machinery	1,80,000
	Add: Net Profit	85,000		Furniture	16,000
3,35,000				Sundry Debtors	1,04,000
	Less: Drawings	(36,000)	2,99,000	Closing Stock	35,000
				Bills Receivable	5,000
Creditors			50,000	Cash in Hand	12,600
Bills Payable			3,600
			3,52,600		3,52,600

10. Prepare trading and profit and loss account and balance sheet from the following particulars as on March 31, 2017.

 

Account Title	Debit Amount ₹	Credit Amount ₹
Purchases and Sales	3,52,000	5,60,000
Return inwards and Return outwards	9,600	12,000
Carriage inwards	7,000
Carriage outwards	3,360
Fuel and power	24,800
Opening stock	57,600
Bad debts	9,950
Debtors and Creditors	1,31,200	48,000
Capital		3,48,000
Investment	32,000
Interest on investment		3,200
Loan		16,000
Repairs	2,400
General expenses	17,000
Wages and salaries	28,800
Land and buildings	2,88,000
Cash in hand	32,000
Miscellaneous receipts		160
Sales tax collected		8,350

 

Closing stock ₹ 30,000.

Trading and profit and loss account and balance sheet for the question is posted below:

Trading Account as on March 31, 2017
Dr.												Cr.
Particulars						Amount ₹	Particulars					Amount ₹
Opening Stock						57,600	Sales			5,60,000
Purchases			3,52,000					Less: Return Inwards		(9,600)		5,50,400
	Less: Return Outwards		(12,000)			3,40,000	Closing Stock					30,000
Carriage Inwards						7,000
Fuel and Power						24,800
Wages and Salaries						28,800
Profit and Loss (Gross Profit)						1,22,200
						5,80,400						5,80,400

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Carriage Outwards	3,360	Trading (Gross Profit)	1,22,200
Bad Debts	9,950	Interest on Investment	3,200
Repairs	2,400	Miscellaneous Receipts	160
General Expenses	17,000
Net Profit	92,850
	1,25,560		1,25,560

 

Balance Sheet as on March 31,2017
Liabilities				Amount ₹	Assets		Amount ₹
Capital			3,48,000		Land and Building		2,88,000
	Add: Net Profit		92,850	4,40,850	Investment		32,000
					Debtors		1,31,200
Loan				16,000	Closing Stock		30,000
Creditors				48,000	Cash in Hand		32,000
Sales Tax Collected				8,350
				5,13,200			5,13,200

11. From the following trial balance of Mr. A. Lal, prepare trading, profit and loss account and balance sheet as on March 31, 2017.

 

Account Title	Debit Amount ₹	Credit Amount ₹
Stock as on April 01, 2016	16,000
Purchases and Sales	67,600	1,12,000
Returns inwards and outwards	4,600	3,200
Carriage inwards	1,400
General expenses	2,400
Bad debts	600
Discount received		1,400
Bank over draft		10,000
Interest on bank overdraft	600
Commission received		1,800
Insurance and taxes	4,000
Scooter expenses	200
Salaries	8,800
Cash in hand	4,000
Scooter	8,000
Furniture	5,200
Building	65,000
Debtors and Creditors	6,000	16,000
Capital		50,000

Closing stock ₹ 15,000.

 

Trading and profit and loss account and balance sheet for the question is posted below:

Trading Account as on March 31, 2017
Dr.											Cr.
Particulars						Amount ₹	Particulars				Amount ₹
Opening Stock						16,000	Sales			1,12,000
Purchases				67,600				Less: Sales Return Inwards		(4,600)	1,07,400
	Less: Return Outwards			(3,200)		64,400	Closing Stock				15,000
Carriage Inwards						1,400
Profit and Loss (Gross Profit)						40,600
						1,22,400					1,22,400

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
General Expenses	2,400	Trading (Gross Profit)	40,600
Bad Debts	600	Discount Received	1,400
Interest on Bank Overdraft	600	Commission Received	1,800
Insurance and Taxes	4,000
Scooter Expenses	200
Salaries	8,800
Net Profit	27,200
	43,800		43,800

 

Balance Sheet as on March 31, 2017
Liabilities			Amount ₹	Assets			Amount ₹
Capital		50,000		Building			65,000
	Add: Net Profit	27,200	77,200	Furniture			5,200
				Scooter			8,000
Creditors			16,000	Debtors			6,000
Bank Overdraft			10,000	Closing Stock			15,000
				Cash in Hand			4,000
			1,03,200				1,03,200

12. Prepare trading and profit and loss account and balance sheet of M/s Royal Traders from the following balances as on March 31, 2017.

 

Debit balances	Amount ₹	Credit balances	Amount ₹
Stock	20,000	Sales	2,45,000
Cash	5,000	Creditors	10,000
Bank	10,000	Bills payable	4,000
Carriage on purchases	1,500	Capital	2,00,000
Purchases	1,90,000
Drawings	9,000
Wages	55,000
Machinery	1,00,000
Debtors	27,000
Postage	300
Sundry expenses	1,700
Rent	4,500
Furniture	35,000

 

Closing stock ₹ 8,000.

