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Followingt Trial Balance has been extracted from the books of Santosh on 31st March, 2018:

Particulars Debit balances
(₹)
Credit balances
(₹)
Drawings 20,000
Plant and Machinery 10,00,000
Furniture and Fixtures 1,20,000
Capital A/c 19,60,000
Sales 46,80,000
Loose Tools 2,00,000
Goodwill 1,00,000
Opening Stock 2,00,000
Returns Outward 40,000
Discount 60,000
Purchases 21,20,000
Returns Inward 80,000
Wages 10,00,000
Sundry Creditors 2,40,000
Provision for Doubtful Debts 20,000
Carriage Inwards 1,20,000
Salaries 4,16,000
General Expenses 7,20,000
Rent 1,44,000
Postage 40,000
Output IGST 1,00,000
Output CGST 50,000
Output SGST 50,000
Sundry Debtors 5,60,000
Shri B. Barua 20,000
Cash and Bank Balances 1,40,000
Input IGST 1,10,000
Input CGST 45,000
Input SGST 45,500
Total 72,00,000 72,00,000

Following additional information is available:
(a) Stock on 31st March, 2018 was ₹3,08,000.
(b) Depreciation is to be charged on Plant and Machinery at 5% and Furniture and Fixtures at 6%. Loose Tools are revalued at ₹1,60,000.
(c)Provision for Doubtful Debts is to be maintained at 5% on Sundry Debtors.
(d) Remuneration of ₹20,000 paid to Shri B. Barua, a temporary employee, stands debited to his personal account and it is to be corrected.
(e) Unexpired insurance was ₹4,000.
You are to prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as at that date.

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Solution

Trading Account
for the year ended March 31, 2018
Dr.
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
2,00,000
Sales
46,80,000
Purchases
21,20,000
Less: Returns
80,000
46,00,000
Less: Returns
40,000
20,80,000
Closing Stock
3,08,000
Carriage Inwards
1,20,000
Wages
10,00,000
Gross Profit
15,08,000
16,80,600
16,80,600
Profit & Loss Account
for the year ended March 31, 2018
Dr.
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
General Expenses
7,20,000
Gross Profit 15,08,000
Salaries
4,16,000
Discount
60,000
Add: Outstanding Salaries
20,000
4,36,000
Unexpired Insurance
4,000
Postage
40,000
Provision for Doubtful Debts
8,000
Rent
1,44,000
Depreciation on:
Furniture & Fixtures
7,200
Plant & Machinery
50,000
Loose Tools
40,000
97,200
Net Profit
1,26,800
15,72,000
15,72,000
Balance Sheet
as on March 31, 2018
Dr.
Cr.
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
2,40,000
Furniture & Fixtures
1,20,000
Capital
19,60,000
Less: Depreciation
7,200
1,12,800
Less: Drawings
20,000
Plant & Machinery
10,00,000
Add: Net Profit
1,26,800
20,66,800
Less: Depreciation
50,000
9,50,000
Debtors
5,60,000
Less: Provision
28,000
5,32,000
Cash & Bank Balances
1,40,000
Closing Stock
3,08,000
Goodwill
1,00,000
Loose Tools
1,60,000
Prepaid Insurance
4,000
23,06,800
23,06,800

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Q. ​On 31st March, 2018 the following Trial Balance was extracted from the books of Mohan:

Particulars Debit Balances
(₹)
Credit Balances
(₹)
Capital 3,00,000
Plant and Machinery 50,000
Debtors 2,00,000
Creditors 1,00,000
Loan 95,000
Interest on Loan 3,000
Cash 20,000
Provision for Doubtful Debts 7,000
Stock on 1st April, 2017 68,000
Motor Vehicles 1,00,000
Bank 35,000
Land and Building 1,20,000
Bad Debts 5,000
Purchases 6,60,000
Sales 11,00,000
Purchases Return 15,000
Sales Return 80,000
Carriage Outwards 25,000
Carriage Inwards 30,000
Salaries 90,000
Rent and Insurance 30,000
Advertising 35,000
Discount Received 5,000
General Expenses 34,000
Bills Receivable 60,000
Bills Payable 20,000
Rent Received 3,000
Total 16,45,000 16,45,000
Prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as at that date after taking into account the following:
(a) Stock as at 31st March, 2018 was valued at ₹70,000.
(b) All debtors are considered good for recovery.
(c) Depreciate Motor Vehicles by 20%.
(d) Bank intimation of customer's cheque of ₹10,000 being dishonoured is not recorded in the books.
(e) Travelling expenses of ₹5,000 paid to sales person was wrongly debited to his Personal Account and was included in debtors.
(f) Amount of ₹6,000 received from Ronit was credited to his account and was included in creditors. This amount was written off as bad debt in earlier years.

(g) Drawings included an amount of ₹2,000 being amount drawn in cash. It was used by Mohan for Purchase of stationery used in business.
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