Question

From the following Trial Balance of M/s Manali Traders, you are required to Prepare a Trading and Profit & Loss Account for the year ended 31st March, 2011 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2011
Particulars	Amount Rs	Particulars	Amount Rs
Drawings	3,000	Capital	85,000
Opening Stock	10,000	Creditors	45,000
Purchases	82,400	Sales	1,44,000
Office Salary	6,000	R.D.D.	1,000
Royalty	2,000	Return outward	2,400
Trade Expenses	1,600	Bills Payable	5,000
Advertisement	5,200	Outstanding wages and salaries	2,600
Wages and Salaries	10,400
Cash in hand	8,000
Sundry Debtors	51,000
Bad debts	400
Investment	16,000
Motor Car	30,000
Furniture	10,000
Office rent	3,400
Plant and Machinery	30,000
Freehold Property	10,000
Bills Receivable	4,000
Interest	1,600
Total	2,85,000	Total	2,85,000

Adjustment:

1) Closing stock was valued at Rs 15,000.

2) Depreciate freehold property at 10% and Motor Car by 25% p.a.

3) Write of Rs 1000 as bad debts and provide 5% R.D.D. on Sundry Debtors and Provide 2% for discount on debtors and creditors.

4) 10% Interest on Investment is accrued for 6 months

5) Office Salary Rs 1,000 paid in advance.

Answer 1

Financial Statement of M/s Manali Traders
Trading Account for the year ended 31st March, 2011
Dr.	Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Opening Stock			10,000	Sales	1,44,000
Purchases		82,400		Closing Stock	15,000
Less: Returns		(2,400)	80,000
Wages& Salaries			10,400
Royalty			2,000
Gross Profit (Balancing Figure)			56,600
			1,59,000		1,59,000

Profit and Loss Account for the year ended March 31, 2011
Dr.	Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Salaries		6,000		Gross Profit	56,600
Less:Prepaid		(1,000)	5,000	Discount on Creditors	900
Trade Expenses			1,600	Accrued Interest $\left(16,000\times 10\%\times \frac{6}{12}\right)$	800
Bad Debts		400
Add:further Bad Debts		1,000
Add: New R.D.D		2,500
Less: Old R.D.D		(1,000)	2,900
Advertisement			5,200
Depreciation on:
Motor Car		7,500
Freehold Property		1,000	8,500
Discount on Debtors			950
Office Rent			3,400
Interest			1,600
Net Profit (Balancing Figure)			29,150
			58,300		58,300

Balance Sheet as on March 31, 2011
Liabilities			Amount (Rs)	Assets			Amount (Rs)
Capital		85,000		Fixed Assets
Less:Drawings		(3,000)		Motor Car	30,000
Add: Net Profit		29,150	1,11,150	Less:Depreciation @ 25%	(7,500)		22,500
				Freehold Property	10,000
Current Liabilities				Less:Depreciation @ 10%	(1,000)		9,000
Creditors	45,000			Investment			16,000
Less: Discount	(900)		44,100	Furniture			10,000
Bills Payable			5,000	Plant & Machinery			30,000
Outstanding Wages & Salaries			2,600
				Current Assets
				Closing Stock			15,000
				Prepaid Salary			1,000
				Debtors		51,000
				Less:Bad Debts		(1,000)
				Less:R.D.D		(2,500)
				Less:Discount on Debtors		(950)	46,550
				Cash in Hand			8,000
				Bills Receivables			4,000
				Accrued Interest			800
			1,62,850				1,62,850