Question

Mr. Asif Ali, a retail trader, who keeps Incomplete Records gives you the following information for the year 2011-12:

Summary of Cash Transactions

	(₹)		(₹)
Received from Debtors	38,000	Bank Overdraft on 1-4-2011	2,500
Cash Sales	26,500	Paid to Creditors	31,200
Miscellaneous Income	300	Carriage inwards	800
		Salaries	12,400
		Advertisement	700
		Cash Purchases	16,000
		Balance at Bank on 31-3-2012	1,200
	64,800		64,800

The Assets and Liabilities were as follows:

	31st March 2011 ₹	31st March 2012 ₹
Stock	15,000	12,000
Fixed Assets	25,000	25,000
Sundry Debtors	12,000	?
	8,600	?

Other Informations:
(1) Credit Sales during the year were ₹ 35,100.
(2) Sales returns ₹ 800.
(3) Credit Purchases during the year were ₹ 30,000.
(4) Discount allowed to Debtors ₹ 300.
(5) Discount received from Creditors ₹ 130.

Adjustments:-
(1) Make a provision for doubtful debts @ 5% on Debtors.
(2) Also make a provision for discount @ 2% on Debtors.
Prepare his Trading, P & L A/c and a Balance Sheet as at 31st March, 2012.

Answer 1

Trading Account for the year ended March 31, 2012
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening Stock	15,000	Sales (Cash + Credit – Returns)	60,800
Purchases (Credit)	46,000	Closing Stock	12,000
Carriage	800
Gross Profit	11,000
	72,800		72,800

Profit & Loss Account for the year ended March 31, 2012
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Salary	12,400	Gross Profit	11,000
Advertisement	700	Miscellaneous Income	300
Provision for Doubtful Debts	400	Discount Received	130
Provision for Discount on Debtors	152	Net Loss	2,522
Discount Allowed	300
	13,952		13,952

Balance Sheet as on March 31, 2012
Dr.					Cr.
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital	40,900		Cash at Bank		1,200
Less: Net Loss	2,522	38,378	Debtors	8,000
Creditors		7,270	Less: Provision for DD	400
			Less: Provision for Discount	152	7,448
			Fixed Assets		25,000
			Closing Stock		12,000
		45,648			45,648

Working Notes:

Balance Sheet as on March 31, 2011
Dr.			Cr.
Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors	8,600	Debtors	12,000
Bank Overdraft	2,500	Fixed Assets	25,000
Capital (Balancing figure)	40,900	Stock	15,000
	52,000		52,000

Debtors Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	12,000	Cash A/c	38,000
Sales A/c	35,100	Sales Return A/c	800
		Discount Allowed A/c	300
		Balance c/d	8,000
	47,100		47,100

Creditors Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Discount Received A/c	130	Balance b/d	8,600
Cash A/c	31,200	Purchases A/c	30,000
Balance c/d	7,270
	38,600		38,600