NCERT Solution (Part - 3) - Financial Statements - II

# NCERT Solution (Part - 3) - Financial Statements - II | Accountancy Class 11 - Commerce PDF Download

Page No 443:

Question.9 : From the following balances of M/s Jyoti Exports, prepare trading and profit and loss account for the year ended March 31, 2017 and balance sheet as on this date.

Closing stock Rs 10,000.
1. To provision for doubtful debts is to be maintained at 5 per cent on sundry debtors.
2. Wages amounting to Rs 500 and salary amounting to Rs 350 are outstanding.
3. Factory rent prepaid Rs 100.
4. Depreciation charged on Plant and Machinery @ 5% and Building @ 10%.
5. Outstanding insurance Rs 100.
Answer :

Note: As per solution Net Profit is Rs 15,890 and Total of the Balance Sheet is Rs 76,940. However, NCERT shows Net Profit Rs 15,895 and Total of the Balance Sheet Rs 76,945.

Page No 444:

Question.10 : The following balances have been extracted from the books of M/s Green House for the year ended December 31, 2017, prepare trading and profit and loss account and balance sheet as on this date.

adjustments :
(a) Machinery is depreciated at 10% and buildings depreciated at 6%.
(b) Interest on capital @ 4%.
(c) Outstanding wages Rs 50.
(d) Closing stock Rs 50,000.

Answer :

Page No 445:
Question.11 : From the following balances extracted from the book of M/s Manju Chawla on March 31, 2017. You are requested to prepare the trading and profit and loss account and a balance sheet as on this date.

Closing stock was Rs 2,000.
(a) Interest on drawings @ 7% and interest on capital @ 5%.
(b) Land and Machinery is depreciated at 5%.
(c) Interest on investment @ 6%.
(d) Unexpired rent Rs 100.
(e) Charge 5% depreciation on furniture.
Answer :
Trading Account

Profit and Loss Account

Balance Sheet

Note: In the NCERT textbook, the answer provided for question number 11 is different from the solution. However, the answer should be
Gross profit = Rs 22,400 instead of Rs 21,900
Net profit = Rs 24,985 instead of Rs 25,185
Total of Balance Sheet = Rs 72,945 instead of Rs 71,185

Page No 446:
Question.12 : The following balances were extracted from the books of M/s Panchsheel Garments on  March 31, 2017.

Prepare the trading and profit and loss account for the year ended March 31, 2017 and a balance sheet as on that date.
(a) Unexpired insurance Rs 1,000.
(b) Salary due but not paid Rs 1,800.
(c) Wages outstanding Rs 200.
(d) Interest on capital 5%.
(e) Scooter is depreciated @ 5%.
(f) Furniture is depreciated Rs @ 10%.
Answer : Trading Account

Profit and Loss Account

Balance Sheet

Page No 447:
Question.13 : Prepare the trading and profit and loss account and balance sheet of M/s Control Device India on December 31, 2017 from the following balance as on that date.

Closing stock was valued Rs 20,000.
(a) Interest on capital @ 10%.
(b) Interest on drawings @ 5%.
(c) Wages outstanding Rs 50.
(d) Outstanding salary Rs 20.
(e) Provide a depreciation @ 5% on plant and machinery.
(f) Make a 5% provision on debtors.
Answer :

Trading Account

Profit and Loss Account

Balance Sheet

Question.14 : The following balances appeared in the trial balance of M/s Kapil Traders as on March 31, 2017

The partners of the firm agreed to records the following adjustments in the books of the Firm: Further bad debts Rs.300. Maintain provision for bad debts 10%. Show the following adjustments in the bad debts account, provision account, debtors account, profit and loss account and balance sheet.
Answer :
Profit and Loss Account

Bad Debts Account

Question.15 : Prepare the bad debts account, provision for account, profit and loss account and balance sheet from the following information as on December 31, 2017

Adjustments:
Bad Debts Rs 500 Provision on Debtors @ 3%.
Answer :

Balance Sheet

Bad Debts Account

Note: In this case, the old provision exceeds the sum total of Bad debts and the New Provision. Thus, the balancing figure is Rs 115 and is calculated as Rs 2,500 + Rs 2,385 – Rs 5,000 = Rs (115)

The document NCERT Solution (Part - 3) - Financial Statements - II | Accountancy Class 11 - Commerce is a part of the Commerce Course Accountancy Class 11.
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## Accountancy Class 11

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## FAQs on NCERT Solution (Part - 3) - Financial Statements - II - Accountancy Class 11 - Commerce

 1. What are financial statements and why are they important?
Ans. Financial statements are formal records of the financial activities and position of a company, organization, or individual. They provide information about the financial performance, profitability, and financial health of an entity. Financial statements are important as they help stakeholders, such as investors, creditors, and management, to make informed decisions, assess the financial position of the entity, and evaluate its performance.
 2. What are the different types of financial statements?
Ans. There are three main types of financial statements: 1. Income Statement: It provides information about the revenues, expenses, and net income or loss of a company during a specific period of time. 2. Balance Sheet: It presents the financial position of a company at a specific point in time by showing its assets, liabilities, and shareholders' equity. 3. Cash Flow Statement: It shows the inflow and outflow of cash and cash equivalents from operating, investing, and financing activities during a specific period.
 3. How are financial statements prepared?
Ans. Financial statements are prepared by following generally accepted accounting principles (GAAP). The process involves several steps, including: 1. Recording financial transactions: All financial transactions are recorded in appropriate journals, such as the cash book, sales book, and purchase book. 2. Posting to ledger accounts: The recorded transactions are posted to respective ledger accounts, such as cash, accounts payable, and accounts receivable. 3. Trial balance: A trial balance is prepared to ensure that the total debits equal the total credits. 4. Adjustments: Adjusting entries are made for accruals, deferrals, and other necessary adjustments. 5. Financial statement preparation: Finally, the income statement, balance sheet, and cash flow statement are prepared using the information from the trial balance and adjusting entries.
 4. How can financial statements be analyzed?
Ans. Financial statements can be analyzed using various techniques, such as: 1. Ratio Analysis: Ratios, such as profitability ratios, liquidity ratios, and solvency ratios, are calculated to assess the financial performance and position of a company. 2. Trend Analysis: Financial data from multiple periods are compared to identify trends and patterns, which can help in understanding the company's financial performance over time. 3. Comparative Analysis: Financial statements of competitors or industry benchmarks are compared to evaluate the company's performance in relation to others in the same industry. 4. Vertical Analysis: Financial statements are analyzed by expressing each line item as a percentage of a base amount, such as total assets or net sales, to understand the composition and proportionality of different components. 5. Common Size Analysis: Financial statements are presented in a common size format, where each line item is expressed as a percentage of a total, to facilitate comparison and identify trends.
 5. What are the main users of financial statements?
Ans. The main users of financial statements include: 1. Investors: They use financial statements to assess the profitability and financial health of a company before making investment decisions. 2. Creditors: Financial statements help creditors, such as banks and suppliers, to evaluate the creditworthiness and repayment capacity of a company before extending credit. 3. Management: Financial statements provide crucial information to management for decision-making, planning, and monitoring the financial performance of the company. 4. Government and Regulatory Authorities: Financial statements are used by government agencies and regulatory authorities to ensure compliance with financial reporting standards and taxation laws. 5. Employees and Unions: Financial statements are often used by employees and unions to negotiate better wages, benefits, and working conditions based on the financial position of the company.

## Accountancy Class 11

82 videos|105 docs|42 tests

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