Question

From the following Trial Balance, prepare a Trading and Profit Loss Account for the year ended 31st March 2012 and a Balance Sheet as on that date: The following adjustments are to be made:

1. Stock on 31-3-2012 was Rs 3,250.

2. Depreciate Building @ 5%, Furniture @10%and Scooter @20%.

3. One-third of the commission received is in respect of work to be done next year.

Q. From the following Trial Balance 30th June, 2012 and prepare Trading and Profit & Loss A/c and Balance Sheet:

Adjustments :

1. Sales include sale of Furniture on 30th June, 2012 at actual sale price of Rs 750. The Book value of furniture sold on that date was Rs 1,000.

2. Rs 2,500 paid to Ajay against our acceptance were debited by mistake to Ajay's A/c and from there it was included in the list of Sundry Debtors.

3. Depreciate furniture by 10% p.a. and Dead Stock by 30% p.a.

$\begin{array}{ccc}\text{Particulars}& \text{Amount}& \text{Amount}\\ & \text{Cr.(Rs)}& \text{Dr.(Rs)}\\ \text{Furniture}& 640& \\ \text{Scooter~}& 6,250& \\ \text{Building}& 7,500& \\ \text{Capital}& & 12,500\\ \text{Bad Debts}& 125& \\ \text{Provision for Bad Debts}& & 200\\ \text{Creditors}\&\text{Debtors}& 3,800& 2,500\\ \text{Opening Stock}& 3,460& \\ \text{Purchases}\&\text{Sales}& 5,475& 15,450\\ \text{Bank overdraft}& & 2,850\\ \text{Returns}& 200& 125\\ \text{Advertising}& 450& \\ \text{interest}& 118& \\ \text{Commission}& & 375\\ \text{Cash}& 650& \\ \text{Taxes and Insurances}& 1,250& \\ \text{General Expenses}& 782& \\ \text{Salaries}& 3,300& \\ \overline{\underset{–}{34,000}}& \overline{\underset{–}{34,000}}& \end{array}$

From the following Trial Balance 30th June, 2012 and prepare Trading and Profit & Loss A/c and Balance Sheet :

$\begin{array}{cccc}\text{Particulars}& \text{(Rs)}& \text{Particulars}& \text{(Rs)}\\ \text{Purchases}& 2,10,000& \text{Sales}3,60,000& \\ \text{Wages and Salaries}& 16,200& \text{Bills Payable}& 2,500\\ \text{Repairs and Renewals}& 2,100& \text{Capital}& 2,00,000\\ \text{Freight on Purchases}& 4,500& \text{Returns}& 2,000\\ \text{Furniture}& 6,000& \text{Mortgage and Interest to date}& 10,750\\ \text{Dead Stock}& 8,000& \text{Bad Debts Recovered}& 1,650\\ \text{Returns}& 5,200& \text{Interest on Govt. Bonds}& 500\\ \text{Bank balance}& 7,300& \text{General Reserve}& 6,800\\ \text{Sundry Debtors}& 75,000& \text{Sundry Creditors}& 24,000\\ \text{Advertisement Expenses}& 10,000& \text{Outstanding Salaries}& 4,400\\ \text{Unexpired Insurance}& 500& & \\ \text{Miscellaneous Expenses}& 2,570& & \\ \text{Freehold Premises}& 1,28,100& & \\ \text{Patent Rights}& 20,000& & \\ \text{Delivery Van}& 50,000& & \\ \text{Audit fees}& 4,000& & \\ \text{Agent's Commission}& 5,780& & \\ \text{Insurance}& 2,000& & \\ \text{Drawings}& 8,400& & \\ 10\%\text{Govt. Bonds}& & & \\ \text{(Purchased on Oct.}1,2011)& 10,000& & \\ \text{Mortgage Interest}& 750& & \\ \text{Stock on 30th June,}2012& 36,200& & \\ & \overline{\underset{–}{6,12,000}}& & \overline{\underset{–}{6,12,000}}\end{array}$

Answer 1

Income & Expenditure A/c

$\begin{array}{cccc}\text{Expenditure}& \text{Amount}& \text{Income}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{To Opening stock}& 3,460& \text{By Sales}15,450& \\ \text{To Purchases}5,475& & \text{Less:Return}\underset{–}{200}& 15,250\\ \text{Less:Returns}\underset{–}{125}& 5,350& \text{By Closing stock}& 3,250\\ \text{To Gross Profit transferred to}& & & \\ \text{P}\&\text{L A/c}& 9,600& & \\ & \overline{\underset{–}{18,500}}& & \overline{\underset{–}{18,500}}\\ \text{To Bad Debts}& 125& \text{By Gross Profit}& 9,690\\ \text{To Advertising}& \text{450}& \text{By Prov. for Bad Debts}& 200\\ \text{To Interest}& 118& \text{By Commission}375& \\ \text{To Taxes}\&\text{Insurance}1,250& & \text{Less : Recd in Adv.}\underset{–}{125}& 250\\ \text{To General Expenses}& 782& & \\ \text{To Salaries}& 3,300& & \\ \text{To Depreciation :}& & & \\ \text{Furniture}64& & & \\ \text{Scooter}1,250& & & \\ \text{Building}\underset{–}{375}& 1,689& & \\ \text{To Net Profit transferred to}& & & \\ \text{capital A/c}& 2,426& & \\ & \overline{\underset{–}{10,140}}& & \overline{\underset{–}{10,140}}\end{array}$

