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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.

Account TitleAmt. (Rs.)Amt. (Rs.)Opening Stock10,000Purchases and Sales40,00080,000Returns200600Wages6,000Dock and Clearing Charges4,000Lighting500Miscellaneous Income6,000Rent2,000Capital40,000Drawings2,000Debtors and Creditors6,0007,000Cash3,000Investment6,000Patents4,000Land and Machinery43,000Donations and Charity600Sales Tax Collected1,000Furniture11,300¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,36,600––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,36,600––––––––

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.


Solution

                                          Trading and Profit and Loss AccountDr.                                                 as on 31 December, 2010                                                                     Cr.ParticularsAmt. (Rs)ParticularsAmt. (Rs) Opening Stock10,000 Sales80,000 Purchases40,000  (-) Sales Return  200–––79,800(-) Purchase Return    600–––––39,400 Closing Stock2,000 Wages6,000 Dock and Clearing Charges4,000 Gross Profit c/d22,400¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯81,800––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯81,800–––––––––––– Donation and Charity600 Gross Profit b/d22,400 Interest an Capital2,000 Interest on Drawings140 Depreciation on Furniture565 Interest on Investment360 Depreciation on Land and Machinery2,150 Miscellaneous Income6,000 Lighting 500 Rent Received2,000 Net Profit24,985(-) Unexpired Rent    100–––––1,900¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯30,800––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯30,800––––––––––––

                                          Balance Sheet                                  as on 31 st March, 2010Capital and LiabilitiesAmt. (Rs.)AssetsAmt. (Rs.)Capital40,000Furniture11,300(+)Interest on Capital2,000()Depreciation @5%    565–––––10,735¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯42,000Land and Machinery43,000(+)Net Profit24,985()Depreciation @5%2,150––––40,850¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯66,985()Drawings2,000Investment6,000()Interest     140–––––64,845(+)Interest @6%   360––––6,360Unexpired Rent100Debtors6,000Sales Tax Collected1,000Cash3,000Creditors7,000Patents4,000Closing Stock2,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯      72,945––––––––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯      72,945––––––––––––––––––

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