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Q.1 Following are the balances extracted from the books of Manish on 31st March, 2019:
? ?
Capital 1,90,000 Cash at Bank 26,000
Drawing 7,000 Salaries 8,000
Plant and
Machinery
1,20,000 Repairs 1,900
Delivery
Vehicle
26,000 Stock on 1st April, 2018 16,000
Sundry
Debtors
36,000 Rent 4,500
Sundry
Creditors
26,000 Manufacturing Expenses 1,500
Purchases 20,000 Bills Payable 23,500
Sales 42,000 Bad Debts 5,000
Wages 8,000 Carriage 1,600
Prepare Trading and Profit and Loss Account and Balance Sheet as at 31st March, 2019 after following
adjustments are made:
(i) Closing Stock was ? 16,000.
(ii) Depreciate Plant and Machinery @ 10% and Delivery Vehicle @ 15%.
(iii) Unpaid Rent amounted to ? 500.
The solution can be presented as follows
Page 2
Q.1 Following are the balances extracted from the books of Manish on 31st March, 2019:
? ?
Capital 1,90,000 Cash at Bank 26,000
Drawing 7,000 Salaries 8,000
Plant and
Machinery
1,20,000 Repairs 1,900
Delivery
Vehicle
26,000 Stock on 1st April, 2018 16,000
Sundry
Debtors
36,000 Rent 4,500
Sundry
Creditors
26,000 Manufacturing Expenses 1,500
Purchases 20,000 Bills Payable 23,500
Sales 42,000 Bad Debts 5,000
Wages 8,000 Carriage 1,600
Prepare Trading and Profit and Loss Account and Balance Sheet as at 31st March, 2019 after following
adjustments are made:
(i) Closing Stock was ? 16,000.
(ii) Depreciate Plant and Machinery @ 10% and Delivery Vehicle @ 15%.
(iii) Unpaid Rent amounted to ? 500.
The solution can be presented as follows
Page 3
Q.1 Following are the balances extracted from the books of Manish on 31st March, 2019:
? ?
Capital 1,90,000 Cash at Bank 26,000
Drawing 7,000 Salaries 8,000
Plant and
Machinery
1,20,000 Repairs 1,900
Delivery
Vehicle
26,000 Stock on 1st April, 2018 16,000
Sundry
Debtors
36,000 Rent 4,500
Sundry
Creditors
26,000 Manufacturing Expenses 1,500
Purchases 20,000 Bills Payable 23,500
Sales 42,000 Bad Debts 5,000
Wages 8,000 Carriage 1,600
Prepare Trading and Profit and Loss Account and Balance Sheet as at 31st March, 2019 after following
adjustments are made:
(i) Closing Stock was ? 16,000.
(ii) Depreciate Plant and Machinery @ 10% and Delivery Vehicle @ 15%.
(iii) Unpaid Rent amounted to ? 500.
The solution can be presented as follows
Q.2 Prepare Trading and Profit and Loss Account and Balance Sheet from the following balances, relating
to the year ended 31st March, 2019:
? ?
Capital 1,00,000 Wages 50,000
Creditors 12,000 Bank 10,000
Returns
Outward
5,000 Repairs 500
Sales 1,64,000 Stock on 1st April, 2018 20,000
Bills Payable 5,000 Rent 4,000
Plant and
Machinery
40,000 Manufacturing Expenses 8,000
Sundry
Debtors
24,000 Trade Expenses 7,000
Drawings 10,000 Bad Debts 2,000
Purchases 1,05,000 Carriage 1,500
Returns
Inward
3,000 Fuel and Power 1,000
Additional Information:
(i) Closing Stock was valued at ? 14,500.
(ii) Depreciate Plant and Machinery by ? 4,000.
(iii) Write off Bad Debts ? 5,000.
(iv) ? 400 is due for repairs.
The solution can be presented as follows
Page 4
Q.1 Following are the balances extracted from the books of Manish on 31st March, 2019:
? ?
Capital 1,90,000 Cash at Bank 26,000
Drawing 7,000 Salaries 8,000
Plant and
Machinery
1,20,000 Repairs 1,900
Delivery
Vehicle
26,000 Stock on 1st April, 2018 16,000
Sundry
Debtors
36,000 Rent 4,500
Sundry
Creditors
26,000 Manufacturing Expenses 1,500
Purchases 20,000 Bills Payable 23,500
Sales 42,000 Bad Debts 5,000
Wages 8,000 Carriage 1,600
Prepare Trading and Profit and Loss Account and Balance Sheet as at 31st March, 2019 after following
adjustments are made:
(i) Closing Stock was ? 16,000.
(ii) Depreciate Plant and Machinery @ 10% and Delivery Vehicle @ 15%.
(iii) Unpaid Rent amounted to ? 500.
The solution can be presented as follows
Q.2 Prepare Trading and Profit and Loss Account and Balance Sheet from the following balances, relating
to the year ended 31st March, 2019:
? ?
Capital 1,00,000 Wages 50,000
Creditors 12,000 Bank 10,000
Returns
Outward
5,000 Repairs 500
Sales 1,64,000 Stock on 1st April, 2018 20,000
Bills Payable 5,000 Rent 4,000
Plant and
Machinery
40,000 Manufacturing Expenses 8,000
Sundry
Debtors
24,000 Trade Expenses 7,000
Drawings 10,000 Bad Debts 2,000
Purchases 1,05,000 Carriage 1,500
Returns
Inward
3,000 Fuel and Power 1,000
Additional Information:
(i) Closing Stock was valued at ? 14,500.