Balance Sheet

$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ \text{Capital}12,500& & \text{Furniture}640& \\ \text{Add:Net Profit}\underset{–}{2,426}& 14,926& \text{Less: Depreciation}\underset{–}{64}& 576\\ \text{Creditors}& 2,500& \text{Scooter}\text{6,250}& \\ \text{Bank overdraft}& 2,850& \text{Less : Depreciation}\underset{–}{1,250}& 5,000\\ \text{Commission received in Adv.}& 125& \text{Building}7,500& \\ & & \text{Less: Depreciation}\underset{–}{375}& 7,125\\ & & \text{Debtors}& 3,800\\ & & \text{Cash}& 650\\ & & \text{Closing Stock}& 3,250\\ & \overline{\underset{–}{20,401}}& & \overline{\underset{–}{20,401}}\end{array}$

Or

Trading and P & L A/c

$\begin{array}{cccccc}\text{Particulars}& & \text{Amount}& \text{Particulars}& & \text{Amount}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ \text{To Purchases}& 2,10,000& & \text{By Sales}& 3,60,000& \\ \text{Less: Returns}& \underset{–}{2,000}& 2,08,000& \text{Less: Sale of furniture}& \underset{–}{750}& \\ \text{To Wages and Salaries}& & 16,200& & 3,59,750& \\ \text{To Freight on purchases}& & 4,500& \text{Less : Returns}& \underset{–}{5,200}& 3,54,550\\ \text{To Gross Profit transferred to}& & & & & \\ \text{P}\&\text{L}\&\text{A/c}& & 1,25,850& & & \\ & & \overline{\underset{–}{3,54,550}}& & & \overline{\underset{–}{3,54,550}}\\ \text{To Repairs}\&\text{Renewals}& & 2,100& \text{By Gross Profit}& & 1,25,850\\ \text{To Depreciation :}& & & \text{By Int. on Govt honds}500& & \\ \text{Furniture}500& & & \text{Add: Accured Int.}\underset{–}{250}& & 750\\ \text{Deat Stock}\underset{–}{2,400}& & 2,900& \text{By Bad Debts recovered}& & 1,650\\ \text{To Less on sale of furniture}& & 250& & & \\ \text{To Advertisement Expenses}& & 10,000& & & \\ \text{To Miscellaneous Expenses}& & 2,570& & & \\ \text{To Audit fees}& & 4,000& & & \\ \text{To Agent's commission}& & 5,780& & & \\ \text{To Insurance}& & 2,000& & & \\ \text{To Mortgage Interest}& & 750& & & \\ \text{To Net Profit transferred to}& & & & & \\ \text{capital A/c}& & 97,900& & & \\ & & \overline{\underset{–}{1,28,250}}& & & \overline{\underset{–}{1,28,250}}\end{array}$

Balance Sheet

$\begin{array}{cccccc}\text{Liabilities}& & \text{Amount}& \text{Assets}& & \text{Amount}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ \text{Capital}& 2,00,000& & \text{Furniture}& 6,000& \\ \text{Less: Drawings}& 8,400& & \text{Less: Sold}& 1,000& \\ & \overline{1,91,600}& & & \overline{5,000}& \\ \text{Add: Net profit}& \underset{–}{97,900}& 2,89,500& \text{Less : Dep.}& \underset{–}{500}& 4,500\\ \text{Sundry Creditors}& & 24,000& \text{Dead Stock}& 8,000& \\ \text{Bills Payable}& 2,500& & \text{Less: Dep.}& \underset{–}{2,400}& 5,600\\ \text{Less : Payment to Ajay}& \underset{–}{2,500}& -& \text{Bank Balance}& 7,300& \\ \text{Mortgage including Interest}& & 10,750& \text{S. Debtors}& 75,000& \\ \text{General Reserve}& & 6,800& \text{Less: Ajay's Payment}& \underset{–}{2,500}& 72,500\\ \text{Out standing salaries}& & 4,440& \text{Unexpired Insurance}& & 500\\ & & & \text{Freehold Premises}& & 1,28,100\\ & & & \text{Patents right}& & 20,000\end{array}$