Question

Prepare trading and profit and loss account and balance sheet from the following trial balance of Madan as of 31^st March 2018.

 

Debit balance	₹	Credit balance	₹
Sundry debtors	61,000	Capital	70,000
Plant and machinery	80,000	Purchases return	2,000
Bank charges	4,200	Sales	2,55,000
Wages	7,000	Bank overdraft	77,000
Sales return	5,000
Purchases	1,52,000
Opening stock	30,000
Drawings	22,000
Establishment expenses	20,000
Bad debts	800
Business premises	22,000
	4,04,000		4,04,000

Adjustments:

1. The closing stock was ₹ 80,000
2. Provide depreciation on plant and machinery @ 20%
3. Write off ₹ 800 as further bad debts
4. Provide the doubtful debts @ 5% on sundry debtors.

Answer 1

Trading and Profit & Loss A/c for
the year ended 31.03.2018

Dr.						Cr.
Particulars		₹	₹	Particulars	₹	₹
To Opening stock			30,000	By Sales	2,55,000	2,50,000
To Purchases		1,52,000	1,50,000	Less: Sales return	5,000
Less: Purchases returns		2,000		By Closing Stock		80,000
To wages			7,000
To Gross profit c/d			1,43,000
			3,30,000			3,30,000
To Bank charges			4,200	By Gross profit b/d		1,43,000
To Establishment expenses			20,000
To Depreciation on plant and machinery			16,000
To Bad debts		800	4,610
Add: Further bad debts		800
		1,600
Add: Provision (New)		3,010
			1,43,000			1,43,000

Balance Sheet as on 31.03.2018

Liabilities	₹	₹	Assets	₹	₹
Capital	70,000	1,46,190	Sundry debtors	61,000	57,190
Add: Net profit	98,190		Less: Bad debts	800
	1,68,190			60,200
Less: Drawings	22,000		Less: Provision 5%	3,010
Bank overdraft		77,000	Plant and machinery	80,000	64,000
			Less: Depreciation 20%	16,000
			Business premises		22,000
			Closing stock		80,000
		2,23,190			2,23,190