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%.

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Solution

Financial statement of M/s. Shradha & Sons

Trading Account

for the year ended March 31, 2019

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

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, 2019

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

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, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

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**

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Similar questions

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.

Q. 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%.

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. From the following Trial Balance of Mr. Alok, prepare Trading and Profit & Loss Account for the year ending 31st March, 2019, and a Balance Sheet as at that date:-

Dr. Balances	(₹)	Cr. Balances	(₹)
Drawings	5,275	Capital	59,700
Bills Receivable	4,750	Loan at 8% p.a. (on.1.4.2018)	10,000
Machinery	14,400	Commission Received	2,820
Debtors (including X for dishonoured Bill of ₹ 1,000)	30,000	Creditors	29,815
Wages	20,485	Sales	1,78,215
Returns Inward	2,390
Purchases	1,28,295
Rent	2,810
Stock (1.4.2018)	44,840
Salaries	5,500
Travelling Expenses	945
Insurance	200
Cash	9,750
Repairs	1,685
Interest on Loan	500
Discount Allowed	2,435
Bad-Debts	1,810
Furniture	4,480
	2,80,550		2,80,550

The following adjustments are to be made:
(i) Stock in the shop on 31st March, 2019 was ₹ 64,480.
(ii) Half the amount of X's Bill is irrecoverable.
(iii) Create a provision of 5% on other debtors.
(iv) Wages include ₹ 600 for erection of new Machinery.
(v) Depreciate Machinery by 5% and Furniture by 10%.
(vi) Commission includes ₹ 300 being Commission received in advance.

Q. Prepare Trading and Profit and Loss Account and Balance Sheet from the following Trial Balance and information as on 31st March, 2013:

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, 2012	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, 2013.
(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	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

Financial statement of M/s. Shradha & Sons
Trading Account for the year ended March 31, 2019
Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
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, 2019
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
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, 2019
Liabilities		Amount (₹)	Assets		Amount (₹)
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