Trading and profit and loss account and balance sheet is prepared below:

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	20,000	Sales	2,45,000
Purchases	1,90,000	Closing Stock	8,000
Carriage on Purchases	1,500	Profit and Loss (Gross Loss)	13,500
Wages	55,000
	2,66,500		2,66,500

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Trading (Gross Loss)	13,500
Postage	300
Sundry Expenses	1,700
Rent	4,500	Net Loss	20,000
	20,000		20,000

 

Balance Sheet of M/s Royal Traders as on March 31, 2017
Liabilities			Amount ₹	Assets			Amount ₹
Capital		2,00,000		Machinery			1,00,000
	Less: Net Loss	(20,000)		Furniture			35,000
	Less: Drawings	(9,000)	1,71,000	Debtors			27,000
				Closing Stock			8,000
Creditors			10,000	Bank			10,000
Bills Payable			4,000	Cash			5,000
			1,85,000				1,85,000

13. Prepare trading and profit and loss account from the following particulars of M/s Neema Traders as on March 31, 2017.

Account Title	Debit Amount ₹	Account Title	Credit Amount ₹
Buildings	23,000	Sales	1,80,000
Plant	16,930	Loan	8,000
Carriage inwards	1,000	Bills payable	2,520
Wages	3,300	Bank overdraft	4,720
Purchases	1,64,000	Creditors	8,000
Sales return	1,820	Capital	2,36,000
Opening stock	9,000	Purchases return	1,910
Machinery	2,10,940
Insurance	1,610
Interest	1,100
Bad debts	250
Postage	300
Discount	1,000
Salaries	3,000
Debtors	3,900

Stock on March 31, 2017 ₹ 16,000.

Trading and profit and loss account and balance sheet is prepared below:

Trading Account as on March 31, 2017
Dr.											Cr.
Liabilities						Amount ₹	Assets				Amount ₹
Opening Stock						9,000	Sales		1,80,000
Purchases				1,64,000				Less: Sales Return	(1,820)		1,78,180
	Less: Purchases Return			(1,910)		1,62,090	Closing Stock				16,000
Carriage Inwards						1,000
Wages						3,300
Profit and Loss (Gross Profit)						18,790
						1,94,180					1,94,180

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Insurance	1,610	Trading (Gross Profit)	18,790
Interest	1,100
Bad Debts	250
Postage	300
Discount	1,000
Salaries	3,000
Net Profit	11,530
	18,790		18,790

 

Balance Sheet as on March 31, 2017
Liabilities				Amount ₹	Assets	Amount ₹
Capital			2,36,000		Building	23,000
		Add: Net Profit	11,530	2,47,530	Plant	16,930
					Machinery	2,10,940
Loan				8,000	Debtors	3,900
Creditors				8,000	Closing Stock	16,000
Bills Payable				2,520
Bank Overdraft				4,720
				2,70,770		2,70,770

14. From the following balances of M/s Nilu Sarees as on March 31, 2017. Prepare trading and profit and loss account and balance sheet as on date.

 

Account Title	Debit Amount ₹	Account Title	Credit Amount ₹
Opening stock	10,000	Sales	2,28,000
Purchases	78,000	Capital	70,000
Carriage inwards	2,500	Interest	7,000
Salaries	30,000	Commission	8,000
Commission	10,000	Creditors	28,000
Wages	11,000	Bills payable	2,370
Rent and taxes	2,800
Repairs	5,000
Telephone expenses	1,400
Legal charges	1,500
Sundry expenses	2,500
cash in hand	12,000
Debtors	30,000
Machinery	60,000
Investments	90,000
Drawings	18,000

 

Closing stock, as on March 31, 2017 ₹ 22,000.

Trading Account of M/s Nilu Sarees as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	10,000	Sales	2,28,000
Purchases	78,000	Closing Stock	22,000
Carriage Inwards	2,500
Wages	11,000
Profit and Loss (Gross Profit)	1,48,500
	2,50,000		2,50,000

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Salaries	30,000	Trading (Gross Profit)	1,48,500
Commission	10,000	Interest	7,000
Rent and Taxes	2,800	Commission	8,000
Repairs	5,000
Telephone Expenses	1,400
Legal Charges	1,500
Sundry Expenses	2,500
Net Profit	1,10,300
	1,63,500		1,63,500

 

Balance Sheet as on March 31, 2017
Liabilities					Amount ₹	Assets	Amount ₹
Capital			70,000			Machinery	60,000
		Add: Net Profit	1,10,300			Investments	90,000
			1,80,300			Debtors	30,000
		Less: Drawings	(18,000)		1,62,300	Closing Stock	22,000
						Cash in Hand	12,000
Creditors					28,000
Bills Payable					2,370
Suspense					21,330
					2,14,000		2,14,000

15. Prepare trading and profit and loss account of M/s Sports Equipments for the year ended March 31, 2017 and balance sheet as on that date:

Account Title	Debit Amount ₹	Credit Amount ₹
Opening stock	50,000
Purchases and sales	3,50,000	4,21,000
Sales returns	5,000
Capital		3,00,000
Commission		4,000
Creditors		1,00,000
Bank overdraft		28,000
Cash in hand	32,000
Furniture	1,28,000
Debtors	1,40,000
Plants	60,000
Carriage on purchases	12,000
Wages	8,000
Rent	15,000
Bad debts	7,000
Drawings	24,000
Stationery	6,000
Travelling expenses	2,000
Insurance	7,000
Discount	5,000
Office expenses	2,000

 

Closing stock as on March 31, 2017 ₹ 2,500

Trading and profit and loss account and balance sheet is prepared below:

