2020

Nov 10th : Mr. Singh started business with 60,000

11th : Bought furniture from MM Furniture for 10,000
12th : Purchased goods for cash 15,000
13th : Purchased goods from B. Sen & Co for 30,000
14th : Opened a bank account by depositing 16,000
16th : Sold goods for cash 15,000
17th : Purchased stationery for 1000 from Bharat Stationery Mart
18th : Sold goods to Zahir Khan for Rs. 10,000
19th : Bought machinery for Rs. 6,000 and payment made by cheque
20th : Goods returned by Zahir Khan for 2,000
21st : Payment to B.Sen & Co by cheque 5,000
22nd : Withdrew from bank for personal use 3,000
23rd : Interest paid rS. 2,000
24th : Withdrew from bank for office expenses 10,000
26th : Cheque received from Zahir Khan 5,000
27th : Paid electricity bill for 100
29th : Cash sales for 6,000
30th : Commission received by cheque 5,000
 Journal Entries in the books of Singh
Date Particulars L/f Debit (Rs.) Credit (Rs.)
10-Nov-20 Cash a/c Dr. 60,000.00 Cash
To Capital a/c 60,000.00 Capital
(Being capital introduced)

11-Nov-20 Furniture a/c Dr. 10,000.00 Furniture

To MM Furniture a/c 10,000.00 MM Furniture
(Being Furniture bought on credit)

12-Nov-20 Purchases a/c Dr. 15,000.00 Purchases

To Cash a/c 15,000.00
(Bieng goods purchased)

13-Nov-20 Purchases a/c Dr, 30,000.00

To B. Sen & Co a/c 30,000.00 B.Sen & Co
(Bieng goods purchased on credit)

14-Nov-20 Bank a/c Dr. 16,000.00 Bank

To Cash a/c 16,000.00
(Being money deposited into the bank)

16-Nov-20 Cash a/c Dr. 15,000.00

To Sales a/c 15,000.00 Sales
(Being goods sold)

17-Nov-20 Stationey a/c Dr. 1,000.00 Stationery

To Bharat Stationery a/c 1,000.00 Bharath stationery
(Being stationery purchased on credit)

18-Nov-20 Zahir Khan a/c Dr. 10,000.00 Zahir

To Sales a/c 10,000.00
(Being goods sold to Zahir on credit)

19-Nov-20 Machinery a/c Dr. 6,000.00 Machinery

To Bank a/c 6,000.00
(Being machinery bough and paid through cheque)

20-Nov-20 Sales Return a/c Dr. 2,000.00 Sales Return

To Zahir Khan a/c 2,000.00
(Being goods sold returned by Zahir Khan)

21-Nov-20 B. Sen & Co a/c Dr. 5,000.00

To Bank a/c 5,000.00
(Being payment made to B.Sen & Co)
22-Nov-20 Drawings a/c Dr. 3,000.00 Drawings
To Bank a/c 3,000.00
(Being money withdrawn by owner from bank)

23-Nov-20 Interest Paid a/c Dr. 2,000.00 Intrest Paid a/c

To Bank a/c 2,000.00
(Being interst paid through cheque)

24-Nov-20 Cash a/c Dr. 10,000.00

To Bank a/c 10,000.00
(Being money withdrawn for office use)

26-Nov-20 Bank a/c Dr. 5,000.00

To Zahir Khan 5,000.00
(Being cheque received from Zahir Khan)

27-Nov-20 Electiricity a/c Dr. 100.00 Electricity

To Cash a/c 100.00
(Being Electiricity Bill Paid)

29-Nov-20 Cash a/c Dr. 6,000.00

To Sales a/c 6,000.00
(Being goods sold for cash)

30-Nov-20 Bank a/c Dr. 5,000.00

To Commission Received a/c 5,000.00 Commission Received
(Being Commision Received)
201,100.00 201,100.00
MM Furniture

B.Sen & Co

Bharath stationery

Machinery

Sales Return
Intrest Paid a/c

Electricity

Commission Received
 Capital Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
10-Nov-20 By Cash 60000
30-Nov-20 To Balance c/d 60000
60000 60000
1-Dec-20 By Balance b/d 60000

Cash Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
10-Nov-20 To Capital 60000 12-Nov-20 By Purchases 15000
16-Nov-20 To Sales 15000 14-Nov-20 By Bank 16000
24-Nov-20 To Bank 10000 23-Nov-20 By Interest Paid 2000
29-Nov-20 To Sales 6000 27-Nov-20 By Electricity 100
30-Nov-20 By Balance c/d 57900
91000 91000
1-Dec-20 To Balance b/d 57900

Furniture Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
11-Nov-20 To MM Furniture 10000
30-Nov-20 By Balance c/d 10000
10000 10000
1-Dec-20 To Balance b/d 10000

