1st sem MBA Business Accounting

Chapter -1
1. The position of a businessman on 30th June 2024 was as follows:
Cash: Rs. 5,000, Debtors: Rs. 20,000, Machinery: Rs. 60,000, Stock: Rs. 25, 000, Capital: Rs.
75,000
Calculate his liabilities.
Solution:
Liabilities = Assets – Capital
Liabilities = 5,000+20,000+60,000+25,000−75,000
=1, 10,000−75,000
=1, 10,000−75,000 =35,000

2. What will be effect of the following on the Accounting Equation?

(i) Started business with cash ₹ 45,000
(ii) Opened a Bank Account with a deposit of ₹ 4,500
(iii) Bought goods from M/s Sun & Co. for ₹ 11,200
Solution:
Assets = Liabilities + Capital
40,500 + 4,500+11,200 = 11,200 + Capital
Capital = 56,200 -11,200
Capital = 45,000
[Assets: Cash ₹ 40,500 + Bank ₹ 4,500 + Stock ₹ 11,200 = Liabilities: Creditors ₹ 11,200 + Capital:
₹ 45,000.]

3. Company A starts with 10,000 in cash as its only asset. What are the company's assets,
liabilities, and owner's equity?
Solution:
Assets = 10,000 (cash)
Liabilities = 0 (no debts or liabilities)
Owner's Equity = 10,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Accounting Equation:
Assets=Liabilities+Owner’s Equity
10,000=0+10,000

4. A business owner invests $15,000 in cash to start their company, and the company borrows
Rs.5, 000 from a bank. What are the total assets, liabilities, and owner’s equity?
Solution:
Liabilities = 5,000 (loan)
Owner’s Equity = 15,000 (owner’s investment)
Accounting Equation:
Assets=Liabilities+Owner’s Equity
Assets = 5,000 + 15,000
Assets = 20,000

5. (a) A starts a business and invests Rs. 50,000 on 1st April, 2020. On 31st March, 2021, his
assets are Rs. 65,000, and liabilities are Rs. 6,000. Find out the amount of capital on 31st March,
2021, and his profit.
(b) In the above case, if the proprietor had invested Rs. 5,000 as additional capital and
withdrawn Rs. 2,000, what will be your answer?
(c) If A had withdrawn Rs. 3,000 for personal use, find out the profit in this case.
Solution:
(a) Closing Capital = Assets - Liabilities
=65,000−6,000=59,000
= 65,000 - 6,000 = 59,000
=65,000−6,000=59,000
Profit = Closing Capital - Opening Capital
=59,000−50,000=9,000
= 59,000 - 50,000 = 9,000
=59,000−50,000=9,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

(b)Profit = Closing Capital - Opening Capital - Additional Capital + Drawings

=59,000−50,000−5,000+2,000=6,000
= 59,000 - 50,000 - 5,000 + 2,000 = 6,000
=59,000−50,000−5,000+2,000=6,000
(c)Profit = Closing Capital - Opening Capital + Drawings
=59,000−50,000+3,000=12,000
= 59,000 - 50,000 + 3,000 = 12,000
=59,000−50,000+3,000=12,000
7.
Mr A had the following transactions. Use Accounting equation to show their effect on his
Assets, Liabilities and Owners' equity

1 Started business with cash Rs 5,000

2 Purchased goods on credit Rs 400
3 Purchased goods for cash Rs 100
4 Purchased furniture Rs 50
5 Withdrew for personal use Rs 70
6 Paid rent Rs 20
7 Received interest Rs 10
8 Sold goods costing Rs 50 on credit for Rs 70
9 Paid to creditors Rs 40
10 Paid for salaries Rs 20
11 Further Capital invested Rs 1,000
12 Borrowed from Mr B Rs 1,000

Solution:

Assets = Liabilities + Owner's Equity

Cash Stock Furniture Debtors Creditors Loan

1 5,000 5,000

2 400 400

3 -100 100

4 -50 50

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 1st sem MBA Business Accounting

5 -70 -70
6 -20
-20
7 10
10
8 20
-50 70
9 -40
-40
10 -20
-20
11 1,000
1,000
12
1,000 1,000
= 360 + 5,920
6,710 450 50 70 1,000
7280 = 1360 + 5920

8.

During the month of July, a travel company recorded the following transactions.

1 Owner invested Rs 25,000 to start the business.

2 He paid Rs 500 as rent for the month
3 Purchased machinery worth Rs 8,000 for credit.
4 Puchased office supplies worth Rs 500
5 Paid for advertising Rs 750
6 Paid salaries Rs 3,000
7 Earned fees Rs 10,000 out of which Rs 2,000 got in cash immediately.
8 Paid Rs 5,000 to the machinery supplier.
9 Used Rs 100 worth supplies.
10 Paid Rs 1,000 miscellaneous expenses through company's credit card

Use Accounting equation to show their effect on Assets, Liabilities and Owners' equity

SVYASA university Dr. Rekha Gothe

 1st sem MBA Business Accounting

Solution:

Owner's
Assets = Liabilities + Equity
Off. C. C.
Cash Machinery Supplies Debtors = Creditors Loan +

1 25,000 25,000
- -
2 500 500

3 8,000 8,000
-
4 500 500
- -
5 750 750
- -
6 3,000 3,000

7 2,000 8,000 10,000

- -
8 5,000 5,000
- -
9 100 100
-
10 1,000 1,000

17,250 8,000 400 8,000 3,000 1,000 29,650

33,650 4,000 29,650

Total 33,650 = 33,650

9.