Trading Account as on March 31, 2017
Dr.				Cr.
Particulars			Amount ₹	Particulars				Amount ₹
Opening Stock			50,000	Sales		4,21,000
Purchases			3,50,000		Less: Sales Return		5,000	4,16,000
Carriage on Purchases			12,000	Closing Stock				2,500
Wages			8,000	Profit and Loss (Gross Loss)				1,500
			4,20,000					4,20,000

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Trading (Gross Loss)	1,500	Commission	4,000
Rent	15,000	Net Loss	41,500
Bad Debts	7,000
Stationery	6,000
Travelling Expenses	2,000
Insurance	7,000
Discount	5,000
Office Expenses	2,000
	45,500		45,500

 

Balance Sheet as on March 31, 2017
Liabilities				Amount ₹	Assets			Amount ₹
Capital			3,00,000		Plants			60,000
	Less: Net Loss		(41,500)		Furniture			1,28,000
	Less: Drawings		(24,000)	2,34,500	Debtors			1,40,000
					Closing Stock			2,500
Creditors				1,00,000	Cash in Hand			32,000
Bank Overdraft				28,000
				3,62,500				3,62,500

16.The objectives of preparing financial statements?

Financial statements are prepared with the following objective:

1. Determine the financial position of a business.
2. Ascertain the financial performance of the business.
3. To measure the changes in financial position of a business.
4. To compare financial performance of business both intra and inter farm wise.
5. What is the purpose of preparing trading and profit and loss account?

Trading account is prepared for the following purpose:

1. To determine the gross profit or loss in a financial year or period.
2. Determine the ratio of gross profit to sales.
3. To determine ratio of direct expense to sales.

Profit and Loss account is prepared for the following purpose:

1. Determining net profit or loss incurred by the business
2. To comply with statutory requirements such as Company act or Partnership Act
3. Explain the concept of cost of goods sold.

Costs incurred in production of goods that are sold by company is known as Cost of Goods Sold or COGS

No goods left out: In this case all goods are sold out. Hence, it can be calculated as:

Cost of goods sold = Purchases + Direct Expenses

Presence of a closing stock: There can be some stock that are yet to get sold at the end of accounting period. At that time it can be calculated as:

Cost of goods sold = Purchases + Direct Expenses – Closing Stock

Presence of an Opening stock: Stock that is carried forward at the beginning of the accounting period from the previous accounting period is considered as opening stock and is calculated as:

Cost of goods sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

4. What is a balance sheet? What are its characteristics?

A statement prepared to determine assets and values of a business on a particular date is known as Balance Sheet. Debits represent the assets while credits signify the liabilities.

It has the following characteristics:

1. Reflects financial position of a business.
2. It is dependent on other statements such as trading and P & L account.
3. It is prepared at the end of an accounting period.
4. The balance of both sides should tally.
5. Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure:

(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.

(b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.

(c) Registration fees paid at the time of purchase of a building

(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.

(e) Depreciation charged on a plant.

(f) The expenditure incurred in erecting a platform on which a machine will be fixed.

(g) Advertising expenditure, the benefits of which will last for four years.

Basis of Difference	Capital Expenditure	Revenue Expenditure
Meaning	Expenditure beared for acquiring or improving an asset.	Expenses beared for running daily business activities
Term	Long Term, can span many accounting periods	Short term limited to an accounting period
Benefits	Benefits can be achieved across many accounting periods	Benefits can be availed only in the current year
Nature	Non-recurring	Recurring
Shown in	It is shown in Income Statement and Balance Sheet	It is shown in Income statement

 

(a) Capital expenditure

(b) Revenue expenditure

(c) Capital expenditure

(d) Capital expenditure

(e) Revenue expenditure

(f) Capital expenditure

(g) Deferred revenue expenditure

5. What is an operating profit?

Operating profit referred to as EBIT, is an accounting metric that measures, the profits a company generates from its core business functions. It does not take into account interest deduction and exclusion of tax from calculation. The following equation is used to calculate the operating profit.

The following equation can be used to represent

Operating Profit = Net Profit + Non-Operating Expenses – Non Operating Incomes

Long Answers for NCERT Accountancy Solutions Class 11 Chapter 9

1. What are financial statements? What information do they provide?

Statements that contain financial information about business which can satisfy the information requirements of internal and external users are known as financial statements. It serve as a source of financial information that caters to diverse information requirement of users. It is prepared with the purpose of representing a true and fair view of business.

To do so it requires the creation of three statements namely, trading and profit and loss account and balance sheet.

The financial statements related to gross/net profit or loss, the assets and liabilities. The users of information can be the following:

Current Owners: These internal users would like to know the profits in the previous accounting period and current position of the assets and liabilities.

Government: Government is an external user and want to know the financial position of a business so that stakeholder’s rights are protected.

Prospective Owner: These external users would like to know the past profits and financial position and also the future performance of the business to make an informed decision whether to invest in the business or not

2. What are closing entries? Give four examples of closing entries.

A journal entry that is made at the end of an accounting period that transfers balances from the temporary accounts to a permanent account is known as closing entries. Some examples are here as follows:

1. The purchases returns are closed by transferring the balance in purchases account. Following entries are made:

Purchases return A/c

Dr

To Purchases A/c

2. Sales return account is closed by transfer of balance to sales account. Entries will be

Sales A/c

Dr

To Sales return A/c

3. Purchases account closed by transferring to debit side of trading and P & L Account

Trading A/c

Dr

To Purchases A/c

4. Sales account closed by transferring balance to credit side of trading and P & L account.

Sales A/c

Dr.

