OMTEX CLASSES ACCOUNTS NOTES WITH SOLUTION

FINAL ACCOUNTS

1. Ravi and Magesh are in a Partnership firm. The trial Balance of the firm on

31st March, 2014 was as follows. Prepare Trading and Profit & Loss account

for the year ended 31st March, 2014 and a Balance sheet as on that date.

2. Nivedha and Suganya are partners sharing profits and losses in the ratio of 2 :

1. From the following Trial Balance prepare Trading and Profit and loss

account for the year ending 31st March, 2014.

3. From the following Trial Balance of M/s Bheem and Raju, you are required to

prepare Trading Profit and Loss Account for the year ended 31st March, 2014

and the Balance sheet as on that date. Trial Balance as on 31.3.2014.

4. Prepare Trading and Profit & Loss account for the year ended 31st March,

2014 and Balance sheet as on that date from the following Trial Balance of

Kaveri and Narmada.

5. Miss Meena and Miss Reena are in partnership sharing profits and losses in

the ratio of 3:2. From the following trial balance and adjustments, you are

required to prepare Trading Account, Profit and Loss Account for the year

ended 31st March, 2013 and Balance Sheet as on that date.

6. From the following Trial Balance of M/s Kale and Gore your are required to

prepare Trading and Profit and Loss account for the year ended 31st March,

2014 and the Balance sheet as on that date after taking into account the

necessary adjustments. Trial Balance as on 31st March, 2014.

7. Agarkar and Dravid are in partnership sharing profit and losses in the ratio of

2: 1 from the following information of Trial balance and adjustments you are

required to prepare profit and loss account, trading account and Balance sheet

as on 31st march 2003.

8. From the following Trial Balance of Somnath and Ambadas being equal

partners, you are required to prepare Trading and Profit & Loss A/c for the

year ended 31st March, 2005 and Balance Sheet as on that date after taking

into consideration the additional information.

9. Misha and Latha are partners sharing profits and losses in the ratio of 2 : 1.

From the following Trial Balance prepare Trading and Profit and loss account

for the year ending 31st December, 2004.

10.From the following information you are required to prepare the Trading

account, profit and loss account and Balance sheet as on 31st March, 2005.

11.From the following Trial Balance of M/s Sonia and Sufi, you are required to

prepare Trading Profit and Loss Account for the year ended 31st December,

2004 and the Balance sheet as on that date.

12.Surya and Abhijeet are in a Partnership firm. The trial Balance of the firm on

31st March, 2014 was as follows. Prepare Trading and Profit & Loss account

for the year ended 31st March, 2014 and a Balance sheet as on that date. Trial

Balance as on 31st March, 2014.

13.Following is the Trial Balance of Jitesh and Pritesh. The partners share

profits and losses equally. [March 2012]

14.From the following Trial Balance of Kamlesh and Mahajan and given

adjustments, prepare a Trading Account, Profit and Loss account for the year

ended 31st March, 2007 and a Balance Sheet as on that date. [September

2011)

15.From the following Trial balance of M/s Sanjay and Vijay, you are required

to prepare Trading and Profit and Loss account for the year ended on 31st

March, 2010 and Balance Sheet as on that date after taking into consideration

the additional information given below. [March 2011]

16.Following is the Trial Balance of Kalavati and Lilavati as on 31st March,

2005 who share Profits and Loses to the ratio of 3:2. Interest on capital was

allowed at 5% p.a.

17.Mr. Kale and Mr. Gore were partners sharing profits and losses equally. The

Trial Balance of their firm was as under: Prepare Trading and Profit and Loss

Account for the year ended on 31st March, 2004 and Balance Sheet as on that

date:

18.Ashok and Tanaji are Partners sharing Profits and Losses in the ratio 2:3

respectively. (20)

19.Ganga and Godawari are partners sharing profits and losses equally the Trial

Balance of their firm on 31st March, 2007 was as following. (20) [September,

2009]

20.From the following Trial Balance and Adjustments of Kumbhar and Maroti

you are required to prepare Trading and Profit and Loss Account for the year

ended on 31st March, 2005 and Balance Sheet as on that date. [March 2009]

21.Following is the Trial Balance of Premlal and Sundarlal as on 31 st March,

2006. (20) Trial Balance as on 31 st March, 2006 [September 2008]

22.Swati, Swity and Sweta were partners sharing profits and losses equally.

