Question

The following balances were extracted from the books of M/s Panchsheel Garments on March 31, 2017.

Account Title	Debit Amount Rs	Account Title	Credit Amount Rs
Opening stock	16,000	Sales	1,12,000
Purchases	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 March 31, 2017 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 Rs @ 10%.

Answer 1

Trading Account
Dr.										Cr.
Particulars				Amount Rs	Particulars					Amount Rs
Opening Stock				16,000	Sales				1,12,000
Purchases			67,600				Less: Return Inwards		4,600	1,07,400
	Less: Return Outwards		3,200	64,400	Closing Stock					15,000
Carriage Inwards				1,400
Wages			1,200
	Add: Outstanding Wages		200	1,400
Gross Profit				39,200
				1,22,400						1,22,400

Profit and Loss Account
Dr.								Cr.
Particulars				Amount Rs	Particulars			Amount Rs
General Expenses				2,400	Gross Profit			39,200
Insurance			4,000		Discount			1,400
	Less: Unexpired Insurance		1,000	3,000	Commission			1,800
Scooter Expenses				200
Salary			8,800
	Add: Outstanding Salary		1,800	10,600
Interest on Capital				2,500
Depreciation on Scooter				400
Depreciation on Furniture				520
Net Profit				22,780
				42,400				42,400

Balance Sheet
Liabilities			Amount Rs	Assets			Amount Rs
Capital		50,000		Cash in Hand			4,000
	Add: Interest on Capital	2,500		Scooter		8,000
	Add: Net Profit	22,780	75,280		Less: Depreciation	400	7,600
Bank Overdraft			10,000	Furniture		5,200
Creditors			16,000		Less: Depreciation	520	4,680
Outstanding Salary			1,800	Buildings			65,000
Outstanding Wages			200	Debtors			6,000
				Unexpired Insurance			1,000
				Closing Stock			15,000
			1,03,280				1,03,280