To Trading A/c

3. Discuss the need of preparing a balance sheet.

Balance sheet needs to be prepared due to following reasons:

1. To show financial position of business.
2. To show much assets and liabilities a business has
3. It serves as information source for internal and external users
4. It acts as a reference for balances that need to be carried forward
5. To gather an idea about the liquidity of the firm or business
6. Helps management in planning and controlling business operations.
7. What is meant by Grouping and Marshalling of assets and liabilities? Explain the ways in which a balance sheet may be marshalled.

Grouping refers to including assets and liabilities of similar nature under o common heading. For example different types of creditors can be placed in one heading. Similarly work in progress, raw material and finished goods can be placed.

Marshalling refers to arranging of assets and liabilities in order of liquidity and permanence.

In order of Liquidity: It shows how easily an asset can be converted into cash or a liability can be paid off. The asset examples arranged as follows:

1. Cash
2. Bank
3. Debtors

In order of permanence: In this system the most important asset or a liability gets the top position in balance sheet and remaining assets are arranged in reducing level of permanence: For e.g.

1. Debtors
2. Bank
3. Cash

Similarly, liabilities in order of permanence is as follows:

1.Capital

2. Long term loan
3. Creditors

Numerical Answers for NCERT Accountancy Solutions Class 11 Chapter 9

1. From the following balances taken from the books of Simmi and Vimmi Ltd.

for the year ending March 31, 2017, calculate the gross profit.

₹

Closing stock 2,50,000

Net sales during the year 40,00,000

Net purchases during the year 15,00,000

Opening stock 15,00,000

Direct expenses 80,000

The gross profit is calculated below:

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	15,00,000	Net Sales	40,00,000
Net Purchases	15,00,000	Closing Stock	2,50,000
Direct Expenses	80,000
Gross Profit	11,70,000
	42,50,000		42,50,000

Therefore, the Gross Profit is ₹ 11, 70,000.

2. From the following balances extracted from the books of M/s Ahuja and Nanda. Calculate the amount of:

(a) Cost of goods available for sale

(b) Cost of goods sold during the year

(c) Gross Profit

 

₹

Opening stock 25,000

Credit purchases 7,50,000

Cash purchases 3,00,000

Credit sales 12,00,000

Cash sales 4,00,000

Wages 1,00,000

Salaries 1,40,000

Closing stock 30,000

Sales return 50,000

Purchases return 10,000

1. a) Cost of Goods Sold Available for Sales

Or

Cost of Goods Manufactured = Opening Stock + Net Purchases + Wages

= 25,000 + 10, 40,000 + 1, 00,000

= ₹ 11, 65,000

(b) Cost of Goods Sold = Opening Stock + Net Purchases + Wages – Closing Stock

= 25,000 + 10, 40,000 + 1, 00,000 – 30,000

= ₹ 11, 35,000

Or

Cost of Goods Sold = Net Sales – Gross Profit

= 15, 50,000 – 4, 15,000

= ₹ 11, 35,000

(c)

Trading Account
Dr.				Cr.
Particulars			Amount ₹	Particulars			Amount ₹
Opening Stock			25,000	Sales
Purchases					Add: Credit Sales	12,00,000
	Add: Credit Purchases	7,50,000			Add: Cash Sales	4,00,000
	Add: Cash Purchases	3,00,000				16,00,000
		10,50,000			Less: Sales Return	(50,000)	15,50,000
	Less: Purchases Return	(10,000)	10,40,000
Wages			1,00,000		Closing Stock		30,000
Gross Profit			4,15,000
			15,80,000				15,80,000

3. Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv and Sons for the year ended March 31, 2017.

₹

Opening stock 50,000

Net sales 11,00,000

Net purchases 6,00,000

Direct expenses 60,000

Administration expenses 45,000

Selling and distribution expenses 65,000

Loss due to fire 20,000

Closing stock 70,000

The solution is as follows:

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	50,000	Net Sales	11,00,000
Net Purchases	6,00,000	Closing Stock	70,000
Direct Expenses	60,000
Gross Profit	4,60,000
	11,70,000		11,70,000

 

Operating Profit	=	Sales – (Opening Stock + Net Purchases + Direct Expenses + Administration Expenses + Selling and Distribution Expenses) + Closing Stock
	=	11,00,000 – (50,000 + 6,00,000 + 60,000 + 45,000 + 65,000) + 70,000
	=	₹ 3,50,000

4. Operating profit earned by M/s Arora and Sachdeva in 2016-17 was ₹ 17, 00,000. Its non-operating incomes were ₹ 1, 50,000 and non-operating expenses were ₹ 3, 75,000. Calculate the amount of net profit earned by the firm.

 

Net Profit = Operating Profit + Non-operating Income – Non-operating Expenses

= 17, 00,000 + 1, 50,000 – 3, 75,000

= ₹ 14, 75,000

Net profit earned by M/S Arora and Sachdeva in 2016–17 is ₹ 14, 75,000

5. The following are the extracts from the trial balance of M/s Bhola and Sons as on March 31, 2017

Account title	Debit ₹	Credit ₹
Opening Stock	2,00,000
Purchases	8,10,000
Sales		10,10,000
	10,10,000	10,10,000

 

(Only relevant items)

Closing Stock as on date was valued at ₹ 3, 00,000.

