The following balances has been extracted from the trial of M/s Runway Shine Ltd. Prepare a trading and profit and loss account and a balance sheet as on December 31, 2010.
Account Title Amt. (Rs.)
Account Title Amt. (Rs.)
Purchase 1,50,000 Sales 2,50,000
Opening Stock 50,000 Return Outwards 4,500
Return Inwards 2,000 Interest Received 3,500
Carriage Inwards 4,500 Discount Received 400
Cash in Hand 77,800 Creditors 1,25,000
Cash in Bank 60,800 Bills Payable 6,040
Wages 2,400 Capital 1,00,000
Printing and Stationery 4,500
Discount 400
Bad Debts 1,500
Insurance 2,500
Investment 32,000
Debtors 53,000
Bills Receivable 20,000
Postage and Telegraph 400
Commission 200
Interest 1,000
Repair 440
Lighting Charges 500
Telephone Charges 100
Carriage Outward 400
Motor Car 25,000
4,89,440 4,89,440
Adjustments
1. Further bad debts Rs. 1,000. Discount on debtors Rs. 500 and make a provision on debtors @ 5%.
2. Interest received on investment @ 5%.
3. Wages and interest outstanding Rs. 100 and Rs. 200 respectively.
4. Depreciation charged on motor car @ 5% pa. 5. Closing stock Rs. 32,500.

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Solution

Trading and Profit and Loss Account
as on 31st December,2010
Dr Cr
Particulars Amt. (Rs.) Particular Amt. (Rs.)
To Opening Stock 50,000 By Sales 2,50,000
To Purchase 1,50,000 (-) Return Inwards 2,000
2,48,000
(-) Purchase 4,500 By Closing Stock 32,500
Return 1,19,000
To Wages 2,400
(+) Outstanding Wages 1,00
2,500
To Gross Profit c/d 78,000
2,80,500 2,80,500
To Carriage Outwards 400 By Gross Profit b/d 78,000
To Lighting Charges 500 By Interest Received 3,500
To Repair 440 (+) Interest on Investment 1,600
5,100
To Printing and Stationary 4,500 By Discount Received 400
To Discount 400
To Insurance 2,500
To Bad Debts
(+) Further Bad 1,500
Debts 1,000
(+) New Provision 2,600
(+) Discount 500
5,600
To Postage and Telegraph 400
To Commission 200
To Interest 1,000
(+) Outstanding Interest 200
1,200
To Telephone Charges
To Depreciation on Motar Car 100
1,250
To Net Profit 66,010
83,500 83,500

Balance Sheet
Liabilities Amt. (Rs.) Assets Amt. (Rs.)
Capital 1,00,000 Cash in Hand
Cash at Bank
Investment 77,800
60,800
32,000
(+) Net Profit 66,010
1,66,010 (+) Interest on Investment 1,600
33,600
Creditors 1,25,000 Debtors 53,000
Bills Payable 6,040 (-) Bad Debts 1,000
52,000
Outstanding Wages 100 (-) Provision 2,600
Outstanding Interest 200 (-) Discount 500
48,900
Bills Receivable 20,000
Motar Car 25,000
(-) Depreciation 1,250
23,750
Closing Stock 32,500
2,97,350
2,97,350

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Similar questions

Q. Prepare a trading and profit and loss account of M/s Green Club Ltd for the year ending December 31, 2010 from the following figures taken from his trial balance

Account Title	Amt. (Rs.)	Account Title	Amt. (Rs.)
Opening Stock	35,000	Sales	2,50,000
Purchase	1,25,000	Purchase Return	6,000
Return Inwards	25,000	Creditors	10,000
Postage and Telegram	600	Bills payable	20,000
Salary	12,300	Discount	1,000
Wages	3,000	Provision for Bad Debts	4,500
Rent and Rates	1,000	Interest Received	5,400
Packing and Transport	500	Capital	75,000
General Expenses	400
Insurance	4,000
Debtors	50,000
Cash in Hand	20,000
Cash at Bank	40,000
Machinery	20,000
Lighting and Heating	5,000
Discount	3,500
Bad Debts	3,500
Investment	23,100
	3,71,900		3,71,900

Adjustments
1. Depreciation charged on machinery @ 5% pa.
2. Further bad debts Rs. 1,500, discount on debtors @ 5% and make a provision on debtors @ 6%.
3. Wages prepaid Rs. 1,000.
4. Interest on investment @ 5% pa.
5. Closing stock Rs. 10,000.

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

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

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%.

Q. Prepare a Trading and Profit and Loss account for year ending December 31, 2010 from the balances extracted to M/s Rahul Sons. Also prepare a balance sheet at the end of the year.

