From the following Trial Balance you are required to prepare trading and profit and loss account for the year ending March 31, 2017 and Balance Sheet on that date.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening stock 25,000 Sales 7,00,000

Furniture 16,000 Creditors 72,500

Purchases 5,55,300 Bank Overdraft 50,000

Carriage Inwards 4,700 Provision for bad and doubtful debts 2,100

Bad debts 1,800 Discount 500

Wages 52,000 Capital 2,00,000

Debtors 80,000 Purchases Return 20,000

Sales Return 15,000

Rent 24,000

Miscellaneous Expenses 3,400

Salaries 68,000

Cash 8,900

Drawings 14,000

Buildings 1,60,000

Advertising 10,000

Interest on Bank Overdraft 7,000

10,45,100 10,45,100

Adjustments
1. Closing stock valued at ₹ 36,000.
2. Private purchases amounting to ₹ 5,000 debited to purchases account.
3. Provision for doubtful debts @ 5% on debtors.
4. Sign board costing ₹ 4,000 includes in advertising.
5. Depreciate furniture by 10%.

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Solution

Trading A/c

Dr.

For the year ended 31^st March, 2017

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

25,000

Sales

7,00,000

Purchases

5,55,300

Less: Sales Return

(15,000)

6,85,000

Less: Private Purchases

(5,000)

Closing Stock

36,000

Less: Purchases Return

(20,000)

5,30,300

Carriage Inwards

4,700

Wages

52,000

Gross Profit c/d

1,09,000

7,21,000

7,21,000

Profit and Loss A/c

Dr.

For the year ended 31^st March, 2017

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Bad debts

1,800

Gross Profit b/d

1,09,000

Provision for Doubtful debts

4,000

Discount Received

500

Less: Old Provision

(2,100)

3,700

Net Loss to be transferred

4,600

Rent

24,000

Miscellaneous Expenses

3,400

Salaries

68,000

Advertising

10,000

Less: Sign Board

(4,000)

6,000

Interest on Bank Overdraft

7,000

Depreciation on Furniture

2,000

1,14,100

1,14,100

Balance Sheet

Dr.

As at 31^st March, 2017

Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital

2,00,000

Furniture

16,000

Add: Sign Board

4,000

Less: Drawings

(19,000)

Less: Depreciation

(2,000)

18,000

Less: Net Loss

(4,600)

1,76,800

Building

1,60,000

Creditors

72,500

Debtors

80,000

Bank Overdraft

50,000

Less: Provision (New)

(4,000)

76,000

Closing Stock

36,000

Cash

8,900

2,98,900

2,98,900

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Practical Problem

From the following Trial Balance of M/s Sanjay and Vijay, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date after taking into consideration the adjustments given below.

Trial Balance as on 31^st March, 2013
Debit Balance	Amount Rs	Credit Balance		Amount Rs
Salaries and wages	12,000	Sales		1,10,000
Postage and Telegram	1,750	Sundry Creditors		72,700
Opening Stock	23,500	Bills Payable		40,000
Plant and Machinery	70,000	10% Bank loan (Taken on 1^st Oct. 2012)		60,000
Advertisement	5,000	Outstanding Audit fees		5,900
Import duty	2,100	Capital A/c-	Sanjay	45,000
Bad debts	1,000		Vijay	45,000
Purchases	98,500
Sundry Debtors	45,800
Bills Receivable	16,700
Carriage outward	1,800
Wages and stationery* (Note 2)	14,000
Printing and stationery	4,600
Cash in hand	1,850
Leasehold Premises	80,000
	3,78,600			3,78,600

Adjustments:
1) Closing stock was valued at Rs 30,000.

2) Postage stamps of Rs 250 and stationery of Rs 400 are unused.

3) Goods of Rs 2,500 distributed as free samples.

4) Leasehold property is to be run for 10 years w.e.f. 1st October, 2012.

5) Depreciate Plant and Machinery at 10% p.a.

6) Mr. Rajan, our customer become insolvent and could not pay his debts of Rs 1,500.

