Question

From the following Trial Balance of M/s . Patil and Desai , you are required to prepare Trading and profit and loss Account for the year ended 31st March , 2016 and Balance Sheet as on that date :

Trial Balance as on 31.03.2016

Debit Balances	Amount (₹)	Credit Balances	Amount (₹)
Machinery	140000	Capital accounts :
Furniture	80000	Patil	200000
Coal,gas and water	4300	Desai	150000
Land and Building	120000	Sales	330000
Purchases	232000	Sundry creditors	105000
Postage and telegram	2200	Bank loan	40000
Export duty	15500
Wages and Salaries	31000
Rent and taxes	7200
Cash in hand	58000
Freight	6200
Prepaid rent	3600
Sundry debtors	76000
Salaries	4200
Opening stock	39000
Discount	5800
	825000		825000

Adjustments : 

(1) Closing stock in hand was valued at ₹ 61000.

(2) Goods distributed as free samples were ₹ 3000.

(3) Outstanding salaries ₹ 900

(4) Provide reserve for doubtful debts at 5 % on sundry debtors.

(5) Depreciate machinery at 5 % p.a.

Answer 1

In the books of M/s Patil and Desai 
Trading A/c for the year ended 31.3.16

Particulars	Amount (₹)	Particulars	Amount (₹)
To Opening stock	39000	By sales	330000
To purchases	232000	By Goods distributed as free samples	3000
To coal, gas, and water	4300
To wages and salaries	31000
To freight	6200
To Gross profit c/d	81500	By Closing stock	61000
	394000		394000

Profit and loss A/c for the year ended 31.3.16

Particulars		Amount	Particulars	Amount
To postage and telegram		2200	By Gross profit b/d	81500
To Export Duty		15500
To Rent and Taxes		7200
To salaries	4200	5100
Add: outstanding	900
To Discount		5800
To Goods distributed as free samples		3000
To R.D.D		3800
To Depreciation on machinery		7000
To net Profit c/d
Patil	15950	31900
Desai	15950
		81500		81500

Balance sheet as on 31.3.16

Liabilities		Amount (₹)	Assets		Amount (₹)
Capital A/c			Machinery	140000	133000
Patil	200000	215950	Less : Depreciation @ 5 %	(7000)
Add: Net Profit	15950		Furniture		80000
Desai	150000	165950	Land and Building		120000
Add: Net Profit	15950		Cash in hand		58000
Sundry Creditors		105000	Prepaid Rent		3600
Bank loan		40000	Sundry Debtors	76000	72200
Outstanding salaries		900	Less : R.D.D. @ 5 %	(3800)
			Closing Stock		61000
		527800			527800