Following is their Trial Balance for the year ended 31st March, 2006. (March

2008)

23.Sharma and Varma are in partnership sharing profit and losses in the ratio of

2: 1 from the following information of Trial balance and adjustments you are

required to prepare profit and loss account, trading account and Balance sheet

as on 31st March 2014.

24.From the following Trial Balance of Shyam and Sundar, You are required to

prepare a Trading and Profit and Loss account for the year ended 31st

December, 2002 and Balance sheet as on that date after taking into

consideration the additional information. They share profits and losses in

their capital ratio.

25. Kamesh and Mani are partners sharing profits and losses in equal ratio. From

the following Trial Balance you are required to prepare Trading and profit

and Loss Account for the year ended 31st December, 2005 and Balance sheet

as on that date after taking into consideration the additional information.

26.Prepare Trading and Profit & Loss account for the year ended 31st

December, 1996 and Balance sheet as on that date from the following Trial

Balance of Kaveri and Narmada

27.Devi & Jaya were partners sharing profits and losses in ratio 3/5 & 2/5.

Interest on Capital was allowed @ 5% p.a. but interests on drawings were

ignored. The following balances of accounts were given on 30.9.1997.

28.Dalal & Raja are partners sharing profit and losses equally. From the

following Trial Balance of the firm, prepare Trading a/c Profit and Loss A/c

and Balance sheet for the year ending 31.12.1997.

29.Pankaj and Bindas are partners sharing profits in the ratio of their capital.

Their Trial Balance as on 31.03.1997 is as under.

30.Asha and Nisha are the partners sharing profits and losses equally. You are

required to prepare the Trading and profit and loss account for the year ended

31st December, 1997 and a Balance sheet as at that date after making the

necessary adjustments

31.Pradeep and Prashant are partners sharing profits and losses in equal ratio.

From the following Trial Balance you are required to prepare Trading and

Profit & Loss account for the year ended 31st March, 1998 and Balance

Sheet as on that date after taking into consideration the additional

information.

32.Following is the Trial Balance of Vinod and Vikas sharing profits and losses

equally. Prepare a Trading and Profit & Loss account for the year ending 31st

March, 1996 and a Balance Sheet as on that date after considering the

adjustment given below.

33.Given below is the Trial Balance of M/s Radha and Krishna on 31st March,

2004. Partners share profit & losses in the ratio of 3:2 respectively. From the

following trial balance and additional information, prepare a Trading & Profit

& Loss account for the year ended 31st March, 2004 and a Balance sheet as

on that date.

34. From the following information you are required to prepare the Trading

account, profit and loss account and Balance sheet as on 31st March, 2014.

35. Following is the Trial Balance of Mano and Prakash as on 31st March,

2014 who share Profits and Loses to the ratio of 3:2. Interest on capital was

allowed at 5% p.a. Prepare Trading A/c and Profit & Loss A/c for the year

ending 31st March, 2014 and a balance sheet as on that date.

36. Mani and Sonu are the partners sharing profits and losses equally. You

are required to prepare the Trading and profit and loss account for the year

ended 31st March, 2014 and a Balance sheet as at that date after making the

necessary adjustments.

37. From the following Trial Balance of Meena and Reena being equal

partners, you are required to prepare Trading and Profit & Loss A/c for the

year ended 31st March, 2014 and Balance Sheet as on that date after taking

into consideration the additional information.

38. Karthik and Jones are partners sharing profits and losses in equal ratio.

From the following Trial Balance you are required to prepare Trading and

Profit & Loss account for the year ended 31st March, 2014 and Balance

Sheet as on that date after taking into consideration the additional

information.

39. Following is the Trial Balance of Devi and Sridevi sharing profits and

losses equally. Prepare a Trading and Profit & Loss account for the year

ending 31st March, 2014 and a Balance Sheet as on that date after

considering the adjustment given below.