MM Furniture Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
11-Nov-20 By Furniture a/c 10000
30-Nov-20 To Balance c/d 10000
10000 10000
1-Dec-20 By Balance b/d 10000

Purchases Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
12-Nov-20 To Cash 15000
13-Nov-20 To B. Sen & Co 30000
 By Balance c/d 45000
45000 45000
To Balance b/d 45000

B. Sen & Co Account

Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
21-Nov-20 To Bank 5000 13-Nov-20 By Purchases 30000
To Balance c/d 25000
30000 30000
By Balance b/d 25000

Bank Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
14-Nov-20 To Cash 16000 19-Nov-20 By Machinery 6000
26-Nov-20 To Zahir Khan 5000 21-Nov-20 By B.Sen & Co 5000
30-Nov-20 By Commission Received 5000 22-Nov-20 By Drawings 3000
24-Nov-20 By Cash 10000
By Balance c/d 2000
26000 26000
To Balance b/d 2000
 Sales Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
16-Nov-20 By Cash 15000
18-Nov-20 By Zahir Khan 10000
29-Nov-20 By Cash 6000
30-Nov-20 To Trading a/c 31000
31000 31000

Stationery Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
17-Nov-20 To Bharath Stationery 1000
By Balance c/d 1000
1000 1000
To Balance b/d 1000

Bharath Stationery Account

Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
17-Nov-20 By Stationery 1000
To Balance c/d 1000
1000 1000
By Balance b/d 1000

Zahir Khan Account

Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
18-Nov-20 To Sales 10000 20-Nov-20 By Sales Returns 2000
26-Nov-20 By Bank 5000
By Balance c/d 3000
10000 10000
To Balance b/d 3000

Machinery Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
19-Nov-20 By Bank 6000
By Balance c/d 6000
 6000 6000
To Balance b/d 6000

Sales Returns Account

Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
20-Nov-20 To Zahir Khan 2000
By Balance b/d 2000
2000 2000
To Balance b/d 2000

Drawings Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
22-Nov-20 To Bank 3000
By Balance b/d 3000
3000 3000
To Balance b/d 3000

Trading Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
By Sales 31000
 Interst Paid Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
23-Nov-20 To Cash 2000
By Balance b/d 2000
2000 2000
To Balance b/d 2000

Electricity Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
27-Nov-20 To Cash 100
By Balance b/d 100
100 100
To Balance b/d 100

Commision Received Account

Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
30-Nov-20 By Bank 5000
To Balance c/d 5000
5000 5000
By Balance b/d 5000
 Trial Balance of Singh as on 30 Nov 2020
S. No Particulars Debit (Rs.) Credit (Rs.) Sole Properitorship Final Accounts
1 Capital Account 60000 Partnership Partnership Accounts
2 Cash Account 57900 Companies Companies Accounts
3 Furniture Account 10000
4 MM Furniture 10000
5 Purchases Account 45000
6 B.Sen & Co 25000
7 Bank Account 2000
8 Sales Account 31000
9 Stationery account 1000
10 Bharath stationery 1000
11 Zahir Acccount 3000
12 Machinery Account 6000
13 Sales Returns 2000
14 Drawings Account 3000
15 Interest Paid 2000
16 Electricity 100
17 Commissioned Received 5000
Total 132000 132000 0
Final Accounts
Partnership Accounts
Companies Accounts
Transactions

Journal Subsidiary Books Sales Book

Ledger Purchases Book
Trial Balance Sales Returns Book
Purchases Return Book
Bills Receivable Book
Bills Payable Book
Cash Book
Journal Proper

Purchases Account
Dr.
Date Particulars Amt (Rs.) Date
10-Jul-21 To Cash 31250
To Sundries as per
31-Jul-21 Purchases Book 135000

Kanan & Co Account

Dr.
Date Particulars Amt (Rs.) Date

Balan & Co Account

Dr.
Date Particulars Amt (Rs.) Date
ccount Cash Book
Cr. Dr.
Particulars Amt (Rs.) Date Particulars Amt (Rs.) Date

ccount
Cr.
Particulars Amt (Rs.)
By Purchases 55000

ccount
Cr.
Particulars Amt (Rs.)
By PUrhases 80000
h Book
Cr.
Particulars Amt (Rs.)
By Purchases 31250
 2020
Oct 1st : Neel started business with a capital of 80,000
3rd : Bought goods from Karl on credit 20,000
4th : Sold goods to Tarl 25,000
5th : Cash purchases 25,000
7th : Cash sales 15,000
9th : Goods retuned to Karl 2,000
10th : Bought furniture for 15,000
11th : Cash paid to Karl 12,000
12th : Goods returned by Tarl 3,000
14th : Goods taken by Neel for personal use 3,000
15th : Cash received from Tarl 12,000
16th : Took loan from Parl 30,000
17th : Salary paid 5,000
18th : Bought stationery for 1,000
19th : Amount paid to Parl on loan account 18,000
20th : Interest received 4,000

