Question

From the following Trial Balance of Ayub & Co. as of 31st March 2019, you are required to prepare Trading Account, Profit and Loss Account for the year ending 31st March 2019, and Balance Sheet as of that date after making necessary adjustments.
Trial Balance as of 31st March 2019

Debit balances	Amount (₹)	Credit Balances	Amount (₹)
Cash in hand	4,575	Discount	900
Cash at Bank	15,450	Loan from Abhay	15,000
Drawings	18,000	Creditors	18,225
Furniture	6,000	Sales	1,95,000
Plant & Machinery	45,000	Returns Outward	3,000
Opening Stock	30,000	Capital	90,000
Purchases	1,20,000
Salaries and Wages	33,600
Debtors	30,600
Returns Inward	7,500
Audit Fees	2,250
Rent. Rates and Taxes	5,400
Bad debts	600
Travelling Expenses	750
Insurance	1,200
Interest on Loan from Abhay	450
Trade Expenses	300
Sundry expenses	450
	3,22,125		3,22,125

Adjustments:

1. Stock on hand on 31st March 2019 valued at ₹ 60,000

2. Rent amounting to ₹ 600 Prepaid.

3. Bad Debts ₹ 600 and create a Provision for Doubtful Debts 5%

4. Depreciation on Plant & Machinery by 10% and Furniture is valued at ₹ 4,500

5. Outstanding Salaries ₹ 900

Answer 1

In the books of Ayub and Co.
Dr.	Trading and Profit and Loss for the year ended 31st march, 2019				Cr.
Particulars	Amt. (₹)	Amt. (₹)	Particular	Amt. (₹)	Amt. (₹)
To Opening Stock		30,000	By Sales	1,95,000
To Purchases	1,20,000		Less: Return Inwards	7,500	1,87,500
Less: Return Outward	3,000	1,17,000	By Closing Stock		60,000
To Gross Profit c/d		1,00,500
		2,47,500			2,47,500
To Salaries and Wages	33,600		By Gross Profit b/d		1,00,500
Add: Outstanding	900	34,500	By Discount		900
To Audit fees		2,250
To Rent, Rates and Taxes	5,400
Less: Prepaid Rent	600	4,800
To Bad debts (T)	600
Add: New B.D. (A)	600
Add: New R.D.D. (A)	1,500	2,700
To Travelling Expenses		750
To Insurance		1,200
To Interest on loan		450
To Trade Expenses		300
To Sundry Expenses		450
To Depreciation on :
Furniture	1,500
Plant and Machinery	4,500	6,000
To Net Profit c/d		48,000
		1,01,400			1,01,400

 

Balance Sheet as of 31st March 2019
Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (₹)	Amt. (₹)
Capital	90,000		Cash in hand		4,575
Less: Drawings	18,000		Cash at bank		15,450
	72,000		Furniture	6,000
Add: Net Profit	48,000	1,20,000	Less: Depreciation	1,500	4,500
Loan from Abhay		15,000	Plant and Machinery	45,000
Creditors		18,225	Less: Depreciation @ 10%	4,500	40,500
Outstanding Salaries		900	Debtors (T)	30,600
			Less: New B.D.(A)	600
				30,000
			Less: New R.D.D.(A)	1,500	28,500
			Prepaid Rent		600
			Closing Stock		60,000
		1,54,125			1,54,125