Following is the Trial Balance obtained from the books of Mr. Vishwanath on 31st March, 2018:

Heads of Accounts

Dr.

(₹)

Cr.

(₹)

Computers ............................................................
37,000

…

Plant and Machinery ............................................................
1,60,000

…

Motor Van ............................................................
2,20,000

…

Cash in Hand ............................................................
6,330

…

Cash at Bank ............................................................
50,000

…

Stock on 1^st April, 2017 ............................................................
8,100

…

Debtors ............................................................
65,300

…

Creditors ............................................................
…

29,500

Purchases ............................................................
2,74,685

…

Sales ............................................................
…

5,21,870

Returns Inwards ............................................................
2,300

…

Returns Outwards ............................................................
…

2,100

Rent ............................................................
6,700

…

Salaries ............................................................
35,000

…

Bank Loan taken on 1^st April, 2017 @ 10% p.a ............................................................
…

2,00,000

Carriage Outwards ............................................................
3,100

…

Wages ............................................................
54,755

…

Interest ............................................................
10,000

…

Electric Charges ............................................................
4,200

…

General Expenses ............................................................
24,000

…

Capital ............................................................
…
2,10,000

Input IGST ............................................................
10,000

…

Output CGST ............................................................
…

4,000

Output SGST ............................................................
…

4,000

Total
9,71,470

9,71,470

You are required to prepare Mr. Vishwanath’s Trading and Profit and Loss Account for the year ended 31^st March, 2018 and his Balance Sheet as at that date after taking into account the following adjustments:
(a) Stock on 31st March, 2018 was ₹ 15,600.
(b) Depreciate Motor Van and Plant and Machinery by 10% p.a. and Computers @ 20% p.a.
(c) Create Provision for Doubtful Debts @ 5%
(d) General Expenses include ₹ 2,000 paid of wages.

Open in App

Solution

Financial Statements for Mr. G. Vishwanath

Trading Account

for the year ended March 31, 2018

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

8,100

Sales

5,21,870

Purchases

2,74,685

Less: Return Inwards

(2,300)

5,19,570

Less: Return Outwards

(2,100)

2,72,585

Closing Stock

15,600

Wages

54,755

Add: General Expenses

2,000

56,755

Gross Profit (Balancing Figure)

1,97,730

5,35,170

5,35,170

Profit and Loss Account

for the year ended March 31, 2018

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Rent

6,700

Gross Profit

1,97,730

Salaries

35,000

Carriage Outwards

3,100

Interest on Loan

10,000

Add: Interest Outstanding

10,000

20,000

Electricity Charges

4,200

General Expenses

24,000

Less: Wages

(2,000)

22,000

Depreciation on

Motor Van

22,000

Plant and Machinery

16,000

Computer

7,400

45,400

Provision for Doubtful Debts

3,265

Net Profit (Balancing Figure)

58,065

1,97,730

1,97,730

Balance Sheet

as on March 31, 2018

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

2,10,000

Fixed Assets

Add: Net Profit

58,065

2,68,065

Plant and Machinery

1,60,000

Bank Loan

2,00,000

Less: 10% Depreciation

(16,000)

1,44,000

Add: Interest Outstanding

10,000

2,10,000

Motor Van

2,20,000

Current Liabilities

Less: 10% Depreciation

(22,000)

1,98,000

Creditors

29,500

Computer

37,000

Less: 20% Depreciation

(7,400)

29,600

Current Assets

Closing Stock

15,600

Debtors

65,300

Less: Provision for Doubtful Debts

(3,265)

62,035

Cash at Bank

50,000

Cash in Hand
GST Receivable (Input IGST)

6,330
2,000

5,07,565

5,07,565

Working Notes:

(1)Calculation of Interest Outstanding on Loan

Amount of Bank Loan = 2,00,000

Interest on Loan (2,00,000 × 10%)

20,000

Less: Interest Paid

(10,000)