Account Title	Amt. (Rs.)	Account Title	Amt. (Rs.)
Stock	50,000	Sales	1,80,000
Wages	3,000	Purchase Return	2,000
Salary	8,000	Discount Received	500
Purchase	1,75,000	Provision for Bad Debts	2,500
Sales Return	3,000	Capital	3,00,000
Sundry Debtors	82,000	Bills Payable	22,000
Discount Allowed	1,000	Commission Received	4,000
Insurance	3,200	Rent	6,000
Rent, Rates and Taxes	4,300	Loan	34,800
Fixtures and Fittings	20,000
Trade Expenses	1,500
Bad Debts	2,000
Drawings	32,000
Repair and Renewals	1,600
Travelling Expenses	4,200
Postage	300
Telegram Expenses	200
Legal Fees	500
Bills Receivable	50,000
Building	1,10,000
	5,51,800		5,51,800

Adjustments
1. Commission received in advance Rs. 1,000.
2. Rent received Rs. 22,000.
3. Salary outstanding Rs. 1,000 and insurance prepaid Rs. 800.
4. Further bad debts Rs. 1,000 and provision for bad debts @ 5% on debtors and discount on debtors @ 2%.
5. Closing stock Rs. 32,000.
6. Depreciation on building @ 6% pa.

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

Account Title	Amt.(Rs)	Account Title	Amt. (Rs)
Sundry Debtors	1,00,000	Bills Payable	85,550
Bad Debts	3,000	Sundry Creditors	25,000
Trade Expenses	2,500	Provisions for Bad Debts	1,500
Printing and Stationery	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
Purchase	75,000
Drawings	13,560
Investments	65,500
Cash in Hand	36,000
Cash at Bank	53,000
	4,81,310		4,81,310

Adjustments
1. Closing stock was valued Rs.35,000.
2. Depredation 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%.

The following balances has been extracted from the trial balance of M/s Runway Shine Ltd. Prepare a trading and profit and loss account and a balance sheet as on December 31, 2010.

$\begin{matrix} Account Title & Amt. (Rs.) & Account Title & Amt. (Rs) Purchase & 1, 50, 000 & Sales & 2, 50, 000 Opening Stock & 50, 000 & Return Outwards & 4, 500 Return Inwards & 2, 000 & Interest Received & 3, 500 Carriage Inwards & 4, 500 & Discount Received & 400 Cash in Hand & 77, 800 & Creditors & 1, 25, 000 Cash at Bank & 60, 800 & Bills Payable & 6, 040 Wages & 2, 400 & Capital & 1, 00, 000 Printing and Stationery & 4, 500 Discount & 400 Bad Debts & 1, 500 Insurance & 2, 500 Investment & 32, 000 Debtors & 53, 000 Bills Receivable & 20, 000 Postage and Telegraph & 400 Commission & 200 Interest & 1, 000 Repair & 440 Lighting Charges & 500 Telephone Charges & 100 Carriage Outward & 400 Motor Car & 25, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 4, 89, 440 - ---------- - - ---------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 4, 89, 440 - ---------- - - ---------- - \end{matrix}$

Adjustments-

1. Further bad debts Rs. 1,000. Discount on debtors Rs. 500 and make a provision on debtors @ 5%.

2. Interest received on investment @ 5%.

3. Wages and interest outstanding Rs. 100 and Rs. 200 respectively.

4. Depreciation charged on motor car @ 5% pa.

5. Closing stock Rs. 32,500.

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Particulars	Amt. (Rs.)	Particular	Amt. (Rs.)
To Opening Stock	50,000	By Sales	2,50,000
To Purchase	1,50,000	(-) Return Inwards	2,000 2,48,000
(-) Purchase	4,500	By Closing Stock	32,500
Return	1,19,000
To Wages	2,400
(+) Outstanding Wages	1,00 2,500
To Gross Profit c/d	78,000 2,80,500		2,80,500
To Carriage Outwards	400	By Gross Profit b/d	78,000
To Lighting Charges	500	By Interest Received	3,500
To Repair	440	(+) Interest on Investment	1,600 5,100
To Printing and Stationary	4,500	By Discount Received	400
To Discount	400
To Insurance	2,500
To Bad Debts (+) Further Bad	1,500
Debts	1,000
(+) New Provision	2,600
(+) Discount	500 5,600
To Postage and Telegraph	400
To Commission	200
To Interest	1,000
(+) Outstanding Interest	200 1,200
To Telephone Charges To Depreciation on Motar Car	100 1,250
To Net Profit	66,010
	83,500		83,500

Liabilities	Amt. (Rs.)	Assets	Amt. (Rs.)
Capital	1,00,000	Cash in Hand Cash at Bank Investment	77,800 60,800 32,000
(+) Net Profit	66,010 1,66,010	(+) Interest on Investment	1,600 33,600
Creditors	1,25,000	Debtors	53,000
Bills Payable	6,040	(-) Bad Debts	1,000 52,000
Outstanding Wages	100	(-) Provision	2,600
Outstanding Interest	200	(-) Discount	500 48,900
		Bills Receivable	20,000
		Motar Car	25,000
		(-) Depreciation	1,250 23,750
		Closing Stock	32,500
	2,97,350		2,97,350