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Practical Problem

From the following Trading Balance of M/s Ajay and Vijay you are required to prepared Trading and Profit and Loss Account for the year ended 31st March, 2009 and Balance Sheet as on that date

Trial Balance as on 31st March, 2009
Particulars
Debit
Amount
Rs
Credit
Amount
Rs
Capital A/cs -
Ajay
60,000
Vijay
35,000
Purchases and Sales
46,700
85,000
Sundry Debtors and Creditors
28,000
25,000
Bills Receivable and payable
5,000
6,000
Commission
4,600
1,800
Opening stock
18,000
Wages
9,900
Investment
13,500
Postage and Telegrams
3,600
Insurance
1,200
Plant and Machinery
40,700
Furniture
18,000
Cash in hand
2,500
Carriage
3,200
Bad debts
400
Prepaid Rent
7,000
Salaries
10,500
2,12,800
2,12,800

Adjustments:

1) The closing stock is valued at Rs 31,000.

2) Outstanding expenses were wages Rs. 1,400, salaries Rs 800.

3) Depreciate Plant and Machinery by 10%.

4) Insurance at Rs 500 is paid in advance.

5) Provide for further bad debts of Rs 1,500.

6) Commission due but not received Rs 1,200.

Open in App
Solution

Trading Account
for the year ended Mar.31,2009
Dr.

Cr.

Particulars
Amount
(Rs)
Particulars
Amount
(Rs)
Opening Stock
18,000
Sales
85,000
Purchases
46,700
Closing Stock
31,000
Carriage
3,200
Wages
9,900
Add: Outstanding Wages
1,400
11,300
Gross Profit (Balancing Figure)
36,800
1,16,000
1,16,000

Profit and Loss Account

for the year ended March 31, 2009

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Commission

4,600

Gross Profit

36,800

Salaries

10,500

Commission Received

1,800

Add: Outstanding Salaries

800

11,300

Add: Accrued Commission

1,200

3,000

Postage and Telegram

3,600

Insurance

1,200

Less: Prepaid Insurance

(500)

700

Depreciation on Plant and Machinery

4,070

Bad-Debts

400

Add: Further Bad-Debts

1,500

1,900

Net Profit (Balancing Figure)

Ajay

6,815

Vijay

6,815

13,630

39,800

39,800

Balance Sheet

as on March 31, 2009

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Capital of Ajay

60,000

Fixed Assets

Add: Net Profit

6,815

66,815

Investment

13,500

Capital of Vijay

35,000

Furniture

18,000

Add: Net Profit

6,815

41,815

Plant and Machinery

40,700

Current Liabilities

Less: Depreciation

(4,070)

36,630

Creditors

25,000

Current Assets

Bills Payable

6,000

Closing Stock

31,000

Outstanding Wages

1,400

Debtors

28,000

Outstanding Salaries

800

Less: Further Bad-Debts

(1,500)

26,500

Bills Receivable

5,000

Prepaid Rent

7,000

Accrued Commission

1,200

Prepaid Insurance

500

Cash in Hand

2,500

1,41,830

1,41,830


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