Question

The following balances were extracted from the books of M/s Panchsheel Garments on December 31, 2010.

$\begin{array}{cccc}\text{Account Title}& \text{Amt. (Rs.)}& \text{Account Title}& \text{Amt. (Rs.)}\\ \text{Opening Stock}& 16,000& \text{Sales}& 1,12,000\\ \text{Purchase}& 67,600& \text{Return Outwards}& 3,200\\ \text{Return Inwards}& 4,600& \text{Discount}& 1,400\\ \text{Carriage Inwards}& 1,400& \text{Bank Overdraft}& 10,000\\ \text{General Expenses}& 2,400& \text{Commission}& 1,800\\ \text{Insurance}& 4,000& \text{Creditors}& 16,000\\ \text{Scooter Expenses}& 200& \text{Capital}& 50,000\\ \text{Salary}& 8,800& & \\ \text{Cash in Hand}& 4,000& & \\ \text{Scooter}& 8,000& & \\ \text{Furniture}& 5,200& & \\ \text{Buildings}& 65,000& & \\ \text{Debtors}& 6,000& & \\ \text{Wages}& 1,200& & \\ & \overline{\underset{–}{1,94,400}}& & \overline{\underset{–}{1,94,400}}\end{array}$

Prepare the trading and profit and loss account for the year ended December 31, 2010 and a balance sheet as on that date

(a) Unexpired insurance Rs. 1,000

(b) Salary due but not paid Rs. 1,800.

(c) Wages outstanding Rs. 200.

(d) Interest on capital @ 5$\%$.

(e) Scooter is depreciated @ 5$\%$.

(f) Furniture is depreciated @ 10$\%$

(g) Closing stock is Rs. 15,000

Answer 1

$\text{Trading and Profit and Loss Account}\text{Dr.}\text{as on 31 December, 2010}\text{Cr.}\begin{array}{cccccc}\text{Particulars}& & \text{Amt. (Rs)}& \text{Particulars}& & \text{Amt. (Rs)}\\ \text{Opening Stock}& & 16,000& \text{Sales}& 1,12,000& \\ \text{Purchases}& 67,600& & \text{(-) Return Inwards}& \underset{–}{4,600}& 1,07,400\\ \text{(-) Return Outwards}& \underset{–}{3,200}& 64,400& \text{Closing Stock}& & 15,000\\ \text{Carriage Inwards}& & 1,400& & & \\ \text{Wages}& 1,200& & & & \\ \text{(+) Outstanding Wages}& \underset{–}{200}& 1,400& & & \\ \text{Gross Profit}& & 39,200& & & \\ & & \overline{\underset{–}{\underset{–}{1,22,400}}}& & & \overline{\underset{–}{\underset{–}{1,22,400}}}\\ \text{General Expenses}& & 2,400& \text{Gross Profit}& & 39,200\\ \text{Insurance}& 4,000& & \text{Discount}& & 1,400\\ \text{(-) Unexpired Insurance}& \underset{–}{1,000}& 3,000& \text{Commission}& & 1,800\\ \text{Scooter Expenses}& & 200& & & \\ \text{Salary}& 8,800& & & & \\ \text{(+) Outstanding Salary}& \underset{–}{1,800}& 10,600& & & \\ \text{Interest on Capital}& & 2,500& & & \\ \text{Depreciation on Scooter}& & 400& & & \\ \text{Depreciation on Furniture}& & 520& & & \\ \text{Net Profit}& & 22,780& & & \\ & & \overline{\underset{–}{\underset{–}{42,400}}}& & & \overline{\underset{–}{\underset{–}{42,400}}}\end{array}$

$\text{Balance Sheet}\text{as on 31 December, 2010}\begin{array}{cccccc}\text{Capital and Liabilities}& & \text{Amt. (Rs.)}& \text{Assets}& & \text{Amt. (Rs.)}\\ \text{Capital}& 50,000& & \text{Cash in Hand}& & 4,000\\ \text{(+)Interest on}& & & \text{Scooter}& 8,000& \\ \text{Capital}& 2,500& & \text{(-) Depreciation}& \underset{–}{400}& 7,600\\ \text{(+) Net Profit}& \underset{–}{22,780}& 75,280& \text{Furniture}& 5,200& \\ \text{Bank Overdraft}& & 10,000& \text{(-) Depreciation}& \underset{–}{520}& 4,680\\ \text{Creditors}& & 16,000& \text{Buildings}& & 65,000\\ \text{Outstanding Salary}& & 1,800& \text{Debtors}& & 6,000\\ \text{Outstanding Wages}& & 200& \text{Unexpired Insurance}& & 1,000\\ & & & \text{Closing Stock}& & 15,000\\ & & \overline{\underset{–}{\underset{–}{1,03,280}}}& & & \overline{\underset{–}{\underset{–}{1,03,280}}}\end{array}$