[DK Goel] Q. 18 Financial Statements (with Adjustments) Solutions Class 11 CBSE (2025-26)
Solutions of Question number 18 of Chapter 20 Financial Statements (with Adjustments) DK Goel class 11 CBSE (2025-26)
From the following Trial Balance extracted from the books of Sh. Pawan Kumar, prepare a Trading Account, Profit & Loss Account for the year ended 31st March, 2024 and a Balance Sheet a at that date:
| Dr. Balances | ₹ | Cr. Balances | ₹ |
| Drawings | 1,20,000 | Capital | 16,00,000 |
| Plant and Machinery | 12,00,000 | Creditors | 2,60,000 |
| Horses and Carts | 2,60,000 | Sales | 8,20,000 |
| Debtors | 3,40,000 | Bills Payable | 2,21,200 |
| Purchases | 2,00,000 | Interest on Ram’s Loan | 1,800 |
| Wages | 80,000 | Rent Received | 12,000 |
| Cash at Bank | 2,60,000 | ||
| Salaries | 80,000 | ||
| Repairs | 5,000 | ||
| Stock (1.4.2023) | 70,000 | ||
| Stock (31.3.2024) | 92,000 | ||
| Rent | 45,000 | ||
| Manufacturing expenses | 15,000 | ||
| Bad-Debts | 50,000 | ||
| Carriage | 15,000 | ||
| Income Tax | 20,000 | ||
| Life Insurance Premium | 30,000 | ||
| Loan to Ram at 12% p.a. | 20,000 | ||
| Insurance | 12,000 | ||
| Insurance Prepaid | 1,000 | ||
| 29,15,000 | 29,15,000 |
Adjustments:-
(1) Plant and Machinery includes a new machinery purchased on 1st October, 2023 for ₹ 2,00,000.
(2) Depreciate Plant and Machinery by 10% p.a. and Horses and Carts by 20% p.a.
(3) Salaries for the month of February and March 2024 are outstanding.
(4) Goods worth ₹ 15,000 were sold and depatched on 27th March but no entry was passed to this effect.
(5) Make a provision for Doubtful Debts at 5% on Debtors.
[Ans. G.P. ₹ 4,55,000; Net Profit ₹ 81,650; B/S Total ₹ 20,08,850.]
Solution:-
Hints:-
(1) In adjustment no. 1 no recording will be made of ₹ 2,00,000. However, depreciation will be charged as:
On ₹ 10,00,000 @ 10% for one year = ₹ 1,00,000
On ₹ 2,00,000 @ 10% for half year = ₹ 10,000
(2) Closing Stock and Prepaid Insurance are given inside the Trial Balance. As such, these will be recorded on the Assets side only.
(3) Total Drawings = ₹ 1,20,000 + ₹ 20,000 + ₹ 30,000 = ₹ 1,70,000.
(4) Sales of ₹ 15,000 will be added in sales as well as in debtors.
