Question

Following is the Trial Balance of Komal Jaggi as on 31st March 2010 Prepare Trading and Profit and Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2010
Particulars	Amount Rs	Particulars	Amount Rs
Stock on 1-4-2009 Purchases Return inward Wages Insurance Salaries Rent & Taxes Bad debts Discount allowed Machinery Buildings Sundry debtors Advertisement Carriage inward Cash in hand Cash at Bank Office expenses Drawings	50,000 1,19,000 3,000 7,750 1,500 9,400 5,000 1,000 2,000 25,000 55,000 70,000 10,000 2,350 6,000 8,000 2,000 4,000	Sales Return outward Discount received Sundry Creditors Capital Bank Loan Bills Payable	1,90,000 1,500 2,500 52,000 1,00,000 30,000 5,000
Total	3,81,000	Total	3,81,000

Adjustment:

1) On 31st March 2010 the stock was valued Rs 30,000

2) Outstanding Wages Rs 1,250 and Rent Rs 1,000

3) Insurance was paid for the year ending 30th Sep. 2010

4) Depreciate Machinery 10% and Buildings by 4% p.a.

5) Provide R.D.D. at 5% on Sundry Debtors.

Answer 1

Financial Statements of Komal Jaggi
Trading Account for the year ended 31st March, 2010
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Opening Stock			50,000	Sales	1,90,000
Purchases		1,19,000		Less: Return Inwards	(3,000)	1,87,000
Less: Return Outwards		(1,500)	1,17,500	Closing Stock		30,000
Carriage Inwards			2,350
Wages		7,750
Add: Outstanding		1,250	9,000
Gross Profit (Balancing Figure)			38,150
			2,17,000			2,17,000

Profit and Loss Account for the year ended March 31, 2010
Dr.						Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Rents & Taxes		5,000		Gross Profit	38,150
Add: Outstanding		1,000	6,000	Discount	2,500
Salaries			9,400
Insurance		1,500
Less: Prepaid		(750)	750
Bad Debts		1,000
Add: R.D.D		3,500	4,500
Discount			2,000
Depreciation on:
Machinery		2,500
Building		2,200	4,700
Advertisement			10,000
Office Expenses			2,000
Net Profit (Balancing Figure)			1,300
			40,650		40,650

Balance Sheet as on March 31, 2010
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital	1,00,000		Fixed Assets
Less:Drawings	(4,000)		Machinery	25,000
Add: Net Profit	1,300	97,300	Less:Depreciation @ 10%	(2,500)	22,500
			Building	55,000
Current Liabilities			Less:Depreciation @ 4%	(2,200)	52,800
Outstanding Rent		1,000
Outstanding Wages		1,250	Current Assets
Creditors		52,000	Closing Stock		30,000
Bank Loan		30,000	Debtors	70,000
Bills Payable		5,000	Less:R.D.D	(3,500)	66,500
			Prepaid Insurance		750
			Cash in Hand		6,000
			Cash at Bank		8,000
		1,86,550			1,86,550

Note: The total of Balance Sheet is different from that given in the book, it is because of difference in the balance of Profit and Loss Account as per our solution it shows the Net Profit of Rs 1,300 whereas there is Net Loss of Rs 3,700 as per the book.