Question

From the following trial balance of Ramesh as of 31^st March 2017, prepare the trading and profit and loss account and the balance sheet as of that date,

Particulars	Debit ₹	Credit ₹
Stock (01.04.2016)	40,000
Purchases	85,000
Sales		1,90,000
Sundry creditors		48,000
Furniture and fixtures	65,000
Debtors	45,000
Cash at bank	21,000
Wages	37,500
Drawings	15,000
Telephone charges	3,000
Bad debts	2,000
Provision for bad debts		2,500
Discount received		3,000
Capital		85,000
Advertising	15,000
	3,28,500	3,28,500

Adjustments:

1. The closing stock was valued at ₹ 35,000
2. Unexpired advertising ₹ 250
3. Provision for bad and doubtful debts is to be increased to ₹ 3,000
4. Provide 2% for discount on debtors.

Answer 1

Trading and Profit & Loss A/c of Ramesh
for the year ended 31.03.2017

Dr.					Cr.
Particulars		₹	₹	Particulars	₹
To Opening stock			40,000	By Sales	1,90,000
To Purchases			85,000	By Closing stock	35,000
To Wages			37,500
To Gross profit c/d			62,500
			2,25,000		2,25,000
To Telephone charges			3,000	By Gross profit b/d	62,500
To Bad debts		2,000	2,500	By Discount received	3,000
Add: Provision increased		3,000		By Interest on drawing `(15,000 xx 10/100)`	1,500
		5,000
Less: Old provision		2,500
To Advertisement		15,000	14,750
Less: unexpired advertising		250
To Discount on debtors 2%			840
To Net profit c/d			45,910
			67,000		67,000

Balance Sheet of Ramesh as on 31.03.2017

Liabilities	₹	₹	Assets	₹	₹
Capital	85,000	1,14,410	Furniture and fixtures		65,000
Add: Net profit	45,910		Cash at bank		21,000
	1,30,910		Debtors	45,000	41,160
Less: Drawings	15,000		Less: Provision for bad debts	3,000
	1,15,910			42,000
Less: Interest on drawings	1,500		Less: Discount on debtors	840
Sundry creditors		48,000	Closing stock		35,000
			Unexpired advertising		250
		1,62,410			1,62,410