Question

Prepare the trading and profit and loss account and a balance sheet of M/s Shine Ltd. from the following particulars.

Account Title	Amount ₹	Account Title	Amount ₹
Sundry debtors	1,00,000	Bills payable	85,550
Bad debts	3,000	Sundry creditors	25,000
Trade expenses	2,500	Provision for bad debts	1,500
Printing and Stationary	5,000	Return outwards	4,500
Rent, Rates and Taxes	3,450	Capital	2,50,000
Freight	2,250	Discount received	3,500
Sales return	6,000	Interest received	11,260
Motor car	25,000	Sales	1,00,000
Opening stock	75,550
Furniture and Fixture	15,500
Purchases	75,000
Drawings	13,560
Investments	65,500
Cash in hand	36,000
Cash in bank	53,000
	4,81,310		4,81,310

Adjustments
1. Closing stock was valued ₹ 35,000.
2. Depreciation charged on furniture and fixture @ 5%.
3. Further bad debts ₹ 1,000. Make a provision for bad debts @ 5% on sundry debtors.
4. Depreciation charged on motor car @ 10%.
5. Interest on drawing @ 6%.
6. Rent, rates and taxes was outstanding ₹ 200.
7. Discount on debtors 2%.

Answer 1

Dr.	Trading Account					Cr.
Particulars			Amount ₹	Particulars		Amount ₹
Opening Stock			75,550	Sales	1,00,000
Purchases		75,000		Less: Sales Inwards	6,000	94,000
Less: Return Outwards		4,500	70,500	Closing Stock		35,000
Freight			2,250	Gross Loss		19,300
			1,48,300			1,48,300

 

Dr.	Profit and Loss Account			Cr.
Particular		Amount ₹	Particulars	Amount ₹
Gross Loss		19,300	Discount	3,500
Bad Debts	3,000		Interest Received	11,260
Add: Further Bad-Debts	1,000		Interest on Drawings	814
Add: New Provision	4,950		Net Loss	27,482
Less: Old Provision	1,500	7,450
Discount on Debtors		1,881
Trade Expenses		2,500
Printing and Stationery		5,000
Rent, Rates and Taxes	3,450
Add: O/S Rent, Rates and Taxes	200	3,650
Depreciation on Furniture		775
Depreciation on Motor Car		2,500
		43,056		43,056

 

Balance Sheet
Liabilities		Amount ₹	Assets		Amount ₹
Bills Payable		85,550	Sundry Debtors	100,000
Sundry Creditors		25,000	Less: Further Debts	1,000
Capital	2,50,000		Less: New Provision	4,950
Less: Net Loss	27,482		Less: Discount on Debtors	1,881	92,169
Less: Drawings	13,560
Less: Interest on Drawings	814	2,08,144	Motor Car	25,000
Outstanding Rent, Rates and Taxes		200	Less: Depreciation	2,500	22,500
			Furniture and Fixtures	15,500
			Less: Depreciation	775	14,725
			Investments		65,500
			Cash in Hand		36,000
			Cash in Bank		53,000
			Closing Stock		35,000
		3,18,894			3,18,894

Note: 

In NCERT book, the Gross Loss is ₹ 17,050, the Net Loss is ₹ 27,344 and the Total of Balance Sheet is ₹ 3,19,032.

However, as per the solution Net Loss and the Total of the Balance Sheet are ₹ 27,482 and ₹ 3,18,894 respectively.