Question

From the following Trial Balance of Sanjiv & Sons. Prepare Trading Account and Profit & Loss Account for the year ending on 31st March 2019 and a Balance Sheet as on that date.

Particulars	Debit Amount (₹)	Credit Amount (₹)
Opening stock	22,000
Purchases & Sales	1,78,000	4,60,000
Carriage Outward	4,800
Plant and Machinery	50,000
Debtors and Creditors	44,000	76,000
Returns	2,000	4,000
Buildings	58,000
Motor Van	40,000
Printing & Stationery	3,000
Wages	28,000
Reserved for Bad debts		3,200
Commission		2,400
Office expenses	5,400
Carriage	9,000
Furniture	20,000
Premises	81.000
Loose Tools	20,400
Drawings	24,700
Bank Overdraft		22,000
Cash in hand	71,000
Dividend		3,300
Capital		1,40,000
Salaries	44,000
Bills Receivable & Bills Payable	5,600	8,400
Bad debts	2,400
Advertisement (for 3 year)	6,000
	7,19,300	7,19,300

Additional information:

1. Closing stock on 31st March, 2019, was at cost ₹ 60,000 and Market Price ₹ 70,000.
2. Outstanding expenses: Wages ₹ 4,000, Salary ₹ 2,400
3. Provide depreciation at 10% on Motor Van and 5% on Furniture.
4. Write off ₹ 2,000 for bad debts and create R.D.D. at 5% on debtors.
5. Provide 10% p.a. interest on capital.

Answer 1

In the books of Sanjiv & Sons
Dr.	Trading & Profit & Loss Account for the year ended 31st March, 2019				Cr.
Particulars	Amt. (₹)	Amt. (₹)	Particulars	Amt. (₹)	Amt. (₹)
To Opening stock		22,000	By Sales	4,60,000
To Purchase	1,78,000		Less: Returns	2,000	4,58,000
Less: Returns	4,000	1,74,000	By Closing stock		60,000
To Wages	28,000
Add Outstanding	4,000	32,000
To Carriage		9,000
To Gross Profit c/d		2,81,000
		5,18,000			5,18,000
To Carriage Outward		4,800	By Gross Profit b/d		2,81,000
To Printing and Stationery		3,000	By Commission		2,400
To Office Expenses		5,400	By Dividend		3,300
To Salaries	44,000
Add: Outstanding	2,400	46,400
To Bad debts (T)	2,400
Add: New B.D.(A)	2,000
Add: New R. D. D. (A)	2,100
	6,500
Less: old R.D.D.(T)	3,200	3,300
To Advertisement	6,000
Less: Prepaid	4,000	2,000
To Interest on Capital		14,000
To Depreciation on :
Motor Van	4,000
Furniture	1,000	5,000
lo Net Profit c/d		2,02,800
		2,86,700			2,86,700

 

Balance Sheet as of 31st March, 2019
Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (₹)	Amt. (₹)
Capital	1,40,000		Plant and Machinery		50,000
Less: Drawings	24,700		Debtors (T)	44,000
	1,15,300		Less: New B.D.(A)	2,000
Add: Interest on Capital	14,000			42,000
	1,29,300		Less: New R.D.D. (A)	2,100	39,900
Add: Net Profit	2,02,800	3,32,100	Building		58,000
Creditors		76,000	Motor Van	40,000
Bank Overdraft		22,000	Less: Dep @ 10%	4,000	36,000
Bills payable		8,400	Furniture	20,000
Outstanding Wages		4,000	Less Dep @ 5%	1,000	19,000
Outstanding Salaries		2,400	Premises		81,000
			Loose Tools		20,400
			Cash in hand		71,000
			Bills Receivable		5,600
			Prepaid Advertisement		4,000
			Closing stock		60,000
		4,44,900			4,44,900