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TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.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.The solution can be presented as follows(i) Capital Expenditure(ii) Capital Expenditure(iii) Revenue Expenditure(iv) Revenue Expenditure(v) Capital ExpenditureQ.2 State with reasons whether the following are Capital or Revenue Expenses:(i) Excise duty paid on purchase of new machine.(ii) Wages paid to install a machine.(iii) Repairs carried out on existing car.(iv) Office block of building repainted for 50,000.(v) Paid telephone bill 2,500.The solution can be presented as followsExpenditure(i) Capital Expenditure(ii) Capital Expenditure(iii)Revenue Expenditure(iv)Revenue Expenditure(v) Revenue ExpenditureReasonPaid for the acquisition of new assetPaid to make the asset ready to usePaid for the running and maintenance of carPaid for the maintenance of BuildingPart of normal operating cost

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.3 From the following information, determine Gross Profit for the year ended 31st March, 2019: Opening Stock (1st April, 2018)Freight and PackingSales 25,00010,0001,90,000Goods purchased during the yearClosing Stock (31st March, 2019)Packing Expenses on Sales1,40,00030,0006,000The solution can be presented as followsGross Profit Sales Closing Stock – (Opening Stock Goods Purchased Freight and Packing) 1,90,000 30,000 – (25,000 1,40,000 10,000) 2,20,000 – 1,75,000 45,000N.B: The entry packing expense on sales is an indirect expense and therefore is not considered to be a part ofthe Gross Profit.Q.4 Calculate Closing Stock from the following details: Opening StockCash Sales20,00060,000The solution can be presented as followsGross Profit on cost 33 1/3 %.Cost 1/3rd.Gross Profit on sales ¼ thAlso,Sales Cash Sales Credit Sales 60,000 40,000 1,00,000So, Gross Profit 1,00,000 x ¼ 25,000 PurchasesCredit SalesRate of Gross Profit on Cost 33 1/3%70,00040,000

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipCost of Goods Sold Sales - Gross Profit 1,00,000 - 25,000 75,000Cost of Goods Sold Opening Stock Purchases- Closing StockNow putting the values in this formula, we get75,000 20,000 70,000 - Closing StockClosing Stock 90,000- 75,000 15,000Q.5 Prepare Trading Account from the transactions given below: Opening StockPurchasesSales ReturnSales23,00029,00050025,400 Purchases ReturnClosing StockCarriage InwardsDepreciationAlso pass the Journal entries.The solution can be presented as followsN.B: As Depreciation is regarded an Indirect Expense, it is not shown in trading account2,40047,7001002,000

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole Proprietorship

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.6 Ascertain Gross Profit from the following: Opening StockClosing StockPurchasesCarriage on Purchases2,00,0001,80,0008,50,00023,000 Carriage on SalesOffice RentSales30,00058,00014,07,000The solution can be presented as followsHere gross profit is calculated to be 5,14,000N.B: The entries such as the Carriage on sales and Office Rent are the Indirect Expenses, therefore, theseentries are not considered for calculating gross profit.

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.7 From the following information, prepare Trading Account for the year ended 31st March, 2019: Stock on 1st April, 2018PurchasesSalesCarriage Inwards40,0004,00,0003,80,00020,000 Returns OutwardWages and SalariesReturns InwardStock on 31st March, 201980,00050,00020,0001,30,000Net Realisable Value (Market Value) of stock as on 31st March, 2019 was 1,20,000.The solution can be presented as followsNote: According to Principle of Conservatism, closing stock is taken at Cost or Market Price whichever is less.Therefore, Closing Stock is taken at its Market Price (i.e. 1,20,000) instead of its Cost (i.e. 1,30,000).

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.8 From the following information, prepare Trading Account for the year ended 31st March, 2019:Adjusted Purchases 6,60,000; Sales 7,44,000; Closing Stock 50,400; Freight and Carriage Inwards 3,600; Wages 6,000; Freight and Cartage Outwards 2,000.The solution can be presented as followsNotes:1. Freight and Carriage Outwards being indirect expenses are not recorded in the Trading Account.2. Closing Stock amounting to 50,400 is not recorded in the Trading Account as it has been adjusted with theAdjusted purchases.Q.9 Following balances appear in the Trial Balance of a firm as on 31st March, 2019: Opening Stock:PurchasesSalesReturns:Raw MaterialFinished GoodsPurchasesSalesWagesFactory ExpensesFreight:InwardsOutwardsAt the end of the accounting period,stock was:Raw MaterialsWork-in-ProcessFinished GoodsPrepare Trading Account of the ,00090,00020,00030,00070,00020,0001,10,000

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipThe solution can be presented as followsNote: Freight outwards being an indirect expense will be recorded in Profit & Loss A/c.Q.10 From the following information, prepare Trading account for the year ended 31st March, 2019:Adjusted Purchases 5,50,000; Sales 6,25,000; Freight and Carriage Inwards 3,000; Wages 7,000;Freight and Cartage Outwards 2,500; Closing Stock 50,000.The solution can be presented as follows

