FINAL ACCOUNT

Practice Questions

Qazi Wajid Iqbal

PAC - Lahore

Qazi Wajid Iqbal 0

Q.1 DJ Waly Babu has provided the given trial balance for the year ending 30th June
2020 with the following adjustments:

Trial Balance
Head of Account Amount Head of Account Amount

Cash in Hand 45,000 Utility expenses 22,000

Cash at Bank 355,000 Insurance expense 30,000

Sales 355,000 Printing & Stationary 18,000

Purchases 220,000 Salaries Expense 28,500

Debtors 15,000 Drawings 4,000

Creditors 4,000 Capital 208,000

Building 200,000 Opening Inventory 6,000

Equipment 50,000 Bad Debts 2,000

Furniture 60,000 Allowance for Bad Debts 500

Loan 500,000 Computers 12,000

i. Debtors include a balance which needs to be written off Rs. 1,000 and allowance
for bad debts is to be provided at 5% of closing receivable.

iii. Closing inventory in hand was costing Rs. 12,000. Physical count revealed that
some inventory costing 2,000 were damaged and can be sold at cost with after
incurring 10% cost to complete. This inventory is normally sold at 10% markup.

Required:
Prepare SOCI and SOFP for the year ending 30th June, 2020.

Qazi Wajid Iqbal 1

 Q.2. Asaan Limited has provided the given trial balance for the
year ending 31 December 2022 with the following adjustments:

Trial Balance
Head of Account Dr. Amount Cr. Amount
Cash in Hand 12,000
Cash at Bank 20,000
Sale & Purchases 420,000 870,000
Debtors & Creditors 30,000 14,000
Returns 2,000 3,000
Bank Charges 9,000
Salaries & Wages 120,000
Rent Expense 44,000
Building 400,000
Equipment 150,000
Furniture 80,000
Utility expenses 22,000
Insurance expense 30,000
Carriage In 10,000
Carriage Out 2,500
Discount 1,000 2,000
Accrued Income 4,000
Inventory (1st Jan 2020) 12,000
Bad Debts 2,000
Allowance for Bad Debts 1,500
Long term Loan 80,000
Drawings 4,000
Capital 404,000
Total 1,374,500 1,374,500
i. An amount receivable from a customer is irrecoverable and need to be written off amounting to Rs
500.

ii. Allowance for bad debts is to be provided at 5% of closing receivable.

iii. Closing inventory was costing Rs. 12,000 and it is expected that this inventory can be sold in the
market at 10% markup with Rs. 2,200 estimated costs of sales.

iv. There are accrued utilities of Rs. 2,000 and insurance expense include some prepaid expenses of Rs.
5,000.

v. Land purchased for Rs. 100,000 during the year is recorded as building.

Required:

Prepare SOCI and SOFP for the year ending 31 Dec, 2020.

Qazi Wajid Iqbal 2

Q.3 Mushkil Limited has provided the given trial for the year ending 31 December 2020 with the
following adjustments:

Trial Balance
Head of Account Dr. Amount Cr. Amount
Cash in Hand 36,000
Cash at Bank 15,000
Sale & Purchases 541,000 977,000
Debtors & Creditors 35,000 24,000
Returns 42,000 47,000
Carriage In 15,000
Salaries & Wages 79,000
Utility Expenses 46,000
Building - Cost 900,000
Building - Accumulated Depreciation 90,000
Furniture - Cost 50,000
Furniture - Accumulated Depreciation 10,000
Equipment - Cost 30,000
Equipment - Accumulated Depreciation 6,000
Interest 27,000 54,000
Prepaid Rent 9,000
Accrued Salaries 19,000
Unearned Income 8,000
Bad Debts 7,000
Allowance for Bad Debts 6,000
Long term Loan 200,000
Short Term loan 40,000
Capital 321,000
Total 1,817,000 1,817,000
i. An amount receivable from a customer needs to be written off amounting to Rs 1,000.

ii. Allowance for bad debts remains unchanged this year.

iii. Closing inventory was costing Rs. 20,000 out of which an item costing Rs. 2,000 is damaged with no
market value.

iv. Land of Rs. 50,000 purchased during the year is recorded as Building

v. Long term loan is obtained on 1st Oct 2020. Interest on loan is always paid in arrears annually at 10%
per Anum.

vi. Utility expenses include owner's residenace electricity bill of Rs. 2,000

vii. Depreciation for the year is to be calculated on SLM as follow:

Building - 10% Furniture - 20% Equipment - 20%

Required: Prepare SOCI and SOFP for the year ending 31 Dec, 2020.

