Question

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

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

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 depredated @ 5%.
(f) Furniture is depredated @ 10%.

Answer 1

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

Particulars	Amt. (Rs.)	Particular	Amt. (Rs.)
To Opening Stock	16,000	By Sales	1,12,000
To Purchase	67,600	(-) Return Inwards	4,600 1,07,400
(-) Return Outwards	3,200 64,400	By Closing Stock	15,000
To Carriage Inwards	1,400
To Wages	1,200
(+) Outstanding Wages	200 1,400
To Gross Profit c/d	39,200 1,22,400		1,22,400
To General Expenses	2,400	By Gross Profit	39,200
To Insurance (-) Unexpired Insurance	4,000 1,000 3,000	By Discount	1,400
To Scooter Expenses	200	By Commission	1,800
To Salary	8,800
(+) Outstanding Salary	1,800 10,600
To Interest on Capital	2,500
To Depreciation on Scooter	400
To Depreciation on Furniture	520
To Net Profit	22,780
	42,400		42,400

Balance Sheet
as on 31st December, 2010

Liabilities	Amt. (Rs.)	Assets	Amt. (Rs.)
Capital	50,000	Cash in Hand Scooter	4,000 8,000
(+) Interest on Capital (+) Net Profit	2,500 22,780 75,280	(-) Depreciation Furniture	400 5,200 7,600
		(-) Depreciation Buildings	520 4,680 65,000
Creditors	16,000	Debtors	6,000
Outstanding Salary	1,800	Unexpired Insurance	1,000
Outstanding Wages	200	Closing Stock	15,000
	1,03,280		1,03,280

Note: In this question, the closing stock Rs. 15,000, which is not mentioned