On July,1, 2024, Mr D set up a cleaning business by investing Rs 60,000. He reveals the following data
for the year.
Revenue from services Rs 1,03,000
Rent expense Rs 11,200
Electricity Expenses Rs 42,000
Salaries Expenses Rs 16,600
Delivery Expenses Rs 2,500

SVYASA university Dr. Rekha Gothe

 1st sem MBA Business Accounting

Building Rs 66,700
Equipment Rs 25,000
Supplies Rs 2,300
Trade Receivables Rs 17,800
Cash Rs 25,000
Loan payable Rs 34,000
Expenses payable Rs 6,600
During the year he withdrew Rs 4,500 for personal use and made further investments of Rs 10,000
Prepare Income statement and Balance Sheet.

Solution

Income Statement Amount Amount

Revenue :

Revenue from Services 1,03,000

Expenses:

Rent Expenses 11,200

Electricity Expenses 42,000
Salaries Expenses 16,600
Delivery Expenses 2,500 72,300

Profit 30,700

Balance Sheet

Assets = Liabilities + Owner's Equity

Buildings 66,700 Loan Pay 34,000 Capital 60,000
Equipment 25,000 Exp Pay 6,600 Drawings -4,500
Supplies 2,300 Add Cap 10,000
Tr Receiv 17,800 Add Profit 30,700
Cash 25,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Total 1,36,800 40,600 96,200

10.

On March, 1,2024, Mr R set up an Accounting services business. He reported the following

transaction for the month.

a Mr R brought in Rs 50,000 worth computer to the business

b Provided services for cash Rs 23,000
c Bought office machinery on credit for Rs 25,000
d Billed clients for services Rs 16,000
e Paid rent deposit for office Rs 10,000
f Collected money from clients billed in (d) above Rs 12,300
g Withdrew for personal use Rs 9,000
h Paid for electricity Rs 1,700
i Paid salary to Office clerk Rs 2,000

Use Accounting equation to show their effect on his Assets, Liabilities and Owners' equity

Solution

Owner's
Assets = Liabilities + Equity
Rent
Cash Computer Machinery Deposit Debtors Creditors
a 50,000 50,000
b 23,000 23,000

c 25,000 25,000

d 16,000 16,000

e -10,000 10,000

f 12,300 12,300
g -9,000 -9,000
h -1,700 -1,700
i -2,000 -2,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

12,600 50,000 25,000 10,000 3,700 25,000 76,300

Total 1,01,300 25,000 76,300

Exercise problems:

1) Journalise the following transactions in the books of Mr. Ganesh 2024

January 01 Mr. Ganesh commenced business with cash Rs.60000
02 paid into Bank Rs.20000
03 Purchased goods for cash Rs.20000.
05 Sold goods for cash Rs.25000.
08 Purchased goods from Dharshan on credit for Rs.10000.
10 Sold goods to sudeep on credit for Rs.20000.
15 Returned goods to Dharshan Rs.1000 for damage.
18 Received goods returned by sudeep Rs.2000.
20 Bought furniture for cash Rs.10000.
21 Paid to Dharshan Rs.8000 on account.
27 Received from sudeep Rs.15000 on account.
31 paid salaries Rs.5000.

Solution

Date Particulars L/F Debit (Rs.) Credit (Rs.)

Jan-01 Cash A/c Dr. 60,000

To Capital A/c 60,000

(Business commenced with cash)

Jan-02 Bank A/c Dr. 20,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

To Cash A/c 20,000

(Cash deposited into bank)

Jan-03 Purchases A/c Dr. 20,000

To Cash A/c 20,000

(Goods purchased for cash)

Jan-05 Cash A/c Dr. 25,000

To Sales A/c 25,000

(Goods sold for cash)

Jan-08 Purchases A/c Dr. 10,000

To Dharshan A/c 10,000

(Goods purchased on credit from Dharshan)

Jan-10 Sudeep A/c Dr. 20,000

To Sales A/c 20,000

(Goods sold on credit to Sudeep)

Jan-15 Dharshan A/c Dr. 1,000

To Purchases Return A/c 1,000

(Returned goods to Dharshan for damage)

Jan-18 Sales Return A/c Dr. 2,000

To Sudeep A/c 2,000

(Goods returned by Sudeep)

Jan-20 Furniture A/c Dr. 10,000

To Cash A/c 10,000

(Furniture purchased for cash)

