Question

​Following is the Trial Balance of Mr. Bharat on 31st March, 2018.

Particulars	Dr. (₹)	Cr. (₹)
Capital		40,000
Plant and Machinery	50,000
Office Furniture and Fittings	2,600
Stock on 1st April, 2017	48,000
Accrued Commission	12,000
Sundry Debtors	45,700
Cash in Hand	400
Cash at Bank	6,500
Wages	1,50,000
Salaries	14,000
Purchases	2,13,500
Sales		4,80,000
Bills Receivable	7,200
Bills Payable		5,600
Sundry Creditors		52,000
Returns Inward	9,300
Provision for Doubtful Debts		2,500
Drawings	7,000
Returns Outward		5,500
Rent	6,000
Factory Lighting and Heating	800
Insurance	6,300
General Expenses	1,000
Bad Debts	2,500
Discount	6,500	3,700
Total	5,89,300	5,89,300
	​

Following adjustments are to be made:
(a) Stock on 31st March, 2018 ₹52,000.
(b) Three months' factory lighting and heating due but not paid ₹300.
(c) 5% depreciation to be written off on furniture.
(d) Write off further Bad Debts ₹700.
(e) Provision for Doubtful Debts to be increased to ₹3,000 and Provision of Discount on Debtors @ 2% to be made.
(f) During the year, machinery was purchased for ₹20,000 but it was debtied to the Purchases Account.

You are required to prepare Trading Account, Profit and Loss Account and Balance Sheet.

Answer 1

Trading Account for the year ended March 31, 2018
Dr.						Cr.
Particulars			Amount (₹)	Particulars		Amount (₹)
Opening Stock			48,000	Sales	4,80,000
Purchases	2,13,500			Less: Returns	9,300	4,70,700
Less: Machinery	20,000			Closing Stock		52,000
Less: Returns	5,500		1,88,000
Factory Lighting & Heating		800
Add: Outstanding		300	1,100
Wages			1,50,000
Gross Profit			1,35,600
			5,22,700			5,22,700

Profit & Loss Account for the year ended March 31, 2018
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Depreciation on Furniture		130	Gross Profit	1,35,600
Discount		6,500	Discount	3,700
General Expenses		1,000
Insurance Premium		6,300
Rent		6,000
Bad Debts	2,500
Add: Further Bad Debts	700
Add: Provision for Doubtful Debts	500
Add: Provision for Discount on Debtors	840	4540
Salaries		14,000
Net Profit		1,00,830
		1,39,300		1,39,300

Balance Sheet as on March 31, 2018
Dr.					Cr.
Liabilities		Amount (₹)	Assets		Amount (₹)
Bills Payable		5,600	Furniture & Fixtures	2,600
Creditors		52,000	Less: Depreciation	130	2,470
Factory, Lighting & Heating O/s		300	Debtors	45,700
Capital	40,000		Less: Further Bad Debts	700
Less: Drawings	7,000		Less: Provision for DD	3,000
Add: Net Profit	1,00,830	1,33,830	Less: Provision for Discount	840	41,160
			Plant & Machinery	50,000
			Add: Machinery	20,000	70,000
			Accrued Commission		12,000
			Bills Receivable		7,200
			Closing Stock		52,000
			Cash in Hand		400
			Cash at Bank		6,500
		1,91,730			1,91,730