Buying goods on credit

A 100
B 2200 Bills Pyable
C 330
D 5000
E 4000

B P A/c 11630
Balance Sheet Balance Sheet
Liabilites Assets Liabilites Assets
11630 A 100
B 2200
C 330
D 5000
E 4000
 Trading Account in
Particulars
Opening stock
Purchases
Wages
 
 
 
 
 
 
 

Profit and Loss Accoun

Particulars
Gross Loss
Bad debts
Office expences
interest paid
repairs
depreciation
rates and taxes
salaries
Trial Balance of .... as on .....
S.No Particulars Debit Rs. Credit Rs.
1 Sundry Debtors 15,000
2 Opening Stock 50,000
3 Land and Building 100,000
4 Capital 250,000
5 Rent Received 6,000
6 Cash in hand 16,000
7 Cash at bank 40,000
8 Wages 30,000
9 Sundry Creditors 70,000
10 Bills Receivables 20,000
11 Interest Paid 2,000
12 Bad Debts 5,000
13 Repairs 3,000
14 Sales 170,000
15 Bills Payable 40,000
16 Furniture & Fitting 15,000
17 Depreciation 10,000
18 Rates & Taxes 8,000
19 Salaries 20000
20 Drawings 20,000
21 Purchases 100,000
22 Office Expenses 25,000
23 Plant and Machinery 57,000
Total 536,000 536000
 Trading Account in the books of ..........
Amt (Rs.) Amt (Rs.) Particulars Amt (Rs.) Amt (Rs.) Balance Sheet of ...... a
50,000 Sales 170,000 Liabilities Amt (Rs.)
100,000 Capital 250,000
30,000 Less: Drawings 20,000
    Less: Net Loss 77,000
   
      Sundry Creditors
      Bills Payable
     
       
  Gross Loss 10,000
180,000 180,000

Profit and Loss Account in the books of ..........

Amt (Rs.) Amt (Rs.) Particulars Amt (Rs.) Amt (Rs.)
10,000 Rent Received 6000
5,000
25,000
2,000
3,000
10,000
8,000
20,000

Net Loss 77,000

83,000 83,000
Balance Sheet of ...... as on ..........
Amt (Rs.) Assets Amt (Rs.) Amt (Rs.)
Land and Building 100,000
Plant and Machinery 57,000
153,000 Furniture and Fittings 15,000

70,000 Sundry Debtors 15,000

40,000 Bills Receivables 20,000
Cash at Bank 40000
Cash in Hand 16,000

263,000 263,000 0
 Trading Account
Final Accounts with Adjustments
Adjustment Entries - Two Effects
1 Closing Stock Tradiing Account (Credit)
2 Outstanding Expesnses Added to concerned expenses
Ex: Wages Wages Add O/S Wages
Salary

3 Prepaid Expenses Deducted from concerned expenses

Ex: Wages Wages Less Prepaid Wages
Salary

4 Outstanding Income

5 Advance Income

6 Depreciation

7 Bad Debts

8 Provision for Bad Debts

9 Provision for Discount on Debtors

10 Provision for Discount on Creditors

11 Interest on Capital

12 Interest on Drawings

13 Interest on Loan (Borrowed)

14 Interest on Loan (Advance)

 P&L Account

-
Added to concerned expenses

Salary Add O/S Salary

Deducted from concerned expenses

Salary Less Prepaid Salary

Added to the concerned income

Deducted from the concerned income

Debit side

Debit Side

Debit Side

Debit Side

Credit Side

Debit side

Credit Side

Debit Side

Crdit Side
 Balance sheet

Balance Sheet (Assets-Current Assets)

Balance Sheet on Liability Side
O/S Wages
O/S Salary

Prepaid Expense on Asset side of B/S

Prepaid Wageson Asset Side
Prepaid Salaryon Asset Side

Asset Side

Liabilities side

Deducted from the concerned fixedasset value in the Balance Sheet

Deducting it from Debtors (Asset Side)

Deducting it from Debtors (Asset Side)

Deducting it from Debtors (Asset Side)

Deducted from Creditors (Liabilities side)

B/S add it to Capital

B/s Deducted from capital

B/S add it to loan account

B/S add it the loan account in asset side

 Trading Accoun
Particulars
To Opening Stock
To Purchases
Less Returns Outward

To Gross Profit

Profit and Loss Acc

Particulars

To Depreciation on Plant & Mach

To Bad Debts
To Sundry Expenses
To Rent
Add: Outstanding Ren
To Rates and Taxes
Less: Prepaid Taxes

To Interest on Capital
To Provision for Doubt
Less Old Provision

To Net Profit

Balance Shee
Liabilities
Capital
Less: Drawings
Add: Interest on Capit
Add: Net Profit

Sundry Creditors
Bills Payable
Bank Overdraft
Outstanding Rent
Adv App Premium
 Trading Account in the books of ..........
Amt (Rs.) Amt (Rs.) Particulars Amt (Rs.) Amt (Rs.)
29,200 By Sales 238120 Working Notes:
207240 Less Returns Inwards 4200 233,920 WN-1: Interest on Capital
5820 201,420 By Closing Stock 34000 4250

WN-2: Provision for Doubtful Debts

Sundry Deb 64000
5% Provisi 3200

37,300 WN_3: Depreciation on Plant and Machinery

267,920 267,920 P&M 19000
Dep 10% p. 1900

Profit and Loss Account in the books of ..........

