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Question

From the following balances of M/s Jyoti Exports, prepare trading and profit and loss account for the year ended March 31, 2017 and balance sheet as on this date.

Account Title

Debit

Amount

Rs

Account Title

Credit

Amount

Rs

Sundry debtors

9,600

Sundry creditors

2,500

Opening stock

22,800

Sales

72,670

Purchases

34,800

Purchases returns

2,430

Carriage inwards

450

Bills payable

15,600

Wages

1,770

Capital

42,000

Office rent

820

Insurance

1,440

Factory rent

390

Cleaning charges

940

Salary

1,590

Building

24,000

Plant and Machinery

3,600

Cash in hand

2,160

Gas and Water

240

Octroi

60

Furniture

20,540

Patents

10,000

1,35,200

1,35,200

Closing stock Rs 10,000.

1. To provision for doubtful debts is to be maintained at 5 per cent on sundry debtors.

2. Wages amounting to Rs 500 and salary amounting to Rs 350 are outstanding.

3. Factory rent prepaid Rs 100.

4. Depreciation charged on Plant and Machinery @ 5% and Building @ 10%.

5. Outstanding insurance Rs 100.

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Solution

Trading Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Opening Stock

22,800

Sales

72,670

Purchases

34,800

Closing Stock

10,000

Less: Purchases Return

2,430

32,370

Carriage Inwards

450

Wages

1,770

Add: Outstanding Wages

500

2,270

Factory Rent

390

Less: Prepaid Rent

100

290

Gas and Water

240

Octroi

60

Cleaning Charges

940

Gross Profit

23,250

82,670

82,670

Profit and Loss Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Office Rent

820

Gross Profit

23,250

Insurance

1,440

Add: Outstanding Insurance

100

1,540

Depreciation on Plant and Machinery

180

Salary

1,590

Add: Outstanding Salary

350

1,940

Provision for Doubtful Debts

480

Depreciation on Building

2,400

Net Profit

15,890

23,250

23,250

Balance Sheet

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital

42,000

Sundry Debtors

9,600

Add: Net Profit

15,890

57,890

Less: New Provision

480

9,120

Sundry Creditors

2,500

Building

24,000

Bills Payable

15,600

Less: Depreciation

2,400

21,600

Outstanding Salary

350

Plant and Machinery

3,600

Outstanding Wages

500

Less: Depreciation

180

3,420

Outstanding Insurance

100

Cash in Hand

2,160

Furniture

20,540

Patents

10,000

Closing Stock

10,000

Prepaid Factory Rent

100

76,940

76,940

Note: As per solution Net Profit is Rs 15,890 and Total of the Balance Sheet is Rs 76,940. However, NCERT shows Net Profit Rs 15,895 and Total of the Balance Sheet Rs 76,945.


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