Prepare a trading and profit and loss account for the year ending December 31, 2017. from the balances extracted of M/s Rahul Sons. Also prepare a balance sheet at the end of the year.

Account Title

Amount

Rs

Account Title

Amount

Rs

Stock

50,000

Sales

1,80,000

Wages

3,000

Purchases return

2,000

Salary

8,000

Discount received

500

Purchases

1,75,000

Provision for doubtful debts

2,500

Sales return

3,000

Capital

3,00,000

Sundry Debtors

82,000

Bills payable

22,000

Discount allowed

1,000

Commission received

4,000

Insurance

3,200

Rent

6,000

Rent Rates and Taxes

4,300

Loan

34,800

Fixtures and fittings

20,000

Trade expenses

1,500

Bad debts

2,000

Drawings

32,000

Repair and renewals

1,600

Travelling expenses

4,200

Postage

300

Telegram expenses

200

Legal fees

500

Bills receivable

50,000

Building

1,10,000

5,51,800

5,51,800

Adjustments

1. Commission received in advance Rs 1,000.

2. Rent receivable Rs 2,000.

3. Salary outstanding Rs 1,000 and insurance prepaid Rs 800.

4. Further bad debts Rs 1,000 and provision for doubtful debts @ 5% on debtors and discount on debtors @ 2%.

5. Closing stock Rs 32,000.

6. Depreciation on building @ 6% p.a.

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Solution

Books of M/s. Rahul Sons.

Trading Account for the year ending December 31, 2017

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Opening Stock

50,000

Sales

1,80,000

Purchases

1,75,000

Less: Sales Returns

3,000

1,77,000

Less: Purchase Returns

2,000

1,73,000

Closing Stock

32,000

Wages

3,000

Gross Loss

17,000

2,26,000

2,26,000

Profit and Loss Account for the year ending December 31, 2017

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Gross Loss

17,000

Discount Received

500

Salary

8,000

Commission Received

4,000

Add: Outstanding Salary

1,000

9,000

Less: Advance Commission

1,000

3,000

Discount Allowed

1,000

Insurance

3,200

Rent

6,000

Less: Insurance Prepaid

800

2,400

Add: Rent Receivable

2,000

8,000

Rent Rates and Taxes

4,300

Trade Expenses

1,500

Net Loss

43,189

Bad-Debts

2,000

Add: Further Bad-Debts

1,000

Add: New Provision

4,050

Less: Old Provision

2,500

4,550

Discount on Debtors

1,539

Postage

300

Telegram Expenses

200

Depreciation on Building

6,600

Repair and Renewals

1,600

Travelling Expenses

4,200

Legal Fees

500

54,689

54,689

Balance Sheet for the year ending December 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital

3,00,000

Debtors

82,000

Less: Net Loss

43,189

Less: Further Bad-Debts

1,000

Less: Drawings

32,000

2,24,811

Less: New Provision

4,050

Bills Payable

22,000

Less: Discount on Debtors (on Rs 76,950)

1,539

75,411

Loan

34,800

B/R

50,000

Advance Commission

1,000

Buildings

1,10,000

Outstanding Salary

1,000

Less: 6% Depreciation

6,600

1,03,400

Rent Receivable

2,000

Prepaid Insurance

800

Closing Stock

32,000

Furniture and Fittings

20,000

2,83,611

2,83,611

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Similar questions

The following is the Trial Balance of Mr. Deepak as on March 31, 2017. You are required to prepare trading account, profit and loss account and a balance sheet as on date:

Account title	Debit Amount Rs	Account title	Credit Amount Rs
Drawings	36,000	Capital	2,50,000
Insurance	3,000	Bills payable	3,600
General expenses	29,000	Creditors	50,000
Rent and taxes	14,400	Discount received	10,400
Lighting (factory)	2,800	Purchases return	8,000
Travelling expenses	7,400	Sales	4,40,000
Cash in hand	12,600
Bills receivable	5,000
Sundry debtors	1,04,000
Furniture	16,000
Plant and Machinery	1,80,000
Opening stock	40,000
Purchases	1,60,000
Sales return	6,000
Carriage inwards	7,200
Carriage outwards	1,600
Wages	84,000
Salaries	53,000

Closing stock Rs 35,000.

From the following information prepare trading and profit and loss account of M/s Indian sports house for the year ending March 31, 2017.

Account Title	Amount Rs	Account Title	Amount Rs
Drawings	20,000	Capital	2,00,000
Sundry debtors	80,000	Return outwards	2,000
Bad debts	1,000	Bank overdraft	12,000
Trade Expenses	2,400	Provision for bad debts	4,000
Printing and Stationery	2,000	Sundry creditors	60,000
Rent Rates and Taxes	5,000	Bills payable	15,400
Freight	4,000	Sales	2,76,000
Return inwards	7,000
Opening stock	25,000
Purchases	1,80,000
Furniture and Fixture	20,000
Plant and Machinery	1,00,000
Bills receivable	14,000
Wages	10,000
Cash in hand	6,000
Discount allowed	2,000
Investments	40,000
Motor car	51,000
	5,69,400		5,69,400

Adjustments

1. Closing stock was Rs 45,000.

2. Provision for doubtful debts is to be maintained @ 2% on debtors.

3. Depreciation charged on : furniture and fixture @ 5%, plant and Machinery @ 6% and motor car @ 10%.

4. A Machine of Rs 30,000 was purchased on October 01, 2016.

5. The manager is entitle to a commission of @ 10% of the net profit after charging such commission.

Prepare a trading and profit and loss account of M/s Green Club Ltd. for the year ending March 31, 2017. from the following figures taken from his trial balance :

