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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.

Account TitleAmt.(Dr)Amt.(Cr)Drawing and Capital19,53067,500Purchases and Sales45,0001,12,500Salary and Commission25,4701,575Carriage2,700Plant and Machinery27,000Furniture6,750Opening Stock42,300Insurance Premium2,700Interest7,425Bank Overdraft24,660Rent and Taxes2,160Wages11,215Returns2,3851,440Carriage Outwards1,485Debtors and Creditors36,00058,500General Expenses6,975Octroi530Investment41,400¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯2,73,600––––––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯2,73,600––––––––––––––––

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.


Solution

Dr.                         Trading and Profit and Loss Account              Cr.

                                 as on 31 st December, 2012

ParticularsAmt.(Rs.)ParticularsAmt. (Rs.)Opening Stock42,300 Sales                   1,12,500Purchases                45,000()Sales Return      2,385––––1,10,115()Purchases        Return              1,440––––43,560 Closing Stock20,000Carriage2,700 Wages                    11,215(+)Outstanding      Wages                      50–––––11,265 Octroi530 Gross Profit29,760––––––1,30,115––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,30,115––––––––Salary                    25,470 Gross Profit b/d29,760(+)Outstanding Commission1,575       Salary                      20––––––25,490 Interest7,425 Rent and Taxes2,160 Interest on Drawings977 Insurance Premium2,700 Net Loss8,973 Carriage Outwards1,485 General Expenses6,975 Interest on Capital6,750 Depreciation of Plant and Machinery1,350 Provision for Debtors1,800––––48,710––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯48,710––––––

                                            Balance Sheet
                                   as on 31st December, 2012

Capital and LiabilitiesAmt. (Rs.)AssetsAmt. (Rs.)Capital                        67,500Furniture6,750(+)Interest onPlant and Machinery     27,000      Capital                    6,750()Depreciation(-)Loss (Net)                8,973    @5%                               1,350––––25,650(-)Drawings                19,530(-)Interest on Drawings  977––    44,770Debtors                            36,000Bank Overdraft    24,660()Provision                     1,800––––  34,200Creditors    58,500Investment  41,400Outstanding Wages          50Closing Stock  20,000Outstanding Salary          20  ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,28,000––––––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,28,000––––––––––––––––

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