The following balances were taken from the books of Shri R. Lal as at 31st March, 2017.

Particulars (₹) Particulars (₹)

Capital 1,00,000 Rent (Cr.) 2,100

Drawing 17,600 Railway Freight on sales 16,940

Purchases 80,000 Carriage Inwards 2,310

Sales 1,40,370 Office Expenses 1,340

Purchase Returns 2,820 Printing & Stationery 660

Stock on 1.4.2016 11,460 Postage 820

Bad Debts 1,400 Sundry Debtors 62,070

Bad Debts Provision on 1.4.2016 3,240 Sundry Creditors 18,920

Rates & Insurance 1,300 Cash at Bank 12,400

Discount (Cr.) 190 Cash in Hand 2,210

Bills Receivable 1,240 Office Furniture 3,500

Sales Returns 4,240 Salaries & Commission 9,870

Wages 6,280 Addition to Building 7,000

Building 25,000

Prepare Trading and Profit & Loss A/c and a Balance Sheet as at 31st March, 2017, after keeping in view the following adjustments:
(i) Depreciate old Building at 2 1/2% and addition to Building at 2% and Office Furniture at 5%.
(ii) Write off further Bad-debts ₹ 570.
(iii) Increase the Bad-debts Provision to 6% of Debtors.
(iv) On 31st March, 2017 ₹ 570 are outstanding for salary.
(v) Rent receivable ₹ 200 on 31st March, 2017.
(vi) Interest on capital at 5% to be charged.
(vii) Unexpired Insurance ₹ 240.
(viii) Stock was valued at ₹ 14,290 on 31st March, 2017.

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Solution

Financial Statements of Shri R. Lal

Trading Account
for the year ended March31, 2017

Dr.

Cr.

Particulars
Amount
(Rs)

Particulars

Amount
(Rs)

Opening Stock
11,460
Sales
1,40,370

Purchases
80,000
Less: Return Inwards
4,240

1,36,130

Less: Return Outwards
2,820

77,180
Closing Stock
14,290

Carriage Inwards
2,310

Wages
6,280

Gross Profit (Balancing Figure)
53,190

1,50,420

1,50,420

Profit and Loss Account
for the year ended March 31, 2017

Dr.

Cr.

Particulars

Amount
(Rs)

Particulars

Amount
(Rs)

Depreciation: (WN1) Gross Profit
53,190

Building
625
Rent
2,100

Furniture
175
Add: Accrued
200

2,300

Additions to Building
140

940
Discount
190

Salary & Commission
9,870

Add: Outstanding Salaries
570

10,440

Bad Debts
1,400

Add: Further Bad Debts
570

Add: New Provision (WN2)
3,690

Less: Old Provision
3,240

2,420

Interest on Capital
5,000

Rates & Insurance
1,300

Less: Unexpired
240

1,060

Railway Freight on Sales
16,940

Office Expenses
1,340

Printing & Stationery
660

Postage & Telegram
820

Net Profit (Balancing Figure)
16,060

55,680

55,680

Balance Sheet
as on March 31, 2017

Liabilities

Amount
(Rs)

Assets

Amount
(Rs)

Capital
1,00,000
Fixed Assets

Add: Interest on Capital
5,000
Building
25,000

Add: Net Profit
16,060
Less: Depreciation
625

24,375

Less: Drawings
17,600

1,03,460
Additions to Building
7,000

Less: Depreciation
140

6,860

Current Liabilities Office Furniture
3,500

Sundry Creditors
18,920
Less: Depreciation
175

3,325

Outstanding Salaries
570

Current Assets

Closing Stock
14,290

Bills Receivable
1,240

Accrued Rent
200

Unexpired Insurance
240

Cash in Hand
2,210

Sundry Debtors
62,070

Less: Further Bad Debts
570

Less: Provision for Discount on Debtors
3,690

57,810

Cash at Bank
12,400

1,22,950

1,22,950

Working Notes

WN1: Calculation of Amount of Depreciation

WN2: Calculation of Provision for Doubtful Debts

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Similar questions

Q. The following are the balances of Messrs Gupta & Co. as at 31st March, 2009:-

Particulars	(₹)	Particulars	(₹)
Cash in Hand	540	Patents	7,500
Cash at Bank	2,630	Salaries	25,000
Purchases	40,675	General Expenses	22,790
Returns Inwards	680	Insurance	600
Wages	8,480	Drawings	5,245
Fuel & Power	4,730	Sundry Debtors	14,500
Bad-debts	210	Sales	98,440
Bad-debts Provision	340	Returns Outwards	500
Carriage on Sales	3,200	Capital	92,000
Carriage on Purchases	2,040	S. Creditors	6,300
Stock (1.4.2008)	5,760	Rent Cr.	9,000
Building	32,000
Freehold Land	10,000
Machinery	20,000