Account Title	Amount Rs	Account Title	Amount Rs
Opening stock	35,000	Sales	2,50,000
Purchases	1,25,000	Purchase return	6,000
Return inwards	25,000	Creditors	10,000
Postage and Telegram	600	Bills payable	20,000
Salary	12,300	Discount	1,000
Wages	3,000	Provision for bad debts	4,500
Rent and Rates	1,000	Interest received	5,400
Packing and Transport	500	Capital	75,000
General expense	400
Insurance	4,000
Debtors	50,000
Cash in hand	20,000
Cash at bank	40,000
Machinery	20,000
Lighting and Heating	5,000
Discount	3,500
Bad debts	3,500
Investment	23,100
	3,71,900		3,71,900

Adjustments

1. Depreciation charged on machinery @ 5% p.a.

2. Further bad debts Rs 1,500, discount on debtors @ 5% and make a provision on debtors @ 6%.

3. Wages prepaid Rs 1,000.

4. Interest on investment @ 5% p.a.

5. Closing stock 10,000.

The following balances have been extracted from the trial of M/s Haryana Chemical Ltd. You are required to prepare a trading and profit and loss account and balance sheet as on March 31, 20170 from the given information.

Account Title	Amount Rs	Account Title	Amount Rs
Opening stock	50,000	Sales	3,50,000
Purchases	1,25,500	Purchases return	2,500
Sales return	2,000	Creditors	25,000
Cash in hand	21,200	Rent	5,000
Cash at bank	12,000	Interest	2,000
Carriage	100	Bills payable	1,71,700
Free hold land	3,20,000	Capital	3,00,000
Patents	1,20,000
General Expenses	2,000
Sundry Debtors	32,500
Building	86,000
Machinery	34,500
Insurance	12,400
Drawings	10,000
Motor vehicle	10,500
Bad debts	2,000
Light and Water	1,200
Trade expenses	2,000
Power	3,900
Salary and Wages	5,400
Loan a 15% (01.09.2010)	3,000
	8,56,200		8,56,200

Adjustments

1. Closing stock was valued at the end of the year Rs 40,000.

2. Salary amounting Rs 500 and trade expense Rs 300 are due.

3. Depreciation charged on building and machinery are @ 4% and @ 5% respectively.

4. Make a provision of @ 5% on sundry debtors.

Following balances have been extracted from the trial balance of M/s Keshav Electronics Ltd. You are required to prepare the trading and profit and loss account and a balance sheet as on March 31, 2017.

Account Title	Amount Rs	Account Title	Amount Rs
Opening stock	2,26,000	Sales	6,80,000
Purchases	4,40,000	Return outwards	15,000
Drawings	75,000	Creditors	50,000
Buildings	1,00,000	Bills payable	63,700
Motor van	30,000	Interest received	20,000
Freight inwards	3,400	Capital	3,50,000
Sales return	10,000
Trade expense	3,300
Heat and Power	8,000
Salary and Wages	5,000
Legal expense	3,000
Postage and Telegram	1,000
Bad debts	6,500
Cash in hand	79,000
Cash at bank	98,000
Sundry debtors	25,000
Investments	40,000
Insurance	3,500
Machinery	22,000
	11,78,700		11,78,700

The following additional information is available :

1. Stock on December 31, 2017 was Rs 30,000.

2. Depreciation is to be charged on building at 5% and motor van at 10%.

3. Provision for doubtful debts is to be maintained at 5% on Sundry Debtors.

4. Unexpired insurance was Rs 600.

5. The Manager is entitled to a commission @ 5% on net profit before charging such commission.

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Books of M/s. Rahul Sons. Trading Account for the year ending December 31, 2017
Dr.								Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Opening Stock			50,000	Sales		1,80,000
Purchases		1,75,000			Less: Sales Returns	3,000	1,77,000
	Less: Purchase Returns	2,000	1,73,000	Closing Stock			32,000
Wages			3,000	Gross Loss			17,000

			2,26,000				2,26,000

Profit and Loss Account for the year ending December 31, 2017
Dr.							Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Gross Loss			17,000	Discount Received			500
Salary		8,000		Commission Received		4,000
	Add: Outstanding Salary	1,000	9,000		Less: Advance Commission	1,000	3,000
Discount Allowed			1,000
Insurance		3,200		Rent		6,000
	Less: Insurance Prepaid	800	2,400		Add: Rent Receivable	2,000	8,000
Rent Rates and Taxes			4,300
Trade Expenses			1,500	Net Loss			43,189
Bad-Debts		2,000
	Add: Further Bad-Debts	1,000
	Add: New Provision	4,050
	Less: Old Provision	2,500	4,550
Discount on Debtors			1,539
Postage			300
Telegram Expenses			200
Depreciation on Building			6,600
Repair and Renewals			1,600
Travelling Expenses			4,200
Legal Fees			500

			54,689				54,689

Balance Sheet for the year ending December 31, 2017
Liabilities			Amount Rs	Assets			Amount Rs
Capital		3,00,000		Debtors		82,000
	Less: Net Loss	43,189			Less: Further Bad-Debts	1,000
	Less: Drawings	32,000	2,24,811		Less: New Provision	4,050
Bills Payable			22,000		Less: Discount on Debtors (on Rs 76,950)	1,539	75,411
Loan			34,800	B/R			50,000
Advance Commission			1,000	Buildings		1,10,000
Outstanding Salary			1,000		Less: 6% Depreciation	6,600	1,03,400
				Rent Receivable			2,000
				Prepaid Insurance			800
				Closing Stock			32,000
				Furniture and Fittings			20,000

			2,83,611				2,83,611