Amt (Rs.) Amt (Rs.) Particulars Amt (Rs.) Amt (Rs.)
By Gross Profit 37,300

iation on Plant & Mach 1,900 By Discount Received 1200

By Apprecentice Prem 2400
3,440 Less: Advance App Pr 400 2000
8,800
2400
800 3,200
4000
1600 2400

4250
3200
2100 1100

15,410
40,500 40,500

Balance Sheet of ...... as on ..........

Amt (Rs.) Amt (Rs.) Assets Amt (Rs.) Amt (Rs.)
85,000 Plant and Machinery 19000
14,200 Less Depreciation 1900 17,100
4,250
15,410 90,460 Closing Stock 34,000
Sundry Debtors 64000
20,000 Less Provision for Doub 3200 60,800
 3600 Bill Receivable 4800
4000 Cash in hand 960
800 Prepaid Taxes 1,600
400
119,260 119,260
Doubtful Debts

on Plant and Machinery

 Trading Account in the
ParticularsAmt (Rs.)
Opening stock
Purchases
Wages
 
 
 
 
 
   
   

Profit and Loss Account in t

ParticularsAmt (Rs.)
Gross Loss
Bad debts
Office expences
interest paid
repairs
depreciation
rates and taxes
salaries
Trial Balance of .... as on .....
S.No Particulars Debit Rs. Credit Rs.
1 Sundry Debtors 15,000
2 Opening Stock 50,000
3 Land and Building 100,000
4 Capital 250,000
5 Rent Received 6,000
6 Cash in hand 16,000
7 Cash at bank 40,000
8 Wages 30,000
9 Sundry Creditors 70,000
10 Bills Receivables 20,000
11 Interest Paid 2,000
12 Bad Debts 5,000
13 Repairs 5,000
14 Sales 170,000
15 Bills Payable 40,000
16 Furniture & Fitting 15,000
17 Depreciation 10,000
18 Rates & Taxes 8,000
19 Salaries 20000
20 Drawings 20,000
21 Purchases 100,000
22 Office Expenses 25,000
23 Plant and Machinery 57,000
24 Suspense Account 2,000 Bal. Fig
Total 538,000 536000
 Trading Account in the books of ..........
Amt (Rs.) ParticularsAmt (Rs.) Amt (Rs.) Balance Sheet of ...... as on ..........
50,000 Sales 170,000 Liabilities Amt (Rs.) Amt (Rs.) Assets Amt (Rs.)
100,000 Capital 250,000 Land and Building
30,000 Less: Draw 20,000 Plant and Machinery
    Less: Net L 79,000 151,000 Furniture and Fittings
   
      Sundry Creditors 70,000 Sundry Debtors
      Bills Payable 40,000 Bills Receivables
      Suspense Account 2000 Cash at Bank
      Cash in Hand
Gross Loss 10,000
180,000 180,000
263,000

Profit and Loss Account in the books of ..........

Amt (Rs.) ParticularsAmt (Rs.) Amt (Rs.)
10,000 Rent Received 6000
5,000
25,000
2,000
5,000
10,000
8,000
20,000

Net Loss 79,000

85,000 85,000
..........
Amt (Rs.)
100,000
57,000
15,000

15,000
20,000
40000
16,000

263,000
Trial Balance
Trial Balance
Debit Rs. Credit Rs.
Sales 65000
SR 500
Stock Op 8000
Purchases 29000
Purcahses Return 300
DW 5000
DE 5000
CI 4000
Capital 30000
Drawings 5000
Sdy Debtor 10000
Sdy Creditor 12000
DA 100
DR 500
Salaries 3000
Interest Paid 400
Furniture 3000
Buildings 20000
P&M 20000
Cash in hand 1000
BP 6200
RBDD 500
BD 300
Closing Stock 8000
Suspense Account 7800
122300 114500 7800
 Trading Account in the books of ..........
Particulars Amt (Rs.) Amt (Rs.) Particulars Amt (Rs.) Amt (Rs.)
To Opening Stock 8,000 By Sales 65000
To Purchases 29000 Less Sales Returns 500 64,500
Less Purchases Returns 300 28,700
To Direct Wages 5000
To Direct Expenses 5000
To Carriage Inward 4000

To Gross Profit c/d 13,800

64,500 64,500

Profit and Loss Account in the books of ..........

