Question

Following balances were extracted from the books of Vijay on 31st March, 2019:

Particulars	₹	Particulars	₹
Capital	2,45,000	Loan	78,800
Drawings	20,000	Sales	6,53,600
General Expenses	47,400	Purchases	4,70,000
Building	1,10,000	Motor Car	20,000
Machinery	93,400	Provision for Doubtful Debts	9,000
Stock on 1st April, 2018	1,62,000	Commission (Cr.)	13,200
Insurance	13,150	Car Expenses	18,000
Wages	72,000	Bills Payable	38,500
Debtors	62,800	Cash	800
Creditors	25,000	Bank Overdraft	33,000
Bad Debts	5,500	Charity	1,050

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date after giving effect to the following adjustments:
(a) Stock as on 31st March, 2019 was valued at ₹ 2,30,000.
(b) Write off further ₹ 1,800 as Bad Debts and maintain the Provision for Doubtful Debts at 5%.
(c) Depreciate Machinery at 10%.
(d) Provide ₹ 7,000 as outstanding interest on loan.

Answer 1

Financial Statement of Vijay Kumar
Trading Account for the year ended March 31, 2019
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening Stock	1,62,000	Sales	6,53,600
Purchases	4,70,000	Closing Stock	2,30,000
Wages	72,000
Gross Profit (Balancing Figure)	1,79,600
	8,83,600		8,83,600

Profit and Loss Account for the year ended March 31, 2019
Dr.						Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Taxes and Insurance			13,150	Gross Profit	1,79,600
Bad Debts		5,500		Commission	13,200
Add: Further Bad Debts		1,800
Add: Provision for Doubtful Debts		3,050
		10,350
Less: Exiting Provision		9,000	1,350
Car Expenses			18,000
Charity			1,050
Depreciation on Machinery			9,340
Outstanding Interest on Loan			7,000
General Expenses			47,400
Net Profit (Balancing Figure)			95,510
			1,92,800		1,92,800

Balance Sheet as on March 31, 2019
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital	2,45,000		Fixed Assets
Add: Net Profit	95,510		Building		1,10,000
Less: Drawings	(20,000)	3,20,510	Machinery	93,400
Loan	78,800		Less:10% Depreciation	9,340	84,060
Add: Outstanding Interest	7,000	85,800	Motor Car		20,000
Current Liabilities			Current Assets
Creditors		25,000	Closing Stock		2,30,000
Bills Payable		38,500	Debtors	62,800
Bank Overdraft		33,000	Less: Bad Debts	(1,800)
			Less: 5% Provision for Doubtful Debts	(3,050)	57,950
			Cash		800
		5,02,810			5,02,810