Question

From the following balances extracted from the book of M/s Manju Chawla on March 31, 2010. You are requested to prepare the trading and profit and loss account and a balance sheet as on this date.

$\begin{array}{ccc}\text{Account Title}& \text{Amt. (Rs.)}& \text{Amt. (Rs.)}\\ \text{Opening Stock}& 10,000& \\ \text{Purchases and Sales}& 40,000& 80,000\\ \text{Returns}& 200& 600\\ \text{Wages}& 6,000& \\ \text{Dock and Clearing Charges}& 4,000& \\ \text{Lighting}& 500& \\ \text{Miscellaneous Income}& & 6,000\\ \text{Rent}& & 2,000\\ \text{Capital}& & 40,000\\ \text{Drawings}& 2,000& \\ \text{Debtors and Creditors}& 6,000& 7,000\\ \text{Cash}& 3,000& \\ \text{Investment}& 6,000& \\ \text{Patents}& 4,000& \\ \text{Land and Machinery}& 43,000& \\ \text{Donations and Charity}& 600& \\ \text{Sales Tax Collected}& & 1,000\\ \text{Furniture}& 11,300& \\ & \overline{\underset{–}{1,36,600}}& \overline{\underset{–}{1,36,600}}\end{array}$

Closing Stock was. Rs 2,000.

(a) Interest on drawings @ $7\%$ and interest on capital @ $5\%$.

(b) Land and machinery is depreciated at $5\%$.

(c) Interest on investment @ $6\%$.

(d) Unexpired rent Rs 100.

(e) Charge $5\%$ depreciation on furniture.

Answer 1

$\text{Trading and Profit and Loss Account}\text{Dr.}\text{as on 31 December, 2010}\text{Cr.}\begin{array}{ccccccc}\text{Particulars}& & \text{Amt. (Rs)}& \text{Particulars}& & \text{Amt. (Rs)}& \\ \text{Opening Stock}& & 10,000& \text{Sales}& 80,000& & \\ \text{Purchases}& 40,000& & \text{(-) Sales Return}& \underset{–}{200}& 79,800& \\ \text{(-) Purchase Return}& \underset{–}{600}& 39,400& \text{Closing Stock}& & 2,000& \\ \text{Wages}& & 6,000& & & & \\ \text{Dock and Clearing Charges}& & 4,000& & & & \\ \text{Gross Profit c/d}& & 22,400& & & & \\ & & \overline{\underset{–}{\underset{–}{81,800}}}& & & \overline{\underset{–}{\underset{–}{81,800}}}& \\ \text{Donation and Charity}& & 600& \text{Gross Profit b/d}& & 22,400& \\ \text{Interest an Capital}& & 2,000& \text{Interest on Drawings}& & 140& \\ \text{Depreciation on Furniture}& & 565& \text{Interest on Investment}& & 360& \\ \text{Depreciation on Land and Machinery}& & 2,150& \text{Miscellaneous Income}& & 6,000& \\ \text{Lighting}& & 500& \text{Rent Received}& 2,000& & \\ \text{Net Profit}& & 24,985& \text{(-) Unexpired Rent}& \underset{–}{100}& 1,900& \\ & & \overline{\underset{–}{\underset{–}{30,800}}}& & & \overline{\underset{–}{\underset{–}{30,800}}}& \end{array}$

$\text{Balance Sheet}\text{as on 31 st March, 2010}\begin{array}{cccccc}\text{Capital and Liabilities}& & \text{Amt. (Rs.)}& \text{Assets}& & \text{Amt. (Rs.)}\\ \text{Capital}& 40,000& & \text{Furniture}& 11,300& \\ (+)\text{Interest on Capital}& 2,000& & (-)\text{Depreciation}@5\%& \underset{–}{565}& 10,735\\ & \overline{42,000}& & \text{Land and Machinery}& 43,000& \\ (+)\text{Net Profit}& 24,985& & (-)\text{Depreciation}@5\%& \underset{–}{2,150}& 40,850\\ & \overline{66,985}& & & & \\ (-)\text{Drawings}& 2,000& & \text{Investment}& 6,000& \\ (-)\text{Interest}& \underset{–}{140}& 64,845& (+)\text{Interest}@6\%& \underset{–}{360}& 6,360\\ \text{Unexpired Rent}& & 100& \text{Debtors}& & 6,000\\ \text{Sales Tax Collected}& & 1,000& \text{Cash}& & 3,000\\ \text{Creditors}& & 7,000& \text{Patents}& & 4,000\\ & & & \text{Closing Stock}& & 2,000\\ & & \overline{\underset{–}{\underset{–}{72,945}}}& & & \overline{\underset{–}{\underset{–}{72,945}}}\end{array}$