Prepare Trading and Profit & Loss A/c and a Balance Sheet as at 31st March, 2009 after taking into account the following adjustments:-
(i) Stock on hand as on 31st March, 2009 is ₹ 6,800.
(ii) Machinery is to be depreciated at 10% and Patents at 20%.
(iii) Salaries for the month of March, 2009 amounting to ₹ 1,500 were unpaid.
(iv) Insurance includes a premium of ₹ 170 on a policy expiring on 30th September, 2009.
(v) Write off ₹ 500 as Bad-debts and create a provision for Doubtful Debts at 5% on Sundry Debtors.
(vi) Rent Receivable ₹ 1,000.

Q. The following balances were extracted from the books of Modern Traders as at 31st March, 2017:-


Particulars	(₹)	Particulars	(₹)
Capital Account	85,000	Printing and Stationery	800
Drawings Account	5,000	Sundry Creditors	23,000
Plant and Machinery	40,000	Sales	1,20,000
Stock on 1-4-2016	15,000	Postage	800
Purchases	82,000	Bad-Debts	400
Sundry Debtors	20,600	Provision for Doubtful Debts	800
Furniture	5,000	Discount received	400
Freight Inward	2,000	Rent Revenue	1,200
Carriage Outward	500	Insurance	700
Rent, Rates and Taxes	4,600	Salaries	20,000
		Wages	1,300
		Cash in Hand	6,200
		Cash at Bank	25,500

Prepare Final Accounts for the year ended 31st March, 2017 after taking into account the following:
(i) Stock on 31st March, 2017 was valued at ₹ 15,000.
(ii) Goods costing ₹ 6,000 were sent to a customer on "Sale on Return basis" for ₹ 7,200 on 26th March, 2017 and had been recorded in the books as actual sales.
(iii) Provision for Doubtful Debts is to be maintained at 5% of the Debtors.
(iv) Prepaid Insurance was ₹ 100.
(v) Provide Depreciation on Plant and Machinery @ 10% and on Furniture @ 5%.

Q. Following is the Trial Balance of Mr. Bharat on 31st March, 2018.


Particulars	Dr. (₹)	Cr. (₹)
Capital		40,000
Plant and Machinery	50,000
Office Furniture and Fittings	2,600
Stock on 1st April, 2017	48,000
Accrued Commission	12,000
Sundry Debtors	45,700
Cash in Hand	400
Cash at Bank	6,500
Wages	1,50,000
Salaries	14,000
Purchases	2,13,500
Sales		4,80,000
Bills Receivable	7,200
Bills Payable		5,600
Sundry Creditors		52,000
Returns Inward	9,300
Provision for Doubtful Debts		2,500
Drawings	7,000
Returns Outward		5,500
Rent	6,000
Factory Lighting and Heating	800
Insurance	6,300
General Expenses	1,000
Bad Debts	2,500
Discount	6,500	3,700
Total	5,89,300	5,89,300

Following adjustments are to be made:
(a) Stock on 31st March, 2018 ₹52,000.
(b) Three months' factory lighting and heating due but not paid ₹300.
(c) 5% depreciation to be written off on furniture.
(d) Write off further Bad Debts ₹700.
(e) Provision for Doubtful Debts to be increased to ₹3,000 and Provision of Discount on Debtors @ 2% to be made.
(f) During the year, machinery was purchased for ₹20,000 but it was debtied to the Purchases Account.

You are required to prepare Trading Account, Profit and Loss Account and Balance Sheet.

