Question

Following are the closing ledger balances of Deepak & Co. Prepare Trading Account and Profit & Loss Account for the year ended 31st March 2019 and Balance sheet as of that date.
Ledger Balances of Mr. Deepak and Co. as of 31st March, 2019

Particulars	Amount (₹)	Particulars	Amount (₹)
Bank	30,000	Capital	1,20,000
Bills Payable	7,500	Insurance Premium	18,000
Furniture	19,500	(1.1.2019 to 31.12.2019)
Commission Received	3,000	Salaries	30,000
Stock (1.4.2018)	27,000	Bank loan	30,000
Building	37,500	Sundry expenses	7,500
Wages	7,500	Interest paid	1,500
Creditors	37,500	Machinery	25,500
Bad Debts	4,500	Sales	96,000
R.D.D. (old)	3,000	Purchases	42,000
Sales Returns	1,500	Debtors	31,500
		Purchases returns	3,000
		Cash in hand	16,500

Adjustments:

1. Closing stock was valued at ₹ 60,000

2. An amount of ₹ 3,000 is still to be received on account of commission.

3. Provision for discount on debtors and Provision for discount on Creditors are to be created 2% and 3% respectively.

4. Amount of Furniture is to reduce by ₹ 4,500 and Building by 10%.

5. Outstanding expenses Salaries ₹ 4,500 and Wages ₹ 1,500.

Answer 1

 

In the books of Deepak & Co.
Dr.	Trading & Profit & Loss Account for the year ended 31st March, 2019				Cr.
Particulars	Amt. (₹)	Amt. (₹)	Particulars	Amt. (₹)	Amt. (₹)
To Opening Stock		27,000	By Sales	96,000
To Purchases	42,000		Less : Sales Return	1,500	94,500
Less : Purchase Return	3,000	39,000	By Closing Stock		60,000
To Wages	7,500
Add : Outstanding	1,500	9,000
To Gross Profit c/d		79,500
		1,54,500			1,54,500
To Bad debts (T)	4,500		By Gross Profit b/d		79,500
Less : Old R.D.D.(T)	3,000	1,500	By Commission Received	3,000
To Insurance Premium	18,000		Add : Commission
Less : Pre-paid for 9m	13,500	4,500	Receivable	3,000	6,000
To Salaries	30,000		By Provision for Discount on creditors		1,125
Add : Outstanding	4,500	34,500
To Sundry Expenses		7,500
To Interest paid		1,500
To Provision for Discount On debtors		630
To Depreciation on :
Furniture	4,500
Building	3,750	8,250
To Net Profit c/d		28,245
		86,625			86,625

 

Balance Sheet as of 31st March 2019
Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (₹)	Amt. (₹)
Capital	1,20,000		Bank		30,000
Add : Net Profit	28,245	1,48,245	Furniture	19,500
Bills Payable		7,500	Less : Depreciation	4,500	15,000
Bank Loan		30,000	Building	37,500
Creditors	37,500		Less : Depreciation @ 10%	3,750	33,750
Less : Provision for			Prepaid Insurance		13,500
Discount on Creditors @ 3 %	1,125	36,375	Machinery		25,500
Outstanding Salaries		4,500	Debtors	31,500
Outstanding Wages		1,500	Less : Provision for	630
			Discount on Debtor @ 2%		30,870
			Commission Receivable		3,000
			Cash in hand		16,500
			Closing Stock		60,000
		2,28,120			2,28,120