You are required to record the necessary journal entries and show how the above items will appear in the trading and profit and loss account and balance sheet of M/s Bhola and Sons.

Books of M/s Bhola and Sons Journal
Date		Particulars		L.F.	Debit Amount ₹	Credit Amount ₹
2017
Mar.31	Trading A/c		Dr.		10,10,000
		To Opening Stock A/c				2,00,000
		To Purchases A/c				8,10,000
	(Balances from Purchases Account and Stock Account transferred to Trading Account)
Mar.31	Sales A/c		Dr.		10,10,000
	Closing Stock A/c				3,00,000
		To Trading A/c				13,10,000
	(Balance from sales and closing stock transferred to Trading Account)
Mar.31	Trading A/c		Dr.		3,00,000
		To Profit and Loss (Gross Profit) A/c				3,00,000
	(Balance of Trading Account (gross profit) transferred to Profit and Loss Account)

 

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	2,00,000	Sales	10,10,000
Purchases	8,10,000	Closing Stock	3,00,000
Profit and Loss A/c – Gross Profit	3,00,000
	13,10,000		13,10,000

 

Balance Sheet as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
		Closing Stock	3,00,000

6. Prepare trading and profit and loss account and balance sheet, as on March 31, 2017:

Account Title	Amount ₹	Account Title	Amount ₹
Machinery	27,000	Capital	60,000
Sundry debtors	21,600	Bills payable	2,800
Drawings	2,700	Sundry creditors	1,400
Purchases	58,500	Sales	73,500
Wages	15,000
Sundry expenses	600
Rent and taxes	1,350
Carriage inwards	450
Bank	4,500
Openings stock	6,000

 

Closing stock, as on March 31, 2017 ₹ 22,400

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	6,000	Sales	73,500
Purchases	58,500	Closing Stock	22,400
Wages	15,000
Carriage Inwards	450
Profit and Loss (Gross Profit)	15,950
	95,900		95,900

 

Profit and Loss Account as on March 31, 2017
Dr.		Cr.
Particulars	Amount ₹		Particulars	Amount ₹
Sundry Expenses	600		Trading (Gross Profit)	15,950
Rent and Taxes	1,350
Net Profit	14,000
	15,950			15,950

 

Balance Sheet as on March 31, 2017
Liabilities			Amount ₹	Assets	Amount ₹
Capital		60,000		Fixed Assets
	Add: Net Profit	14,000		Machinery	27,000
		74,000
	Less: Drawings	2,700	71,300	Current Assets
				Bank	4,500
Sundry Creditors			1,400	Closing Stock	22,400
Bills Payable			2,800	Sundry Debtors	21,600
			75,500		75,500

7. The following trial balance is extracted from the books of M/s Ram on March 31, 2017. You are required to prepare trading and profit and loss account and the balance sheet as on date:

 

Account title	Amount ₹	Account title	Amount ₹
Debtors	12,000	Apprenticeship premium	5,000
Purchases	50,000	Loan	10,000
Coal, gas and water	6,000	Bank overdraft	1,000
Factory wages	11,000	Sales	80,000
Salaries	9,000	Creditors	13,000
Rent	4,000	Capital	20,000
Discount	3,000
Advertisement	500
Drawings	1,000
Loan	6,000
Petty cash	500
Sales return	1,000
Machinery	5,000
Land and building	10,000
Income tax	100
Furniture	9,900

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017
Dr.						Cr.
Particulars					Amount ₹	Particulars			Amount ₹
Purchases					50,000	Sales		80,000
Coal, Gas and Water					6,000		Less: Sales Return	1,000	79,000
Factory Wages					11,000
Profit and Loss (Gross Profit)					12,000
					79,000				79,000

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Salaries	9,000	Trading (Gross Profit)	12,000
Rent	4,000	Apprenticeship Premium	5,000
Discount	3,000
Advertisement	500
Net Profit	500
	17,000		17,000

 

Balance Sheet as on March 31, 2017
Liabilities			Amount ₹	Assets			Amount ₹
Capital		20,000		Machinery			5,000
	Add: Profit and Loss (Net Profit)	500		Land and Building			10,000
		20,500		Furniture			9,900
	Less: Drawings	(1,000)		Loan (Given)			6,000
	Less: Income Tax	(100)	19,400	Debtors			12,000
				Petty Cash			500
Loan (Taken)			10,000
Creditors			13,000
Bank Overdraft			1,000
			43,400				43,400

8. The following is the trial balance of Manju Chawla on March 31, 2017. You are required to prepare trading and profit and loss account and a balance sheet as on date:

Account title	Debit Amount ₹		Credit Amount ₹
Opening stock	10,000
Purchases and sales	40,000		80,000
Returns	200		600
Productive wages	6,000
Dock and Clearing charges	4,000
Donation and charity	600
Delivery van expenses	6,000
Lighting	500
Sales tax collected			1,000
Bad debts	600
Misc. incomes			6,000
Rent from tenants			2,000
Royalty	4,000
Capital			40,000
Drawings	2,000
Debtors and Creditors	6,000		7,000
Cash	3,000
Investment	6,000
Patents	4,000
Land and Machinery	43,000

 

Closing stock ₹ 2,000.

