Question

Following is the Trial Balance of M/s Shetty Traders, as on 31st March 2011 Prepare Trading Profit and Loss Account for the year ended 31st March, 2011 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2011
Particulars	Debit Amount Rs	Credit Amount Rs
Land and Buildings	50,000
Machinery	40,000
Salaries	21,000
Cash in Bank	50,000
Cash in hand	1,100
Office expenses	1,000
Motor Van	18,000
Capital		1,70,000
Carriage	5,000
Purchases and Sales	2,20,000	2,88,000
Returns	2,000	5,500
Bad debts	1,000
Sundry Debtors and Creditors	32,800	35,000
Rent	1,100
Printing and Stationery	1,500
Bills payable		32,000
R.D.D.		1,000
Travelling expenses	5,500
Opening stock	30,000
Insurance	1,500
Discount	6,000
Advertisement	14,000
Furniture	30,000
Total	5,31,500	5,31,500

Adjustment:

1) Closing stock was valued Rs 41,000.

2) Goods of Rs 5,000 withdrawn for personal use but not recorded.

3) Goods of Rs 1,000 distributed as free sample.

4) Debtors of Rs 800 were bad and Provide R.D.D. at 5% on debtors and make a provison for discount on creditors at 2%.

5) Depreciate Machinery by 10% p.a. and Building by 5% p.a.

Answer 1

Financial Statement of M/s Shetty Traders
Trading Account for the year ended 31st March, 2011
Dr.	Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Opening Stock			30,000	Sales	2,88,000
Purchases		2,20,000		Less: Returns	(2,000)	2,86,000
Less: Returns		(5,500)		Closing Stock		41,000
Less: Drawings		(5,000)
Less: Free Samples		(1,000)	2,08,500
Carriage			5,000
Gross Profit (Balancing Figure)			83,500
			3,27,000			3,27,000

Profit and Loss Account for the year ended March 31, 2011
Dr.	Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Salaries			21,000	Gross Profit	83,500
Office Expenses			1,000	Discount on Creditors	700
Bad Debts		1,000
Add: Further Bad Debts		800
Add: R.D.D		600	2,400
Advertisement		14,000
Add: Free Samples		1,000	15,000
Depreciation on:
Land & Building		2,500
Machinery		4,000	6,500
Rent			1,100
Printing & Stationery			1,500
Travelling Expenses			5,500
Insurance			1,500
Discount			6,000
Net Profit (Balancing Figure)			22,700
			84,200		84,200

Balance Sheet as on March 31, 2011
Liabilities			Amount (Rs)	Assets			Amount (Rs)
Capital		1,70,000		Fixed Assets
Less:Drawings		(5,000)		Land & Building	50,000
Add: Net Profit		22,700	1,87,700	Less:Depreciation @ 5%	(2,500)		47,500
				Machinery	40,000
Current Liabilities				Less:Depreciation @ 10%	(4,000)		36,000
Creditors	35,000			Motor Van			18,000
Less:Discount	(700)		34,300	Furniture			30,000
Bills Payable			32,000
				Current Assets
				Closing Stock			41,000
				Debtors		32,800
				Less:Bad Debts		(800)
				Less:R.D.D		(1,600)	30,400
				Cash in Hand			1,100
				Cash at Bank			50,000
			2,54,000				2,54,000