Problem # 1:

Prepare Adjustment Entries, Adjusted Trial Balance and three Informal Financial Statements excluding cash flow statement.


financial statements problems and solution



  • Inventory on 31st, December 2015 was valued at Rs. 68,000.
  • Depreciation Machinery by 10 % and Amortization of Patents by 20 %.
  • Unexpired Insurance at the end financial year was Rs. 2,000.
  • Wages includes Rs. 7,000 paid as advance to employees (Prepaid Wages Debit).

Solution # 1 Adjustment Entries

adjusting entries

Solution # 2 Adjusted Trial Balance


adjusted trial balance


Solution # 3 Three Financial Statements (Informal)   

statement of owner equity


income statement


balance sheet


PDF Download

Facebook Handel


Ramchandran, N., & Kakani, R. K. (2007). Financial Accounting for Management. (2nd, Ed.) New Delhi: Tata McGraw Hill.

Sehgal, A., & Sehgal, D. (n.d.). Advanced Accountancy (Vol. I & II). New Delhi: Taxmann Publication Pvt. Ltd.

Shukla, M. C., Grewal, T. S., & Gupta, S. C. (2008). Advanced Accountancy (Vol. I & II). New Delhi: S Chand & Co.

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2012). Accounting Principles (10th ed.). Hoboken: John Wiley & Sons, Inc.

Williams, M., & Bettner, H. (1999). Accounting (The basic for business decisions). (11th, Ed.) USA: Irwin McGraw- Hill.



  1. sana ullah

    some time we see Acc.dep. marcahniry add in capital
    and some time deprication machainery is less in Assets side??????????????????????????????????????????

  2. Fekede Getachew

    Is good

  3. Brandy

    What’s up, after reading this awesome piece of writing i am
    also delighted to share my experience here with

  4. Yaurun

    Aren’t COGS = Opening inventory + New Purchase – Closing inventory?
    Why the opening inventory is not included in the income statement?


    you’re in point of fact a excellent webmaster. The
    site loading speed is incredible. It kind of feels that you’re doing any distinctive trick.
    Also, The contents are masterwork. you’ve performed a magnificent activity on this matter!


Submit a Comment

Your email address will not be published.