Interest Outstanding

10,000

(2)GST Set off
GST Payable/(Receivable)=Output CGST+Output SGST-Input IGST
=4,000+4,000-10,000=(2,000)

Suggest Corrections

Similar questions

Q. Following Trial Balance has been extracted from the books of Shri Sunder Lal on 31st March, 2018:

Particulars		Debit Balances (₹)	Credit Balances (₹)
Cash in Hand and at Bank	..............................................................	77,400	…
Capital	..............................................................	…	30,00,000
Drawings	..............................................................	1,26,000	...
Bills Receivable	..............................................................	37,200	…
Land and Building	..............................................................	6,51,600	…
Furniture	..............................................................	1,02,400	…
Wages	..............................................................	9,37,700	…
Discount Allowed	..............................................................	79,200	…
Discount Received	..............................................................	…	59,700
6% Loan	..............................................................	…	3,00,000
Bank Charges	..............................................................	2,100	…
Bad Debts	..............................................................	27,600	…
Sundry Debtors	..............................................................	13,15,500	…
Office Salaries	..............................................................	1,28,400	…
Purchases	..............................................................	39,81,600	…
Stock on 1^st April, 2017	..............................................................	12,04,500	…
Sales Return	..............................................................	37,500	…
Carriage Inwards	..............................................................	1,03,600	…
General Expenses	..............................................................	1,53,600	…
Plant and Machinery	..............................................................	4,32,800	…
Rent	..............................................................	72,600	…
Purchases Return	..............................................................	…	29,100
Sales	..............................................................	…	56,30,100
Insurance	..............................................................	14,100	…
Provision for Doubtful Debts	..............................................................	…	93,000
Sundry Creditors	..............................................................	…	3,73,500
Total		94,85,400	94,85,400

Closing Stock on 31st March, 2018 was ₹ 12,74,000. You are required to prepare Trading and Profit and Loss Account for the year ended 31^st March, 2018 and Balance Sheet as at that date after making the following adjustments:
(a) Depreciate Plant and Machinery @ 10% and Furniture @ 5%.
(b) Provision for Doubtful Debts to be maintained at ₹ 1,50,000.
(c) Insurance includes annual premium of ₹ 7,200 on a policy which will expire on 30^th September, 2018.
(d) Purchases include a computer costing ₹ 60,000 purchased on 1^st July, 2017 and is subject to depreciation @ 10% p.a.

Q. Following is the Trial Balance of Atam Prakash as on 31st March, 2018:

Heads of Accounts		Dr. Balances (₹)	Cr. Balances (₹)
Capital A/c	................................................................................	…	8,00,000
Drawings A/c	................................................................................	60,000	…
Stock on 1st April, 2017	................................................................................	4,50,000	…
Purchases	................................................................................	26,00,000	…
Sales	................................................................................	…	31,00,000
Furniture	................................................................................	1,00,000	…
Sundry Debtors	................................................................................	4,00,000	…
Freight and Octroi	................................................................................	46,000	…
Trade Expenses	................................................................................	5,000	…
Salaries	................................................................................	55,000	…
Rent	................................................................................	24,000	…
Advertisement Expenses	................................................................................	50,000	…
Insurance Premium	................................................................................	4,000	…
Commission	................................................................................	…	13,000
Discount	................................................................................	2,000	…
Bad Debts	................................................................................	16,000	…
Provision for Doubtful Debts	................................................................................	…	9,000
Creditors	................................................................................	…	2,00,000
Cash in Hand	................................................................................	52,000	…
Bank	................................................................................	58,000	…
Land and Building	................................................................................	2,00,000	…
Total		41,22,000	41,22,000

Adjustments:
(i) Stock on 31st March, 2018 was valued at ₹ 5,30,000.
(ii) Salaries have been paid so far for 11 months only.
(iii) Unexpired insurance is ₹ 1,000
(iv) Commission earned but not yet received amounting to ₹ 1,220 plus IGST @ 12% is to be recorded in books of account.
(v) Provision for Doubtful Debts is to be bought up 3% of Sundry Debtors.
(vi) Manager is to be allowed a commission of 10% on net profits after charging such commission.
(vii) Furniture is depreciated @ 10% p.a.
(viii) Only one-fourth of advertisement expenses are to be written off.
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as on that date.