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipNotes:1. Freight and Carriage Outwards are indirect expenses; therefore, it is not recorded in the Trading Account.2. Closing Stock is not recorded in the Trading Account as it is already adjusted in the amount of AdjustedPurchases.Q.11 From the following figures, calculate Operating Profit: Net ProfitGain on Sale of MachineDonation1,00,00015,0002,000 Rent ReceivedInterest on Loans10,00020,000The solution can be presented as followsCalculating Operating ProfitOperating Profit Net Profit - Rent Received - Gain of sales of Machine Interest on Loan Donation 1,00,000 - 10,000 - 15,000 20,000 2,000 Rs.97,000Q.12 From the following, prepare Profit and Loss Account of Sohan Lal as it would appear in the 1st yearthat ended 31st March, 2019: Salaries and WagesCommission PaidPostage and CourierInsuranceInterest PaidCarriage Outwards30,0002,0001,5003,0004,0005,000 AdvertisingDiscount AllowedRent ReceivedInterest on InvestmentBad DebtsBrokerage PaidThe Gross Profit was 45% of sales, which amounted to 6,50,000.Also, pass the Journal entries.10,00018,00017,00015,0009,000950

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipThe solution can be presented as followsQ.13 From the following information, prepare Profit and Loss Account for the year ended 31st March,2019: Gross ProfitRentSalaryCommission PaidInterest on LoanAdvertisementInterest ReceivedOutput IGST A/c1,20,0005,00035,00019,0005,0008,0008,0001,000 Discount ReceivedPrinting andStationeryLegal ChargesBad DebtsLoss by FireDepreciationInput IGST A/c6,0004,00010,0002,0006,0004,0002,000

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipThe solution can be presented as followsQ.14 From the following particulars, prepare Balance Sheet as at 31st March, 2019:CapitalDrawingsDebtors and CreditorsCash in HandCash at BankPlantFurnitureNet ProfitGeneral ReserveClosing StockTotalDr. ( ) 44,00064,0003,60072,0001,00,00037,000 1,48,0004,68,600Cr. ( )4,00,000 42,000 16,60010,000 4,68,600

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipThe solution can be presented as followsQ.15 From the following information, prepare Balance Sheet of a trader as at 31st March, 2019 arrangingthe assets and liabilities–(i) in order of permanence and (ii) in order of liquidity: GoodwillCapitalLiabilities for ExpensesCash in HandInvestmentBills PayableNet ProfitSundry DebtorsLand and 50,00060,000 BankSundry CreditorsBills ReceivablePlant and MachineryProvision for Doubtful DebtsClosing 80,00016,00030,000

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipThe solution can be presented as follows(I) Balance Sheet in Order of Permanence(II) Balance Sheet in Order of Liquidity

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.16 From the Balance Sheet given below, calculate:(i) Fixed Assets (ii) Current Assets(iii) Current Liabilities (iv) Working CapitalBALANCE SHEET as at 31st March, 2019LiabilitiesTrade CreditorsExpenses AccruedBank OverdraftLong-Term LoanInterest on LoanCapital 42,0003,2004,80020,0001,00093,4001,64,400The solution can be presented as followsAssetsStock in HandDebtorsPrepaid ExpensesGoodwillLandPlantFurniture 48,00036,00040020,00020,00032,0008,0001,64,400

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.17 Prepare Trading and Profit and Loss Account and Balance Sheet of Jagat Shah as at 31st March,2019 from the following balances: Capital (Cr.)MachinerySalesPurchasesSales ReturnStock on 1st April,2018DrawingsWagesCarriage Inwards esGeneral ExpensesRentPurchases ,00040,0001,00,0005,000Carriage OutwardsAdvertisingCreditors20,00020,00050,000The Closing Stock was valued at 2,00,000.The solution can be presented as follows

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole Proprietorship

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.18 From the following balances, prepare Trading and Profit and Loss Account and Balance Sheet:Debit kOpening Stock ,000Debit Balances (Contd.):RentSundry ExpensesCarriageCredit Balances:CapitalCreditorsSalesClosing Stock was valued at 30,000.The solution can be presented as follows 45,00020,00015,00010,00,0001,40,00014,50,000

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.19 The following are the balances as on 31st March, 2019 extracted from the books of Dass: SalesPurchasesReturns InwardReturns OutwardStock on 1st April,2018Carriage 0037,5007,2005,00014,000 Postage and CourierMiscellaneous ExpensesBad 00Loan from SahilCapitalDrawingsBusiness PremisesOffice Furniture50,0005,25,00019,1003,90,00015,000The stock on 31st March, 2019 was valued at 2,40,000.You are required to prepare Trading Account, Profit and Loss Account and Balance Sheet as at 31stMarch, 2019.The solution can be presented as follows

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole Proprietorship

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole ProprietorshipQ.20 From the following balances of Anand, prepare Trading Account, Profit and Loss Account, andBalance Sheet as at 31st March, 2019:Credit Balances:CapitalCreditorsBills PayableSalesBad DebtsRecoveredLoanDebit Balances:DebtorsSalariesDiscount Debit Balances (Contd.): 3,60,00087,20025,2707,81,8201,750PostageBad 701,00,0001,20,000Stock (Opening)PurchasesWagesBuildingSelling ExpensesFixtures and 8,85040,00010,000Value of goods on hand (31st March, 2019) was 1,43,000.The solution can be presented as follows

TS Grewal Solutions for Class 11 Accountancy Chapter 14 - FinancialStatements of Sole Proprietorship