Question

Mr. Manoj keeps incomplete records. During the year 2014-15 the analysis of his cash book was as under:-

			(₹)		(₹)
Receipts from Debtors			6,20,200	Bank Overdraft (1-4-2014)	16,500
Cash Sales			2,08,000	Salaries	22,000
Additional Capital introduced			50,000	Rent	11,000
Miscellaneous receipts			1,800	Payment to Creditors	5,20,000
Bank Overdraft (31-3-2015)			2,500	Furniture purchased (1-10-2014)	75,000
				Cash Purchases	2,10,000
				General Expenses	8,000
				Drawings	20,000
			8,82,500		8,82,500

Assets and Liabilities as on:	1st April, 2014 ₹	31st March, 2015 ₹
Sundry Debtors	62,000	?
Sundry Creditors	46,000	30,000
Stock	58,000	72,000
Furniture	25,000	?

Other Informations:
(i) Credit sales during the year were ₹ 7,00,000
(ii) Sales Returns were ₹ 10,000
(iii) Discount allowed to debtors ₹ 8,400
(iv) Discount received from creditors ₹ 6,000
(v) Bad-debts written off during the year ₹ 11,400

Adjustments:
(i) Write off further bad-debts ₹ 2,000.
(ii) Provide 5% for doubtful debts and 2% for discount on debtors and creditors.
(iii) Charge 10% p.a. depreciation on furniture.
(iv) One month salaries and one month rent was outstanding.
Prepare Trading and Profit & Loss Account for the year ended 31st March, 2015 and a Balance Sheet as at that date.

Answer 1

Trading Account for the year ended March 31, 2015
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening Stock	58,000	Sales (Cash + Credit – Returns)	8,98,000
Purchases (Cash + Credit)	7,20,000	Closing Stock	72,000
Gross Profit	1,92,000
	9,70,000		9,70,000

Profit & Loss Account for the year ended March 31, 2015
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Salaries	22,000		Gross Profit	1,92,000
Add: Outstanding	2,000	24,000	Provision for Discount on Creditors	600
Rent	11,000		Miscellaneous Receipts	1,800
Add: Outstanding	1,000	12,000	Discount Received	6,000
General Expenses		8,000
Bad Debts (2,000 + 11,400)	13,400
Add: Provision for Doubtful Debts	5,500	18,900
Provision for Discount on Debtors		2,090
Discount Allowed		8,400
Depreciation on Furniture (2,500 + 3,750)		6,250
Net Profit		1,20,760
		2,00,400		2,00,400

Balance Sheet as on March 31, 2015
Dr.				Cr.
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital (82,500 + 50,000)	1,32,500		Debtors (1,12,000 – 2,000 –5,500 – 2,090)	1,02,410
Less: Drawings	20,000		Stock	72,000
Add: Net Profit	1,20,760	2,33,260	Furniture (25,000 + 75,000 – 6,250)	93,750
Closing Creditors (30,000 – 600)		29,400
Outstanding Salary		2,000
Outstanding Rent		1,000
Bank Overdraft		2,500
		2,68,160		2,68,160

Working Notes:

Balance Sheet as on March 31, 2014
Dr.			Cr.
Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors	46,000	Debtors	62,000
Loan	16,500	Stock	58,000
Capital (Balancing figure)	82,500	Furniture	25,000
	1,45,000		1,45,000

Debtors Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	62,000	Cash A/c	6,20,200
Sales A/c	7,00,000	Sales Return A/c	10,000
		Discount Allowed A/c	8,400
		Bad Debts A/c	11,400
		Balance c/d	1,12,000
	7,62,000		7,62,000

Creditors Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Cash A/c	5,20,000	Balance b/d	46,000
Discount Received A/c	6,000	Purchases A/c	5,10,000
Balance c/d	30,000
	5,56,000		5,56,000