Question

From the following Trial Balance of Sh. Swamy Narain, prepare Trading and Profit & Loss Account for the year ended 31st March 2018 and a Balance Sheet as at that date :

Dr. Balances	₹	Cr. Balances	₹
Opening Stock	50,000	Capital	20,00,000
Purchases	5,30,000	Sales	12,50,000
General Expenses	45,000	Sundry Creditors	1,36,000
Stationery	6,000	Trade Charges due but not paid	5,000
Wages	2,15,000	Outstanding Rent	4,000
Trade Charges	25,000	Bank Balance	45,000
Rent	44,000
Charity	5,000
Advertisement Expenses	30,000
Carriage on Sales	12,000
Bills Receivables	30,000
Sundry Debtors	2,20,000
Cash Discount	16,000
Cash in Hand	22,000
Furniture	1,00,000
Advance for Furniture	40,000
Plant & Machinery	6,00,000
Building	14,50,000
	34,40,000		34,40,000

Adjustments:
(i) Stock on 31 March, 2018 was valued at ₹ 60,000.
(ii) A new machine was installed during the year costing ₹ 2,00,000 but it was not recorded in the books. Wages paid for its installation ₹ 10,000 have been debited to Wages Account.
(iii) An advance of ₹ 10,000 given alongwith purchase order was wrongly recorded in purchases.
(iv) General expenses include ₹ 20,000 paid for Wages.
(v) Wages include a sum of ₹ 50,000 spent on the erection of a Scooter Stand for employees.
(vi) Advance for Furniture is for furniture at proprietor's residence.
(vii) Depreciate Furniture at 15%, Plant & Machinery at 20% and Building at 10%.
(viii) Carry forward 2/3 of Advertisement Expenses as unexpired.
(ix) A B/R of ₹ 20,000 was discounted with bank on 15 Nov. 2017, but not yet matured.

Answer 1

Trading Account for the year ended March 31, 2018
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Opening Stock		50,000	Sales	12,50,000
Purchases	5,30,000		Closing Stock	60,000
Less: Advance against Order	(10,000)	5,20,000
Wages	2,15,000
Add: Included in General Expenses	20,000
Less: Construction of Shed	(50,000)
Less: Wages on Machinery	(10,000)	1,75,000
Gross Profit		5,65,000
		13,10,000		13,10,000

Profit & Loss Account for the year ended March 31, 2018
Dr.					Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Cash Discount			16,000	Gross Profit	5,65,000
General Expenses	45,000
Less: Wages	(20,000)		25,000
Stationery			6,000
Trade Charges			25,000
Rent			44,000
Charity			5,000
Advertisement Expenses			10,000
Carriage on Sales			12,000
Depreciation on:
Furniture		15,000
Building		1,50,000
Plant & Machinery		1,62,000	3,27,000
Net Profit			95,000
			5,65,000		5,65,000

Balance Sheet as on March 31, 2018
Dr.					Cr.
Liabilities		Amount (₹)	Assets		Amount (₹)
Creditors		1,36,000	Furniture	1,00,000
Outstanding Trade Charges		5,000	Less: Depreciation	15,000	85,000
Outstanding Rent		4,000	Plant & Machinery	6,00,000
Bank Overdraft		45,000	Add: Additions	2,10,000
Capital	20,00,000		Less: Depreciation	1,62,000	6,48,000
Less: Drawings	40,000		Unexpired Advertisement Expenses		20,000
Add: Net Profit	95,000	20,55,000	Building	14,50,000
Creditors for Machinery		2,00,000	Add: Additions	50,000
			Less: Depreciation	1,50,000	13,50,000
			Cash in Hand		22,000
			Closing Stock		60,000
			Debtors		2,20,000
			Advance against Purchases		10,000
			Bills Receivable		30,000
		24,45,000			24,45,000