Q. From the following Trial Balance of Shubdo Banerjee, prepare final accounts for the year ended in 31st March, 2018 and Balance Sheet as at that date:


Particulars	Dr. Balances (₹)	Cr. Balances (₹)
Land and Building	50,000
Purchases (Adjusted)	2,10,000
Stock (31st March, 2018)	45,000
Returns Inward	1,500
Returns Outward		2,500
Wages	45,300
Salaries	39,000
Office Expenses	15,400
Carriage Inwards	1,200
Carriage Outwards	2,000
Discount allowed	750
Discount received		1,200
Bad Debts	1,200
Sales		3,85,000
Capital Account		1,15,000
Chatterji's Loan A/c (taken on 1st Oct., 2017 @ 18% p.a.		25,000
Insurance	1,500
Commission		1,500
Plant and Machinery	50,000
Furniture and Fixtures	20,000
Bills Receivable	20,000
Sundry Debtors	40,000
Sundry Creditors		25,000
Cash at Bank	16,000
Office Equipments	12,000
Bills Payable		12,350
Expenses Payable		3,300
Total	5,70,850	5,70,850

The following adjustments be taken care of:
(i) Depreciate Land and Building @ 6%, Plant and Machinery @ 10%, Office equipments @ 20% and Furniture and Fixtures @ 15%
(ii) Calculate Provision for Doubtful Debts at 2% on Debtors.
(iii) Insurance premium includes ₹250 paid in advance.
(iv) Provide salary to Banerjee ₹15,000 p.a.
(v) Outstanding Salaries ₹11,500.
(vi) 10% of the final profit is to be transferred to General Reserve.

From the following ledger balances Prepare Trial Balance of Mr. Ramakant as on 31^st March, 2012.

Particulars	Rs	Particulars	Rs	Particulars	Rs
Machinery	1,00,000	Sundry Debtors	1,20,800	Furniture	36,000
Stock (1-4-11)	20,000	Wages	1,800	Salary	3,200
Insurance	5,000	Factory Rent	4,600	Printing & Stationery	1,400
Travelling expenses	3,600	Advertisement	1,000	Office Rent	3,000
Purchases	49,300	Sales Returns	2,800	Discount (Dr.)	1,500
Bad Debts	1,200	Drawings	12,000	Discount (Cr.)	2,000
Sales	77,500	Purchase Returns	4,800	Creditors	52,000
Bank Loan	76,000	Bills payable	17,300	R.D.D.	1,600
Bank Overdraft	36,000	Capital	1,00,000

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Financial Statements of Shri R. Lal
Trading Account for the year ended March31, 2017
Dr.						Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
Opening Stock		11,460	Sales	1,40,370
Purchases	80,000		Less: Return Inwards	4,240	1,36,130
Less: Return Outwards	2,820	77,180	Closing Stock		14,290
Carriage Inwards		2,310
Wages		6,280
Gross Profit (Balancing Figure)		53,190
		1,50,420			1,50,420

Profit and Loss Account for the year ended March 31, 2017
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Depreciation: (WN1)				Gross Profit		53,190
Building		625		Rent	2,100
Furniture		175		Add: Accrued	200	2,300
Additions to Building		140	940	Discount		190
Salary & Commission		9,870
Add: Outstanding Salaries		570	10,440
Bad Debts		1,400
Add: Further Bad Debts		570
Add: New Provision (WN2)		3,690
Less: Old Provision		3,240	2,420
Interest on Capital			5,000
Rates & Insurance	1,300
Less: Unexpired	240		1,060
Railway Freight on Sales			16,940
Office Expenses			1,340
Printing & Stationery			660
Postage & Telegram			820
Net Profit (Balancing Figure)			16,060
			55,680			55,680

Balance Sheet as on March 31, 2017
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital	1,00,000		Fixed Assets
Add: Interest on Capital	5,000		Building	25,000
Add: Net Profit	16,060		Less: Depreciation	625	24,375
Less: Drawings	17,600	1,03,460	Additions to Building	7,000
			Less: Depreciation	140	6,860
Current Liabilities			Office Furniture	3,500
Sundry Creditors		18,920	Less: Depreciation	175	3,325
Outstanding Salaries		570
			Current Assets
			Closing Stock		14,290
			Bills Receivable		1,240
			Accrued Rent		200
			Unexpired Insurance		240
			Cash in Hand		2,210
			Sundry Debtors	62,070
			Less: Further Bad Debts	570
			Less: Provision for Discount on Debtors	3,690	57,810
			Cash at Bank		12,400

		1,22,950			1,22,950