(ii) Depreciate Plant and Machinery by ? 4,000.
(iii) Write off Bad Debts ? 5,000.
(iv) ? 400 is due for repairs.
The solution can be presented as follows
Page 5
Q.1 Following are the balances extracted from the books of Manish on 31st March, 2019:
? ?
Capital 1,90,000 Cash at Bank 26,000
Drawing 7,000 Salaries 8,000
Plant and
Machinery
1,20,000 Repairs 1,900
Delivery
Vehicle
26,000 Stock on 1st April, 2018 16,000
Sundry
Debtors
36,000 Rent 4,500
Sundry
Creditors
26,000 Manufacturing Expenses 1,500
Purchases 20,000 Bills Payable 23,500
Sales 42,000 Bad Debts 5,000
Wages 8,000 Carriage 1,600
Prepare Trading and Profit and Loss Account and Balance Sheet as at 31st March, 2019 after following
adjustments are made:
(i) Closing Stock was ? 16,000.
(ii) Depreciate Plant and Machinery @ 10% and Delivery Vehicle @ 15%.
(iii) Unpaid Rent amounted to ? 500.
The solution can be presented as follows
Q.2 Prepare Trading and Profit and Loss Account and Balance Sheet from the following balances, relating
to the year ended 31st March, 2019:
? ?
Capital 1,00,000 Wages 50,000
Creditors 12,000 Bank 10,000
Returns
Outward
5,000 Repairs 500
Sales 1,64,000 Stock on 1st April, 2018 20,000
Bills Payable 5,000 Rent 4,000
Plant and
Machinery
40,000 Manufacturing Expenses 8,000
Sundry
Debtors
24,000 Trade Expenses 7,000
Drawings 10,000 Bad Debts 2,000
Purchases 1,05,000 Carriage 1,500
Returns
Inward
3,000 Fuel and Power 1,000
Additional Information:
(i) Closing Stock was valued at ? 14,500.
(ii) Depreciate Plant and Machinery by ? 4,000.
(iii) Write off Bad Debts ? 5,000.
(iv) ? 400 is due for repairs.
The solution can be presented as follows
Q.3 Following Trial Balance has been extracted from the books of Prasad on 31st March, 2019:
Particulars Dr. (?) Particulars Cr. (?)
Machinery 4,00,000 Capital 9,00,000
Cash at Bank 1,00,000 Sales 16,00,000
Cash in Hand 50,000 Sundry Creditors 4,50,000
Wages 1,00,000 Interest Received 30,000
Purchases 8,00,000
Stock on 1st
April, 2018
6,00,000
Sundry
Debtors
4,40,000
Bills
Receivable
2,90,000
Rent 45,000
Commission 25,000
General
Expenses
80,000
Salaries 50,000
29,80,000 29,80,000
Additional Information:
(i) Outstanding salaries were ? 45,000.
(ii) Depreciate Machinery at 10%.
(iii) Wages outstanding were ? 5,000.
(iv) Rent prepaid ? 10,000.
(v) Provide for interest on capital @ 5% per annum.
(vi) Stock on 31st March, 2019 ? 8,00,000.
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as
at that date.
The solution can be presented as follows
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FAQs on Financial Statements of Sole Proprietorship - Accountancy Class 11 - Commerce
| 1. What are the primary financial statements of a sole proprietorship? |  |
Ans. The primary financial statements of a sole proprietorship include the Income Statement, the Balance Sheet, and the Statement of Cash Flows. The Income Statement summarizes revenues and expenses to show the net profit or loss over a specific period. The Balance Sheet provides a snapshot of the business's assets, liabilities, and owner's equity at a particular point in time. The Statement of Cash Flows outlines the cash inflows and outflows from operating, investing, and financing activities.
| 2. How is the net income calculated in a sole proprietorship? | |
Ans. Net income in a sole proprietorship is calculated by subtracting total expenses from total revenues. This calculation can be represented as: Net Income = Total Revenues - Total Expenses. It is essential for understanding the profitability of the business and is reported on the Income Statement, which reflects the financial performance of the sole proprietorship over a designated period.
| 3. What is the significance of the Balance Sheet for a sole proprietor? | |
Ans. The Balance Sheet is significant for a sole proprietor as it provides crucial information about the financial position of the business at a specific date. It helps the owner assess the value of assets owned, the liabilities owed, and the owner's equity. This information is vital for making informed decisions about investments, financing, and overall business health, enabling the proprietor to plan for the future effectively.
| 4. How does a sole proprietorship handle taxes on its financial statements? | |
Ans. A sole proprietorship is considered a pass-through entity for tax purposes, meaning the business income is reported on the owner's personal tax return. The net income calculated on the Income Statement is used to determine the owner's taxable income. Sole proprietors must keep accurate financial records to ensure compliance with tax regulations and can utilize their financial statements to assist in the preparation of tax filings.
| 5. What are the key differences between the financial statements of a sole proprietorship and a corporation? | |
Ans. The key differences between the financial statements of a sole proprietorship and a corporation include ownership structure, liability, and tax treatment. In a sole proprietorship, the owner has unlimited liability, and profits are taxed as personal income. In contrast, a corporation is a separate legal entity that limits owner liability and may be subject to corporate taxes. Additionally, the Balance Sheet of a corporation includes shareholders' equity, while a sole proprietorship reflects the owner's equity directly.
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Sep 27, 2025
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