Question

Prepare the trading and profit and loss account and balance sheet of M/s Control Device India on December 31, 2012 from the following balance as on the date.

$\begin{array}{ccc}\text{Account Title}& Amt.\left(Dr\right)& Amt.\left(Cr\right)\\ \text{Drawing and Capital}& 19,530& 67,500\\ \text{Purchases and Sales}& 45,000& 1,12,500\\ \text{Salary and Commission}& 25,470& 1,575\\ \text{Carriage}& 2,700& \\ \text{Plant and Machinery}& 27,000& \\ \text{Furniture}& 6,750& \\ \text{Opening Stock}& 42,300& \\ \text{Insurance Premium}& 2,700& \\ \text{Interest}& & 7,425\\ \text{Bank Overdraft}& & 24,660\\ \text{Rent and Taxes}& 2,160& \\ \text{Wages}& 11,215& \\ \text{Returns}& 2,385& 1,440\\ \text{Carriage Outwards}& 1,485& \\ \text{Debtors and Creditors}& 36,000& 58,500\\ \text{General Expenses}& 6,975& \\ \text{Octroi}& 530& \\ \text{Investment}& 41,400& \\ & \overline{\underset{–}{\underset{–}{2,73,600}}}& \overline{\underset{–}{\underset{–}{2,73,600}}}\end{array}$

Closing stock was valued Rs. 20,000.

(a) Interest on capital @ 10$\%$.

(b) Interest on drawings @ 5$\%$

(c) Wages outstanding Rs. 50.

(d) Outstanding salary Rs. 20.

(e) Provide a depreciation @ 5$\%$ on plant and machinery.

(f) Make a 5$\%$ provision on debtors.

Answer 1

Dr. Trading and Profit and Loss Account Cr.

as on 31 st December, 2012

$\begin{array}{cccc}\text{Particulars}& Amt.(Rs.)& \text{Particulars}& \text{Amt. (Rs.)}\\ \text{Opening Stock}& 42,300& \text{Sales}1,12,500& \\ \text{Purchases}45,000& & (-)\text{Sales Return}\underset{–}{2,385}& 1,10,115\\ (-)\text{Purchases}& & & \\ \text{Return}\underset{–}{1,440}& 43,560& \text{Closing Stock}& 20,000\\ \text{Carriage}& 2,700& & \\ \text{Wages}11,215& & & \\ (+)\text{Outstanding}& & & \\ \text{Wages}\underset{–}{50}& 11,265& & \\ \text{Octroi}& 530& & \\ \text{Gross Profit}& \underset{–}{29,760}& & \\ & \underset{–}{1,30,115}& & \underset{–}{\overline{1,30,115}}\\ \text{Salary}25,470& & \text{Gross Profit b/d}& 29,760\\ (+)\text{Outstanding}& & \text{Commission}& 1,575\\ \text{Salary}\underset{–}{20}& 25,490& \text{Interest}& 7,425\\ \text{Rent and Taxes}& 2,160& \text{Interest on Drawings}& 977\\ \text{Insurance Premium}& 2,700& \text{Net Loss}& 8,973\\ \text{Carriage Outwards}& 1,485& & \\ \text{General Expenses}& 6,975& & \\ \text{Interest on Capital}& 6,750& & \\ \text{Depreciation of Plant and}& & & \\ \text{Machinery}& 1,350& & \\ \text{Provision for Debtors}& \underset{–}{1,800}& & \\ & \underset{–}{48,710}& & \overline{\underset{–}{48,710}}\end{array}$

Balance Sheet
as on 31st December, 2012

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Capital}67,500& & \text{Furniture}& 6,750\\ (+)\text{Interest on}& & \text{Plant and Machinery}27,000& \\ \text{Capital}6,750& & (-)\text{Depreciation}& \\ \text{(-)Loss (Net)}8,973& & @5\%\underset{–}{1,350}& 25,650\\ \text{(-)Drawings}19,530& & & \\ \text{(-)Interest on Drawings}\underset{–}{977}& 44,770& \text{Debtors}36,000& \\ \text{Bank Overdraft}& 24,660& (-)\text{Provision}\underset{–}{1,800}& 34,200\\ \text{Creditors}& 58,500& \text{Investment}& 41,400\\ \text{Outstanding Wages}& 50& \text{Closing Stock}& 20,000\\ \text{Outstanding Salary}& 20& & \\ & \overline{\underset{–}{\underset{–}{1,28,000}}}& & \overline{\underset{–}{\underset{–}{1,28,000}}}\end{array}$