Qazi Wajid Iqbal 3

Q.4 Haji Saab has provided the given trial for the year ending 31 December 2020 with the following
adjustments:

Trial Balance
Head of Account Dr. Amount Cr. Amount
Cash in Hand 3,000
Cash at Bank 24,000
Sale & Purchases 220,000 570,000
Debtors & Creditors 10,000 4,000
Return inwards 2,000
Bank Charges 9,000
Salaries & Wages 79,000
Insurance Expense 48,000
Land & Building - Cost 400,000
Building - Accumulated Depreciation 100,000
Furniture - Cost 100,000
Furniture - Accumulated Depreciation 20,000
Equipment - Cost 30,000
Equipment - Accumulated Depreciation 10,000
Interest 2,500
Discount 1,000 2,000
Accrued Income 4,000
Inventory 12,000
Bad Debts 7,000
Allowance for Bad Debts 2,000
Long term Loan 80,000
Drawings 5,500
Capital 169,000
Total 957,000 957,000
i. Bank charges of one month Rs. 1,000 deducted by the bank directly is omitted to record in the books.

ii. An amount receivable from a customer needs to be written off amounting to Rs 2,000.

iii. Allowance for bad debts is to be provided at 5% of closing receivable.

iv. Physical inventory count revealed that closing inventory was costing Rs. 20,000 at the year and goods
sold costing Rs. 3,000 is recorded twice in the books.

v. Insurance expense comprises of the annual insurance paid in advance at the start of the insurance
contract on 1st Mar 2020.

vi. Depreciation for the year is to be calculated on RBM 10%.

vii. 25% of the Land & Building cost relates to the Land price.

viii. Haji Saab is normally selling goods at 20% markup.

Required: Prepare SOCI and SOFP for the year ending 31 Dec, 2020.

Qazi Wajid Iqbal 4

Q.5 Ujda Chaman has provided the given trial balance for the year ending 31 December 2020 with the
following adjustments:

Trial Balance
Head of Account Dr. Amount Cr. Amount
Cash in Hand 12,000
Cash at Bank 20,000
Sale & Purchases 420,000 870,000
Debtors & Creditors 30,000 14,000
Returns 2,000 3,000
Bank Charges 9,000
Salaries & Wages 120,000
Rent Expense 44,000
Building - NBV 400,000
Equipment - NBV 150,000
Furniture - NBV 80,000
Utility expenses 22,000
Insurance expense 30,000
Carriage In 10,000
Carriage Out 2,500
Discount 1,000 2,000
Accrued Income 4,000
Inventory (1st Jan 2020) 12,000
Bad Debts 2,000
Allowance for Bad Debts 1,500
Long term Loan 80,000
Drawings 4,000
Capital 404,000
Total 1,374,500 1,374,500

i. Goods withdrawn by the owner amounting to Rs. 2,000 is not recorded in the books.

ii. Allowance for bad debts is to be provided at 2% of closing receivable.

iii. Closing inventory was costing Rs. 12,000 and it is expected that this inventory can be sold in the
market at 10% markup with Rs. 2,200 as cost of sales.

iv. There are accrued utilities of Rs. 2,000 and prepaid insurance Rs. 5,000.

v. Land purchased for Rs. 100,000 during the year is recorded as building.

vi. Depreciation for the year is to be calculated on RBM as follow:

Building - 10% Furniture - 20% Equipment - 20%

Required: Prepare SOCI and SOFP for the year ending 31 Dec, 2020.

Qazi Wajid Iqbal 5

Q.6 Munna Bhai has provided the given trial balance for the year ending 30th June 2020 with the
following adjustments:

Trial Balance
Head of Account Amount Head of Account Amount
Cash at Bank Balance 45,000 Utility expenses 22,000
Sales 355,000 Insurance expense 30,000
Purchases 220,000 Printing & Stationary 18,000
Debtors 15,000 Salaries Expense 28,500
Creditors 4,000 Dividend Income 4,000
Building - Cost 200,000 Accrued Dividend 1,000
Equipment - Cost 50,000 Inventory (1st Jul 2019) 6,000
Furniture - Cost 60,000 Bad Debts 2,000
Building - Acc. Dep 60,000 Allowance for Bad Debts 500
Equipment - Acc. Dep 15,000 10% Loan 50,000
Furniture - Acc. Dep 10,000 Drawings 4,000
Tax & Duties 5,000 Capital 208,000

i. Utility expenses include owner's residenace electricity bill of Rs. 2,000

ii. Debtors include a balance which needs to be written off Rs. 1,000 and allowance for bad debts is to be
provided at 5% of closing receivable.

iii. Closing inventory in hand was costing Rs. 12,000. Physical count revealed that some inventory costing
2,000 was return by a credit customer and no entry has been made in the books.This inventory was sold
at 10% markup.

iv. Insurance expense comprises of the annual insurance paid in advance at the start of the insurance
contract on 1st Mar 2020.

v. Loan is received on 1st jan 2020 and no entry is recorded for the interest as it is to be paid in arrears
annually.

vi. Depreciation for the year is to be calculated as follow:

Building - 10% SLM

Equipment - 20% SLM

Furniture - 20% RBM

Required:

Prepare SOCI and SOFP for the year ending 30 June, 2020.