Q. The Trial Balance shows the following balances as at 31st March, 2017:-


Dr. Balances	(₹)	Cr. Balances	(₹)
Purchases	60,000	Capital	1,13,075
Sales Returns	1,500	Sales	1,27,000
Plant and Machinery	90,000	Purchases Returns	1,275
Opening Stock	40,000	Discount Received	800
Discount Allowed	350	Sundry Creditors	20,000
Bank Charges	100	Bills Payable	5,000
Sundry Debtors	45,000
Salaries	7,000
Wages	10,000
Freight : In	1,000
Freight : Out	1,200
Rent, Rates and Taxes	2,000
Advertisements	2,000
Cash at Bank	7,000
	2,67,150		2,67,150

Closing Stock was valued at ₹ 35,000. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2017 and Balance Sheet as at that date.

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 prepare Trading and Profit & Loss Account for the year ended 31st March, 2017 and Balance Sheet as at that date:-

	Dr. (₹)	Cr. (₹)
Stock 1st April, 2016	22,300
Purchases and Purchase Return	2,30,000	5,200
Freehold Premises	1,00,000
Incidental Trade Exp.	11,200
Insurance	1,850
Audit Fees	800
Commission Received		2,700
Interest		1,400
Debtors and Creditors	32,400	24,830
Wages	30,200
Salaries	15,200
Capital		1,50,000
Drawings	12,000
Income-Tax	3,600
Investments	8,000
Discount allowed & received	7,500	4,200
Sales Return & Sales	6,400	3,17,400
B/R	5,200
Office Furniture	9,000
Rent		2,600
Cash in hand	5,080
Bank Balance	7,600
	5,08,330	5,08,330

Adjustment:-
1. Stock at 31st March 2017 is ₹ 70,000.
2. Write of 5% Depreciation on Freehold Premises and 20% on office furniture.
3. Commission earned but not received ₹ 500.
4. Interest earned ₹ 600.
5. ₹ 200 for rent have been received in advance.
6. Charge interest on Capital @ 6% and ₹ 500 on Drawings.

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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Particulars	Amount (₹)	Particulars	Amount (₹)
Opening stock	25,000	Sales	7,00,000
Furniture	16,000	Creditors	72,500
Purchases	5,55,300	Bank Overdraft	50,000
Carriage Inwards	4,700	Provision for bad and doubtful debts	2,100
Bad debts	1,800	Discount	500
Wages	52,000	Capital	2,00,000
Debtors	80,000	Purchases Return	20,000
Sales Return	15,000
Rent	24,000
Miscellaneous Expenses	3,400
Salaries	68,000
Cash	8,900
Drawings	14,000
Buildings	1,60,000
Advertising	10,000
Interest on Bank Overdraft	7,000

	10,45,100		10,45,100

Trading A/c
Dr.	For the year ended 31^st March, 2017							Cr.
Particulars				Amount (₹)	Particulars		Amount (₹)
Opening Stock				25,000	Sales	7,00,000
Purchases		5,55,300			Less: Sales Return	(15,000)	6,85,000
Less: Private Purchases			(5,000)		Closing Stock		36,000
Less: Purchases Return			(20,000)	5,30,300
Carriage Inwards				4,700
Wages				52,000
Gross Profit c/d				1,09,000

				7,21,000			7,21,000

Profit and Loss A/c
Dr.	For the year ended 31^st March, 2017					Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Bad debts		1,800		Gross Profit b/d	1,09,000
Provision for Doubtful debts		4,000		Discount Received	500
Less: Old Provision		(2,100)	3,700	Net Loss to be transferred	4,600
Rent			24,000
Miscellaneous Expenses			3,400
Salaries			68,000
Advertising		10,000
Less: Sign Board		(4,000)	6,000
Interest on Bank Overdraft			7,000
Depreciation on Furniture			2,000

			1,14,100		1,14,100

Balance Sheet
Dr.	As at 31^st March, 2017						Cr.
Liabilities			Amount (₹)	Assets		Amount (₹)
Capital		2,00,000		Furniture	16,000
				Add: Sign Board	4,000
Less: Drawings		(19,000)		Less: Depreciation	(2,000)	18,000
Less: Net Loss		(4,600)	1,76,800	Building		1,60,000
Creditors			72,500	Debtors	80,000
Bank Overdraft			50,000	Less: Provision (New)	(4,000)	76,000
				Closing Stock		36,000
				Cash		8,900

			2,98,900			2,98,900