Double
Entry Book Keeping Ts Grewal 2024 for Class 11
Commerce Accountancy Chapter 18 - Financial
Statements Of Sole Proprietorship
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) Wages paid to install a machine.
(vii) Repairs carried out on existing car.
(viii) Office block of building
repainted for `50,000.
(ix) Paid telephone bill `2,500.
Answer:
(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
(vi) Capital Expenditure: Paid to make the asset ready to use
(vii) Revenue Expenditure: Paid for the running and maintenance of car
(viii) Revenue Expenditure: Paid for the maintenance of Building
(ix) Revenue Expenditure: Part of normal operating cost
Question 2:
From the following information, determine Gross Profit for the year ended 31st March, 2024:
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|
` |
|
` |
|
Opening Stock (1st April, 2023) |
50,000 |
Goods
purchased during the year |
2,80,000 |
|
Freight
and Packing |
20,000 |
Closing Stock (31st March, 2024) |
60,000 |
|
Sales |
3,80,000 |
Packing
Expenses on Sales |
12,000 |
Answer:
|
Gross Profit |
= |
Sales + Closing Stock – (Opening Stock + Freight and Packing + Goods Purchased) |
|
|
= |
3,80,000 + 60,000 – (50,000 + 20,000 + 2,80,000) |
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|
= |
2,20,000 – 1,75,000 = `90,000 |
Alternatively,
|
Trading Account for the year ended March 31,
2024 |
|||
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Dr. |
|
Cr. |
|
|
Particulars |
( `) |
Particulars |
( `) |
|
Opening Stock |
50,000 |
Sales |
3,80,000 |
|
Purchases |
2,80,000 |
Closing Stock |
60,000 |
|
Freight and Packing |
20,000 |
|
|
|
Gross Profit (Balancing Figure) |
90,000 |
|
|
|
|
4,40,000 |
|
4,40,000 |
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|
|
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|
Note: Packing Expenses (Rs 12,000) 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:
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|
` |
|
` |
|
Opening Stock |
33,000 |
Purchases Return |
2,400 |
|
Purchases |
29,000 |
Closing Stock |
57,700 |
|
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 |
33,000 |
Sales |
25,400 |
|
|||
|
Purchases |
29,000 |
|
Less: Sales Return |
(500) |
24,900 |
||
|
Less: Purchases Return |
(2,400) |
26,600 |
Closing Stock |
57,700 |
|||
|
Carriage Inwards |
100 |
|
|
||||
|
Gross Profit (Balancing Figure) |
22,900 |
|
|
||||
|
|
82,600 |
|
82,600 |
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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. |
|
62,600 |
|
|
|
To Opening Stock A/c |
|
|
|
33,000 |
|
|
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) |
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|
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|
|
|
|
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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) |
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Closing Stock A/c |
Dr. |
|
57,700 |
|
|
|
To Trading A/c |
|
|
|
57,700 |
|
|
(Recording of Closing Stock) |
|
|
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|
|
|
|
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|
Trading A/c |
Dr. |
|
22,900 |
|
|
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To Profit & Loss A/c |
|
|
|
22,900 |
|
|
(Transfer of gross profit to the Profit & Loss A/c) |
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Question 4:
Calculate Closing Stock from the following details:
|
|
` |
|
` |
|
Opening Stock |
20,000 |
Credit Sales |
40,000 |
|
Cash
Sales |
60,000 |
Rate of Gross Profit on Cost 331/3% |
|
|
Purchases |
70,000 |
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 Stock
=Rs 15,000
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Ts Grewal Solution 2024-2025
Class 11th
Chapter 18 – Financial Statements of a Sole Proprietorship