Jan-21 Dharshan A/c Dr. 8,000

To Cash A/c 8,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

(Payment made to Dharshan on account)

Jan-27 Cash A/c Dr. 15,000

To Sudeep A/c 15,000

(Received payment from Sudeep on account)

Jan-31 Salaries A/c Dr. 5,000

To Cash A/c 5,000

(Salaries paid)

2) Journalise the following transaction in the books of Mr.Arun 2024

April 01 Started business with cash Rs.100000.
03 Deposited into bank Rs.30000.
05 Bought goods from suresh Rs.20000.
06 Sold goods for cash Rs.16000.
08 Purchased furniture and paid by chequeRs.5000
12 Sold goods to mala on credit Rs.14000.
15 Returned goods to suresh Rs.1000.
16 Received loan fromBankRs.10000.
17 Mala returned goods worth Rs.300 for breakage.
20 Paid for stationary Rs.400.
24 Cash received from mala Rs.3500.
25 Withdraw for office use Rs.1000.
28 Withdraw a cheque for personal use Rs.2000.
30 Paid rent to landlord Rs.2000.
Solution

Date Particulars L/F Debit (Rs.) Credit (Rs.)

Apr-01 Cash A/c Dr. 1,00,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

To Capital A/c 1,00,000

(Started business with cash)

Apr-03 Bank A/c Dr. 30,000

To Cash A/c 30,000

(Cash deposited into bank)

Apr-05 Purchases A/c Dr. 20,000

To Suresh A/c 20,000

(Goods purchased from Suresh on credit)

Apr-06 Cash A/c Dr. 16,000

To Sales A/c 16,000

(Goods sold for cash)

Apr-08 Furniture A/c Dr. 5,000

To Bank A/c 5,000

(Furniture purchased and paid by cheque)

Apr-12 Mala A/c Dr. 14,000

To Sales A/c 14,000

(Goods sold on credit to Mala)

Apr-15 Suresh A/c Dr. 1,000

To Purchases Return A/c 1,000

(Returned goods to Suresh)

Apr-16 Cash A/c Dr. 10,000

To Loan from Bank A/c 10,000

(Loan received from the bank)

Apr-17 Sales Return A/c Dr. 300

To Mala A/c 300

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

(Goods returned by Mala for breakage)

Apr-20 Stationery A/c Dr. 400

To Cash A/c 400

(Paid for stationery)

Apr-24 Cash A/c Dr. 3,500

To Mala A/c 3,500

(Cash received from Mala)

Apr-25 Office Expenses A/c Dr. 1,000

To Cash A/c 1,000

(Cash withdrawn for office use)

Apr-28 Drawings A/c Dr. 2,000

To Bank A/c 2,000

(Cash withdrawn by cheque for personal use)

Apr-30 Rent A/c Dr. 2,000

To Cash A/c 2,000

(Paid rent to landlord)

3) Journalise the following transaction in the books of Mr.vijay. 2024

March 01 Commenced business with the following.
Cash 60000
Goods 30000
Furniture 40000
Building 70000
04 purchased goods for cash Rs.10000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

05 sold goods for cash Rs.20000.

07 paid office Rent Rs.1000.
09 paid wages Rs.500.
13 Received commission Rs.1200.
16 cash withdrawn for personal use Rs.21000.
21 Interest received Rs.4000.
Solution

Date Particulars L/F Debit (Rs.) Credit (Rs.)

Mar-01 Cash A/c Dr. 60,000
Goods A/c Dr. 30,000
Furniture A/c Dr. 40,000
Building A/c Dr. 70,000
To Capital A/c 2,00,000
(Commenced business with cash, goods, furniture,
and building)
Mar-04 Purchases A/c Dr. 10,000
To Cash A/c 10,000
(Goods purchased for cash)
Mar-05 Cash A/c Dr. 20,000
To Sales A/c 20,000
(Goods sold for cash)
Mar-07 Rent A/c Dr. 1,000
To Cash A/c 1,000
(Paid office rent)
Mar-09 Wages A/c Dr. 500
To Cash A/c 500
(Paid wages)
Mar-13 Cash A/c Dr. 1,200
To Commission A/c 1,200
(Commission received)
Mar-16 Drawings A/c Dr. 21,000
To Cash A/c 21,000
(Cash withdrawn for personal use)
Mar-21 Cash A/c Dr. 4,000
To Interest A/c 4,000
(Interest received)

4) Journalise the following transactions in the books of Mr.pranav. 2024

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

April 01 Started business with cash Rs.80000

03 Deposited into bank Rs.30000.
05 Bought goods for cash Rs.20000.
08 Sold goods to prerana Rs.30000.
11 Withdraw for office use Rs.10000.
12 Paid Rent Rs.2000.
22 Received interest Rs.4300.
Solution

Date Particulars L/F Debit (Rs.) Credit (Rs.)

