Question

From the following Trial Balance of M/s Sanjay and Vijay, you are require to prepare Trading and Profit and Loss A/c for the year ended on 31st March, 2010 and Balance Sheet as on that date after taking into consideration the additional information given below :

Trial Balance as on 31st March, 2010
Particulars	Debit Amount  (Rs)	Credit Amount  (Rs)
Sundry Debtors and Creditors Bills Receivable and Bills Payable Purchases and Sales Return Inward Salaries and Wages Carriage outward Insurance Premium Postage and Telegram Plant and Machinery Advertisement Import Duty Bad Debts Printing and Stationery Cash in Hand Leasehold Premises Opening Stock Dividend Received Outstanding Audit fees 10% Bank Loan (Taken on 1.10.2009) Capital Accounts : Sanjay                                Vijay	45,800 28,200 98,500 2,000 26,000 1,800 2,200 1,750 70,000 3,000 2,100 1,000 2,400 1,850 80,000 12,000	72,700 40,000 1,10,000                           1,500 4,400 60,000 45,000 45,000
Total	3,78,600	3,78,600

Additional Information:

(1) Closing Stock was valued at Rs 25,000.

(2) Unused Postage Stamps of Rs 250.

(3) Uninsured goods worth Rs 8,000 were stolen from the godown.

(4) Leasehold property is to be run for 10 years w.e.f.1.10.2009.

(5) Depreciate Plant and Machinery at 10% p.a.

(6) Our customer Mr. Ajay became insolvent and could not pay his debts of Rs 2,000.

Answer 1

Financial Statement of M/s Sanjay and Vijay
Trading Account  for the year ended March 31, 2010
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Opening Stock			12,000	Sales	1,10,000
Purchases		98,500		Less: Return Inward	2,000	1,08,000
Less: Goods Stolen		8,000	90,500	Closing Stock		25,000
Import Duty			2,100
Gross Profit (Balancing Figure)			28,400
			1,33,000			1,33,000

 

Profit and Loss Account  for the year ended March 31, 2010
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Postage and Telegram		1,750		Gross Profit		28,400
Less: Unused Stamp		250	1,500	Dividend Received		1,500
Carriage Outward			1,800	Net Loss (Balancing Figure)
Goods Stolen			8,000	Sanjay	16,000
Depreciation:			4,000	Vijay	16,000	32,000
Plant and Machinery		7,000
Leasehold Premises		4,000	11,000
Bad Debts		1,000
Add: Further Bad debts		2,000	3,000
Salaries and Wages			26,000
Insurance Premium			2,200
Advertisement			3,000
Printing and Stationery			2,400
Outstanding Interest on Loan			3,000
			61,900			61,900

 

Balance Sheet  as on March 31, 2010
Liabilities		Amount (Rs)	Assets			Amount (Rs)
Capital:			Fixed Assets
Sanjay	45,000		Leasehold Premises		80,000
Less: Share of Loss	16,000	29,000	Less: Depreciation		4,000	76,000
Vijay	45,000		Plant and Machinery		70,000
Less: Share of Loss	16,000	29,000	Less: Depreciation		7,000	63,000
10% Bank Loan	60,000		Current Assets
Add: Outstanding Interest	3,000	63,000	Closing Stock			25,000
Current Liabilities			Stock of Stamp			250
Creditors		72,700	Bills Receivable			28,200
Bills Payable		40,000	Cash			1,850
Outstanding Audit Fees		4,400	Debtors	45,800
			Less: Bad debts	2,000		43,800
		2,38,100				2,38,100

Working Notes:

WN1 Calculation of Depreciation

\[\begin{array}{l}\text{Depreciation on Plant & Machinery} = 70,000 \times\frac{10}{100}= Rs 7,000 \\ \\ \text{Leasehold property of Rs 80,000 is to be used for 10 years} \\ \text{Depreciation per year} =\frac{80,000}{10}= Rs 8,000 \\ \text{So , Depreciation for 6 months} (\text{from} 1.10.09 - 31.03.2010) = 8,000 \times\frac{6}{12}= Rs 4,000\end{array}\]

WN2 Calculation of Outstanding Interest on Loan

\[\text{Outstanding Interest on Bank Loan} = 60, 000 \times \frac{10}{100} \times \frac{6}{12} = Rs 3, 000\]

WN3 Calculation of Share of Loss 

\[\begin{array}{l}\text{Sanjay} = 32,000 \times\frac{1}{2}= Rs 16,000 \\ \text{Vijay} = 32,000 \times\frac{1}{2}= Rs 16,000\end{array}\]