Question

Prepare a trading and profit and loss account of M/s Green Club Ltd for the year ending December 31, 2010 from the following figures taken from his trial balance

Account Title	Amt. (Rs.)	Account Title	Amt. (Rs.)
Opening Stock	35,000	Sales	2,50,000
Purchase	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 Expenses	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% pa.
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% pa.
5. Closing stock Rs. 10,000.

Answer 1

Trading and Profit and Loss Account
as on 31st December,2010
Dr Cr

Particulars	Amt. (Rs.)	Particular	Amt. (Rs.)
To Opening Stock	35,000	By Sales	2,50,000
To Purchase	1,25,000	(-) Sales Return	25,000 2,25,000
(-) Purchase		By Closing Stock	10,000
Return	6,000 1,19,000
To Wages	3,000
(-) Prepaid Wages	1,000 2,000
To Gross Profit c/d	79,000 2,35,000		2,35,000
To Salary	12,300	By Gross Profit b/d	79,000
To Postage and Telegram	600	By Accrued Interest on Investment	1,155
To Rent and Rates	1,000	By Discount	1,000
To Packing and Transport	500	By Interest Received	5,400
To General Expenses	400
To Insurance	4,000
To Lighting and Heating	5,000
To Discount	3,500
To Bad Debts	3,500
(+) Further Bad
Debts	1,500
(+) New Provisions	2,910
(-) Old Provision	4,500
(+) Discount	2,280 5,690
To Depreciation on Machinery	1,000
To Net Profit	52,565
	86,555		86,555

Balance Sheet

Liabilities	Amt. (Rs.)	Assets	Amt. (Rs.)
Capital	75,000	Investment	23,100
(+) Net Profit	52,565 1,27,565	Accrued Interest	1,155 24,255
Creditors	10,000	Closing Stock	10,000
Bills Payable	20,000	Prepaid Wages	1,000
		Machinery	20,000
		(-) Depreciation @ 5%	1,000 19,000
		Cash in Hand	20,000
		Cash at Bank	40,000
		Debtors	50,000
		(-) Bad Debts	1,500 48,500
		(-) New Provision	2,910 45,590
		(-) Discount	2,280 43,310
	1,57,565		1,57,565

Working Note
Sundry Debtors 50,000
(-) Further Bad Debts 1,500
48,500
(-) Provision (6%) 2,910
45,590
(-) Discount (5%) 2,280
43,310.