Question

From the following Trial Balance of Manish Enterprise, Prepare the Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance sheet as of that date.
Trial Balance as of 31st March 2019

Debit balances	Amount (₹)	Credit Balances	Amount (₹)
Cash in hand	5,200	Capital	50,000
Opening stock	10,370	Bank Loan	15,000
Goodwill	10,000	Bills Payable	8,500
Patents	4,000	Creditors	38,260
Cash at Bank	4,400	General Reserve	1,500
Freight	2,500	Dividend	2,000
Power & Fuel	1,500	Interest on Fixed Deposit	3,440
Furniture	12,000	Sales	40,000
Purchases	35,260
Mobile charges	3,200
Factory Salaries	2,400
Repairs	800
Lighting	1,000
Carriage outward	360
Professional charges	1,240
Debtors	40,000
Plant & Machinery	13,700
Office Equipments	10,000
Carriage Inwards	770
	1,58,700		1,58,700

Adjustments:

1. Closing Stock was ₹ 32,000.

2. Write off 50% of patents, depreciate Plant & Machinery by 10% p.a and Office Equipment by 20%.

3. Reserve for bad debts is to be created 5% and discount on Debtors 2%.

4. Outstanding expenses Mobile charges ₹ 300 and Freight ₹ 500

5. Charge Interest on Capital @ 5%.

6. Goods of ₹ 2,000 distributed on free samples.

Answer 1

In the books of Manish Enterprise
Dr.	Trading & Profit & Loss A/c for the year ended 31st March, 2019				Cr.
Particulars	Amt. (₹)	Amt. (₹)	Particulars	Amt. (₹)	Amt. (₹)
To Opening Stock		10,370	By Sales		40,000
To Purchases		35,260	By Goods distributed as
To Power and fuel		1,500	free samples		2,000
To Factory salaries		2,400	By Closing Stock		32,000
To Carriage Inwards		770
To Freight	2,500
Add : Outstanding	500	3,000
To Gross Profit c/d		20,700
		74,000			74,000
To Mobile charges	3,200		By Gross Profit b/d		20,700
Add :Outstanding	300	3,500	By Dividend		2,000
To Repairs		800	By Interest on Fixed
To Lighting		1,000	Deposit		3,440
To Carriage Outward		360
To Professional charges		1,240
To Reserve for Bad debts		2,000
To Provision for Discount on Debtors		760
To Interest on Capital		2,500
To Advertisement		2,000
To Depreciation on :
Patents	2,000
Plant and Machinery	1,370
Office Equipments	2,000	5,370
To Net Profit c/d		6,610
		26,140			26,140

 

Balance Sheet as of 31st March 2019
Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (₹)	Amt. (₹)
Capital	50,000		Cash in hand		5,200
Add : Interest on Capital	2,500		Goodwill		10,000
	52,500		Patents	4,000
Add : Net profit	6,610	59,110	Less : Written off	2,000	2,000
Bank loan		15,000	Cash at bank		4,400
Bills Payable		8,500	Furniture		12,000
Creditors		38,260	Debtors (T)	40,000
General Reserve		1,500	Less : New R.D.D. (A)	2,000
Outstanding Mobile charges		300		38,000
Outstanding Freight		500	Less : Provision for Dis. on
			Debtors @ 2%	760	37,240
			Plant and Machinery	13,700
			Less : Dep. @ 10%	1,370	12,330
			Office Equipments	10,000
			Less : Dep. @ 20%	2,000	8,000
			Closing Stock		32,000
		1,23,170			1,23,170