Particulars Amt (Rs.) Amt (Rs.) Particulars Amt (Rs.) Amt (Rs.)
By Gross Profit b/d 13,800

To Discount Allowed 100 By Discount Received 500

To Salaries 3000
Add: Outstanding Salar 500 3,500
To Interest Paid 400
Less Prepaid Interes 100 300
To Bad Debts 300
To Interest on Capital 3000
To Depreciation
Plant and Machiner 2000
Builldings 1000 3000
To Provision for BDD 1000
Less Old Provision 500 500
To Net Profit tfd to Capital a/c 3,600
14,300 14,300

Balance Sheet of ...... as on ..........

Liabilities Amt (Rs.) Amt (Rs.) Assets Amt (Rs.) Amt (Rs.)
Capital 30,000 Buildings 20000
Less Drawings 5,000 Less Depreciation 1000 19,000
Add: Interest on Capita 3,000 Plant and Machinery 20000
Add: Net Profit 3,600 31,600 Less Depreciation 2000 18,000
Furniture 3,000
Sundry Creditors 12,000 Clsoing Stock 8,000
Bills Payable 6200 Sundry Debtors 10000
Outsanding Salary 500 Less New Provision 1000 9,000
Suspense Account 7800 Cash in Hand 1,000
Prepaid Insurance 100
58,100 58,100 0
PBC 412,720
NP + MC
PBC = NP + MC
PBC * MC Percentage / MC Percentage + Total Percentage
37520

375,200
TB
Bad Debts Sdy Debtors
PBDD

Adjustments
Addl Bad Debts
Create a Provision for BD
Create a provisin for discount on debtors
 Trading Account in the books of ..........
Particulars Amt (Rs.) Amt (Rs.) Particulars Amt (Rs.) Amt (Rs.)
To opening stock   450,000 By sales   3,100,000
To purchases   2,600,000 By closing stock   530,000
To freight and octroi   46,000      
To gross profit c/d   534000      
           
           
           
           
           
           
    3,630,000     3,630,000

Profit and Loss Account in the books of ..........

Particulars ParticularsParticulars Particulars ParticularsParticulars
    By gross profit c/d   534,000
    By commission receive 13000  
To trade expenses   5,000 (Add) accrued income 1220 14220
To salaries 55000    
(add) o/s salaries 5000 60,000    
To rent   24000    
To advertising expense 50000    
(less) prepaid advertis 37500 12,500    
To insurance premium 4000    
(less) prepaid insuranc 1000 3000    
To discount allowed   2000    
To bad debts   16000    
To provision for bad de 12000    
(less) old provision 9000 3000    
To depreciation   10000    
   
To manager commissio 1o% 37520
To net profit 100% 375,200    
    548,220     548,220

centage + Total Percentage

Balance Sheet of ...... as on ..........

Liabilities Liabilities Liabilities Liabilities Liabilities Liabilities
capital 800,000   cash in hand   52,000
(less) drawings 60,000   cash in bank   58,000
(add) net profit 375,200 1,115,200 goodwill   200000
o/s salaries   5,000 closing stock   530,000
managers commission 37,520      
creditors   200,000 furniture 100000  
      (less) depreciation 10000 90000
      sundry debtors 400000  
      (less) provision 12000 388000
      prepaid insurance   1000
      accrued income   1220
      Prepaid Adv Expense   37500
           
           
           
    1,357,720     1,357,720
Net Profit Before Charging Commission
Before Charging Commission *Com Per / Total Per + Com Per
 Gross Profit Ratio

Operating Ratio

Operating Profit Ratio

Return on Capital Employed

Current Ratio

Liquid Ratio
Stock Turnover Ratio

Inventory Holding Period

Debtors Turnover Ratio

Debtors Collection Period

Gross Profit Ratio = (Gross Profit / Net Sales)*100

= (70000/195000)*100
GPR = 35.90%

Operating Ratio = (Operating Expenses / Net Sales) * 100

Cost of Goods Sold = Opening Stock + Purchases + Other Direct Expenses - Closing Stock
Sales - Gross Profit
(3000+120000+7000-5000)
125000
Total Operating Expenses = COGS + Admin Expenses + S&D Expenses
(125000+15000+20000)
160000
(160000/195000)*100
OR 82.05%

Operating Profit Ratio = (Operating Profit / Net Sales)*100

Operating Profit = Sales - COGS - Other Operating Expenses
Total Operating Expenses 160000
195000
(195000-160000) = 35000
OPR (35000/195000)*100
17.94%

Return on Capital Employed = (EBIT/Net Capital Employed) *100

(Net Profit / Net Capital Employed)*100
Capital Employed 500000+50000+70000
620000
(40000/620000)*100
ROCE 6.45%