TRY THESE QUESTION PAPER AS PER NEW SYLLABUS AND

PAPER PATTERN

ACCOUNTS BOARD PAPER FEBRUARY 2014

ACCOUNTS PAPER ONE

ACCOUNTS PAPER TWO

ACCOUNTS PAPER THREE

BILL OF EXCHANGE

Problem No. 1

Journalize the following transactions in the books of Maharaja. [Ans]

i. Ayub informs Maharaja that Sadashiv’s acceptance for Rs. 2,000 endorsed

to Ayub has been dishonoured, noting charges amounted to Rs. 150.

ii. Pankaj renews his acceptance to Maharaja for Rs. 1200 by paying Rs. 400

in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for

3 months..

iii. Vaibhav’s acceptance to Maharaja for Rs. 6000 retired one month before

the due date at a discount of 12%p.a.

iv. Bank informs Maharaja as to the dishonour of Kasam’s acceptance for Rs.

2000 to Maharaja discounted with Bank noting charges Rs. 200.

Problem No. 2

Journalise the following transactions in the book’s of Bhaskar. [Ans]

i. Suresh informed Bhaskar that Nishad’s acceptance for Rs. 2500 endorsed

to Suresh has been dishonoured and noting charges amounted to Rs. 25.

ii. Rajesh renews his acceptance to Bhaskar for Rs. 7500 by paying Rs. 2500

in cash and accepting a fresh bill for the balance plus interest @ 10% p.a. for

three months.

iii. Mandar retired his acceptance to Bhaskar for Rs. 3,800 by paying Rs.

3750 in cash.

iv. Bhaskar sent a bill of Dayaram for Rs. 5000 to the bank for collection. But

the bank informed that the bill has been dishonoured by Dayaram.

Problem No. 3

Journalize the following transactions in the books of Kamesh: [Ans]

i. Nanda informs Kamesh that Shanti’s acceptance for Rs. 4,000 endorsed to

Nanda has been dishonoured and noting charges have been Rs. 100.

ii. Ashok renews his acceptance to Kamesh for Rs. 2400 by paying Rs. 800 in

cash and accepting a new bill for the balance plus interest @ 12 p.a. for 3

months.

iii. Deva’s acceptance to Kamesh Rs. 12,000 is retired one month before its

due date at a discount of 12% p.a.

iv. The bank informs Kamesh that Sudhakar’s acceptance for Rs. 4,000 has

been dishonoured and it has paid noting charges Rs. 80.

Problem no. 4

On 1st March, 2013. Ramchandra sold goods to Raman worth Rs. 8,000/- and

Raman accepted the Bill for Rs. 8,000/- at 3 months drawn by Ramchandra.

Ramchandra discounted the bill with his bank @ 6% p.a. On due date the bill

was dishonoured and Raman requested Ramchandra to accept Rs. 4,000/-

immediately and draw upon him a new bill for the remaining amount at 3

months together with an interest @ 10% p.a. Ramchandra agreed. The second

Bill was duly honoured. Give Journal entries in the books of

Ramchandra. [Ans]

Problem no. 5

Premlal sold goods to Sunderlal worth Rs. 10,000/- and Sunderlal accepted

the bill for Rs. 10,000/- at 3 months drawn by Premlal. Premlal discounted

the bill with his bank @ 6 % p.a. On due date the bill was dishonoured and

Sunderlal requested Premlal to accept Rs. 4,000 immediately and draw upon

him a new bill for the remaining amount at 3months together with an interest

at 10% p.a. Premlal agreed and the second bill was duly honoured. Give the

Journal entries in the books of Premlal. [Ans.]

Problem no. 6

Archana purchased goods from Babita on credit for Rs. 20,000. On next day

Archana paid Rs. 10,000 to Babita and accepted a bill drawn by Babita for

the balance amount for four months. Babita discounted the bill with her bank

for Rs. 9600/-. Before the due date Archana approached Babita with a request

to renew the Bill. Babita agreed with the condition that Archana should pay

Rs. 6000 along with interest of Rs. 120 and accept a new bill for the balance.

These arrangements were duly carried out. New bill is met on the due date.

Pass journal entries in the books of Babita. [Ans.]

Problem no. 7

Bhagyashri sold goods to Rupa worth Rs. 24,000 to Rupa. On the next day

Rupa paid Rs. 10,000 in cash and accepted 4 months bill for balance amount

drawn by Bhagyashri. Bhagyashri discounted the bill at 10% p.a. after one

month with her bank. On due date Rupa dishonoured her acceptance and

noting charges amounted to Rs. 200. Rupa paid half the amount of the bill

and full amount of noting charges. Rupa accepted a new bill at 2 months for

the balance amount plus interest Rs. 100. Pass necessary journal entries in the

books of Bhagyashri. [Ans.]

