Question

Form the following Trial Balance of M/s Deven Traders you are require to Prepare Trading, Profit and Loss A/c for the year ending 31st March, 2011 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2011
Particulars	Amount Rs	Particulars	Amount Rs
Opening Stock Purchases Wages Investments Carriage outward Printing & stationery Insurance Salaries Postage and Telegram Machinery Furniture Debtors Bills Receivable Cash at Bank Advertisement Bad debts Carriage Inward	15,000 45,700 9,900 3,500 4,600 3,400 750 10,000 700 26,800 6,400 25,000 4,000 6,000 1,000 250 4,500	Capital Bills payable Outstanding Salary Sales Creditors Bank overdraft	60,000 11,000 1,700 79,800 12,000 3,000
Total	1,67,500	Total	1,67,500

Adjustment:

1) Closing stock was valued at Rs 61,500.

2) Unexpired insurance Rs 200.

3) Carriage inward included Rs 3,200 paid for transport on new machinery purchased on 1-4-2010.

4) Outstanding wages were Rs 1,100.

5) Depreciate Machinery by 10% and Furniture by Rs 400.

Answer 1

Financial Statements of M/s Deven Traders
Trading Account for the year ended 31st March, 2011
Dr.	Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Opening Stock			15,000	Sales	79,800
Purchases			45,700	Closing Stock	61,500
Wages		9,900
Add:Outstanding		1,100	11,000
Carriage Inward		4,500
Less: Machinery’s Transportation Charges		(3,200)	1,300
Gross Profit (Balancing Figure)			68,300
			1,41,300		1,41,300

Profit and Loss Account for the year ended March 31, 2011
Dr.	Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Postage& Telegram			700	Gross Profit	68,300
Carriage Outward			4,600
Advertisement			1,000
Printing & Stationery			3,400
Bad Debts			250
Insurance		750
Less: Unexpired		(200)	550
Depreciation on:
Furniture		400
Machinery		3,000	3,400
Salaries			10,000
Net Profit (Balancing Figure)			44,400
			68,300		68,300

Balance Sheet as on March 31, 2011
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital	60,000		Fixed Assets
Add: Net Profit	44,400	1,04,400	Furniture	6,400
			Less:Depreciation	(400)	6,000
Current Liabilities			Machinery	26,800
Creditors		12,000	Add: Transportation Charges	3,200
Bank Overdraft		3,000	Less:Depreciation @ 10%	(3,000)	27,000
Outstanding Wages		1,100	Investments		3,500
Bills Payable		11,000
Outstanding Salary		1,700	Current Assets
			Closing Stock		61,500
			Unexpired Insurance		200
			Debtors		25,000
			Bills Receivables		4,000
			Cash at Bank		6,000
		1,33,200			1,33,200

Note: As per the book, the total of Balance Sheet is Rs 1,11,700 but as per our solution it is Rs 1,33,200, which is due to the Gross Profit of Rs 68,300 (as per our solution).