Question

The following balances have been extracted from the books of M/s Green House for the year ended December 31, 2010, prepare trading and profit and loss account and balance sheet as on this date.

Account Title	Amt. (Rs)	Account Title	Amt. (Rs)
Purchase	80,000	Capital	2,10,000
Bank Balance	11,000	Bills Payable	6,500
Wages	34,000	Sales	2,00,000
Debtors	70,300	Creditors	50,000
Cash in Hand	1,200	Return Outwards	4,000
Legal Expenses	4,000
Building	60,000
Machinery	1,20,000
Bills Receivable	7,000
Office Expenses	3,000
Opening Stock	45,000
Gas and Fuel	2,700
Freight and Carriage	3,500
Factory Lighting	5,000
Office Furniture	5,000
Patent Right	18,800
	4,70,500		4,70,500

Adjustments
(a) Machinery is depreciated @ 10% and buildings depreciated @ 6%.
(b) Interest on capital @ 4%.
(c) Outstanding wages Rs. 50.
(d) Closing stock Rs. 50,000.

Answer 1

Trading and Profit and Loss Account
as on 31st December,2010
Dr Cr

Particulars	Amt. (Rs.)	Particular	Amt. (Rs.)
To Opening Stock	45,000	By Sales	2,00,000
To Purchase	80,000	By Closing Stock	50,000
(-) Return Outwards	4,000 76,000
To Gas and Fuel	2,700
To Freight and Carriage To Wages (+) Outstanding Wages	3,500 34,000 50 34050
To Factory Lighting	5000
To Gross Profit c/d	83750 2,50,000		2,50,000
To Legal Expenses	4,000	By Gross Profit b/d	83,750
To Office Expenses	3,000
To Interest on Capital	8,400
To Depreciation on Building	3,600
To Depreciation on Machinery	12,000
To Net Profit	52,750
	83,750		83,750

Balance Sheet
as on 31st December, 2010

Liabilities	Amt. (Rs.)	Assets	Amt. (Rs.)
Capital	3,00,000	Bank	11,000
(+) Interest on Capital (+) Net Profit	8,400 2,18,400 52,750 2,71,150	Debtors Office Furniture	70,300 5,000
Bills Payable	6,500	Cash in Hand	1,200
Creditors	50,000	Building	60,000
Outstanding Wages	50	(-) Depreciation @ 6%	3,600 56,400
		Machinery	1,20,000
		(-) Depreciation @ 10%	12,000 10,8000
		Bills Receivable	7,000
		Patent Right	18,800
		Closing Stock	50,000
	3,27,700		3,27,700