Problem no. 8

Baloo owes Kaloo Rs.8000. Kaloo then draws a bill for Rs. 8000 on Baloo

for a period of three months. Baloo accepts and return it to Kaloo. Kaloo

discounted the bill with his bank @ 12 % p.a. On due date, the bill was

dishonoured noting charges amount to Rs. 30. Kaloo then draws a bill for the

balance plus interest of Rs. 170. Before the due date of this bill Baloo pays

the amount at a discount of Rs. 40 to retire the bill. Pass Journal Entries in the

books of Kaloo. [Ans.]

Problem No. 9.

Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts the bill

and return to Minal. Minal discounted the bill @ 12 % p.a. with the bank. On

Maturity Usha finds herself unable to make payment of the bill and requested

Minal to renew the bill. Minal accepts the proposal on the condition that

Usha should Pay Rs. 2,000 in cash and accept a new bill at one month along

with interest at 10% p.a. These arrangements were carried through. Usha

retires the bill by paying Rs. 3015/- Pass Journal Entries in the books of

Minal. [Ans]

Problem No. 10

Sonia draws a bill on Moni for Rs. 6,000 at 4 months. Moni accepts the bill

and returns it to Sonia who discounts the bill with the bank at a discount of

8% p.a. Before the due date of Bill Moni requested Sonia to accept Rs. 4000

in cash and draw a bill for the balance plus interest at 12% p.a. for two

months. Sonia draws a bill as the request is agreed. The bill is sent to bank

for collection. On the due date the bill was honoured. Pass the necessary

journal entries in the books of Sonia. [Ans]

Problem No. 11

On 1st March, 2014. Bheem sold goods to Raju worth Rs. 10,000/- and Raju

accepted the Bill for Rs. 10,000/- at 3 months drawn by Bheem. Bheem

discounted the bill with his bank @ 10% p.a. On due date the bill was

dishonoured and Raju requested Bheem to accept Rs. 4,000/- immediately

and draw upon him a new bill for the remaining amount at 3 months together

with an interest @ 10% p.a. Bheem agreed. The second Bill was duly

honoured. Give Journal entries in the books of Bheem. [Ans]

Problem No. 12

Sachin sold goods to Dhoni worth Rs. 1,00,000/- and Dhoni accepted the bill

for Rs. 1,00,000/- at 3 months drawn by Sachin. Sachin discounted the bill

with his bank @ 10 % p.a. On due date the bill was dishonoured and Dhoni

requested Sachin to accept Rs. 40,000 immediately and draw upon him a new

bill for the remaining amount at 3months together with an interest at 10% p.a.

Sachin agreed and the second bill was duly honoured. Give the Journal

entries in the books of Dhoni. [Ans]

Problem No. 13

Rose purchased goods from Lilly on credit for Rs. 2,000. On next day Rose

paid Rs. 1,000 to Lilly and accepted a bill drawn by Lilly for the balance

amount for four months. Lilly discounted the bill with her bank for Rs. 960/-.

Before the due date Rose approached Lilly with a request to renew the Bill.

Lilly agreed with the condition that Rose should pay Rs. 600 along with

interest of Rs. 12 and accept a new bill for the balance. These arrangements

were duly carried out. New bill is met on the due date. Pass journal entries

books of Lilly. [Ans]

Problem No. 14

Kaveri sold goods to Ganga worth Rs. 4,000 to Ganga. On the next day

Ganga paid Rs. 1,000 in cash and accepted 4 months bill for balance amount

drawn by Kaveri. Kaveri discounted the bill at 10% p.a. after one month with

her bank. On due date Ganga dishonoured her acceptance and noting charges

amounted to Rs. 20. Ganga paid half the amount of the bill and full amount of

noting charges. Ganga accepted a new bill at 2 months for the balance

amount plus interest Rs. 100. Pass necessary journal entries in the books of

Kaveri. [Ans]

Problem No. 15

Ronaldo owes Ricardo Rs.80,000. Ricardo then draws a bill for Rs. 80,000 on

Ronaldo for a period of three months. Ronaldo accepts and return it to

Ricardo. Ricardo discounted the bill with his bank @ 10 % p.a. On due date,

the bill was dishonoured noting charges amount to Rs. 300. Ricardo then

draws a bill for the balance plus interest of Rs. 1700. Before the due date of

this bill Ronaldo pays the amount at a discount of Rs. 400 to retire the bill.

