wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Following balances are taken from the books of Mr. Niranjan. You are required to prepare Trading and Profit and Loss Account and Balance Sheet for the year ended 31st March, 2018:
Particulars
Particulars
Capital
1,20,000
Drawings
21,000
Opening Stock
45,000
Plant and Machinery
24,000
Furniture
1,500
Purchases
2,95,000
Sales
4,35,000
Insurances
1,500
Purchases Return
4,000
Sales Return
7,000
Rent
5,000
Trade Expenses
2,000
Salaries
24,000
Wages
40,000
Bad Debts
1,000
6% Investments
50,000
Sundry Debtors
40,000
Sundry Creditors
19,000
Bills Payable
800
Cash
12,200
Advertisement Expenses
6,000
Miscellaneous Receipts
1,200
Patents
4,800

Adjustments:
(i) Closing Stock ₹ 75,000.
(ii) Depreciate Machinery by 10% and Furniture by 20%.
(iii) Wages ₹ 5,000 and salaries ₹ 2,000 are outstanding.
(iv) Write off ₹ 5,000 as further Bad Debts and create 5% Provision for Doubtful Debts.
(v) Investments were made on 1st July, 2017 and no interest has been received so far.

Open in App
Solution

Financial statements of Mr. Niranjan

Trading Account

for the year ended March 31, 2018

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

45,000

Sales

4,35,000

Purchases

2,95,000

Less: Sales Return

(7,000)

4,28,000

Less: Purchases Return

(4,000)

2,91,000

Closing Stock

75,000

Wages

40,000

Add: Outstanding wages

5,000

45,000

Gross Profit (Balancing Figure)

1,22,000

5,03,000

5,03,000

Profit and Loss Account

for the year ended March 31, 2018

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Rent

5,000

Gross Profit

1,22,000

Salaries

24,000

Add: Outstanding Salaries

2,000

26,000

Bad Debts

1,000

Interest Accrued on Investment

Add: Further Bad Debts

5,000

(50,000 × 6% × 9/12)

2,250

Add: Provision for Doubtful Debts

1,750


7,750

Miscellaneous Receipts

1,200

Advertisement expenses

6,000

Provision for discount on debtors

665

Insurances

1,500

Trade Expenses

2,000

Depreciation on:

Machinery

2,400

Furniture

300

2,700

Net Profit (Balancing Figure)

73,835

1,25,450

1,25,450

Balance Sheet

as on March 31, 2018

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

1,20,000

Fixed Assets

Less: Drawings

(21,000)

Patents

4,800

Add: Net Profit

73,835

1,72,835

Plant and Machinery

24,000

Current Liabilities

Less: 10% Depreciation

(2,400)

21,600

Sundry Creditors

19,000

Furniture

1,500

Wages Outstanding

5,000

Less: 20% Depreciation

(300)

1,200

Salaries Outstanding

2,000

6% Investment

50,000

Bills Payable

800

Add: Accrued Interest

2,250

52,250

Current Assets

Closing Stock

75,000

Debtors

40,000

Less: Further Bad Debts

(5,000)

Less: Provision for Doubtful Debts

(1,750)

33,250

Less: Provision for Discount

(665)

32,585

Cash

12,200

1,99,635

1,99,635


flag
Suggest Corrections
thumbs-up
11
similar_icon
Similar questions
View More
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
VAT
MATHEMATICS
Watch in App
Join BYJU'S Learning Program
CrossIcon