Apr-01 Cash A/c Dr. 80,000
To Capital A/c 80,000
(Started business with cash)
Apr-03 Bank A/c Dr. 30,000
To Cash A/c 30,000
(Deposited cash into bank)
Apr-05 Purchases A/c Dr. 20,000
To Cash A/c 20,000
(Bought goods for cash)
Apr-08 Prerana A/c Dr. 30,000
To Sales A/c 30,000
(Goods sold on credit to Prerana)
Apr-11 Office Expenses A/c Dr. 10,000
To Cash A/c 10,000
(Cash withdrawn for office use)
Apr-12 Rent A/c Dr. 2,000
To Cash A/c 2,000
(Paid rent)
Apr-22 Cash A/c Dr. 4,300
To Interest A/c 4,300
(Received interest)

5) Journalise the following transactions in the books of pramod. 2024

May 01 Business started with cash Rs.75000.
05 paid into bank Rs.20000.
08 sold goods for cash Rs.15000.

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

10 Bought machinery from HMT ltd Rs.12000.

17 Purchased goods for cash Rs.5000.
19 sold goods to swathi Rs.2300.
23 Purchased furniture Rs.4000.
25 paid salary Rs.4000.
28 Received interest Rs.2000.
Solution

Date Particulars L/F Debit (Rs.) Credit (Rs.)

May-01 Cash A/c Dr. 75,000
To Capital A/c 75,000
(Business started with cash)
May-05 Bank A/c Dr. 20,000
To Cash A/c 20,000
(Cash deposited into bank)
May-08 Cash A/c Dr. 15,000
To Sales A/c 15,000
(Goods sold for cash)
May-10 Machinery A/c Dr. 12,000
To HMT Ltd. A/c 12,000
(Bought machinery from HMT Ltd.)
May-17 Purchases A/c Dr. 5,000
To Cash A/c 5,000
(Purchased goods for cash)
May-19 Swathi A/c Dr. 2,300
To Sales A/c 2,300
(Goods sold on credit to Swathi)
May-23 Furniture A/c Dr. 4,000
To Cash A/c 4,000
(Purchased furniture for cash)
May-25 Salaries A/c Dr. 4,000
To Cash A/c 4,000
(Paid salary)
May-28 Cash A/c Dr. 2,000
To Interest A/c 2,000
(Received interest)

6)

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Mr A starts a business regarding which we have the following data:

Introduces Capital in cash Rs 50,000

Purchases (Cash) Rs 20,000

Purchases (Credit) from Mr B Rs 25,000

Freight charges paid in cash Rs 1,000

Goods sold to Mr C on credit Rs 15,000

Cash Sale Rs 30,000

Purchased computer Rs 10,000

Commission Income Rs 8,000

Journal entries for above items would be done as -

S.No. Journal Entries Classification Rule

1 Cash A/cDr. 50,000 Real A/c Debit what comes in;

To Capital A/c50,000 Personal A/c Credit the giver(Owner)

2 Goods Purchase A/cDr. 20,000 Real A/c Debit what comes in;

To cash A/c20,000 Real A/c Credit what goes out

3 Goods Purchase A/cDr. 25,000 Real A/c Debit what comes in;

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

To B A/c25,000 Personal A/c Credit the giver

4 Freight A/cDr. 1,000 Nominal A/c Debit all expenses

To cash A/c1,000 Real A/c Credit what goes out

5 C A/cDr. 15,000 Personal A/c Debit the receiver

To Sale A/c15,000 Real Account Credit what goes out

6 Cash A/cDr. 30,000 Real A/c Debit what comes in;

To Sale A/c30,000 Real A/c Credit what goes out

7 Computer A/cDr. 10,000 Real A/c Debit what comes in;

To cash A/c10,000 Real A/c Credit what goes out

8 Cash A/cDr. 8,000 Real A/c Debit what comes in;

To commission A/c8,000 Nominal A/c Credit all incomes

Exercise problems.

1. Journalise the following transactions and post them to ledger and balance them. 2025

January 01 commenced business with cash Rs.10000.

04 Goods purchased for cash Rs.3000.
06 Cash sales Rs.2000.
10 Purchased goods from Keshava Rs.1500.
19 Sold goods to Madhava Rs.2500.
SVYASA university Dr. Rekha Gothe
1st sem MBA Business Accounting

Date Particulars L/F Debit (Rs.) Credit (Rs.)