Q. From the following balances extracted from the Ledger of Sri Narugopal, prepare Trial Balance as on 31st March, 2018:


	₹		₹
Capital	75,00,000	Building	7,50,000
Plant	15,00,000	Stock on 1st April, 2017	12,50,000
Cash in Hand	2,500	Cash at Bank	5,75,000
Commission Received	1,75,000	Rates, Taxes and Insurance	30,000
Discount (Dr.)	55,000	Discount (Cr.)	45,000
Purchases Return	50,000	Sundry Creditors	2,50,000
Interest Received	30,000	Sales	62,50,000
Repairing Charges	1,25,000	Book Debts	15,00,000
General Expenses	3,00,000	Rent	62,500
Wages	5,00,000	Purchases	48,00,000
Furnitures	1,20,000	Carriage and Freight	75,000
Sales Return	90,000	Delivery Van	5,00,000
Loan Advanced	6,00,000	Travelling Expenses	50,000
Office Salaries	6,25,000	Drawings	6,00,000

Q. On 31st March, 2017 the following Trial Balance was extracted from the books of Sh. Ghanshyam Das:-

	Dr. (₹)	Cr. (₹)
Capital Account		2,00,000
Debtors and Creditors	40,000	25,000
Loan on Mortgage		30,000
Interest on Loan	2,250
Discount		1,800
Stock on 1st April, 2016	20,000
Motor Vehicle	50,000
Cash at Bank	4,450
Investments	16,000
Wages	18,000
Land and Building	2,80,000
Bad-Debts	1,500
Purchases and Sales	2,50,000	4,80,000
Purchases and Sales Returns	12,000	10,000
Carriage Outward	8,000
Carriage Inward	6,500
Salaries	7,200
Outstanding Salaries		600
Rates, Taxes and Insurance	15,000
Advertising	5,000
General Expenses	6,400
Bills Receivable and Payable	7,500	5,400
Prepaid Insurance	3,000
	7,52,800	7,52,800

Prepare Trading and Profit & Loss Account for the year ended 31st March, 2017 and Balance Sheet as at that date, after making adjustments for the following matters:
1. Depreciate Land and Building at 2.5% and Motor Vehicles at 20%.
2. Interest on Loan at 15% p.a. is unpaid for six months.
3. Ghanshyam Das withdrew ₹ 2,000 for his private use. This amount was included in general expenses.
4. Interest on Investments is receivable for full year @ 10%.
5. Provide for Manager's Commission at 10% on Net Profit after charging such commission.
6. Stock in hand on 31st March, 2017 was valued at ₹ 25,000 (Realisable value ₹ 22,000).

Q. Following is the Trial Balance of Mr. Gautam as at 31st March, 2017:

Dr. Balances	(₹)	Cr. Balances	(₹)
Goodwill	30,000	Purchase Returns	2,650
Land & Buildings	60,000	Capital A/c	2,03,000
Plant & Machinery	40,000	Bills Payable	13,800
Loose Tools	3,000	Sundry Creditors	30,000
Bills Receivable	2,000	Sales	1,15,000
Stock 1st April, 2016	40,000
Purchases	51,000
Wages	20,000
Carriage Inwards	1,200
Coal & Gas	5,600
Salaries	4,000
Rent	2,700
Discount allowed	1,500
Cash at Bank	25,000
Cash in hand	1,400
Sundry Debtors	45,000
Repairs	1,800
Printing & Stationery	600
Bad-debts	1,200
Advertisements	3,500
Furniture and Fixtures	1,200
General Expenses	250
Investments	5,000
Drawings	15,000
Carriage Outwards	1,500
Sales Returns	2,000
	3,64,450		3,64,450

