Depreciation, Provisions and Reserves — Account STD 11 Commerce — Question

Rectifying the following errors:

1. Sales Book has been totalled ₹ 1,000 short.
2. Goods worth ₹ 1,500 returned by Green & Co. have not been recorded anywhere.
3. Goods purchased worth ₹ 2,500 have been posted to the debit of the supplier, Gupta & Co.
4. Furniture purchased from Gulab & Co. worth ₹ 10,000 has been entered in Purchases Book.
5. Cash received from A ₹ 2,500 has not been posted in his account.

On 1st July, 2015, A Co. Ltd. purchases second-hand machinery for ₹ 20,000 and spends ₹ 3,000 on reconditioning and installing it. On 1st January, 2016, the firm purchases new machinery worth ₹ 12,000. On 30th June, 2017, the machinery purchased on 1st January, 2016, was sold for ₹ 8,000 and on 1st July, 2017, a fresh plant was installed.
Payments for this plant was to be made as follows:

1st July, 2017	₹ 5,000
30th June, 2018	₹ 6,000
30th June, 2019	₹ 5,500

Payments in 2018 and 2019 include interest of ₹ 1,000 and ₹ 500 respectively.
The company writes off 10% p.a. on the original cost. The accounts are closed every year on 31st March. Show the Machinery Account for the year ended 31st March, 2018.

Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. Also prepare a Balance Sheet.

1. Commenced business with cash ₹ 60,000.
2. Paid rent in advance ₹ 500.
3. Purchased goods for cash ₹ 30,000 and credit ₹ 20,000.
4. Sold goods for cash ₹ 30,000 costing ₹ 20,000.
5. Paid salary ₹ 500 and salary outstanding being ₹ 100.
6. Bought motorcycle for personal use ₹ 5,000

Define Trial Balance. Give any four functions of Trial Balance. What are the two methods of preparation of Trial Balance?

X Ltd. purchased a plant on 1st July, 2010 costing ₹ 5,00,000. It purchased another plant on 1st September, 2010 costing ₹ 3,00,000. On 31st December, 2012, the plant purchased on 1st July, 2010 got out of order and was sold for ₹ 2,15,000. Another plant was purchased to replace the same for ₹ 6,00,000. Depreciation is to be provided at 20% p.a. according to Writen Down Value Method. The accounts are closed every year on 31st March.
Show the Plant Account and Provision for Depreciation Account.

Write up Cash Book of Bhanu Partap with Cash and Bank Columns from the following transactions:

2017		(₹)
March 1	Cash-in-hand	2,710
	Cash at Bank	27,500
March 3	Received from Subhash	3,500
March 4	Sold goods for cash	10,000
March 7	Paid Rent by Cheque	800
March 8	Paid Sohan by cheque	3,000
March 10	Bought goods for cash	15,000
March 12	Paid cash for stationery	200
	Drew from Bank for office use	8,000
March 15	Received cheque from Surendra and sent it to Bank	6,600
March 16	Paid for advertisement	750
March 18	Issued cheque in favour of Nath Brothers	4,300
March 19	Cash Sales	13,000
	Paid into Bank	16,000
March 20	Received cheque from Vinod and sent it to Bank	2,400
March 22	Bought Scooter and paid for the same by cheque	18,000
March 25	Bank returned Surendra's cheque dishonoured
March 28	Paid salary by cheque	7,200
	Paid Trade expenses	2,000
March 29	Cash sales	9,500
March 30	Paid into Bank	10,000

Following accounts are being maintained in the books of Shri Ashok. Classify them into Personal, Real and Nominal Accounts:

i	Land and Building	ii	Excise Duty
iii	Creditors	iv	Capital
v	Motor Vehicles	vi	Goodwill
vii	Investments	viii	Salary
ix	Debtors	x	Bad Debts
xi	Depreciation	xii	Wages
xiii	Repairs	xiv	Ramesh, a debtor
xv	Interest Received	xvi	Bank Overdraft
xvii	Purchase Returns	xviii	Drawings
xix	Freight	xx	Return Inwards.

Ram owes ₹ 2,000 to Mohan on 1st January, 2019. On this date, he accepted a draft for the amount for 3 months. Mohan got the bill discounted at his bank @ 6% p.a. On the due date, the bill was dishonured, nothing charges ₹ 20. Ram agreed to pay ₹ 520 immediately and accept another bill for the remaining amount for 3 months together with interest at 9% p.a. This bill was met on the due date. Give the Journal entries in the books of both the parties.

Vishal sold goods for ₹ 7,000 to Manju on Jan 05, 2016 and drew upon her a bill of exchange payable after 2 months. Manju accepted Vishal’s draft and handed over the same to Vishal after acceptance. Vishal immediately discounted the bill with his bank @ 12% p.a. On the due date Manju met her acceptance. Journalise the above transactions in the books of Vishal and Manju.

Explain the double entry mechanism with an illustrative example.