Question

Following is the Trial Balance extracted from the books of Raju Traders. You are required to prepare Trading A/c, Profit and Loss A/c for the year ending on 31st March 2019 and Balance Sheet as on that date after considering the additional information given below.

Trial Balance as of 31st March 2019

Debit Balance	Amount (₹)	Credit Balance	Amount (₹)
Raju's Drawings	5,000	Capital	2,00,000
Opening stock	30,000	Sales	1,64,000
Wages	5,000	Returns outward	2,400
Purchases	60,000	Creditors	40,000
Trade Expenses	800	Discount	1,600
Royalties	1,600	Bills payable	13,600
Salaries	20,000
Debtors	80,000
Plant & Machinery	56,000
Printing & Stationery	2,400
Bad debts	900
Discount	1,200
Furniture	16,000
Advertisement	3,000
Carriage outwards	600
Computers	1,20,000
Bills Receivable	16,000
Cash in hand	1,100
Cash at Bank	2,000
	4,21,600		4,21,600

Adjustments:

1. Closing stock is valued at ₹ 40,000 at Cost Price and ₹ 44,000 as Market Price.
2. Provide Depreciation on Plant and Machinery, Furniture, Computers @ 5%, 10%, 15%, respectively.
3. Salaries are paid for 10 months only.
4. Further Bad debts amounted to ₹ 400 and provide 10% R.D.D. on Sundry Debtors.
5. Advertisement is paid for 2 years.

Answer 1

In the books of Raju Traders
Dr.	Trading and Profit and Loss A/c for the ended  31st March 2019				Cr.
Particulars	Amt. (₹)	Amt. (₹)	Particulars	Amt. (₹)	Amt. (₹
To Opening Stock		30,000	By Sales		1,64,000
To Purchases	60,000		By Closing Stock		40,000
Less: Return Outward	2,400	57,600
To Wages		5,000
To Royalties		1,600
To Gross Profit c/d		1,09,800
		2,04,000			2,04,000
To Trade Expenses		800	By Gross Profit b/d		1,09,800
To Salaries (10 m)	20,000		By Discount		1,600
Add: Outstanding (2 m)	4,000	24,000
To Printing and Stationery		2,400
To Bad Debts (T)	900
Add: New B. D. (A)	400
Add: New R.D.D.(A)	7,960	9,260
To Discount		1,200
To Advertisement (2y)	3,000
Less: Prepaid (1y)	1,500	1,500
To Carriage Outwards		600
To Depreciation on :
Plant & Machinery	2,800
Furniture	1,600
Computer	18,000	22,400
To Net Profit c/d		49,240
		1,11,400			1,11,400

 

Balance Sheet as of 31st March 2019
Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (₹)	Amt. (₹)
Capital	2,00,000		Debtors (T)	80,000
Less: Drawings	5,000		Less: New B.D.(A)	400
	1,95,000			79,600
Add: Net Profit	49,240	2,44,240	Less: New R.D.D. (A)	7,960	71,640
Creditors		40,000	Plant and Machinery	56,000
Bills Payable		13,600	Less: Dep. @ 5%	2,800	53,200
Outstanding Salaries		4,000	Furniture	16,000
			Less : Dep. @ 10%	1,600	14,400
			Computers	1,20,00
			Less : Dep. @ 15%	18,000	1,02,000
			Bills Receivable		16,000
			Cash in hand		1,100
			Cash at bank		2,000
			Closing Stock		40,000
			Prepaid Advertisement		1,500
		3,01,840			3,01,840