Mr. Prakash runs a factory which produces Pressure Cookers. The following details were obtained about his manufacturing expenses for the year ended 31st March 2024: Particulars Amount Opening Work-in-Progress 6,25,000 Closing Work-in-Progress 7,15,000 Opening Inventory of Raw material 5,85,000 Closing Inventory of Raw material 4,70,000 Purchases 18,74,000 Purchases Returns 95,000 Indirect Material 1,88,000 Direct Wages 3,97,000 Indirect Wages 82,000 Power & Electricity 1,76,000 Repairs and Maintenance 2,65,000 Depreciation on Factory Shed 1,44,000 Depreciation on Plant & Machinery 1,62,000 Sale of scrap 36,000 You are required to prepare Manufacturing Account for the year ended 31st March, 2024. [June 2024, MTP Jan 2025, Modified Figures – 3x]

Mr. A accepts two bills of exchange on June 1, 2024 for ₹ 1,50,000 and 60,000 drawn on him by Mr. B. The bill of exchange for ₹ 1,50,000 is for two months while the bill of exchange for 60,000 is for three months. Mr. B got the first bill discounted with the bank for ₹ 1,49,000 on June 3, 2024. On August 2, 2024 Mr. A requested Mr. B. to cancel both the bills and drew a new bill on him with the combined amount of both the bills along with interest @ 12% per annum for a period of two months. Before the due date of the renewed bill on September 3, 2024, Mr. A becomes insolvent and only 40 paise in a rupee could be recovered from his estate. You are required to give the journal entries in the books of Mr. B. [Jan. 2025, 5 Marks]

Discuss the limitations which must be kept in mind while evaluating the Financial Statements. [Nov. 2018, 4 Marks]

Trading account

Profit and loss account

Balance sheet

Manufacturing A/c