Question

From the following Trial Balance of Shradha Enterprises, you are required to prepare Final Accounts for the year ending on 31st March 2019.
Trial Balance as of 31st March 2019

Debit balances	Amount (₹)	Credit Balances	Amount (₹)
Opening Stock	2,40,000	Capital	13,00,000
Purchases	8,50,000	Sundry Creditors	1,20,000
Returns Inward	15,000	Bills Payable	60,000
Wages	29,000	Sales	25,00,000
Power and Fuel	21,800	Return Outward	8,000
Travelling Expenses	14,700	Discount	2,000
Audit fees	7,000	Bank Overdraft	1,54,000
Royalty	72,000	Reserve for Bad and doubtful debts	8,000
Discount	1,750
Postage	13,500
Bad debts	3,000
Sundry Debtors	5,20,000
Furniture	1,20,000
Plant & Machinery	15,00,000
Freehold Premises	7,02,000
Rent, Rates and Insurance	42,250
	41,52,000		41,52,000

Adjustments:

1. Insurance is prepaid to the extent of ₹ 2,250

2. Closing stock is valued at ₹ 3,80,000 Cost price and ₹ 4,00,000 as Market price.

3. Outstanding Expenses are Wages ₹ 6,000 and Rent ₹ 5,000

4. Write off further had debts ₹ 1,500 and provide 5% Reserve for doubtful debts.

5. Depreciation on Furniture and Plant and Machinery at 10% p.a. and on Freehold Premises at 15% p.a.

Answer 1

In the books of Shradha Enterprises
Dr.	Trading and Profit and Loss A/c for the year ended 31st March, 2019				Cr.
Particulars	Amt. (₹)	Amt. (₹)	Particular	Amt. (₹)	Amt. (₹)
To Opening Stock		2,40,000	By Sales	25,00,000
To Purchases	8,50,000		Less: Return Inwards	15,000	24,85,000
Less: Return Outward	8,000	8,42,000	By Closing Stock		3,80,000
To Wages	29,000
Add: Outstanding	6,000	35,000
To Power and Fuel		21,800
To Royalty		72,000
To Gross Profit c/d		16,54,200
		28,65,000			28,65,000
To Travelling Expenses		14,700	By Gross Profit b/d		16,54,200
To Audit Fees		7,000	By Discount		2,000
To Discount		1,750
To Postage		13,500
To Bad debts (T)	3,000
Add: New B.D.(A)	1,500
Add: New R.D.D.(A)	25,925
	30,425
Less: Old R.D.D.(T)	8,000	22,425
To Rent, Rates and Insurance	42,250
Less: Prepaid Insurance	2,250
	40,000
Add: Outstanding Rent	5,000	45,000
To Depreciation on:
Furniture	12,000
Plant & Machinery	1,50,000
Freehold Premises	1,05,300	2,67,300
To Net Profit c/d		12,84,525
		16,56,200			16,56,200

 

Balance Sheet as of 31st March 2019
Liabilities	Amt. (₹)	Amt. (₹)	Assets	Amt. (2)	Amt. (₹)
Capital	13,00,000		Sundry Debtors (T)	5,20,000
Add: Net Profit	12,84,525	25,84,525	Less: New B.D.(A)	1,500
Sundry Creditors		1,20,000		5,18,500
Bills Payable		60,000	Less: New R.D.D.(A) @ 5%	25,925	4,92,575
Bank Overdraft		1,54,000	Furniture	1,20,000
Outstanding Wages		6,000	Less: Depreciation @ 10%	12,000	1,08,000
Outstanding Rent		5,000	Plant & Machinery	15,00,000
			Less: Depreciation @ 10%	1,50,000	13,50,000
			Freehold Premises	7,02,000
			Less: Depreciation @ 15%	1,05,300	5,96,700
			Prepaid Insurance		2,250
			Closing Stock		3,80,000
		29,29,525			29,29,525