[Link]. Ramesh started business on January 1, 2015.
The following transac ons took place during the
month:
Jan 1 – Started business with cash ₹1,00,000.
Jan 2 – Purchased furniture for ₹20,000.
Jan 3 – Purchased goods for ₹60,000.
Jan 5 – Sold goods for cash ₹80,000.
Jan 6 – Paid salaries ₹10,000.
Jan 7 – Purchased office furniture ₹2,000 and paid through cheque.
Jan 8 – Cash sales ₹3,000.
Jan 9 – Wages paid ₹1,000.
Jan 10 – Telephone bill paid ₹500.
Jan 11 – Cash sales ₹2,000 and credit sales ₹2,000 to Sunil.
[Link]. Kavitha started business on March 1, 2015. The following transac ons took place:
Mar 1 – Started business with cash ₹1,20,000.
Mar 2 – Purchased building ₹50,000.
Mar 3 – Purchased goods ₹70,000.
Mar 5 – Sold goods for cash ₹90,000.
Mar 6 – Paid salaries ₹12,000.
Mar 7 – Purchased office equipment ₹5,000 by cheque.
Mar 8 – Cash sales ₹15,000.
Mar 9 – Paid wages ₹3,000.
Mar 10 – Paid insurance premium ₹2,500.
Mar 11 – Sold goods on credit to Meena ₹10,000.
[Link]. Anand started business on April 1, 2015. The following transac ons took place:
Apr 1 – Started business with cash ₹90,000.
Apr 2 – Purchased furniture ₹15,000.
Apr 3 – Purchased goods ₹50,000.
Apr 5 – Sold goods for cash ₹70,000.
Apr 6 – Paid rent ₹6,000.
Apr 7 – Purchased machinery ₹25,000 by cheque.
Apr 8 – Cash sales ₹12,000.
Apr 9 – Paid wages ₹4,000.
Apr 10 – Paid telephone bill ₹1,000.
Apr 11 – Sold goods on credit to Ravi ₹8,00
[Link]. Prakash started business on May 1, 2015. The following transac ons took place:
May 1 – Started business with cash ₹1,50,000.
May 2 – Deposited ₹50,000 into bank.
May 3 – Purchased goods worth ₹60,000 from Ramesh on credit.
May 4 – Sold goods worth ₹40,000 to Suresh on credit.
May 5 – Paid salaries ₹12,000.
May 6 – Received ₹20,000 from Suresh with 5% discount allowed.
May 7 – Returned goods worth ₹5,000 to Ramesh.
May 8 – Paid electricity bill ₹2,500.
May 9 – Cash sales ₹25,000.
May 10 – Withdrew ₹10,000 cash for personal use.
Required: a) Journalize the transac ons.
5. Ques on: Mr. Ajay started business on July 1, 2015. The following transac ons took place:
Jul 1 – Started business with cash ₹1,00,000 and machinery ₹50,000.
Jul 2 – Deposited ₹40,000 into bank.
Jul 3 – Purchased goods ₹70,000 (₹30,000 cash, ₹40,000 credit).
Jul 4 – Sold goods worth ₹50,000 (₹30,000 cash, ₹20,000 credit to Ravi).
Jul 5 – Paid salaries ₹15,000 by cheque.
Jul 6 – Received ₹18,000 from Ravi with 10% discount allowed.
Jul 7 – Paid wages ₹6,000.
Jul 8 – Paid telephone bill ₹2,000.
Jul 9 – Cash sales ₹12,000.
Jul 10 – Proprietor withdrew ₹5,000 cash and goods worth ₹3,000 for personal use.
Required: a) Journalize the transac ons.