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017
Dr.				Cr.
Particulars			Amount ₹	Particulars			Amount ₹
Opening Stock			10,000	Sales		80,000
Purchases		40,000			Less: Sales Returns	(200)	79,800
	Less: Purchases Returns	(600)	39,400
Productive Wages			6,000	Closing Stock			2,000
Dock and Clearing Charges			4,000
Royalty			4,000
Profit and Loss (Gross Profit)			18,400
			81,800				81,800

 

Profit and Loss Account as on March 31, 2017
Dr.		Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Donation and Charity	600	Trading (Gross Profit)	18,400
Delivery Van Expenses	6,000	Misc. Incomes	6,000
Lighting	500	Rent from Tenants	2,000
Bad Debts	600
Net Profit	18,700
	26,400		26,400

 

Balance Sheet as on March 31, 2017
Liabilities					Amount ₹	Assets			Amount ₹
Capital			40,000			Patents			4,000
	Add: Profit and Loss (Net Profit)			18,700		Land and Machinery			43,000
			58,700			Investment			6,000
	Less: Drawings		(2,000)		56,700	Debtors			6,700
						Cash			3,000
Sales Tax Collected					1,000	Closing Stock			2,000
Creditors					7,000
					64,700				64,700

10. The following is the Trial Balance of Mr. Deepak as on March 31, 2017. You are required to prepare trading account, profit and loss account and a balance sheet as on date:

 

Account title	Debit Amount ₹	Account title	Credit Amount ₹
Drawings	36,000	Capital	2,50,000
Insurance	3,000	Bills payable	3,600
General expenses	29,000	Creditors	50,000
Rent and taxes	14,400	Discount received	10,400
Lighting (factory)	2,800	Purchases return	8,000
Travelling expenses	7,400	Sales	4,40,000
Cash in hand	12,600
Bills receivable	5,000
Sundry debtors	1,04,000
Furniture	16,000
Plant and Machinery	1,80,000
Opening stock	40,000
Purchases	1,60,000
Sales return	6,000
Carriage inwards	7,200
Carriage outwards	1,600
Wages	84,000
Salaries	53,000

 

Closing stock ₹ 35,000.

The trading account, profit and loss account and a balance sheet are prepared below:

Trading Account as on March 31, 2017
Dr.					Cr.
Particulars			Amount ₹	Particulars				Amount ₹
Opening Stock			40,000	Sales			4,40,000
Purchases		1,60,000				Less: Sales Return	6,000	4,34,000
	Less: Purchases Return	(8,000)	1,52,000	Closing Stock				35,000
Lighting (Factory)			2,800
Carriage Inwards			7,200
Wages			84,000
Profit and Loss (Gross Profit)			1,83,000
			4,69,000					4,69,000

 

Profit and Loss Account as on March 31, 2017
Dr.					Cr.
Particulars			Amount ₹	Particulars				Amount ₹
Insurance			3,000	Trading (Gross Profit)				1,83,000
General Expenses			29,000	Discount Received				10,400
Rent and Taxes			14,400
Travelling Expenses			7,400
Carriage Outwards			1,600
Salaries			53,000
Net Profit			85,000
			1,93,400					1,93,400

 

Balance Sheet as on March 31, 2017
Liabilities			Amount ₹	Assets	Amount ₹
Capital		2,50,000		Plant and Machinery	1,80,000
	Add: Net Profit	85,000		Furniture	16,000
3,35,000				Sundry Debtors	1,04,000
	Less: Drawings	(36,000)	2,99,000	Closing Stock	35,000
				Bills Receivable	5,000
Creditors			50,000	Cash in Hand	12,600
Bills Payable			3,600
			3,52,600		3,52,600

11. Prepare trading and profit and loss account and balance sheet from the following particulars as on March 31, 2017.

 

Account Title	Debit Amount ₹	Credit Amount ₹
Purchases and Sales	3,52,000	5,60,000
Return inwards and Return outwards	9,600	12,000
Carriage inwards	7,000
Carriage outwards	3,360
Fuel and power	24,800
Opening stock	57,600
Bad debts	9,950
Debtors and Creditors	1,31,200	48,000
Capital		3,48,000
Investment	32,000
Interest on investment		3,200
Loan		16,000
Repairs	2,400
General expenses	17,000
Wages and salaries	28,800
Land and buildings	2,88,000
Cash in hand	32,000
Miscellaneous receipts		160
Sales tax collected		8,350

 

Closing stock ₹ 30,000.

Trading and profit and loss account and balance sheet for the question is posted below:

Trading Account as on March 31, 2017
Dr.												Cr.
Particulars						Amount ₹	Particulars					Amount ₹
Opening Stock						57,600	Sales			5,60,000
Purchases			3,52,000					Less: Return Inwards		(9,600)		5,50,400
	Less: Return Outwards		(12,000)			3,40,000	Closing Stock					30,000
Carriage Inwards						7,000
Fuel and Power						24,800
Wages and Salaries						28,800
Profit and Loss (Gross Profit)						1,22,200
						5,80,400						5,80,400

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Carriage Outwards	3,360	Trading (Gross Profit)	1,22,200
Bad Debts	9,950	Interest on Investment	3,200
Repairs	2,400	Miscellaneous Receipts	160
General Expenses	17,000
Net Profit	92,850
	1,25,560		1,25,560

 

Balance Sheet as on March 31,2017
Liabilities				Amount ₹	Assets		Amount ₹
Capital			3,48,000		Land and Building		2,88,000
	Add: Net Profit		92,850	4,40,850	Investment		32,000
					Debtors		1,31,200
Loan				16,000	Closing Stock		30,000
Creditors				48,000	Cash in Hand		32,000
Sales Tax Collected				8,350
				5,13,200			5,13,200

12. From the following trial balance of Mr. A. Lal, prepare trading, profit and loss account and balance sheet as on March 31, 2017.

