From the following Trial Balance of M/s. Shradha & Sons as on 31st March, 2018, prepare Trading and Profit and Loss Account and Balance Sheet.

Heads of Accounts
Dr.

Balance

(₹)

Cr.

Balance

(₹)

Capital ................................................................................
…

80,000

Drawings ................................................................................
18,000

…

Sales ................................................................................
…

1,55,000

Purchases ................................................................................
82,600

…

Stock (1st April, 2017) ................................................................................
42,000

…

Returns Outward ................................................................................
…

1,600

Carriage Inwards ................................................................................
1,200

…

Wages ................................................................................
4,000

…

Power ................................................................................
6,000

…

Machinery ................................................................................
50,000

…

Furniture ................................................................................
14,000

…

Rent ................................................................................
22,000

…

Salary ................................................................................
15,000

…

Insurance ................................................................................
3,600

…

8% Bank Loan ................................................................................
…

25,000

Debtors ................................................................................
20,600

…

Creditors ................................................................................
…

18,900

Cash in Hand ................................................................................
1,500

…

Total
2,80,500

2,80,500

Adjustments:
(i) Closing Stock ₹ 64,000.
(ii) Wages outstanding ₹ 2,400.
(iii) Bad Debts ₹ 600.
(iv) Provision for Doubtful Debts to be 5%.
(v) Rent is paid for 11 months.
(vi) Insurance premium is paid per annum, ended 31st May, 2018.
(vii) Loan from the bank was taken on 1st October, 2017.
(viii) Provide Depreciation on machinery @ 10% and on Furniture @ 5%.

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Solution

Financial statement of M/s. Shradha & Sons

Trading Account

for the year ended March 31, 2018

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Opening Stock

42,000

Sales

1,55,000

Purchases

82,600

Less: Return Outwards

(1,600)

81,000

Carriages Inwards

1,200

Closing Stock

64,000

Wages

4,000

Add: Outstanding Wages

2,400

6,400

Power

6,000

Gross Profit (Balancing Figure)

82,400

2,19,000

2,19,000

*

Profit and Loss Account

for the year ended March 31, 2018

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Rent

22,000

Gross Profit

82,400

Add: Outstanding for One month (22,000/11)

2,000

24,000

Salary

15,000

Insurance

3,600

Less: Prepaid 2 month(3,600 × 2/12)

(600)

3,000

Outstanding Interest on Bank Loan

(25,000 × 8% × 6/12)

1,000

Bad Debts

600

Add: Provision for Doubtful Debts

1,000

1,600

Depreciation on:

Machinery

5,000

Furniture

700

5,700

Net Profit (Balancing Figure)

32,100

82,400

82,400

Balance Sheet

as on March 31, 2018

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Capital

80,000

Fixed Assets

Add: Net Profit

32,100

Machinery

50,000

Less: Drawings

(18,000)

94,100

Less: 10% Depreciation

(500)

45,000

8% Bank Loan

25,000

Furniture

14,000

Add: Outstanding Interest

1,000

26,000

Less: 5% Deprecation

(700)

13,300

Current Liabilities

Current Assets

Creditors

18,900

Closing Stock

64,000

Wages Outstanding

2,400

Debtors

20,600

Rent Outstanding

2,000

Less: Bad Debts

(600)

Less: 5% Provision for doubtful Debts

(1,000)

19,000

Prepaid Insurance

600

Cash in hand

1,500

1,43,400

1,43,400**

Suggest Corrections

Similar questions

Q. From the following Trial Balance of M/s Arjun and Sons as on 31st March, 2018, prepare Trading and Profit and Loss Account and Balance Sheet:

Heads of Accounts		Debit Balances (₹)	Credit Balances (₹)
Drawings	................................................................................	1,80,000	…
Capital	................................................................................	…	8,00,000
Purchases	................................................................................	8,26,000	...
Sales	................................................................................	…	15,50,000
Opening Stock	................................................................................	4,20,000	…
Returns Outward	................................................................................	…	16,000
Carriage Inwards	................................................................................	12,000	…
Wages	................................................................................	40,000	…
Power	................................................................................	60,000	…
Machinery	................................................................................	5,00,000	…
Furniture	................................................................................	1,40,000	…
Rent	................................................................................	2,20,000	…
Salary	................................................................................	1,50,000	…
Insurance	................................................................................	36,000	…
8% Bank Loan	................................................................................	…	2,50,000
Debtors	................................................................................	2,06,000	…
Creditors	................................................................................	…	1,89,000
Cash in Hand	................................................................................	15,000	…
Total		28,05,000	28,05,000

Adjustments:
(i) Closing Stock ₹ 6,40,000.
(ii) Wages Outstanding ₹ 24,000.
(iii) Bad Debts ₹ 6,000 and Provision for Bad and Doubtful Debts to 5% on Debtors.
(iv) Rent is paid for 11 months.
(v) Loan from bank was taken on 1^st October, 2017.
(vi) Provide Depreciation on Machinery @ 10% p.a.
(vii) Provide Manager’s Commission at 10% on net profit after charging such commission.

Q. From the following Trial Balance of Shradha as on 31st March, 2019, prepare Trading and Profit and Loss Account and Balance Sheet:

Heads of Accounts	Debit Balances (₹)	Credit Balances (₹)
Capital	…	80,000
Drawings	18,000	…
Sales	…	1,55,000
Purchases	82,600	…
Stock (1st April, 2018)	42,000	…
Returns Outward	…	1,600
Carriage Inwards	1,200	…
Wages	4,000	…
Power	6,000	…
Machinery	50,000	…
Furniture	14,000	…
Rent	22,000	…
Salary	15,000	…
Insurance	3,600	…
8% Bank Loan	…	25,000
Debtors	20,600	…
Creditors	…	18,900
Cash in Hand	1,500	…
Total	2,80,500	2,80,500

Adjustments:
(i) Closing Stock ₹ 64,000.
(ii) Wages outstanding ₹ 2,400.
(iii) Bad Debts ₹ 600.
(iv) Provision for Doubtful Debts to be 5%.
(v) Rent is paid for 11 months.
(vi) Insurance premium is paid per annum, ended 31st May, 2019.
(vii) Loan from the bank was taken on 1st October, 2018.
(viii) Provide Depreciation on machinery @ 10% and on Furniture @ 5%.

Q. 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

\frac{1}{2}

%, 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.

Q. From the following Trial Balance, prepare Trading Account, Profit and Loss Account for the year ended 31^st March, 2018 and Balance Sheet as at the date:

Debit Balances	₹	Credit Balances	₹
Purchases	3,00,000	Sales	4,79,760
Drawings	3,500	Purchases Return	12,200
Plant and Machinery	1,23,000	Capital	5,90,000
Motor Vehicles	1,76,000	Creditors	11,870
Building	3,80,000	Bank Loan	33,700
Sundry Debtors	80,000
Stock in Trade (1.4.2017)	8,400
Sales Return	1,800
Wages	2,800
Carriage Inwards	890
Carriage Outwards	300
Telephone Charges	3,290
Salaries	12,000
Insurance and Taxes	31,200
Printing and Stationery Expenses	1,350
Cash in Hand	3,000
	11,27,530		11,27,530

Following adjustments are to be considered:
(i) Closing Stock ₹ 15,270.
(ii) Printing and Stationery expenses due ₹ 58,650.
(iii) Outstanding liabilities for salaries ₹ 12,000
(iv) An old machine value at ₹ 12,000 (Book Value of which was ₹ 2,000) was given in exchange for a new machine purchased on 1^st April, 2017. The machine given in exchange was not recorded in the books. Cheque issued for new machine purchased was accounted in the books of account.
(v) Depreciation @ 10% p.a. is to be provided on all fixed assets except building.

