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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 31st 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 30th September, 2018.
(d) Purchases include a computer costing ₹ 60,000 purchased on 1st July, 2017 and is subject to depreciation @ 10% p.a.

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Solution

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 (60,000×10100×912)

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.

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Similar questions
Q. Following is the Trial Balance of Shri Bansi Lal as on 31st March, 2018. You are required to prepare Final Accounts:
Particulars
Dr.
(₹)
Cr.
(₹)
Sundry Creditors ................................................................................
63,000
Sundry Debtors ................................................................................
1,45,000
Capital A/c ................................................................................
7,10,000
Drawings ................................................................................
52,450
Insurance ................................................................................
6,000
General Expenses ................................................................................
30,000
Salaries ................................................................................
1,50,000
Patents ................................................................................
75,000
Machinery ................................................................................
2,00,000
Freehold Land ................................................................................
1,00,000
Building ................................................................................
3,00,000
Stock on 1st April, 2017 ................................................................................
57,600
Carriage on Purchases ................................................................................
20,400
Carriage on Sales ................................................................................
32,000
Fuel and Power ................................................................................
47,300
Wages ................................................................................ 1,04,800
Returns Outward ................................................................................
5,000
Returns Inward ................................................................................
6,800
Sales ................................................................................
9,87,800
Purchases ................................................................................
4,06,750
Cash at Bank ................................................................................
30,300
Cash in Hand ................................................................................
5,400
Input CGST ................................................................................
20,000
Input SGST ................................................................................
20,000
Output CGST ................................................................................ 22,000
Output SGST ................................................................................
22,000
Total
18,09,800
18,09,800

Following adjustments are to be made:
(a) Stock on 31st March, 2018 was valued at ₹ 68,000.
(b) Provision for Doubtful Debts is to be created to the extent of 5% on Debtors.
(c) Depreciate Machinery by 10% and Patents by 20%.
(d) Wages include a sum of ₹ 20,000 spent on the erection of a cycle shed for employees and customers.
(e) Salaries for the month of March, 2018 amounted to ₹ 15,000 were unpaid.
(f) Insurance includes a premium of ₹ 1,700 on a policy expiring on 30th September, 2018.
Q. 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 1st 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 1st 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 31st 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.
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