Question

From the following Trial Balance of Riddhi and Siddhi, you are required to prepare Trading and Profit & Loss Account for the year ended 31st March, 2020 and Balance Sheet as on that date after considering the additional information given below.

Trial Balance as on 31st March, 2020
Debit Balance	Debit (₹)	Credit (₹)
Stock (1/4/2018)	48,000
Capital - Riddhi		50,000
Siddhi		30,000
Purchases	22,500
Wages	800
Carriage Inward	1,000
Sundry Creditors		27,600
Bills Payable		20,000
Cash in hand	2,850
Insurance	1,200
Sundry Debtors	32,000
Bank Overdraft		18,000
Carriage outward	900
Land and Building	42,500
Furniture	38,700
Sales		47,000
Purchase Return		500
Sales Return	400
Rent		1,800
Bad-debts	300
R.D.D		350
Discount	700	1,000
Travelling Expenses	250
Advertisements	4,150
	1,96,250	1,96,250

Adjustments:

1. Closing stock ₹ 48,700.
2. Outstanding Expenses - Wages ₹ 700 and Travelling Expenses ₹ 200.
3. Depreciate Land and Building by 10% and Furniture by 5%.
4. Insurance Paid in Advance ₹ 300.
5. Goods of ₹ 3,000 destroyed by fire and Insurance Company rejected the claim fully.

Answer 1

Dr.	In the Books of Riddhi and Siddhi Trading and Profit and Loss A/c for the year ended 31st March 2020				Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
To Opening Stock		48,000	By Sales	47,000	46,600
To Purchases	22,500	22,000	Less: Sales Return	400
Less: Purchase Return	500		By Closing Stock		48,700
To Wages	800	1,500	By Good destroyed by fire		3,000
Add: Outstanding Wages	700
To Carriage Inward		1,000
To Gross Profit c/d		25,800
		98,300			98,300
To Insurance	1,200	900	By Gross Profit b/d		25,800
Less: Prepaid	300		By Rent		1,800
To Depreciation on :			By R.D.D (Old)	350	50
Land & Building	4,250	6,185	Less: Bad-debts (New)	300
Furniture	1,935		By Discount		1,000
To Travelling Expenses	250	450
Add: Outstanding	200
To Loss by fire		3,000
To Carriage Outward		900
To Discount		700
To Advertisement		4,150
To Net Profit Transferred to Capital A/c
Riddhi	6,183	12,365
Siddhi	6,182
		28,650			28,650

 

Balance Sheet as on 31st March, 2020
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital A/c:		56,183	Land & Building	42,500	38,250
Riddhi	50,000		Less: Depreciation 10%	4,250
Add: Net Profit	6,183		Furniture	38,700	36,765
Capital A/c:		36,182	Less: Depreciation 5%	1,935
Siddhi	30,000		Prepaid Insurance		300
Add: Net Profit	6,182		Cash in hand		2,850
Sundry Creditors		27,600	Sundry Debtors		32,000
Outstanding Expenses:			Closing Stock		48,700
Wages	700	900
Travelling	200
Bill Payable		20,000
Bank Overdraft		18,000
		1,58,865			1,58,865