Q. Prepare Trading and Profit and Loss Account and Balance Sheet from the following Trial Balance and information as on 31st March, 2019:

Name of Account	Debit (₹)	Credit (₹)
Drawings and Capital	15,000	3,25,000
Plant and Machinery	2,00,000	–
Motor Vehicle	1,50,000	–
Return Inward and Outward	25,000	37,000
Stock on 1st April, 2018	82,000	–
Purchases and Sales	4,40,000	6,75,000
Carriage Inward	6,000	–
Trade Expenses	2,500	–
Bad Debts	4,250	–
Provision for Doubtful Debts	–	6,000
Commission	–	4,000
Rent, Rates & Taxes	12,000	–
Salaries and Wages	24,000	–
Debtors and Creditors	70,000	55,000
Fuel and Water	4,750	–
Cash in Hand	16,500	–
Cash at Bank	50,000	–

Total	11,02,000	11,02,000

Adjustments:
(i) Closing Stock was valued at ₹ 1,12,500.
(ii) Commission include ₹ 1,200 being commission received in advance.
(iii) Salaries and wages is outstanding for the month of Feb. & March, 2019.
(iv) Depreciate Plant & Machinery by 15% and Motor Vehicle by 20%.
(v) Write off ₹ 500 as further Bad Debts and maintain provision for doubtful debts at 1% on debtors.

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Heads of Accounts		Dr. Balance (₹)	Cr. Balance (₹)
Capital	................................................................................	…	80,000
Drawings	................................................................................	18,000	…
Sales	................................................................................	…	1,55,000
Purchases	................................................................................	82,600	…
Stock (1st April, 2017)	................................................................................	42,000	…
Returns Outward	................................................................................	…	1,600
Carriage Inwards	................................................................................	1,200	…
Wages	................................................................................	4,000	…
Power	................................................................................	6,000	…
Machinery	................................................................................	50,000	…
Furniture	................................................................................	14,000	…
Rent	................................................................................	22,000	…
Salary	................................................................................	15,000	…
Insurance	................................................................................	3,600	…
8% Bank Loan	................................................................................	…	25,000
Debtors	................................................................................	20,600	…
Creditors	................................................................................	…	18,900
Cash in Hand	................................................................................	1,500	…
Total		2,80,500	2,80,500

Financial statement of M/s. Shradha & Sons
Trading Account for the year ended March 31, 2018
Dr.					Cr.
Particulars		Amount (Rs)	Particulars	Amount (Rs)
Opening Stock		42,000	Sales	1,55,000
Purchases	82,600
Less: Return Outwards	(1,600)	81,000
Carriages Inwards		1,200	Closing Stock	64,000
Wages	4,000
Add: Outstanding Wages	2,400	6,400
Power		6,000
Gross Profit (Balancing Figure)		82,400
		2,19,000		2,19,000

***

Profit and Loss Account for the year ended March 31, 2018
Dr.				Cr.
Particulars		Amount (Rs)	Particulars	Amount (Rs)
Rent	22,000		Gross Profit	82,400
Add: Outstanding for One month (22,000/11)	2,000	24,000
Salary		15,000
Insurance	3,600
Less: Prepaid 2 month(3,600 × 2/12)	(600)	3,000
Outstanding Interest on Bank Loan (25,000 × 8% × 6/12)		1,000
Bad Debts	600
Add: Provision for Doubtful Debts	1,000	1,600
Depreciation on:
Machinery	5,000
Furniture	700	5,700
Net Profit (Balancing Figure)		32,100
		82,400		82,400

Balance Sheet as on March 31, 2018
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital	80,000		Fixed Assets
Add: Net Profit	32,100		Machinery	50,000
Less: Drawings	(18,000)	94,100	Less: 10% Depreciation	(500)	45,000
8% Bank Loan	25,000		Furniture	14,000
Add: Outstanding Interest	1,000	26,000	Less: 5% Deprecation	(700)	13,300
Current Liabilities			Current Assets
Creditors		18,900	Closing Stock		64,000
Wages Outstanding		2,400	Debtors	20,600
Rent Outstanding		2,000	Less: Bad Debts	(600)
			Less: 5% Provision for doubtful Debts	(1,000)	19,000
			Prepaid Insurance		600
			Cash in hand		1,500
		1,43,400			1,43,400