Question

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 1st 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.

Answer 1

Financial Statements of Shri Sunder Lal Trading Account for the year ended March 31, 2018
Dr.							Cr.
Particulars			Amount (₹)	Particulars			Amount (₹)
Opening Stock			12,04,500	Sales		56,30,100
Purchases		39,81,600		Less: Returns		37,500	55,92,600
Less: Returns		(29,100)		Closing Stock			12,74,100
Less: Computer		(60,000)	38,92,500
Wages			9,37,700
Carriage Inwards			1,03,600
Gross Profit (Balancing Figure)			7,28,400
			68,66,700				68,66,700

Profit and Loss Account for the year ended March 31, 2018
Dr.					Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Office Salaries			1,28,400	Gross Profit	7,28,400
General Expenses			1,53,600	Discount Received	59,700
Bank Charges			2,100
Discount Allowed			79,200
Depreciation on:
Plant and Machinery		43,280
Furniture Computer $(60,000\times \frac{10}{100}\times \frac{9}{12})$		5,120 4,500	52,900
Rent and Rates			72,600
Bad Debts		27,600
Add: Provision for Doubtful Debts		1,50,000
Less: Existing Provision		(93,000)	84,600
Insurance		14,100
Less: Prepaid Insurance (7,200 × 6/12)		(3,600)	10,500
Outstanding Interest on Loan			18,000
Net Profit (Balancing Figure)			1,86,200
			7,88,100		7,88,100

Balance Sheet as on March 31, 2018
Liabilities		Amount (₹)	Assets		Amount (₹)
Sundry Creditors		3,73,500	Cash in Hand and Bank		77,400
6% Loan	3,00,000		Bills Receivable		37,200
Add: Outstanding interest	18,000	3,18,000	Sundry Debtors	13,15,500
(3,00,000 × 6% for 12 months)			Less: Provision of Doubtful Debts	(1,50,000)	11,65,500
Capital	30,00,000		Plant and Machinery	4,32,800
Less: Drawings	(1,26,000)		Less: 10% Depreciation	(43,280)	3,89,520
Add: Net Profit	1,86,200	30,60,200	Furniture	1,02,400
			Less: 5% Depreciation	(5,120)	97,280
			Land and Building		6,51,600
			Computer 60,000 Less:10% Depreciation for 9 months (4,500)		55,500
			Prepaid Insurance		3,600
			Closing Stock		12,74,100
		37,51,700			37,51,700

Note:Net Profit as per computation should be ₹1,86,200 but as per Text Book it is ₹1,82,600.