 

Account Title	Debit Amount ₹	Credit Amount ₹
Stock as on April 01, 2016	16,000
Purchases and Sales	67,600	1,12,000
Returns inwards and outwards	4,600	3,200
Carriage inwards	1,400
General expenses	2,400
Bad debts	600
Discount received		1,400
Bank over draft		10,000
Interest on bank overdraft	600
Commission received		1,800
Insurance and taxes	4,000
Scooter expenses	200
Salaries	8,800
Cash in hand	4,000
Scooter	8,000
Furniture	5,200
Building	65,000
Debtors and Creditors	6,000	16,000
Capital		50,000

Closing stock ₹ 15,000.

 

Trading and profit and loss account and balance sheet for the question is posted below:

Trading Account as on March 31, 2017
Dr.											Cr.
Particulars						Amount ₹	Particulars				Amount ₹
Opening Stock						16,000	Sales			1,12,000
Purchases				67,600				Less: Sales Return Inwards		(4,600)	1,07,400
	Less: Return Outwards			(3,200)		64,400	Closing Stock				15,000
Carriage Inwards						1,400
Profit and Loss (Gross Profit)						40,600
						1,22,400					1,22,400

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
General Expenses	2,400	Trading (Gross Profit)	40,600
Bad Debts	600	Discount Received	1,400
Interest on Bank Overdraft	600	Commission Received	1,800
Insurance and Taxes	4,000
Scooter Expenses	200
Salaries	8,800
Net Profit	27,200
	43,800		43,800

 

Balance Sheet as on March 31, 2017
Liabilities			Amount ₹	Assets			Amount ₹
Capital		50,000		Building			65,000
	Add: Net Profit	27,200	77,200	Furniture			5,200
				Scooter			8,000
Creditors			16,000	Debtors			6,000
Bank Overdraft			10,000	Closing Stock			15,000
				Cash in Hand			4,000
			1,03,200				1,03,200

13. Prepare trading and profit and loss account and balance sheet of M/s Royal Traders from the following balances as on March 31, 2017.

 

Debit balances	Amount ₹	Credit balances	Amount ₹
Stock	20,000	Sales	2,45,000
Cash	5,000	Creditors	10,000
Bank	10,000	Bills payable	4,000
Carriage on purchases	1,500	Capital	2,00,000
Purchases	1,90,000
Drawings	9,000
Wages	55,000
Machinery	1,00,000
Debtors	27,000
Postage	300
Sundry expenses	1,700
Rent	4,500
Furniture	35,000

 

Closing stock ₹ 8,000.

Trading and profit and loss account and balance sheet is prepared below:

Trading Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	20,000	Sales	2,45,000
Purchases	1,90,000	Closing Stock	8,000
Carriage on Purchases	1,500	Profit and Loss (Gross Loss)	13,500
Wages	55,000
	2,66,500		2,66,500

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Trading (Gross Loss)	13,500
Postage	300
Sundry Expenses	1,700
Rent	4,500	Net Loss	20,000
	20,000		20,000

 

Balance Sheet of M/s Royal Traders as on March 31, 2017
Liabilities			Amount ₹	Assets			Amount ₹
Capital		2,00,000		Machinery			1,00,000
	Less: Net Loss	(20,000)		Furniture			35,000
	Less: Drawings	(9,000)	1,71,000	Debtors			27,000
				Closing Stock			8,000
Creditors			10,000	Bank			10,000
Bills Payable			4,000	Cash			5,000
			1,85,000				1,85,000

14. Prepare trading and profit and loss account from the following particulars of M/s Neema Traders as on March 31, 2017.

Account Title	Debit Amount ₹	Account Title	Credit Amount ₹
Buildings	23,000	Sales	1,80,000
Plant	16,930	Loan	8,000
Carriage inwards	1,000	Bills payable	2,520
Wages	3,300	Bank overdraft	4,720
Purchases	1,64,000	Creditors	8,000
Sales return	1,820	Capital	2,36,000
Opening stock	9,000	Purchases return	1,910
Machinery	2,10,940
Insurance	1,610
Interest	1,100
Bad debts	250
Postage	300
Discount	1,000
Salaries	3,000
Debtors	3,900

Stock on March 31, 2017 ₹ 16,000.

Trading and profit and loss account and balance sheet is prepared below:

Trading Account as on March 31, 2017
Dr.											Cr.
Liabilities						Amount ₹	Assets				Amount ₹
Opening Stock						9,000	Sales		1,80,000
Purchases				1,64,000				Less: Sales Return	(1,820)		1,78,180
	Less: Purchases Return			(1,910)		1,62,090	Closing Stock				16,000
Carriage Inwards						1,000
Wages						3,300
Profit and Loss (Gross Profit)						18,790
						1,94,180					1,94,180

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Insurance	1,610	Trading (Gross Profit)	18,790
Interest	1,100
Bad Debts	250
Postage	300
Discount	1,000
Salaries	3,000
Net Profit	11,530
	18,790		18,790

 

Balance Sheet as on March 31, 2017
Liabilities				Amount ₹	Assets	Amount ₹
Capital			2,36,000		Building	23,000
		Add: Net Profit	11,530	2,47,530	Plant	16,930
					Machinery	2,10,940
Loan				8,000	Debtors	3,900
Creditors				8,000	Closing Stock	16,000
Bills Payable				2,520
Bank Overdraft				4,720
				2,70,770		2,70,770

15. From the following balances of M/s Nilu Sarees as on March 31, 2017. Prepare trading and profit and loss account and balance sheet as on date.