2025
Cash A/c Dr. 10,000
Jan-01
To Capital A/c 10,000
(Commenced business with cash)
Jan-04 Purchases A/c Dr. 3,000
To Cash A/c 3,000
(Goods purchased for cash)
Jan-06 Cash A/c Dr. 2,000
To Sales A/c 2,000
(Goods sold for cash)
Jan-10 Purchases A/c Dr. 1,500
To Keshava A/c 1,500
(Goods purchased from Keshava on credit)
Jan-19 Madhava A/c Dr. 2,500
To Sales A/c 2,500
(Goods sold on credit to Madhava)

Ledger Accounts
Cash A/c
Date Particulars Amount Date Particulars Amount
Jan-01 To Capital A/c 10,000 Jan-04 By Purchases A/c 3,000
Jan-06 To Sales A/c 2,000 Jan-31 By Balance c/d 12,000

15,000 15,000
Feb-01 To balance b/d 12,000

Purchases A/c
Date Particulars Amount Date Particulars Amount
Jan-04 To Cash A/c 3,000 Jan-31 By Balance c/d 4,500
Jan-10 To Keshava A/c 1,500
4,500 4,500
Feb-01 To balance b/d 4,500

Sales A/c
Date Particulars Amount Date Particulars Amount
Jan-31 To Balance c/d 4,500 Jan-06 By Cash A/c 2,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Jan-19 By Madhava A/c 2,500

4,500 4,500
Feb-01 By balance b/d 4,500

Keshava A/c
Date Particulars Amount Date Particulars Amount
Jan-31 To Balance c/d 4,500 Jan-10 By Purchases A/c 1,500
1,500 1,500
Feb-01 Bybalance b/d 1,500

Madhava A/c
Date Particulars Amount Date Particulars Amount
Jan-19 To Sales A/c 2,500 Jan-31 By Balance c/d 2,500
2,500 2,500
Feb-01 Bybalance b/d 2,500

2. Journalise the following transactions and post them to ledger and balance them. 2025
April 01 Pramod commenced business with cash Rs.50000.
05 Purchased furniture Rs.7000.
10 paid for stationary Rs.1000.
13 Cash purchases Rs.2000.
18 Cash sales Rs.3000
21 paid wages to workers Rs.2300.
28 Deposited cash into Bank Rs.4000.
Solution

Journal Entries
Date Particulars L/F Debit (Rs.) Credit (Rs.)

Apr-01 Cash A/c Dr. 50,000

To Capital A/c 50,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

(Commenced business with cash)

Apr-05 Furniture A/c Dr. 7,000

To Cash A/c 7,000

(Purchased furniture)

Apr-10 Stationery A/c Dr. 1,000

To Cash A/c 1,000

(Paid for stationery)

Apr-13 Purchases A/c Dr. 2,000

To Cash A/c 2,000

(Cash purchases)

Apr-18 Cash A/c Dr. 3,000

To Sales A/c 3,000

(Cash sales)

Apr-21 Wages A/c Dr. 2,300

To Cash A/c 2,300

(Paid wages)

Apr-28 Bank A/c Dr. 4,000

To Cash A/c 4,000

(Deposited cash into bank)

69,300 69300

Cash A/c
Date Particulars Amount Date Particulars Amount
Apr-01 To Capital A/c 50,000 Apr-05 By Furniture A/c 7,000
Apr-18 To Sales A/c 3,000 Apr-10 By Stationery A/c 1,000
Apr-13 By Purchases A/c 2,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Apr-21 By Wages A/c 2,300

Apr-28 By Bank A/c 4,000
Apr-30 By Balance c/d 36,700
53,000 53,000
May-
01 To balance b/d 36,700

Furniture A/c
Date Particulars Amount Date Particulars Amount
Apr-05 To Cash A/c 7,000 Apr-30 By Balance c/d 7,000
7,000 7,000
May-
7,000
01 To balance b/d

Stationery A/c
Date Particulars Amount Date Particulars Amount
Apr-10 To Cash A/c 1,000 Apr-30 By Balance c/d 1,000
1,000 1,000
May-
1,000
01 To balance b/d

Purchases A/c
Date Particulars Amount Date Particulars Amount
Apr-13 To Cash A/c 2,000 Apr-30 By Balance c/d 2,000
2,000 2,000
May-
2,000
01 To balance b/d

Sales A/c
Date Particulars Amount Date Particulars Amount
Apr-18 By Cash A/c 3,000 Apr-30 By Balance c/d 3,000
3,000 3,000
May-
3,000
01 To balance b/d

Wages A/c
Date Particulars Amount Date Particulars Amount

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Apr-21 To Cash A/c 2,300 Apr-30 By Balance c/d 2,300

2,300 2,300
May-
2,300
01 To balance b/d

Bank A/c
Date Particulars Amount Date Particulars Amount
Apr-28 To Cash A/c 4,000 Apr-30 By Balance c/d 4,000
4,000 4,000
May-
4,000
01 To balance b/d

3. Journalise the following transactions and post them to ledger and balance them.2025
May 01 started business with cash Rs.75000.
04 Purchased machinery Rs.8000.
08 paid into bank Rs.6000.
09 purchased goods for cash Rs.6000.
10 Sold goods to prerana Rs.4000.
11 paid Rent Rs.1000.
18 Received commission Rs.1100.
21 paid for Advertisement Rs.1200.
30 paid for wages Rs.2000.

Journal Entries

Date Particulars L/F Debit (Rs.) Credit (Rs.)