Current Ratio = Current Assets / Current Liabilities

Current Assets = Stock + Debtors + Bank Balance
150000
Current Liabilities = Sundry Creditors
80000

CR = 150000/80000
= 1.88

Liquid Ratio = Liquid Assets / Current Liabilities

Liqud Assets = Current Assets - Inventory - Prepaid Expenses
150000 - 80000
70000
 LR = 70000 / 80000
0.88

Stock Turnover Ratio = Cost of Goods Sold / Average Inventory

COGS = 125000

Average Inventory = (Opening Inventory + Closing Inventory) / 2

(3000 + 80000) / 2
41500

STR = (125000 / 41500)

3.01 times

Inventory Holding Period = 365 days / STR

365 / 3.01
121.262458471761
122 Days apx 100

Debtors Turnover Ratio = Credit Sales / AverageDebtors

= Net Sales / Closing Debtor

= 195000 / 50000
3.9 times
Debtors Collection Period = 365 days / DTR
365 / 3.9
94 Days apx 93.58974

12 / 3.9 3.076923
3.07 Months
 Compute Operating Ratio
Operating Expenses
Revnue from Operations

Net Profit after Interest and Tax for the year ended 31st March, 2019 was Rs.1,21,500; Tax Rate: 40%.
CR

CL 50000 2
CA 100000

50000 25000 2 3
100000 75000

50000 50000 2 1
100000 50000

50000 50000 2 4
100000 200000
 Compute Operating Ratio
Operating Expenses = 3100000
Revnue from Operations = 5000000

Operating Ratio = 62.00

Operating Profit Ratio = 38.00

Sales
Less Cost of Goods Sold
Gross Profit / Gross Loss
Less Operating Expenses
Operating Profit
Add: Non Operating Income
Less: Non Operating Expenses or Losses
Earnings Before Interest and Tax 247000
Less: Interest 44500 Interest Paid 48000
Earnings Before Tax 202500 Interest Received 3500
Less: Tax 44500
Earnings After Tax (Net Profit or Net Loss) 121500

Assume your Net Profit Before Tax Rs.100 Rs100 = Rs.60

Tax Rs.40 ? = Rs.121500
PAT Rs.60
x Rate: 40%. = 202500

ROI =
Surplus, i.e., Balance in Statement of Profit and Loss includes profit of Rs.5,00,000 for the current year.
Compute Return on Capital Employed.
 Sales
Less Cost of Goods Sold
Gross Profit / Gross Loss Equity Shareholders
Less Operating Expenses Preference Shareholder
Operating Profit Debtholders
Add: Non Operating Income
Less: Non Operating Expenses or Losses
Earnings Before Interest and Tax 600000 Rs.100 Cr
Less: Interest 100000
Earnings Before Tax 500000
Less: Tax 0
Earnings After Tax (Net Profit or Net Loss) 500000
Dividend to Preference Shares 100000
Earnings available to Equity Shares 400000
Retained Earnings 100000
Dividend to equity shares 300000
No. of Ordinary Shares 100000 Hypothetical
EPS 4 Data
DPS 3
Dividend Payout Ratio 0.75
Market Price 1000
Earnings Yield 0.4
e current year.

ROCE = (EBIT / Net Capital Employed)*100

= (600000/ 3900000)*100
15.38%
e Shareholder

Rs.1000 100000 Rs.100 cr

Stock Markets Market Price

No. of Shares Price

100 1000 100000 150000
100 1200 120000

hi
 Profit and Loss
Debit Side 2020 2019 Credit Side 2020 2019

Balance Sheet
Liabilities 2020 2019 Assets 2020 2019
Fixed Assets

Current Assets
Inventory
Debtors
Cash and Cash Equivalents 250000 175000
75000
Accrual Concept

Cash Flow Statement

A B
Operating Activities 20000 50000

Investing Activities 35000 25000

Financing Activities 20000 0

75000 75000
 Sales
COGS
GP
Other OE
EBIT
I
EBT
T
EAT

P&L a/c
Debit Credit
By Bal b/d 50000

To Bal c/d 70000 Profit for 20000

70000 70000

P&L A/c
Dr. Cr.

