Question

From the following Trial Balance of John & Sons, 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.
Trial Balance as of 31st March 2019

Debit balances	Amount (₹)	Credit Balances	Amount (₹)
Drawings (1st July 2018)	12,000	Sundry Creditors	40,000
Cash in hand	8,000	Returns	4,500
Cash at Bank	20,000	Dividend	100
Bills Receivable	15,000	Rent	200
Wages	1,800	Sales	53,200
Discount	700	Bank Loan	5,000
Rent	2,000	Capital	99,700
Advertisement	3,000
Bad debts	1,200
Travelling Expenses	800
Purchases	40,000
Machinery	15,000
Motor Car	18,000
Returns	1,200
Stock (1st April 2018)	10,000
Sundry Debtors	35,000
Carriage outwards	1,000
6% Investment	18,000
(1st Sept 2018)
	2,02,700		2,02,700

Adjustments:

1. Closing Stock ₹27,000

2. Charge Depreciation on Machinery and Motor car @10% and 5% respectively.

3. Create R.D.D. 5% on Sundry Debtors

4. Interest on Drawings @5% p.a.

5. Create Discount on Sundry Creditors 3%

6. Advertisement ₹1,000 is prepaid.

7. Outstanding Rent ₹1,500

Answer 1

In the books of John and Sons
Dr.	Trading & Profit & Loss A/c for the year ended 31st March, 2019				Cr.
Particulars	Amt. (₹)	Amt. (₹)	Particulars	Amt. (₹)	Amt. (₹)
To Opening Stock		10,000	By Sales	53,200
To Purchases	40,000		Less: Returns	1,200	52,000
Less: Returns	4,500	35,500	By Closing Stock		27,000
To Wages		1,800
To Gross Profit c/d		31,700
		79,000			79,000
To Discount		700	By Gross Profit b/d		31,700
To Rent	2,000		By Dividend		100
Add: Outstanding	1,500	3,500	By Rent		200
To Advertisement	3,000		By Interest on Drawing		450
Less: Prepaid	1,000	2,000	By Interest on Investment		630
To Travelling Expenses		800	By Provision for		1,200
To Depreciation on:			Discount on Creditors
Machinery	1,500
Motor Car	900	2,400
To Bad debts (T)	1,200
Add: New R.D.D. (A)	1,750	2,950
To Carriage Outwards		1,000
To Net Profit c/d		20,930
		34,280			34,280

 

Balance Sheet as of 31st March 2019
Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (₹)	Amt. (₹)
Capital	99,700		Cash in hand		8,000
Less: Drawings	12,000		Cash at bank		20,000
	87,700		Bills Receivable		15,000
Less: Interest on Drawings (9m)	450		Machinery	15,000
	87,250		Less: Dep. @ 10%	1,500	13,500
Add: Net Profit	20,930	1,08,180	Motor Car	18,000
Sundry Creditors	40,000		Less: Dep. @ 5%	900	17,100
Less: Provision for Discount on Creditors @ 3%	1,200	38,800	Sundry Debtors (T)	35,000
			Less: New R.D.D. (A)	1,750	33,250
Bank loan		5,000	6% Investment	18,000
Outstanding Rent		1,500	Add: Int. Receivable	630	18,630
			Closing Stock		27,000
			Prepaid Advertisement		1,000
		1,53,480			1,53,480