6. Prepare a trial balance as on 31-12-2014 from the below informa on.
Sundry debtors 32000 Bills payable 7500 Stock 22000 Purchases 218870 Cash in hand 35 Cash at
bank 1545 Plant and machinery 17500 Sundry creditors 10650 Trade expenses 1075 Sales 234500
Salaries 2225 Carriage outward 400 Rent 900 Discounts (Dr) 1100 Capital 79500 Premises 34500
[Link] a Trial Balance as on 31-03-2015 from the following informa on:
Par culars ₹ Par culars ₹
Sundry Debtors 45,000 Bills Payable 12,000
Stock 30,000 Sundry Creditors 18,500
Cash in Hand 2,500 Sales 3,20,000
Cash at Bank 8,000 Capital 1,00,000
Furniture 25,000
Purchases 2,40,000
Salaries 12,500
Rent 6,000
Carriage Inward 4,500
Insurance 3,000
Discounts (Dr) 2,000
8. Prepare a Trial Balance as on 30-06-2015 from the following informa on:
Par culars ₹ Par culars ₹
Sundry Debtors 60,000 Bills Payable 15,000
Stock 40,000 Sundry Creditors 20,000
Cash in Hand 1,200 Sales 4,10,000
Cash at Bank 12,000 Capital 1,50,000
Plant & Machinery 75,000
Premises 1,20,000
Purchases 3,00,000
Salaries 18,000
Rent 9,000
Carriage Outward 5,000
Trade Expenses 4,500
Discounts (Dr) 3,500
9. Trial Balance of Mr. Arun as on 31-03-2017
Par culars Debit (₹) Credit (₹)
Building 2,80,000
Furniture 60,000
Opening Stock 25,000
Adver sing 5,000
Salaries 14,000
Wages 3,000
Purchases 1,90,000
Discount 4,000
Bad Debts 2,000
Interest on Loan 6,000
Returns Inwards 10,000
Debtors 30,000
Capital 2,50,000
Sales 2,65,000
Bank Loan 1,00,000
Commission 6,000
Creditors 8,000
Total 6,29,000 6,29,000
Adjustments:
1. Closing Stock on 31-03-2015 was ₹35,000.
2. Wages outstanding ₹1,000.
Required:
a) Prepare the Trading Account for the year ending 31-03-2017. b) Prepare the Profit & Loss Account
for the year ending 31-03-2017. c) Prepare the Balance Sheet as on 31-03-2017.
[Link] Balance of Mr. Raghav as on 31-03-2017
Par culars Debit (₹) Credit (₹)
Premises 2,50,000
Furniture 40,000
Opening Stock 30,000
Purchases 1,80,000
Wages 15,000
Salaries 20,000
Rent 12,000
Carriage Outward 4,000
Debtors 25,000
Cash in Hand 10,000
Sales 2,60,000
Capital 2,80,000
Creditors 26,000
Total 5,86,000 5,66,000
Adjustments:
1. Closing Stock on 31-03-2017 was ₹40,000.
2. Rent outstanding ₹2,000.
3. Depreciate furniture by 10%.
Required:
a) Prepare the Trading Account for the year ending 31-03-2017. b) Prepare the Profit & Loss Account
for the year ending 31-03-2017. c) Prepare the Balance Sheet as on 31-03-2017.
11. Trial Balance of Mr. Sanjay as on 31-03-2018
Par culars Debit (₹) Credit (₹)
Building 2,00,000
Furniture 40,000
Opening Stock 50,000
Purchases 1,60,000
Wages 12,000
Salaries 20,000
Rent 8,000
Insurance 4,000
Carriage Inward 6,000
Debtors 30,000
Cash at Bank 15,000
Sales 2,50,000
Capital 2,80,000
Creditors 35,000
Total 5,65,000 5,65,000
Adjustments:
1. Closing Stock on 31-03-2018 was ₹60,000.
2. Rent outstanding ₹2,000.
3. Depreciate furniture by 10%.
Required:
a) Prepare the Trading Account for the year ending 31-03-2018. b) Prepare the Profit & Loss
Account for the year ending 31-03-2018. c) Prepare the Balance Sheet as on 31-03-2018.
Ra o analysis
[Link] the following Balance Sheet of XYZ Co. Ltd. as on 31-03-2015, calculate:
4. Current Ratio
5. Quick Ratio (Acid-Test Ratio)
6. Comment briefly on the liquidity position of the company.
Amount Amount
Liabili es & Capital Assets (₹)
(₹)
Preference Share 225
100 Land & Buildings
Capital
Equity Share Capital 150 Plant & Machinery 250
General Reserve 250 Furniture & Fixtures 100
Debentures 400 Stock 250
Creditors 200 Debtors 125
Bills Payable 50 Cash at Bank 250
Outstanding Expenses 50 Cash in Hand 125
Profit & Loss A/c 100 Prepaid Expenses 50
Marketable 125
Bank Loan (Long-term) 200
Securi es
Total 1,500 Total 1,500
[Link] on: From the following Balance Sheet of LMN Ltd. as on 31-03-2020, calculate:
1. Current Ra o
2. Quick Ra o (Acid-Test Ra o)
3. Debt-Equity Ra o
4. Proprietary Ra o
Amount Amount
Liabili es & Capital Assets
(₹) (₹)
Equity Share Capital 300 Land & Buildings 400
Preference Share
100 Plant & Machinery 300
Capital
General Reserve 150 Furniture & Fixtures 80
Debentures 250 Stock 200
Creditors 180 Debtors 150
Bills Payable 70 Cash at Bank 120
Outstanding Expenses 50 Cash in Hand 60
Profit & Loss A/c 100 Prepaid Expenses 40
Marketable
Bank Loan (Long-term) 200 100
Securi es
Total 1,400 Total 1,400
[Link] the following Trading and Profit & Loss Account and Balance Sheet of PQR Ltd. as on
31-03-2021, calculate:
1. Gross Profit Ra o
2. Net Profit Ra o
3. Opera ng Ra o
4. Return on Capital Employed (ROCE)
5. Inventory Turnover Ra o
6. Debtors Turnover Ra o
Debit Side Amount (₹) Credit Side Amount (₹)
Opening Stock 80,000 Sales 6,00,000
Purchases 3,20,000 Closing Stock 1,00,000
Wages 40,000
Gross Profit c/d 2,60,000
Total 7,00,000 7,00,000
Debit Side Amount (₹) Credit Side Amount (₹)
Salaries 50,000 Gross Profit b/d 2,60,000
Rent 20,000 Commission 10,000
Deprecia on 30,000
Net Profit 1,70,000
Total 2,70,000 2,70,000
Liabili es Amount (₹) Assets Amount (₹)
Equity Share Capital 4,00,000 Land & Buildings 3,00,000
Reserves & Surplus 1,00,000 Plant & Machinery 2,00,000
Debentures 1,50,000 Furniture & Fixtures 50,000
Creditors 80,000 Debtors 1,20,000
Bills Payable 20,000 Cash at Bank 80,000
Outstanding Expenses 50,000 Closing Stock 1,00,000
Prepaid Expenses 50,000
Total 8,00,000 Total 8,00,000
5. A firm sold goods worth Rs. 500000 and its gross profit is 20% of sales value. The
inventory at the beginning of the year was Rs. 16000 and at end of the year was
14000. Compute inventory turnover ra o and also the inventory holding period.
6. A firm’s sales during the year was Rs. 400000 of which 60% were credit sales. The
balance of debtors at the beginning and ending year were 25000 and 15000
respec vely. Calculate debtors turnover ra o of the firm. Also find out debt
collec on period.
7. A firm’s purchases during the year was Rs. 400000 of which 50% were credit
purchases. The balance of creditors at the beginning and ending year were 30000
and 10000 respec vely. Calculate creditors turnover ra o of the firm. Also find out
creditors payment period.
8. From the following Trading and Profit & Loss Account of Sunrise Traders for the
year ending 31-03-2021, calculate:
Gross Profit Ratio
Net Profit Ratio
Operating Ratio
Operating Profit Ratio
Debit Side Amount (₹) Credit Side Amount (₹)
Opening Stock 40,000 Sales 6,00,000
Purchases 3,00,000 Closing Stock 60,000
Wages 50,000
Gross Profit c/d 2,70,000
Total 6,60,000 6,60,000
Salaries 40,000 Gross Profit b/d 2,70,000
Rent 20,000 Commission 10,000
Adver sing 30,000
Deprecia on 15,000
Net Profit 1,75,000
Total 2,80,000 2,80,000
Breakeven point problems
1. Sales = ₹2,00,000; Variable Cost = ₹1,20,000.
Find the PV Ra o.
2. Contribu on = ₹50,000; Sales = ₹1,25,000.
Calculate PV Ra o.
3. Fixed Costs = ₹60,000; PV Ra o = 40%.
Find BEP in sales value.
4. Selling Price per unit = ₹200; Variable Cost per unit = ₹120; Fixed Costs = ₹80,000.
Find BEP in units.
5. Fixed Costs = ₹1,00,000; PV Ra o = 25%; Expected Profit = ₹50,000.
Find Expected Sales.
6. Contribu on per unit = ₹40; Fixed Costs = ₹60,000; Expected Sales = 3,000 units.
Find Expected Profit.
7. Sales = ₹3,00,000; PV Ra o = 30%; Fixed Costs = ₹70,000.
Find Expected Profit.
8. Sales = ₹2,50,000; Variable Costs = ₹1,75,000; Fixed Costs = ₹50,000.
Find Expected Profit.
9. A company manufactures and sells a single product.
Selling Price per unit = ₹200
Variable Cost per unit = ₹120
Fixed Costs = ₹80,000
Expected Sales = 3,000 units
Required:
[Link] the PV Ra o. [Link] the Break-Even Point (BEP) in units and in
sales value.3. Determine the Expected Sales value.4. Compute the Expected
Profit at the given sales level.
10. A company produces and sells a product with the following details:
Selling Price per unit = ₹500
Variable Cost per unit = ₹300
Fixed Costs = ₹2,00,000
Expected Sales = 1,200 units
Required:
A. Calculate the PV Ra o.
B. Find the Break-Even Point (BEP) in units and in sales value.
C. Determine the Expected Sales value.
D. Compute the Expected Profit at the given sales level.