Journal Entries Ronaldo. [Ans]

Problem No. 16

Sun draws a bill on Moon for Rs. 15,000 at 3 months. Moon accepts the bill

and return to Sun. Sun discounted the bill @ 10 % p.a. with the bank. On

Maturity Moon finds herself unable to make payment of the bill and

requested Sun to renew the bill. Sun accepts the proposal on the condition

that Moon should Pay Rs. 12,000 in cash and accept a new bill at one month

along with interest at 10% p.a. These arrangements were carried through.

Moon retires the bill by paying Rs. 3015/- Pass Journal Entries in the books

of Sun. [Ans]

Problem No. 17.

Nazriya draws a bill on Anitha for Rs. 60,000 at 4 months. Anitha accepts the

bill and returns it to Nazriya who discounts the bill with the bank at a

discount of 10% p.a. Before the due date of Bill Anitha requested Nazriya to

accept Rs. 40000 in cash and draw a bill for the balance plus interest at 12%

p.a. for two months. Nazriya draws a bill as the request is agreed. The bill is

sent to bank for collection. On the due date the bill was honoured. Pass the

necessary journal entries in the books of Anitha. [Ans.]

Problem No. 18.

8. Anil drew a bill for Rs. 4,000 on Navin on 1st May, 2013 for three months.

This was for the amount which Navin owed to Anil. Navin accepts the same

and return it to Anil who discounted at his bank for Rs. 3,900. On 1st Aug,

2013 Navin requested Anil to renew the bill and Anil agreed on the condition

that Rs. 1,000 is paid immediately and Navin should accept the new bill for 3

months for the balance payable plus interest of Rs. 45. These arrangements

were carried through. However, on 1st October, 2013, Navin retired his

acceptance for Rs. 3, 035. Pass journal entries in the books of Anil. [Ans]

Problem No. 19.

9. Karthik accepted a bill for Rs. 20,000/- drawn by Jones at three months.

Jones got the bill discounted with his bank for Rs. 19,900. Before the due

date Karthik approached Jones for renewal of the bill. Jones agreed on the

condition that Rs. 10,000/- be paid immediately together with interest on the

remaining amount at 6% p.a. For balance Karthik should accept a new bill for

three months. These arrangements were carried through but afterwards,

Karthik become Insolvent and only 80 % of the amount could be recovered

from his estate. Give journal entries in the books of Karthik. [Ans]

Problem No. 20.

10. Ajith accepted a bill for Rs. 10,000 drawn by Surya at three months.

Surya got the bill discounted with his bank for Rs. 9,700. Before the due date,

Ajith approached Surya for renewal of the Bill. Surya agreed on the condition

that Rs. 7,000 is paid immediately together with an interest on remaining

amount at 18% p.a. for four months and for the balance Ajith should accept a

new bill. But afterwards Ajith become insolvent and only 25% of the amount

could be recovered from her estate. Pass journal entries in the books of Surya.

[Ans]

Problem No. 21.

Salman draws a bill on Amithab worth Rs. 90,000 for three months which

was accepted by Amithab. On the same date Salman discounted the bill with

his bank @ 10 % p.a. On the due date Amithab dishonoured his acceptance.

Amithab paid Rs. 40,000/- to Salman and accepted a fresh bill for two

months for the balance including interest of Rs. 4000. Amithab became

insolvent before the maturity of the bill and 50 paise in a rupee was received

at first and final dividend from his estate. Journal entries books of

Amithab. [ANS]

Problem No. 22.

On 1st January, 2014 Archana drew a bill for Rs. 6,000 for 2 months periods

on Ramya. Ramya duly accepted the bill. On 4th January 2014 Archana

discounted the bill with her bank for Rs. 5850. However, on the due date the

bill was dishonoured. Ramya agreed to accept a new bill with an interest of

Rs. 150 for a period of one month. The bill was duly met on the due date.