 

Account Title	Debit Amount ₹	Account Title	Credit Amount ₹
Opening stock	10,000	Sales	2,28,000
Purchases	78,000	Capital	70,000
Carriage inwards	2,500	Interest	7,000
Salaries	30,000	Commission	8,000
Commission	10,000	Creditors	28,000
Wages	11,000	Bills payable	2,370
Rent and taxes	2,800
Repairs	5,000
Telephone expenses	1,400
Legal charges	1,500
Sundry expenses	2,500
cash in hand	12,000
Debtors	30,000
Machinery	60,000
Investments	90,000
Drawings	18,000

 

Closing stock, as on March 31, 2017 ₹ 22,000.

Trading Account of M/s Nilu Sarees as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	10,000	Sales	2,28,000
Purchases	78,000	Closing Stock	22,000
Carriage Inwards	2,500
Wages	11,000
Profit and Loss (Gross Profit)	1,48,500
	2,50,000		2,50,000

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Salaries	30,000	Trading (Gross Profit)	1,48,500
Commission	10,000	Interest	7,000
Rent and Taxes	2,800	Commission	8,000
Repairs	5,000
Telephone Expenses	1,400
Legal Charges	1,500
Sundry Expenses	2,500
Net Profit	1,10,300
	1,63,500		1,63,500

 

Balance Sheet as on March 31, 2017
Liabilities					Amount ₹	Assets	Amount ₹
Capital			70,000			Machinery	60,000
		Add: Net Profit	1,10,300			Investments	90,000
			1,80,300			Debtors	30,000
		Less: Drawings	(18,000)		1,62,300	Closing Stock	22,000
						Cash in Hand	12,000
Creditors					28,000
Bills Payable					2,370
Suspense					21,330
					2,14,000		2,14,000

16. Prepare trading and profit and loss account of M/s Sports Equipments for the year ended March 31, 2017 and balance sheet as on that date:

Account Title	Debit Amount ₹	Credit Amount ₹
Opening stock	50,000
Purchases and sales	3,50,000	4,21,000
Sales returns	5,000
Capital		3,00,000
Commission		4,000
Creditors		1,00,000
Bank overdraft		28,000
Cash in hand	32,000
Furniture	1,28,000
Debtors	1,40,000
Plants	60,000
Carriage on purchases	12,000
Wages	8,000
Rent	15,000
Bad debts	7,000
Drawings	24,000
Stationery	6,000
Travelling expenses	2,000
Insurance	7,000
Discount	5,000
Office expenses	2,000

 

Closing stock as on March 31, 2017 ₹ 2,500

Trading and profit and loss account and balance sheet is prepared below:

Trading Account as on March 31, 2017
Dr.				Cr.
Particulars			Amount ₹	Particulars				Amount ₹
Opening Stock			50,000	Sales		4,21,000
Purchases			3,50,000		Less: Sales Return		5,000	4,16,000
Carriage on Purchases			12,000	Closing Stock				2,500
Wages			8,000	Profit and Loss (Gross Loss)				1,500
			4,20,000					4,20,000

 

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Trading (Gross Loss)	1,500	Commission	4,000
Rent	15,000	Net Loss	41,500
Bad Debts	7,000
Stationery	6,000
Travelling Expenses	2,000
Insurance	7,000
Discount	5,000
Office Expenses	2,000
	45,500		45,500

 

Balance Sheet as on March 31, 2017
Liabilities				Amount ₹	Assets			Amount ₹
Capital			3,00,000		Plants			60,000
	Less: Net Loss		(41,500)		Furniture			1,28,000
	Less: Drawings		(24,000)	2,34,500	Debtors			1,40,000
					Closing Stock			2,500
Creditors				1,00,000	Cash in Hand			32,000
Bank Overdraft				28,000
				3,62,500				3,62,500

Access Other Chapters and NCERT Solutions For Class 11 Accountancy Chapter 8

You can download the PDF of NCERT Solutions Class 11 Accountancy for Chapter 8 other chapters:

Chapter 1 Introduction to Accounting 

Chapter 2 Theory Base of Accounting 

Chapter 3 Recording of Transactions 1 

Chapter 4 Recording of Transcations 2 

Chapter-5 Bank Reconciliation Statement

Chapter-6 Trial Balance And Rectification Of Errors

Chapter-7 Depreciation, Provisions And Reserves

Chapter-8 Bill Of Exchange

Chapter-10 Financial Statements – 2

Chapter-11 Accounts From Incomplete Records

Chapter-12 Applications of Computers in Accounting

Chapter-13 Computerised Accounting System

Chapter-14 Depreciation

Chapter-15 Bank Reconciliation Statement

 

We have provided all the important above in the article regarding the CBSE NCERT Solutions For Class 11 Accountancy Chapter-8. If you have any queries, you can mention them in the comment section.

FAQ (Frequently Asked Questions): NCERT Solutions For Class 11 Accountancy Chapter 9