Question

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date from the following Trial Balance:

Particulars		Dr. (₹)	Cr. (₹)
Capital		…	1,00,000
Cash		15,000	…
Bank Loan		…	20,000
Purchases		1,20,000	…
Sales		…	1,50,000
Sales Return		10,000	…
Purchases Return		…	20,000
Establishment Expenses		22,000	…
Taxes and Insurance		5,000	...
Bad Debts		5,000	…
Provision for Doubtful Debts		…	7,000
Debtors		50,000	…
Creditors		…	20,000
Commission		…	5,000
Deposits		40,000	…
Opening Stock		30,000	…
Drawings		14,000	…
Furniture		6,000	…
Bills Receivable		32,000	…
Bills Payable		…	25,000
Input CGST		10,000	...
Input SGST		10,000	…
Output CGST		…	8,000
Output SGST		…	8,000
Output IGST		…	6,000
Total		3,69,000	3,69,000

Adjustments:
(i) Taxes ₹ 3,000 are outstanding but Insurance ₹ 500 is prepaid.
(ii) Commission ₹ 1,000 received in advance for the next year.
(iii) Interest ₹ 2,100 is to be received on Deposits and Interest on Bank Loan ₹ 3,000 is to be paid.
(iv) Provision for Doubtful Debts to be maintained at ₹ 10,000.
(v) Depreciate Furniture by 10%.
(vi) Stock on 31st March, 2019 is ₹ 45,000.
(vii) A fire occurred on 1st April, 2019 destroying goods costing ₹ 10,000. These goods were purchased paying CGST and SGST @ 6% each.

Answer 1

Financial Statements Trading Account for the year ended March 31, 2019
Dr.					Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Opening Stock		30,000	Sales	1,50,000
Purchases	1,20,000		Less: Return	(10,000)	1,40,000
Less: Return	(20,000)	1,00,000	Closing Stock		45,000
Gross Profit (Balancing Figure)		55,000
		1,85,000			1,85,000

Profit and Loss Account for the year ended March 31, 2019
Dr.					Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Taxes and Insurance	5,000		Gross Profit		55,000
Add: Outstanding Taxes	3,000		Commission	5,000
Less: Prepaid Insurance	(500)	7,500	Less: Advance Commission	(1,000)	4,000
			Interest Accrued on Investment		2,100
Bad Debts	5,000
Add: Bad Debts Reserve	10,000
Less: Existing Reserve	(10,000)	5,000
Depreciation on Furniture		600
Outstanding Interest on Loan		3,000
Establishment Charges		25,000
Net Profit (Balancing Figure)		20,000
		61,100			61,100

Balance Sheet as on March 31, 2019
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital	1,00,000		Investments (Deposits)	40,000
Less: Drawings	(14,000)		Add: Accrued Interest	2,100	42,100
Add: Net Profit	20,000	1,06,000	Furniture	6,000
Bank Loan	20,000		Less: 10% Depreciation	(600)	5,400
Add: Interest Outstanding	3,000	23,000	Sundry Debtors	50,000
Sundry Creditors		20,000	Less: Provision for Doubtful Debts	(10,000)	40,000
Advance Commission Bills Payable		1,000 25,000	Bills Receivable Prepaid Insurance Closing Stock		32,000 500 45,000
Taxes Outstanding GST Payable (WN 2)		3,000 2,000	Cash in Hand		15,000
		1,80,000			1,80,000

Working Notes:
(1) Loss of stock by fire has ocurred on 1st April, 2019. Hence, it will not affect the Balance Sheet dated 31st March, 2019.

(2)GST Set off
First:CGST Payable/(Receivable)=Output CGST-Input CGST=8,000-10,000=(2,000)
Second:SGST Payable/(Receivable)=Output SGST-Input SGST=8,000-10,000=(2,000)
Third:IGST Payable/(Receivable)=Output IGST-Input CGST-Input SGST=6,000-2,000-2,000=2,000

Final:GST Payable=Output IGST=2,000