BS
Liabilities Assets
 Cash Flow Statement for the year ended 31st March 2019
Particulars Amt in Rs.
1. Cash Flow from Operating Activities Working Notes
Net Profit before Tax and Extra Ordinary Items 20,000.00 1. Computation of Net Profit
Add: Non Cash / Non Operating Expenses Closing Balance of P&L
Patents Amortized 8,000.00 Less Opening Balance of P&L
Interest on Debentures 12,000.00 20,000.00 Profit for the year
Operating Profit before working capital changes 40,000.00
Add Decrease in Current Assets and Increase in Current Liabilities
Creditors 20,000.00
Bills Payable 80,000.00 100,000.00
140,000.00
Less Increase in Current Assets and Decrease in Current Liability
Inventories 20,000.00
Trade Receivables 20,000.00
Outsanding Liabilities 5,000.00 (45,000.00)
Cash from Operating Activities 95,000.00

2. Cash Flow from Investing Activities

Purchase of Land and Buildings (80,000.00)
Loans and Advances (30,000.00)
Cash used in Investing Activities (110,000.00)

3. Cash Flow from Financing Activities

Proceeds from issue of equity shares 50,000.00
Redemption of Debentures (20,000.00)
Interest on Debentures (12,000.00)
Cash from Financing Activities 18000

4. Net Increase / Decrease in Cash (15,000.00)

Add: Cash and cash equivalents in the beigning of the year 15,000.00
Cash and Cash equivalents at the end of year 18,000.00
Working Notes
1. Computation of Net Profit Before Tax and Extraordinary Items
Closing Balance of P&L 70000
Less Opening Balance of P&L 50000
Profit for the year 20000
Additional Information:
1. Investments costing Rs.3,000 were sold for Rs.2,800 during the year.
2. A new machine was purchased for Rs.13,000.

Working Notes

Investments Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
1/4/2018 To Balance b/d 3000 By Bank 2800
By P&L (Loss on Sale o 200

To Bank (Purchases) Ba 8000 31/3/2019By Balance c/d 8000

11000 11000
Rs.10000 Cr
Issuing Equity Shares 10 Cr Shares
Rs. 1000/Share

10000000/1000
1000
100000
 Cash Flow Statement for the year ended 31st March 2019
Particulars Amt in Rs.
1. Cash Flow from Operating Activities
Clsoing Balance as per Surplus (Balance in
Statement of Profit &Loss) 7,000.00
Less Opening Balance (4,500.00)
Add: Transfer to General Reserve (Difff in Closing
balance and
Net Profit Opening
before of General
taxation Reserve0
and Extraordinary 5,000.00 Closing Balance - Opening
Items 16,500.00 7000 - (-4500)
Add: Non Cash and Non Operating Expenses
Depreciation 4,000.00
Loss on Sale of Investment 200.00
Interest on Debentures @10% 1,500.00 5,700.00

Less: Non Operating Income

Interest on Investments @ 10% 300.00 (300.00) Profit
21,900.00 Less Reser
Operating Profit before working capital changes Surplus in
Add Decrease in Current Assets and Increase in
Current Liabilities
Increase in Creditors 3,500.00
Increase in Bills Payable 500.00 4,000.00

Less Increase in Current Assets and Decrease in

Current Liability
Increse in inventory 2,500.00
Incresase in Trade Receivable 11,000.00 13,500.00
Cash from Operating Activities 12,400.00

2. Cash Flow from Investing Activities

Purchase of Machinery (13,000.00)
Purchase of Investments (8,000.00)
Proceeds from sale of Investment 2,800.00
Interest on Investments @ 10% 300.00
Cash used in investing activities (17,900.00)

3. Cash Flow from Financing Activities

Proceeds from issue of Equity Shares 5,000.00
Proceeds from issue of 10% Debentures 10,000.00
Increase in Short-Term Borrowing 1,000.00
Interest on Debentures @10% (1,500.00)
Cash from Financing Activities 14,500.00

4. Net Increse / Decrease in Cash and Cash

Equivalents 9,000.00
Add: Opening Cash and Cash Equivalents 12,000.00
Clsoing Balance as per Surplus (Balance in
Statement of Profit &Loss) 21,000.00
 7000
P&L a/c

Closing Balance - Opening Balance To Opening Balan 4500

7000 - (-4500) 11500
To Balance c/d 7000 Profit for y 11500
11500 11500

16500
5000
11500
 200000
210000

10000
10000
20000
-10000
10000

Fixed Assets Account

Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
1-Apr-18 To Balance b/d 400000 By Bank (Sale of Asset) 34000
To Profit on sale of Ass 10000 By Accumulated Depreciati 16000

To Bank (Purchases of 640000 31-Mar-19 By Balance c/d 1000000

1050000 1050000
 Accumulated Depreciation Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
To Fixed Assets (Tfd o 16000 1-Apr-18 By Balance b/d 60000
By Depreciation (Bal Fig) 52000

To Balance c/d 96000

112000 112000

Investment Account
Dr. Cr.
Date Particulars Amt (Rs.) Date Particulars Amt (Rs.)
To Balance b/d 80000 By Bank (Sale of Investme 28000
To Profit on sale of in 8000