You are required to prepare Final Accounts after taking into account the following adjustments:
(a) Closing Stock on 31st March, 2017 was ₹ 60,000.
(b) Depreciate Plant and Machinery at 5%, Loose Tools at 15% and Furniture and fixtures at 5%.
(c) Provide

2 \frac{1}{2} %

for discount on Sundry Debtors and also provide 5% for Bad and Doubtful Debts on Sundry Debtors.
(d) Only three quarter's rent has been paid, the last quarter's rent being outstanding.
(e) Interest earned but not received ₹ 600.
(f) Write off

\frac{1}{4} th

of Advertisement expenses.

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Heads of Accounts		Dr. (₹)	Cr. (₹)
Computers	............................................................	37,000	…
Plant and Machinery	............................................................	1,60,000	…
Motor Van	............................................................	2,20,000	…
Cash in Hand	............................................................	6,330	…
Cash at Bank	............................................................	50,000	…
Stock on 1^st April, 2017	............................................................	8,100	…
Debtors	............................................................	65,300	…
Creditors	............................................................	…	29,500
Purchases	............................................................	2,74,685	…
Sales	............................................................	…	5,21,870
Returns Inwards	............................................................	2,300	…
Returns Outwards	............................................................	…	2,100
Rent	............................................................	6,700	…
Salaries	............................................................	35,000	…
Bank Loan taken on 1^st April, 2017 @ 10% p.a	............................................................	…	2,00,000
Carriage Outwards	............................................................	3,100	…
Wages	............................................................	54,755	…
Interest	............................................................	10,000	…
Electric Charges	............................................................	4,200	…
General Expenses	............................................................	24,000	…
Capital	............................................................	…	2,10,000
Input IGST	............................................................	10,000	…
Output CGST	............................................................	…	4,000
Output SGST	............................................................	…	4,000
Total		9,71,470	9,71,470

Financial Statements for Mr. G. Vishwanath Trading Account for the year ended March 31, 2018
Dr.					Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Opening Stock		8,100	Sales	5,21,870
Purchases	2,74,685		Less: Return Inwards	(2,300)	5,19,570
Less: Return Outwards	(2,100)	2,72,585	Closing Stock		15,600
Wages	54,755
Add: General Expenses	2,000	56,755
Gross Profit (Balancing Figure)		1,97,730
		5,35,170			5,35,170

Profit and Loss Account for the year ended March 31, 2018
Dr.			Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Rent		6,700	Gross Profit	1,97,730
Salaries		35,000
Carriage Outwards		3,100
Interest on Loan	10,000
Add: Interest Outstanding	10,000	20,000
Electricity Charges		4,200
General Expenses	24,000
Less: Wages	(2,000)	22,000
Depreciation on
Motor Van	22,000
Plant and Machinery	16,000
Computer	7,400	45,400
Provision for Doubtful Debts		3,265
Net Profit (Balancing Figure)		58,065
		1,97,730		1,97,730

Balance Sheet as on March 31, 2018
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital	2,10,000		Fixed Assets
Add: Net Profit	58,065	2,68,065	Plant and Machinery	1,60,000
Bank Loan	2,00,000		Less: 10% Depreciation	(16,000)	1,44,000
Add: Interest Outstanding	10,000	2,10,000	Motor Van	2,20,000
Current Liabilities			Less: 10% Depreciation	(22,000)	1,98,000
Creditors		29,500	Computer	37,000
			Less: 20% Depreciation	(7,400)	29,600
			Current Assets
			Closing Stock		15,600
			Debtors	65,300
			Less: Provision for Doubtful Debts	(3,265)	62,035
			Cash at Bank		50,000
			Cash in Hand GST Receivable (Input IGST)		6,330 2,000
		5,07,565			5,07,565

Interest on Loan (2,00,000 × 10%)	20,000
Less: Interest Paid	(10,000)
Interest Outstanding	10,000