Question

Prepare the trading and profit and loss account and balance sheet of M/s Control Device India on March 31, 2017 from the following balance as on that date.

Account Title	Debit Amount Rs	Credit Amount Rs
Drawings and Capital	19,530	67,500
Purchase and Sales	45,000	1,12,500
Salary and Commission	25,470	1,575
Carriage	2,700
Plant and Machinery	27,000
Furniture	6,750
Opening stock	42,300
Insurance premium	2,700
Interest		7,425
Bank overdraft		24,660
Rent and Taxes	2,160
Wages	11,215
Returns	2,385	1,440
Carriage outwards	1,485
Debtors and Creditors	36,000	58,500
General expenses	6,975
Octroi	530
Investment	41,400
	2,73,600	2,73,600

Closing stock was valued Rs 20,000.
(a) Interest on capital @ 10%.
(b) Interest on drawings @ 5%.
(c) Wages outstanding Rs 50.
(d) Outstanding salary Rs 20.
(e) Provide a depreciation @ 5% on plant and machinery.
(f) Make a 5% provision on debtors.

Answer 1

Trading Account
Dr.							Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Opening Stock			42,300	Sales		1,12,500
Purchases		45,000		Less: Sales Return		2,385	1,10,115
	Less: Purchases Return	1,440	43,560	Closing Stock			20,000
Carriage			2,700
Wages		11,215
	Add: Outstanding Wages	50	11,265
Octroi			530
Gross Profit			29,760
			1,30,115				1,30,115

 

Profit and Loss Account
Dr.					Cr.
Particulars			Amount Rs	Particulars	Amount Rs
Salary		25,470		Gross Profit	29,760
	Add: Outstanding Salary	20	25,490	Commission	1,575
Insurance Premium			2,700	Interest	7,425
Rent and Taxes			2,160	Interest on Drawings	977
Carriage Outwards			1,485	Net Loss	8,973
General Expenses			6,975
Interest on Capital			6,750
Depreciation on P and M			1,350
Provision on Debtors			1,800
			48,710		48,71

 

Balance Sheet
Liabilities		Amount Rs	Assets		Amount Rs
Capital	67,500		Plant and Machinery	27,000
Add: Interest on Capital	6,750		Less: Depreciation	1,350	25,650
Less: Net Loss	8,973		Furniture		6,750
Less: Drawings	19,530		Debtors	36,000
Less: Interest on Drawings	977	44,770	Less: New Provision	1,800	34,200
Bank Overdraft		24,660	Investment		41,400
Creditors		58,500	Closing Stock		20,000
Outstanding Wages		50
Salary Outstanding		20
		1,28,000			1,28,000