Give the journal entries in the books of Archana and show Archana’s account

in the books of Ramya. [ANS]

Problem No. 23.

Mukesh owes Anil Rs. 40000 for which Anil draws a bill for 2 months on

1st February, 2014. Mukesh accepts it and returns it to Anil. On 4

th March,

2014, Mukesh approaches Anil and request him to accept Rs. 10000 in cash

and draw a fresh bill for 3 months for the balance plus interest @ 10% p.a.

Anil accepts the request and draw a bill accordingly which is accepted by

Mukesh. On 1st June 2014 Mukesh retired his acceptance under discount of

Rs. 30/-. Pass journal entries in the books of Anil and prepare Anil account in

the ledger of Mukesh. [ANS]

Format of the Bill of Exchange

Format No. 1

Drawer : Ramesh Mishra, L.B.S. Road, Ghatkopar, Mumbai

Drawee : Nandkumar Sharma, Laxmi Road, Pune

Payee: Rupesh Kumar Pande, Rajkamal Chowk, Amaravati.

Period of bill: 90 days

Amount of bill : Rs. 25,000

Date of Bill: 17th February, 2014

Date of Acceptance: 20th February, 2014

Accepted for : Rs. 20,000 only.

Format No. 2

Drawer : Shekhar Desai, Shastri Road, Mahad.

Drawee : Sharad Verma, Narayanpeth, Pune

Payee : Mukund Pande, Panel.

Amount : Rs. 3,500/-

Period : 3months.

Date of Bill : 21st June, 2013

Bill accepted : For 3,000 on 25th June, 2013.

Format No. 3

Drawer : Abhijit Patil, Vikram nagar, Patna.

Drawee : Tejas Kapare, Kothrud, Pune.

Payee : Amey Patki, Nagpur.

Amount : Rs. 7500

Period : 60 days

Term : After sight

Date of Bill Drawn : 1st June 2013

Date of Acceptance : 11th June 2013

Accepted bill for Rs. : 7000 only.

Format No. 4

Drawer: Yamini Gupta, Sarvapriya Vihar, Delhi

Drawee – Kamini Sharma, Raj baug, Agra.

Period – 100 days.

Term – After acceptance

Date of Bill – 1st January, 2014

Amount – Rs. 10,500/-

Date of Acceptance – 3rd January, 2014

Format No. 5

Drawer : Mr. Avadhoot Raktade, 586. Main Road, Ajara

Drawee : Mr. Mukund Aglawe 133, Chandni Chowk, Panvel.

Amount : Rs. 8,800.

Period : Two Months.

Date of Bill : 1 st May, 2013.

Date of Acceptance : 5 th May, 2013.

Format No. 6

Drawer : Soundariya, Neelam Bhawan, Kalyan

Drawee : Sugandi, Dastur Nagar, Amaravati

Payee : Umesh , Deogad

Period : 90 days

Amount : Rs. 7,555

Date of bill : 15th March 2012

Accepted on : 20th March 2012

Format No. 7

On 10th March, 2013 Rajesh Bhoyar, Gandhinagar, Nagpur draws a 2 months

bill for Rs. 3,000 on Samir Choudhary, Main Road, and Belapur. Samir

Choudhary accepted the bill on 15th March 2013

Format No. 8

Drawer : Vilas Patil, 44, M.G. Road, Nanded.

Drawee : Pankaj Pawar, 70, Bhavani Galli, Solapur.

Payee : Ramchandra Rampure, Rampur.

Period : 60 days.

Date of Bill : 28th January, 2014

Date of Acceptance : 29th January, 2014

Amount of the Bill : Rs. 2,800/-

Format No. 9

Drawer : Vijay Bhat, Main Road, Nagpur.

Drawee : Ashok Kulkarni, M.G. Road, Nagpur.

Payee : Anil Jadhav, Pune.

Amount : Rs. 6,950.

Period : 80 days.

Date of Bill : 7th March, 2013.

Accepted on : 10th March, 2013. For 90 days.

Definition of Bills of Exchange

Fill ups . Select the most appropriate alternative form those given below.

Write the words/ term /phrase which can substitute each of the following

statements

True or False

Journal Entries in the books of Drawer

Journal Entries in the Books of Drawee

A BILL OF EXCHANGE

Parties to Bill of Exchange

Common Rules regarding Bills of Exchange (Sections 132 and 133)

Acceptance

Valuation of Goodwill with Solution.