May-01 Cash A/c Dr. 75,000
To Capital A/c 75,000
(Started business with cash)
May-04 Machinery A/c Dr. 8,000
To Cash A/c 8,000
(Purchased machinery)

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

May-08 Bank A/c Dr. 6,000

To Cash A/c 6,000
(Paid into bank)
May-09 Purchases A/c Dr. 6,000
To Cash A/c 6,000
(Purchased goods for cash)
May-10 Prerana A/c Dr. 4,000
To Sales A/c 4,000
(Sold goods to Prerana on credit)
May-11 Rent A/c Dr. 1,000
To Cash A/c 1,000
(Paid rent)
May-18 Cash A/c Dr. 1,100
To Commission A/c 1,100
(Received commission)
May-21 Advertisement A/c Dr. 1,200
To Cash A/c 1,200
(Paid for advertisement)
May-30 Wages A/c Dr. 2,000
To Cash A/c 2,000
(Paid wages)

1,04,300 104300

Cash A/c
Date Particulars Amount Date Particulars Amount
May-
To Capital A/c 75,000 May-04 By Machinery A/c 8,000
01
May-
To Commission A/c 1,100 May-08 By Bank A/c 6,000
18
May-09 By Purchases A/c 6,000
May-11 By Rent A/c 1,000
May-21 By Advertisement A/c 1,200

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

May-30 By Wages A/c 2,000

May-31 By Balance c/d 51,900
76,100 76,100
Apr-01 To Balance b/d 51,900

Machinery A/c
Date Particulars Amount Date Particulars Amount
May-
To Cash A/c 8,000 By Balance c/d 8,000
04 May-31
8,000 8,000
Apr-01 To Balance b/d 8,000

Bank A/c
Date Particulars Amount Date Particulars Amount
May-
To Cash A/c 6,000 By Balance c/d 6,000
08 May-31
6,000 6,000
Apr-01 To Balance b/d 6,000

Purchases A/c
Date Particulars Amount Date Particulars Amount
May-
To Cash A/c 6,000 By Balance c/d 6,000
09 May-31
6,000 6,000
Apr-01 To Balance b/d 6,000

Sales A/c
Date Particulars Amount Date Particulars Amount
May-
To Balance c/d 4,000 May-10 By Prerana A/c 4,000
31
4,000 4,000
Apr-01 By Balance b/d 4000

Prerana A/c
Date Particulars Amount Date Particulars Amount
May-
To Sales A/c 4,000 By Balance c/d 4,000
10 May-31
4,000 4,000
Apr-01 To Balance b/d 4,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Rent A/c
Date Particulars Amount Date Particulars Amount
May-
To Cash A/c 1,000 By Balance c/d 1,000
11 May-31
1,000 1,000
Apr-01 To Balance b/d 1,000

Commission A/c
Date Particulars Amount Date Particulars Amount
May-
By Cash A/c 1,100 By Balance c/d 1,100
18 May-31
1,100 1,100
Apr-01 To Balance b/d 1,100

Advertisement A/c
Date Particulars Amount Date Particulars Amount
May-
To Cash A/c 1,200 By Balance c/d 1,200
21 May-31
1,200 1,200
Apr-01 To Balance b/d 1,200

Wages A/c
Date Particulars Amount Date Particulars Amount
May-
To Cash A/c 2,000 By Balance c/d 2,000
30 May-31
2,000 2,000
Apr-01 To Balance b/d 2,000

Trial Balance as of May 31, 2025

Particulars L/F Debit (Rs.) Credit (Rs.)

Cash A/c 51,900
Bank A/c 6,000
Machinery A/c 8,000
Purchases A/c 6,000
Sales A/c 4,000
Prerana A/c 4,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Rent A/c 1,000

Commission A/c 1,100
Advertisement A/c 1,200
Wages A/c 2,000
Capital A/c 75,000
80,100 80100

4.

Journalize the following transactions and post them in to ledger account:

S.No. Transactions Amount

1 Commenced business and introduced cash 400,000.00

2 Goods purchased for cash 50,000.00

3 Goods purchased from Mr.Abdul 135,000.00

4 Freight charges paid on purchases 1,500.00

5 Computer purchased-cash 35,000.00

6 Freight charges paid on purchases of computer 500.00

7 Sale made to Mr.Ram 200,000.00

8 Rent paid 12,000.00

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

9 Salary paid 15,000.00

10 Cash received from Mr.Ram 150,000.00

11 Cash deposited in bank 75,000.00

12 Office Expenses paid 25,000.00

Journal Entries

S.No. Particulars L.F.

