Question

From the following Trial Balance of M/s Vishal and Vaibhav, you are required to prepare Trading and Profit and Loss Account, for the year ended 31st March 2013 and Balance Sheet as on that date after taking into consideration the adjustments given below:

Trial Balance as on 31st March 2013
Debit Balances	Amount	Credit Balances	Amount
Salary and Wages	17000	Sales	110000
Postage and Telegram	1750	Sundry Creditors	72700
Opening Stock	23500	Bills Payable	40000
Plant and Machinery	70000	10% Bank Loan [Taken on 1st October 2012]	60000
Import Duty	3100	Outstanding Audit Fees	5900
Purchases	98500	Capital Accounts:
Sundry Debtors	45800	Vishal	45000
Bills Receivable	16700	Vaibhav	45000
Carriage Outward	1800
Wages and Salary	14000
Printing and Stationery	4600
Cash in hand	1850
Leasehold premises	80000
	378600		378600

Adjustments:

(1) Closing stock was valued at Rs. 30000.

(2) Postal stamps of Rs. 250 and stationery of Rs. 400 are unused.

(3) Leasehold property is to be run for 10 years w.e.f. 1st October 2012.

(4) Depreciate Plant and Machinery at 10% p.a.

(5) Mr. Rajan, our customer, became insolvent and could not pay his debts of Rs. 1500.

Answer 1

In the books of Vishal and Vaibhav

Trading A/c for the year ended 31.3.2013
Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		23500	By Sales		110000
To Purchases		98500
To Import Duty		3100
To Wages and Salaries		14000	By Closing Stock		30000
To Gross Profit C/d		900
		140000			140000

 

Profit and Loss A/c for the year ended 31.3.2013
Particulars	Amount	Amount	Particulars	Amount	Amount
To Salary and Wages		17000	By Gross Profit b/d		900
To Postage and Telegram	1750
Less: Unused Postal Stamps	250	1500
To Carriage Outward		1800
To Printing and Stationery	4600
Less: Unused Stationery	400	4200
To Depreciation on a Leasehold property		4000
To Depreciation on Plant and Machinery		7000
To Bad debts		1500	By Net Loss Transferred to
To Interest on Bank Loan		3000	Vishal’s Capital A/c	19550
			Vaibhav’s Capital A/c	19550	39100
		40000			40000

 

Partners’ Capital A/c
Particulars	Vishal	Vaibhav	Particulars	Vishal	Vaibhav
To Profit and Loss A/c [Net Loss]	19550	19550	By Balance b/d	45000	45000
To balance c/d	25450	25450
	45000	45000		45000	45000

 

Balance Sheet as on 31.3.13
Liabilities	Amount	Amount	Assets	Amount	Amount
Capitals:			Cash in Hand		1850
Vishal	25450		Sundry Debtors	45800
Vaibhav	25450	50900	Less: F.B.D.	1500	44300
Sundry Creditors		72700	Bills Receivable		16700
Bills Payable		40000	Plant and Machinery	70000
10% Bank Loan	60000		Less: Depreciation	7000	63000
Add: Outstanding Interest on Bank Loan	3000	63000	Lease Hold Premises	80000
Outstanding Audit Fees		5900	Less: Written off	4000	76000
			Closing Stock		30000
			Unused Postal Stamps		250
			Unused Stationery		400
		232500			232500

Working Note:

1) 10% Bank Loan [Taken on 1st October 2012] = 60,000

Interest on bank loan(60,000 × `6/12 xx 10/100` = 3000

2) Leasehold property is to be run for 10 years w.e.f. 1st October 2012.

1 year = 12 months
∴ 12 × 10 years = 120 months

1st oct to 31st march is 6 months 

So, `(80,000 xx 6)/120` = 4000.

3) Depreciate Plant and Machinery at 10% p.a. = 70,000
(-) 10% p.a Depreciation(70,000 × `10/100` = 7000.