Qazi Wajid Iqbal 6

Q.7 Fukrey Limited has provided the given trial balance for the year ending 30th September 2020 with
the following adjustments:

Trial Balance
Head of Account Amount Head of Account Amount

Cash at Bank Balances 12,000 Administrative Expenses 122,000

Sales 1,355,000 Selling Expenses 55,000

Purchases 920,000 Prepayments 18,000

Debtors 75,000 Accruals 28,500

Creditors 40,000 Allowance for Bad Debts 4,000

Land 350,000 Inventory 16,000

Building 100,000 Capital 70,500

Furniture 80,000 10% Loan 250,000

i. Cash and bank balances include Rs. 8,000 bank overdrafts.

ii. Debtors include a balance which needs to be written off Rs. 2,000 and allowance for bad debts is to be
provided at 5% of closing receivable.

iii. Closing inventory in hand was costing Rs. 12,000. Physical count revealed that some inventory costing
1,800 was return by a credit customer and no entry has been made in the books. This inventory was sold
at 10% margin.

iv. There are accrued admin expenses of Rs. 2,000 and selling expense include some prepaid expenses of
Rs. 5,000.

v. Loan is received on 1st jan 2020 and no entry is recorded for the interest as it is to be paid in arrears
annually.

vi. Depreciation for the year is to be calculated at 10% on RBM. All assets are equally used by selling and
administrative departments.

vii. Furniture purchased for resale is recorded as purchases Rs. 10,000 during the year.

Required:

Prepare SOCI and SOFP for the year ending 30 September, 2020.

Qazi Wajid Iqbal 7

Q.8 Qazi Saab has provided the given trial balance for the first year of his business ending 31 December
2022 with the following adjustments:

Trial Balance
Head of Account Dr. Amount Cr. Amount
Cash at Bank 12,000
Debtors 20,000
Sale 890,000
Creditors 14,000
Cost of Sales 735,000
Admin Expenses 49,000
Finance Cost 12,000
Selling Expenses 44,000
Land - NBV 300,000
Building - NBV 150,000
Furniture - NBV 70,000
Equipment - NBV 20,000
Machinary - NBV 40,000
Bank Overdraft 13,000
Prepayments 3,000
Accruals 4,000
Inventory 12,000
Bad Debts 2,000
Allowance for Bad Debts 3,000
Long term Loan 180,000
Drawings 35,000
Capital 400,000
Total 1,504,000 1,504,000

i. Selling expenses include owner's residence electricity bill of Rs. 2,000.

ii. Debtors include a balance which needs to be written off Rs. 2,000. A specific provision at 70% is to be
made against a balance of Rs. 3,000. A general provision for doubtful receivables is maintained at 10% of
the remaining debtors.

iii. Administrative expenses include Rs. 12,000 being the annual insurance paid in advance at the start of
the insurance contract on 1st April 2022.

v. NRV of the closing inventory is 2,000 lower than its cost.

vi. Depreciation for the year is to be calculated on SLM as follow:

Building - 10% Furniture - 20%

Equipment - 20% Machinary - 15%

Required: Prepare SOCI and SOFP for the year ending 31 Dec, 2022.

Qazi Wajid Iqbal 8

Q.8 Shabnam Limited has provided the given trial balance for the year ending 30th September
2020 with the following adjustments:

Trial Balance
Head of Account Amount Head of Account Amount
Cash at Bank Balances 12,000 Administrative Expenses 122,000
Sales 1,355,000 Selling Expenses 55,000
Purchases 920,000 Prepayments 18,000
Debtors 75,000 Accruals 28,500
Creditors 40,000 Allowance for Bad Debts 4,000
Land 350,000 Drawings 16,000
Building 100,000 Capital 70,500
Furniture 80,000 10% Loan 250,000

i. Cash and bank balances include Rs. 8,000 bank overdrafts.

ii. Debtors includes a creditors balance of Rs. 5,000.
iii. A debtor owing Rs. 1,000 which needs to be written off and allowance for bad debts is to
be provided at 5% of closing receivable.
iv. Ending inventory in hand was costing Rs. 20,000. As per physical count, it is revealed
that:
• Goods costing Rs. 3,000 were returned to a supplier on 28th September but return
was not recorded in the books.
• Some inventory costing 1,800 was slightly damaged and can be repaired at a cost
of Rs. 500. The entity is selling goods at 10% margin.
v. Furniture purchased amounting to Rs. 20,000 is recorded as purchases on 1st Jan 2020.
vi. Purchased furniture for owner’s residence amounting to Rs. 10,000 and payment is made
from owner’s personal bank account.
vii. Goods withdrawn by the owner for personal use costing Rs. 4,500. The entry is recorded
by the accountant with the sale price of the goods.
viii. Loan is received on 1st January 2020 and no entry is recorded for the interest as it is to be
paid in arrears annually.
ix. Depreciation for the year is to be calculated at 10% on RBM proportionately.

Required:
Prepare SOCI and SOFP for the year ending 30 September, 2020.

Qazi Wajid Iqbal 9