Question

From the following Trial Balance of Pushkraj, you are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019

Debit balances	Amount (₹)	Credit Balances	Amount (₹)
Drawings	2,000	Capital	80,000
Motor Car	30,000	Sundry Creditors	25,000
Cash in hand	1,000	Dividend	4,800
Bills Receivable	20,000	Commission	2,535
Wages	1,000	8% Loan (taken on	13,700
Discount	235	1.7.2018)
Rent	300	Purchases Returns	400
Advertisement	2,500	Sales	38,680
Bad Debts	500
Travelling expenses	1,000
Purchases	27,400
Machinery	30,000
Office expenses	500
Sales Returns	680
Opening Stock	10,000
Sundry Debtors	35,500
Carriage Outward	500
Cash at Bank	2,000
	1,65,115		1,65,115

Adjustments:

1. Stock on 31st March 2019 was valued at ₹ 28,000

2. Create a Provision for doubtful debts on Sundry Debtors @ 5%

3. Depreciate Motor car by 5% p.a. and Machinery by 7% p.a.

4. Outstanding expenses Rent ₹ 800 & Wages ₹ 1,000

5. Charge interest on Capital @ 3% p.a.

6. Goods of ₹ 4,000 withdrawn by the proprietor for personal use.

Answer 1

In the books of Pushkraj
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	38,680
To Purchases	27,400		Less : Sales Return	680	38,000
Less : Purchases Return	400	27,000	By Drawings of goods		4,000
To Wages	1,000		By Closing Stock		28,000
Add : Outstanding	1,000	2,000
To Gross Profit c/d		31,000
		70,000			70,000
To Discount		235	By Gross Profit b/d		31,000
To Rent	300		By Dividend		4,800
Add : Outstanding	800	1,100	By Commission		2,535
To Advertisement		2,500
To Bad debts (T)	500
Add : New R.D.D.(A)	1,775	2,275
To Travelling Expenses		1,000
To Office Expenses		500
To Carriage Outwards		500
To Depreciation on :
Motor car	1,500
Machinery	2,100	3,600
To Interest on loan		822
To Interest on capital		2,400
To Net Profit c/d		23,403
		38,335			38,335

 

Balance Sheet as of 31st March 2019
Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (₹)	Amt. (₹)
Capital	80,000		Motor car	30,000
Less : Drawings	2,000		Less : Dep. @ 5%	1,500	28,500
	78,000		Cash in hand		1,000
Less : Drawings of Goods	4,000		Bills Receivable		20,000
	74,000		Machinery	30,000
Add : Interest on capital	2,400		Less : Dep. @ 7%	2,100	27,900
	76,400		Sundry Debtors (T)	35,500
Add : Net Profit	23,403	99,803	Less: New R.D.D.(A)	1,775	33,725
Sundry Creditors		25,000	Cash at Bank		2,000
8% Loan	13,700		Closing Stock		28,000
Add : Outstanding Interest	822	14,522
Outstanding Wages		1,000
Outstanding Rent		800
		1,41,125			1,41,125