1. The firm’s average profit before charging partner’s remuneration was Rs.

25,000. Total investment of the partners in a firm was Rs. 80,000. Rate of

return in similar business was 20%. Partner’s remuneration was Rs. 5,000.

Goodwill to be valued at two year’s purchase of super profit. Find out value

of goodwill.[Ans.]

2. The profits of the firm for the last five years are 2002 Rs. 20,000; 2003 Rs.

16,000; 2004 Rs. 24,000; 2005 Rs. 8000; 2006 Rs. 12,000. Calculate the

goodwill of the firm. [Ans.]

3. Mona, Reena and Sona have been carrying on a partnership business and

good will of their firm is to be valued at three years purchase of the average

profit for the last five years. The profit and losses for the last five years have

been. 1st Year Rs. 16,000, 2

nd Year, 15,000, 3

rd Year, 8,000(Loss), 4

th Year,

7,000, 5th Year, 10,000. [Ans.]

4. Calculate the good will from the following information goodwill is valued

at three years purchase of average profit of the last six years. Profit and losses

of the business in the last six years are as follows, [Ans]

1st year, Rs, 40,000(Profit)

2nd

Year, Rs, 60,000(Profit)

3rd

Year, Rs, 10,000(Loss)

4th Year, Rs, 50,000(Profit)

5th Year, Rs, 30,000 (Loss)

6th Year, Rs, 80,000(Profit)

5. Calculate the value of goodwill according to average profit method.

Goodwill is valued at three years purchase of last four year average profit.

The profits and losses for the last four years are. [Ans.]

6. The profit of a firm for the four years from 1991 to 1994 where_ [Ans.]

1991 Rs, 40,000

1992 Rs, 45,000

1993 Rs, 55,000

1994 Rs, 53,000

Calculate the goodwill of the firm at 2yrs. Purchase of the average profit

for the last three years.

Homework Sums [Try it Yourself]

OBJECTIVE QUESTIONS

ANSWER IN ONE SENTENCE EACH

SELECT THE MOST APPROPRIATE ALTERNATIVE FROM

THOSE GIVEN BELOW

WRITE THE WORD/ TERM / PHRASE WHICH CAN SUBSTITUTE

EACH OF THE FOLLOWING STATEMENTS.

STATE WHETHER THE FOLLOWING STATEMENTS ARE TRUE

OR FALSE

PREPARE A BILL OF EXCHANGE.

NPO

1st Year Rs, 10,000(Profit)

2nd

Year Rs, 12,000(Profit)

3rd

Year Rs, 4,000(Loss)

4th Year Rs, 18,000(Profit)

ABOUT NOT FOR PROFIT ORGANISATION

Extracts of receipt and payment Account for the year ended 31st March, 2010

are given below

Show the following information in the Balance Sheet of the cosmos club as

on 31st March 2007

On the basis of the following information, calculate the amount to be debited

to Stationary account in the Income and Expenditure for the year ended

31.03.2011

Following is the receipts and payment account of a recreation club for the

year ended 31st March 2009

Prepare income and expenditure account for the year ended 31st March 2009

and the balance-sheet as at 31-3-2009 from the following information related

to Somnath welfare society.

The Balance Sheet as at 1st April, 2006 and the Re YOUNG SPORTS

CLUB...

From the following balance Sheet and Receipts and NANAVATHI

HOSPITAL...

Following is the Balance sheet and receipts and pa..MEMORIAL

HOSPITAL.

From the following Balance sheet and Receipts and ..PADMAVATI HIGH

SCHOOL.

The following is the Receipts and payments Account..MODERN SPORTS

CLUB.

Following is the summary of Receipts and Payments ..BAJRANGBALI

VYAYAM SHALA .

From the following Receipts and Payments Accounts SANGAMESHWAR

SPORTS CLUB...

Following is the Receipts and Payments Account and..KALPANA

HOSPITAL .

From the following Receipts and payments account o..WESTERN

GYMKHANA.

Dr. Arjun Patil commenced Medical practice on 1.4....

Dr. Subhash Raje started practice as a medical pra...

Dr. Narendra commenced practice in the month of Ap...