Question

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

Account Title	Amount Rs	Account Title	Amount Rs
Sundry debtors	1,00,000	Bills payable	85,550
Bad debts	3,000	Sundry creditors	25,000
Trade expenses	2,500	Provision for bad debts	1,500
Printing and Stationary	5,000	Return outwards	4,500
Rent, Rates and Taxes	3,450	Capital	2,50,000
Freight	2,250	Discount received	3,500
Sales return	6,000	Interest received	11,260
Motor car	25,000	Sales	1,00,000
Opening stock	75,550
Furniture and Fixture	15,500
Purchases	75,000
Drawings	13,560
Investments	65,500
Cash in hand	36,000
Cash in bank	53,000
	4,81,310		4,81,310

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 drawing @ 6%.

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

7. Discount on debtors 2%.

Answer 1

Trading Account
Dr.							Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Opening Stock			75,550	Sales		1,00,000
Purchases		75,000			Less: Sales Inwards	6,000	94,000
	Less: Return Outwards	4,500	70,500	Closing Stock			35,000
Freight			2,250
				Gross Loss			19,300
			1,48,300				1,48,300

Profit and Loss Account
Dr.								Cr.
Particulars				Amount Rs	Particulars			Amount Rs
Gross Loss				19,300	Discount			3,500
Bad Debts			3,000		Interest Received			11,260
	Add: Further Bad-Debts		1,000		Interest on Drawings			814
	Add: New Provision		4,950		Net Loss			27,482
	Less: Old Provision		1,500	7,450
Discount on Debtors				1,881
Trade Expenses				2,500
Printing and Stationery				5,000
Rent, Rates and Taxes			3,450
	Add: O/S Rent, Rates and Taxes		200	3,650
Depreciation on Furniture				775
Depreciation on Motor Car				2,500
				43,056				43,056

Balance Sheet
Liabilities			Amount Rs	Assets			Amount Rs
Bills Payable			85,550	Sundry Debtors		100,000
Sundry Creditors			25,000		Less: Further Debts	1,000
Capital		2,50,000			Less: New Provision	4,950
	Less: Net Loss	27,482			Less: Discount on Debtors	1,881	92,169
	Less: Drawings	13,560
	Less: Interest on Drawings	814		Motor Car		25,000
			2,08,144		Less: Depreciation	2,500	22,500
Outstanding Rent, Rates and Taxes			200	Furniture and Fixtures		15,500
					Less: Depreciation	775	14,725
				Investments			65,500
				Cash in Hand			36,000
				Cash in Bank			53,000
				Closing Stock			35,000
			3,18,894				3,18,894

Note: In NCERT book, the Gross Loss is Rs 17,050, the Net Loss is Rs 27,344 and the Total of Balance Sheet is Rs 3,19,032. However, as per the solution Net Loss and the Total of the Balance Sheet are Rs 27,482 and Rs 3,18,894 respectively.