To Bank (Purchases of 30000 By Balance c/d 90000

118000 118000
 Cash Flow Statement for the year ended 31st March 2019
Particulars Amt in Rs.
1. Cash Flow from Operating Activities
Net profit 164000
Add Interim Dividend to equity shares 72000
Dividend Preference shares 18000
Provision for tax 18000
Net Profit before tax and extraodinary Items 272,000.00
10000 Add Non Cash / Non Operating Expenses
Depreciation 52000
Interest on Debentures 70000
Provision for Doubtful Debts 12000 134,000.00

Less Non Cash / Non Operating Income

Profit on Sale of Investment 8000
Profit on Sale of Asset 10000 18,000.00
Operating Profit before working capital changes 388,000.00
Add: Decrease in Current Assets and Increase in Current Liabilities
Trade Receivables 228000
Trade Payables 120000 348,000.00

Less Increase in Current Assets and Decrease in Current Liabilities

Inventories 100000 100,000.00
Cash Generated from Operations 636,000.00
Less Income tax paid 18,000.00
Cash from Operating Activities 618,000.00

2. Cash Flow from Investing Activties

Sale of Assets 34000
Sale of Investments 28000
Purchase of Assets (640,000.00)
Purchases of Investments (30,000.00)
Cash used in Investing Activities (608,000.00)

3. Cash Flow from Financing Activities

Proceeds from issue of equity shares 200000
Share Premium received from issue of equity shares 10000
40000 Proceeds from issue of debentures 90000
-16000 Redemption of Preference Shares (50,000.00)
BV 24000 Dividend to equity shares (72,000.00)
Sold 34000 Dividend to preference (18,000.00)
Profit on S 10000 Interest on Debentures (70,000.00)
Cash from Financing Activities 90,000.00
4. Net Increase / Decrease in Cash 100,000.00
Add: Opening Cash and Cash Equivalants 208,000.00
Cash and Cash equivalents at end of the year 308,000.00
 Provision for Taxation
2018 2019 2020 2021
31-Mar-21 40000 50000 50000
1-Jul-21 40000 50000 50000
 CB PB
-50000 -50000
Cheque Deposited 100000
50000 -50000
 Bank Reconciliation Statement of Akhil as on 31st March 2019
Particulars Rs. Rs.
Balance as per Cash Book 325975
Add:
Cheques Issued but not yet presented 26000
Interest on Bonds collected by bank 25000 51000

Less:
Cheques deposited but not cleared 108150
Insurance Premium paid by bank 52075
Commision 750 160975

Balance as per Pass Book 216000

 Bank Reconciliation Statement of Akhil as on 31st March 2019
Particulars Rs. Rs.
Balance as per pass book (Cr.) 216000
Add:
Cheques deposited but not cleared 108150
Insurance Premium paid by bank 52075
Commision 750 160975

Less
Cheques Issued but not yet presented 26000
Interest on Bonds collected by bank 25000 51000

Balance as per cash book 325975

From the following particulars prepare a Bank Reconciliation Statement to find out
the causes of difference in two balances as on August 31st, 2016 for XYZ & Co.
 
(i) Bank Overdraft as per Bank Statement ……………………………………….………. 17,000
 
(ii) Check issued but not encashed during the August ………………………………….. 2,200
 
(iii) Dividends on shares collected by banker …………………………….…………….… 2,300
 
(iv) Interest charged by the bank recorded twice in the Cash Book ……………..……. 500
 
(v) Check deposited as per Bank Statement not entered in Cash Book ……….…..… 3,400
 
(vi) Credit side of the Bank column in Cash Book cast short ……………….…………… 1,000
 
(vii) Clubs dues paid by bank as per standing instruction not recorded in Cash Book … 1,200
 
(viii) Uncredited check due to outstation …………………………………………………. 3,900
 Bank Reconciliation Statement of XYZ as on 31st August, 2016
Particulars Rs. Rs. PB CB
Bank Overdraft as per pass book 17000 -17000 -17000
Add: 0 -2200
Cheque issued but not encashed 2200 -17000 -19200
Dividends on shares collected 2300
Interest charged shown twice in CB 500 -17000 -17000
Cheque deposited but not recorded in CB 3400 8400 2300 0
-14700 -17000
Less:
Credit side of CB undercast 1000 -17000 -17000
Clubs due paid as per standing instructions 1200 -500 -1000
Uncredited Cheques 3900 6100 -17500 -18000

Overdraft Balance as per cash book 19300 -17000 -17000

3400 0
-13600 -17000

-17000 -17000
-17000 -16000

-17000 -17000
-1200 0
-18200 -17000
Particulars Rs. Rs.
Bank Overdraft as per pass book 17000 -17000 -17000
Add: 0 3900
Cheque issued but not encashed 2200 -17000 -13100
Dividends on shares collected 2300
Interest charged shown twice in CB 500
Cheque deposited but not recorded in CB 3400 8400

Less:
Credit side of CB undercast 1000
Clubs due paid as per standing instructions 3000
Uncredited Cheques 25000 29000

Debit Balance as per cash book -3600

+ -