Question

From the following Trial Balance you are required to prepare trading and profit and loss account for the year ending March 31, 2017 and Balance Sheet on that date.

Particulars	Amount (₹)	Particulars	Amount (₹)
Opening stock	25,000	Sales	7,00,000
Furniture	16,000	Creditors	72,500
Purchases	5,55,300	Bank Overdraft	50,000
Carriage Inwards	4,700	Provision for bad and doubtful debts	2,100
Bad debts	1,800	Discount	500
Wages	52,000	Capital	2,00,000
Debtors	80,000	Purchases Return	20,000
Sales Return	15,000
Rent	24,000
Miscellaneous Expenses	3,400
Salaries	68,000
Cash	8,900
Drawings	14,000
Buildings	1,60,000
Advertising	10,000
Interest on Bank Overdraft	7,000
	10,45,100		10,45,100

Adjustments:
1. Closing stock valued at ₹ 36,000.
2. Private purchases amounting to ₹ 5,000 debited to purchases account.
3. Provision for doubtful debts @ 5% on debtors.
4. Sign board costing ₹ 4,000 includes in advertising.
5. Depreciate furniture by 10%.

Answer 1

Dr.	Trading A/c for the year ended 31st March, 2017				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Opening Stock		25,000	By Sales	7,00,000	6,85,000
To Purchases	5,50,300	5,30,300	Less: Sales Return	(15,000)
Less: Purchases Return	(20,000)		By Closing Stock		36,000
To Carriage Inwards		4,700
To Wages		52,000
To Gross Profit c/d		1,09,000
		7,21,000			7,21,000

 

Dr.	Profit and Loss A/c for the year ended 31st March, 2017			Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)
To Bad debts		1,800	By Gross Profit b/d	1,09,000
To Rent		24,000	By Discount Received	500
To Miscellaneous Expenses		3,400	By Net Loss	4,200
To Salaries		68,000
To Advertising	10,000	6,000
Less: Sign Board	(4,000)
To Interest on Bank Overdraft		7,000
To Provision for bad and doubtful debts		1,900
To Depreciation on Furniture		1,600
		1,13,700		1,13,700

 

Balance Sheet as at 31st March, 2017
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital	2,00,000	1,76,800	Furniture	16,000	14,400
Less: Drawings	(14,000)		Less: Provision for Depreciation	(1,600)
Less: Net Loss	(4,200)		Building		1,60,000
Less: Private purchases	(5,000)		Debtors	80,000	76,000
Creditors		72,500	Less: Provision (New)	(4,000)
Bank Overdraft		50,000	Closing Stock		36,000
			Cash		8,900
			Sign board		4,000
		2,99,300			2,99,300