Question

Prepare the trading and profit and loss account and a balance sheet of M/s Shine Ltd. from the following particulars.

$\begin{array}{cccc}\text{Account Title}& \text{Amt.(Rs)}& \text{Account title}& \text{Amt.(Rs)}\\ \text{Sundry Debtors}& 1,00,000& \text{Bills Payable}& 85,550\\ \text{Bad Debts}& 3,000& \text{Sundry Creditors}& 25,000\\ \text{Trade Expenses}& 2,500& \text{Provision for Bad Debts}& 1,500\\ \text{Printing and Stationery}& 5,000& \text{Return Outwards}& 4,500\\ \text{Rent, Rates and Taxes}& 3,450& \text{Capital}& 2,50,000\\ \text{Freight}& 2,250& \text{Discount Received}& 3,500\\ \text{Sales Return}& 6,000& \text{Interest Received}& 11,260\\ \text{Motor Car}& 25,000& \text{Sales}& 1,00,000\\ \text{Opening Stock}& 75,550& & \\ \text{Furniture and Fixture}& 15,500& & \\ \text{Purchase}& 75,000& & \\ \text{Drawings}& 13,560& & \\ \text{Investments}& 65,500& & \\ \text{Cash in Hand}& 36,000& & \\ \text{Cash at Bank}& 53,000& & \\ & \overline{\underset{–}{\underset{–}{4,81,310}}}& & \overline{\underset{–}{\underset{–}{4,81,310}}}\end{array}$

Adjustments

1. Closing stock was valued Rs. 35,000.

2. Depreciation charged on furniture and fixture @ 5%.

3. Further bad debts Rs. 1,000. Make a provision for bad debts @ 5% on sundry debtors.

4. Depreciation charged on motor car @ 10%.

5. Interest on drawings @ 6%.

6. Rent, rates and taxes was outstanding Rs. 200.

7. Discount on debtors 2%.

Answer 1

$\begin{array}{ccc}& \text{Trading and Profit and Loss Account}& \\ \text{Dr.}& \text{as on ................}\text{Cr.}& \end{array}$

$\begin{array}{cccccc}\text{Particulars}& & \text{Amt. (Rs.)}& \text{Particulars}& & \text{Amt. (Rs.)}\\ \text{Opening Stock}& & 75,550& \text{Sales}& 1,00,000& \\ \text{Purchase}& 75,000& & \text{(-)Return Inwards}& \underset{–}{6,000}& 94,000\\ \text{(-)Return Outwards}& \underset{–}{4,500}& 70,500& \text{Closing stock}& & 35,000\\ & & & \text{Gross Loss c/d}& & 17,050\\ & & \overline{\underset{–}{\underset{–}{1,46,050}}}& & & \overline{\underset{–}{\underset{–}{1,46,050}}}\\ \text{Gross Loss b/d}& & 17,050& \text{Discount Received}& & 3,500\\ \text{Bad Debts}& 3,000& & \text{Interest Received}& & 11,260\\ \text{(+)Further Bad Debts}& 1,000& & \text{Interest On Drawings}& & 814\\ \text{(+)Provision for Bad Debts}& 4,950& & \text{Net Loss}& & 27,482\\ \text{(-)Old Provision}& \underset{–}{1,500}& 7,450& & & \\ \text{Trade Expenses}& & 2,500& & & \\ \text{Printing and Stationery}& & 5,000& & & \\ \text{Rent, Rates and Taxes}& 3,450& & & & \\ \text{(+)Outstanding Rent}& \underset{–}{200}& 3,650& & & \\ \text{Freight}& & 2,250& & & \\ \text{Depreciation on Furniture}& & 775& & & \\ \text{Depreciation on Motor Car}& & 2,500& & & \\ \text{Discount on Debtors}& & 1,881& & & \\ & & \overline{\underset{–}{\underset{–}{43,056}}}& & & \overline{\underset{–}{\underset{–}{43,056}}}\end{array}$

Balance Sheet
as on......

$\begin{array}{cccccc}\text{Capital and Liabilities}& & \text{Amt. (Rs.)}& \text{Assets}& & \text{Amt. (Rs.)}\\ \text{Capital}& 2,50,000& & \text{Cash in Hand}& & 36,000\\ \text{(-)Net Loss}& \underset{–}{27,482}& & \text{Cash at Bank}& & 53,000\\ & 2,22,518& & \text{Investment}& & 65,500\\ \text{(-)Drawings}& 13,560& & \text{Motor Car}& 25,000& \\ \text{(-)Interest}& \underset{–}{814}& 2,08,144& \text{(-)Depreciation}& & \\ \text{Bills Payable}& & 85,550& @10\%& \underset{–}{2,500}& 22,500\\ \text{Sundry Creditors}& & 25,000& \text{Furniture and Fixture}& 15,500& \\ \text{Outstanding Rent, Rates and Taxes}& & 200& \text{(-)Depreciation}@5\%& \underset{–}{775}& 14,725\\ & & & \text{Sundry Debtors}& 1,00,000& \\ & & & \text{(-)Bad Debts}& 1,000& \\ & & & \text{(-)Provision for Bad Debts}& 4,950& \\ & & & \text{(-)Discount on Debt}& \underset{–}{1,881}& 92,169\\ & & & \text{Closing Stock}& & 35,000\\ & & \overline{\underset{–}{\underset{–}{3,18,894}}}& & & \overline{\underset{–}{\underset{–}{3,18,894}}}\end{array}$

Working Note

$\begin{array}{cc}\text{Sundry Debtors}& 1,00,000\\ \text{(-)Further Bad Debts}& \underset{–}{1,000}\\ & 99,000\\ \text{(-)Provision}\left(5\%\right)& \underset{–}{4,950}\\ & 94,050\\ \text{(-)Discount}\left(2\%\right)& \underset{–}{1,881}\\ & \underset{–}{92,169}\end{array}$