Debit Credit

1 Cash A/cDr. 4,00,000

To Capital A/c 4,00,000

(Being capital introduced)

2 Purchase A/cDr. 5,00,000

To Cash A/c 5,00,000

(Being cash purchase made)

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

3 Purchase A/cDr. 135,000 1,35,000

To Abdhul A/c

(Being goods purchase from Abdhul)

4 Inward Freight Charges A/cDr. 1,500

To Cash A/c 1,500

(Being freight charges Paid)

5 Computer A/cDr. 35,000

To Cash A/c 35,000

(Being computer purchased on cash)

6 Computer A/cDr. 500

To Cash A/c 500

(Being freight charges on computer paid)

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

7 Ram A/c Dr. 2,00,000

To Sale A/c 2,00,000

(Being sold to Mr. Ram)

8 Rent A/cDr. 12,000

To Cash A/c 12,000

(Being rent paid )

9 Salary A/cDr. 15,000

To Cash A/c 15,000

(Being salary paid)

10 Cash A/cDr. 1,50,000

To Ram A/c 1,50,000

(Being cash Received from Mr. Ram)

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

11 Bank A/cDr. 75,000

To Cash A/c 75,000

(Being cash deposited in Bank)

12 Office Expenses A/cDr. 25,000

To Cash A/c 25,000

(Being office expenses paid)

Financial Statements

1. The following trial balance have been taken out from the books of XYZ as on 31st December,
2024.

Particulars Dr. Cr.

Plant and Machinery 100,000

Opening stock 60,000
Purchases 160,000
Building 170,000
Carriage inward 3,400
Carriage outward 5,000
Wages 32,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Sundry debtors 100,000

Salaries 24,000
Furniture 36,000
Trade expense 12,000
Discount on sales 1,900
Advertisement 5,000
Bad debts 1,800
Drawings 10,000
Bills receivable 50,000
Insurance 4,400
Bank balances 20,000
Sales 480,000
Interest received 2,000
Sundry creditors 40,000
Bank loan 100,000
Discount on purchases 2,000
Capital 171,500

795,500 795,500

Closing stock is valued at $90,000

XYZ
Trading and Profit and Loss Account
For the year ended 31st, December 2024

Opening stock 60,000 Sales 480,000

Purchases 160,000 Less 1,900 478,100

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

discount
Less discount 2,000 158,000
Closing
90,000
stock
Carriage inward 3,400
Wages 32,000
Gross profit
314,700
(transferred to P&L)

568,100 568,000

Gross profit
Carriage outward 5,000 (transferred 314,700
to P&L)
Interest
Salaries 24,000 2,000
received
Trade expenses 12,000
Advertisement 5,000
Bad debts 1,800
Insurance 4,400
Net profit
(transferred to 264,500
capital)

316,700 316,700

Note: Discount on purchases and discount on sales are deducted from purchases and sales
respectively. They may be shown on the credit and debit side of profit and loss account

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

respectively and it will not affect the net profit of the business. The gross profit will be affected
if discount is treated so.

XYZ
Balance Sheet
For the year ended 31st, December 2024

Assets $ Liabilities $
Current
Current Assets:
Liabilities:
Sundry
Bank balance 20,000 40,000
creditors
Bank
Bills receivable 50,000 100,000
loan
Fixed and
Sundry debtors 100,000 Long
Term:
Closing stock 90,000 Capital 171,500
+Net
Fixed Assets: 264,500
profit
Furniture 36,000
-
Plant and Machinery 100,000 10,000 426,000
Drawings
Building 170,000

566,000 566,000

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

2. Prepare trading, profit and loss account and balance sheet from the following particulars as
on 31st December, 2024:

Particulars Dr. Cr.

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Cash in hand 2,000

Cash at bank 18,000
Purchases and sales 2,20,000 3,50,000
Return inwards 6,0000
Return outwards 7,500
Carriage on purchases 4,400
Carriage onsales 2,100
Fuel and power 15,500
Stock (1-01-2024) 36,000
Bad debts 6,200
Bad debts provision 2,500
Debtors and creditors 82,000 30,000
Capital 2,15,000
Investment 20,000
Interest on investment 2,000
Loan from x @ 18% p.a. 10,000
Repairs 1,520
General expenses 10,600
Land and buildings 1,80,000
Salaries 18,000
Miscellaneous 120
Sales tax collected 5,200
6,22,320 6,22,320

Information:

I. Write off rs.2,000 as bad debts and provision for doubtfull debts is to be maintained at
5% on debtors.
II. Loan from x was taken 1st may, 2008 .no interest has been paid so far.
III. Included in general exp. Is insurance premium rs.1, 200 paid for one year ending 31 st
march, 2025.
IV. 1/3 of wages and salaries is to be charged to trading a/c and balance to p&l a/c.
V. Closing stock was valued at rs.50, 000.

Solution:
Dr. Trading and p&l account cr.

Particulars Rs. Particular Rs.

