[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.

Below is the list of all solutions

S.N	Solutions
1	Question – 1
2	Question – 2
3	Question – 3
4	Question – 4
5	Question – 5
6	Question – 6
7	Question – 7
8	Question – 8
9	Question – 9
10	Question – 10

S.N	Solutions
11	Question – 11
12	Question – 12
13	Question – 13
14	Question – 14
15	Question – 15
16	Question – 16
17	Question – 17
18	Question – 18
19	Question – 19
20	Question – 20

S.N	Solutions
21	Question – 21
22	Question – 22
23	Question – 23
24	Question – 24
25	Question – 25
26	Question – 26
27	Question – 27
28	Question – 28
29	Question – 29
30	Question – 30

S.N	Solutions
31	Question – 31
32	Question – 32
33	Question – 33
34	Question – 34
35	Question – 35
36	Question – 36
37	Question – 37
38	Question – 38
39	Question – 39