Question 1:
State whether the following
expenses are capital or revenue in nature:
(i) Expenses on whitewashing and painting of a
building purchased to make it ready for use.
(ii) `
10,000 spent on constructing platform for a new machine.
(iii) Repair expenses of `25,000
incurred for whitewashing of factory building.
(iv) Insurance premium paid as renewal premium.
(v) Purchased a new car.
(vi) Excise
duty paid on purchase of new machine.
(vii) Wages paid to install a machine.
(viii) Repairs carried out on
existing car.
(ix) Office block of building repainted for
`50,000.
(x) Paid telephone bill `2,500.
Answer:
(1) Capital Expenditure:
Paid to make an asset ready to use
(2) Capital Expenditure:
Paid to make an asset ready to use
(3) Revenue Expenditure:
Made for the maintenance of asset
(4) Revenue Expenditure:
Part of normal operating cost
(5) Capital Expenditure: Used in business for a number of years
(6) Capital Expenditure:
Paid for the acquisition of new asset
(7) Capital Expenditure: Paid to make the asset ready to use
(8) Revenue Expenditure: Paid for the running and maintenance of car
(9) Revenue Expenditure: Paid for the maintenance of Building
(10) Revenue Expenditure: Part of normal operating cost
Question 2:
From the following information, determine Gross Profit for the year ended 31st March, 2022:
|
|
` |
|
` |
|
Opening Stock (1st April, 2018) |
25,000 |
Goods
purchased during the year |
1,40,000 |
|
Freight
and Packing |
10,000 |
Closing Stock (31st March, 2022) |
30,000 |
|
Sales |
1,90,000 |
Packing
Expenses on Sales |
6,000 |
Answer:
|
Gross Profit |
= |
Sales + Closing Stock – (Opening Stock + Freight and Packing + Goods Purchased) |
|
|
= |
1,90,000 + 30,000 – (25,000 +
10,000 + 1,40,000) |
|
|
= |
2,20,000 – 1,75,000 = `45,000 |
Alternatively,
|
Trading Account for the year ended March 31, 2022 |
|||
|
Dr. |
|
Cr. |
|
|
Particulars |
( `) |
Particulars |
( `) |
|
Opening Stock |
25,000 |
Sales |
1,90,000 |
|
Purchases |
1,40,000 |
Closing Stock |
30,000 |
|
Freight and Packing |
10,000 |
|
|
|
Gross Profit (Balancing
Figure) |
45,000 |
|
|
|
|
2,20,000 |
|
2,20,000 |
|
|
|
|
|
Note: Packing Expenses (Rs 6,000) on Sales is an Indirect Expense, therefore it is not considered to compute the amount of Gross Profit.
Question 3:
Prepare Trading Account from the transactions givne
below:
|
|
` |
|
` |
|
Opening Stock |
23,000 |
Purchases Return |
2,400 |
|
Purchases |
29,000 |
Closing Stock |
47,700 |
|
Sales
Return |
500 |
Carriage Inwards |
100 |
|
Sales |
25,400 |
Depreciation |
2,000 |
Also pass the Journal entries.
Answer:
|
Trading Account |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
(Rs) |
Particulars |
(Rs) |
||||
|
Opening Stock |
23,000 |
Sales |
25,400 |
|
|||
|
Purchases |
29,000 |
|
Less: Sales Return |
(500) |
24,900 |
||
|
Less: Purchases Return |
(2,400) |
26,600 |
Closing Stock |
47,700 |
|||
|
Carriage Inwards |
100 |
|
|
||||
|
Gross Profit (Balancing
Figure) |
22,900 |
|
|
||||
|
|
72,600 |
|
72,600 |
||||
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
Note: Depreciation
is an Indirect Expense, therefore it is not shown in the Trading Account.
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (Rs) |
Credit (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 |
|
|
(Transfer of
balances to the debit side of Trading A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales A/c |
Dr. |
|
25,400 |
|
|
|
Purchase Return
A/c |
Dr. |
|
2,400 |
|
|
|
To Trading A/c |
|
|
|
27,800 |
|
|
(Transfer of
balances to the credit side of Trading A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Stock
A/c |
Dr. |
|
47,700 |
|
|
|
To Trading A/c |
|
|
|
47,700 |
|
|
(Recording of
Closing Stock) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading A/c |
Dr. |
|
22,900 |
|
|
|
To Profit & Loss A/c |
|
|
|
22,900 |
|
|
(Transfer of
gross profit to the Profit & Loss A/c) |
|
|
|
|
Question 4:
Calculate Closing Stock from the following details:
|
|
` |
|
` |
|
Opening Stock |
20,000 |
Purchases |
70,000 |
|
Cash
Sales |
60,000 |
Credit Sales |
40,000 |
|
|
|
Rate of Gross Profit on Cost 331/3% |
|
Answer:
Calculation of amount of Closing StockGross Profit=331/3% on cost =1/3rd on cost
∴Gross Profit on sales =14th on salesAnd, Sales = Cash Sales + Credit Sales
= 60,000+40,000 = Rs 1,00,000
So, Gross Profit =1,00,000×14
=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+Direct Expenses−Closing Stock
75,000=20,000+70,000+0−Closing StockClosing Stock
=Rs 15,000
Click below for more Questions
Ts Grewal Solution 2022-2023
Class 11th
Chapter 18 – Financial Statements of a Sole Proprietorship
Question No. 1 To 4
Question No. 5 To 8
Question No. 9 To 12
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11th TS Grewal’s Accountancy Solutions