Question

From the following Trial Balance of M/s. Ram Lal and Sons, prepare Trading, Profit and Loss Account for the year ending 31st March, 2018 and a Balance Sheet as on that date:​

Heads of Accounts	Dr. (₹)	Cr. (₹)
Drawings	15,000
Capital		3,50,000
Plant and Machinery	2,05,000
Debtors	50,000
Creditors		28,000
Returns Inward	8,000
Returns Outward		7,000
Discount Allowed	7,000
Discount Received		6,000
Commission	15,000
Interest on Bank Loan	12,000
Furniture	55,000
Provision for Doubtful Debts		13,000
Wages	50,000
Salaries	45,000
Advertisement	15,000
Rent and Taxes	13,000
Purchases	2,60,000
Sales		4,00,000
Stock on 1st April, 2017	70,000
Carriage	5,000
Land and Building	98,000
Cash in Hand	8,000
Cash at Bank	20,000
10% Bank Loan as on 1st April, 2017		1,50,000
Input CGST	9,000
Input SGST	9,000
Output IGST		15,000
Total	9,69,000	9,69,000
	​

Adjustments:
(i) The cost of stock on 31st March, 2018 was ₹37,000. However, its market value was ₹35,000.
(ii) Wages outstanding were ₹6,000 and salaries outstanding were ₹5,000 on 31st March, 2018.
(iii) Depreciate Land and Building @ 2$\raisebox{1ex}{$1$}\!\left/ \!\raisebox{-1ex}{$2$}\right.$%, Plant and Machinery @ 10% p.a. and Furniture @ 15 p.a.
(iv) Purchase includes purchase of machinery for ₹10,000 on 1st October, 2017.
(v) Debtors include bad debts of ₹2,000. Maintain a provision for doubtful debts @ 10% on Debtors.

Answer 1

Trading Account for the year ended March 31, 2018
Dr.						Cr.
Particulars			Amount (₹)	Particulars		Amount (₹)
Opening Stock			70,000	Sales	4,00,000
Purchases	2,60,000			Less: Returns	8,000	3,92,000
Less: Machinery	10,000			Closing Stock		35,000
Less: Returns	7,000		2,43,000
Carriage			5,000
Wages		50,000
Add: Outstanding		6,000	56,000
Gross Profit			53,000
			4,27,000			4,27,000

Profit & Loss Account for the year ended March 31, 2018
Dr.							Cr.
Particulars				Amount (₹)	Particulars		Amount (₹)
Interest on Bank Loan		12,000			Gross Profit		53,000
Add: Outstanding		3,000		15,000	Discount Received		6,000
Salaries	45,000				Old Provision for DD	13,000
Add: Outstanding	5,000			50,000	Less: Provision for DD	4,800	8,200
Advertisement				15,000	Net Loss		81,500
Commission				15,000
Discount Allowed				7,000
Further Bad Debts				2,000
Rent and Taxes				13,000
Depreciation on:
Land & Building			2,450
Plant & Machinery			21,000
Furniture			8,250	31,700
				1,48,700			1,48,700

Balance Sheet as on March 31, 2018
Dr.					Cr.
Liabilities		Amount (₹)	Assets		Amount (₹)
Creditors		28,000	Plant &Machinery	2,05,000
Wages Outstanding		6,000	Add: Purchases	10,000
Capital	3,50,000		Less: Depreciation	21,000	1,94,000
Less: Drawings	15,000		Furniture	55,000
Less: Net Loss	81,500	2,53,500	Less: Depreciation	8,250	46,750
Outstanding Salaries		5,000	Debtors	50,000
Bank Loan	1,50,000		Less: FBD	2,000
Add: Outstanding Interest	3,000	1,53,000	Less: Provision	4,800	43,200
			Closing Stock		35,000
			Cash at Bank		20,000
			Land &Building	98,000
			Less: Depreciation	2,450	95,550
			Input SGST		3,000
			Cash in Hand		8,000
		4,45,500			4,45,500