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

To stock 36,000 By sales

To purchase Less: return inward 3,44,000
Less returns inwards 2,12,500 By closing stock 50,000
To carriage on purchases
To fuel and power 4,400
To wages 15,500
To gross profit c/d 6,000
1,19,600 3,94,000
To carriage on sales 3,94,000
Salaries 2,100 By gross profit b/d 1,19,600
To repair 12,000 By interest on investment 2,000
To general expense 1,520 By old provision for
Less: prepaid insurance doubtfull debts 2,500
To old debts 10,300 By misc. Receipts
To new bad debts 6,200 120
To new provision for 2,000
doubtfull debts
To interest on loan 4,000
To net profit transferred to 1,200
capital a/c
84,900
1,24,220
1,24,220

Balance sheet (31 st dec., 2024)

Liablities Rs. Assets Rs.

Sales tax collected 5,200 Cash in hand 2,000
Creditors 30,000 Cash at bank 18,000
X’s loan 10,000 Debtors 82,000
Add: outstanding interest Less: bad debts 2,000
1,200 11,200 Less: prpvision for doubtful debts
Capital 2,15,000 4,000 76,000
Add: net profit 84,900 2,99,900 Closing stocks 50,000
Investments 300
Land and buildings 20,000
3,46,300 1,80,000
3,46,300

Note:

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

I. Sales tax collected is liablity because it has been collected from the customers and is
payble to the govt.
II. Interest on loan will be calculated for eight months.

4. The following is the trial balance of raj as on 31 st December, 2024:

Particulars Dr. Rs. Cr. Rs.

Capital 25,000
Building 30,000
Furniture 2,640
Scooter 4,000
Returns inward and return
outward 2,300 1,600
Stock on 1st jan,2024 8,000
Purchase and sales 33,800 56,040
Bad debts 300
Carriage inward 700
General exp. 1,200
Bad debts provision 700
Bank loan 5,000
Interest on bank loan 300
Commission 900
Insurance and taxes 2,0000
Scooter expenses 2,600
Salaries 4,400
Cash in hand 2,000
Debtors and creditors 3,000 8,000
97,240 97,240

You are required to prepare final accounts for the year ending 31 dec 2024taking into account
the following adjustments

I. Closing stock on 31/12/2024 was valued at rs.4, 340.

II. Commission includes rs.300 being commission received in advance.
III. Salaries have been paid for 11 months.
IV. Bank loan has been taken at 10% p.a interest.
V. Depreciate building by 5% and scooter by 15%.
VI. Write off rs.200 as further bad debts and maintain bad debts provision at 5% on
debtors.
VII. Scooter is used for business as well as for private purpose equally.

SVYASA university Dr. Rekha Gothe

 1st sem MBA Business Accounting

Solution:

Dr. Trading and p&l account cr.

Particulars Amount Particular Amount

Rs. Rs.

To opening stock 8,000 By sales 56,040

To purchases 33,800 32,200 Less:return inward 2,300 53,740
Less:return inward 1,600 700 By closing stock 4,340
To carriage inward 17,180
To gross profit c/d 58,080
58,080

1,200 17,180
To general exp. By gross profit b/d
To interest on bank loans 300 700
Add: outstanding interest 200 By old provision for bad debts
To insurance and taxes 500 By commsion 900
To old bad debts 2,000 Less: commision received in
To new bad debts 300 adv. 300 600
To new provision for bad debts 200
To scooter exp. 2,600
Less:drawings 1,300 140
To salaries 4,400
Add: outstanding salaries 4,400/11= 1,300
400
To depriciation:
Building 1,500 4,800
Scooter 600
2,100
Less: drawings 300 1,800
To net profit 6,240
18,480 18,480

Balance sheet (as on 31st december, 2008)

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Liablities Rs. Assets Rs.

Bank loans 5000 Cash in hand 2,000

Add:outstanding interest 200 5,200 Debtors 3,000
Creditors 8,000 Less:further bad debts 200
2,800
400 Less: provision for doubtfull
Outstanding salaries debts 140 2,660
Commsion received in advance 300 Closing stocks 4,340
Capital 25,000 Furniture 2,640
Add: net profit 6,240 Scooter 4,000
31,240 Less: depriciation 600 3,400
Less: drawings 1,600 29,640 Building 30,000
Less: depriciation 1,500 28,500

43,540 43,540

Problems on Cost Sheet

1. From the following particulars ascertain profit.

Particulars units Rs.

Cost of production 30,000 15, 00,000

Opening stock 5,000 2, 25,000

Closing stock 8,000 ?

Selling and distribution overheads

SVYASA university Dr. Rekha Gothe

1st sem MBA Business Accounting

Per unit sold _____ 5

Total sales _____ 20,00,000

Solution

Cost sheet

Particulars Total cost cost per unit

Cost of production 15,00,000 30,000

Add: opening stock 2,25,000 5,000

Balance 17,25,000 35,000

Less : Closing stock 3,94,286 8,000

(17,25,000/35,000=49.28*8,000)

Cost of goods sold 13,30,714 27,000

Add: selling and distribution overhead

27,000*5) 1,35,000

total cost 14,65,714 27,000

Profit (b/f) 5,34,286

sales 20,00,000 27,000

SVYASA university Dr. Rekha Gothe