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Question
From the following Trial Balance of Jyoti, Trading Co. Prepare the Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Stock (1.4.2018) | 9,500 | Capital | 2,00,000 |
| Sales Returns | 750 | R.D.D. | 1,000 |
| Loose Tools | 55,000 | Sales | 38,750 |
| Debtors | 50,800 | Purchases return | 455 |
| Bills Receivable | 4,000 | Creditors | 47,000 |
| Purchases | 29,455 | Bills Payable | 8,000 |
| Furniture | 15,000 | Discount | 1,845 |
| Salaries | 5,000 | ||
| Carriage Outward | 3,000 | ||
| Legal expenses | 2,000 | ||
| Insurance | 2,200 | ||
| Goodwill | 20,000 | ||
| Machinery | 40,000 | ||
| Wages | 2,345 | ||
| Bank | 30,000 | ||
| Drawings | 8,000 | ||
| Investments | 20,000 | ||
| 2,97,050 | 2,97,050 |
Adjustments:
1. Closing stock valued at ₹ 58,000 Cost Price while the Market price is ₹ 60,000
2. Write off ₹ 1,200 as Bad debts and create provision for doubtful debts 2% on Sundry Debtors and also create provision for discount on Creditors 5%.
3. Loose Tools is valued at ₹ 52,000 and depreciate Furniture by 10% p.a.
4. Outstanding expenses Salary ₹ 1,000 and Wages ₹ 225
5. Charge interest on Capital 2% and on Drawings 10%.
Solution
| In the books of Jyoti Trading Co. | |||||
| Dr. | Trading & Profit & Loss A/c for the year ended 31st March, 2019 | Cr. | |||
| Particulars | Amt. (₹) | Amt. (₹) | Particulars | Amt. (₹) | Amt. (₹) |
| To Opening Stock | 9,500 | By Sales | 38,750 | ||
| To Purchases | 29,455 | Less: Sales Return | 750 | 38,000 | |
| Less : Purchases Return | 455 | 29,000 | By Closing Stock | 58,000 | |
| To Wages | 2,345 | ||||
| Add : Outstanding | 225 | 2,570 | |||
| To Gross Profit c/d | 54,930 | ||||
| 96,000 | 96,000 | ||||
| To Salaries | 5,000 | By Gross Profit b/d | 54,930 | ||
| Add : Outstanding | 1,000 | 6,000 | By Discount | 1,845 | |
| To Carriage Outwards | 3,000 | By Interest on Drawing | 400 | ||
| To Legal expense | 2,000 | By Provision for Discount | |||
| To Insurance | 2,200 | on Creditors | 2,350 | ||
| To New B.D.(A) | 1,200 | ||||
| Add: New R.D.D. (A) | 992 | ||||
| 2,192 | |||||
| Less : Old R.D.D. (T) | 1,000 | 1,192 | |||
| To Interest on Capital | 4,000 | ||||
| To Depreciation on : | |||||
| Loose Tools | 3,000 | ||||
| Furniture | 1,500 | 4,500 | |||
| To Net Profit c/d | 36,633 | ||||
| 59,525 | 59,525 | ||||
| Balance Sheet as of 31st March 2019 | |||||
| Liabilities | Amt. (₹) | Amt. (₹) | Assets | Amt. (₹) | Amt. (₹) |
| Capital | 2,00,000 | Loose Tools | 55,000 | ||
| Less : Drawings | 8,000 | Less : Depreciation | 3000 | 52,000 | |
| 1,92,000 | Debtors (T) | 50,800 | |||
| Add : Interest on capital | 4,000 | Less : New B.D.(A) | 1,200 | ||
| 1,96,000 | 49,600 | ||||
| Less : Interest on Drawings | 400 | Less : New R.D.D (A) | 992 | 48,608 | |
| 1,95,600 | Bills Receivable | 4,000 | |||
| Add : New Profit | 36,633 | 2,32,233 | Furniture | 15,000 | |
| Creditors | 47,000 | Less: Dep. @ 10 % | 1,500 | 13,500 | |
| Less :Provision for Discount | Goodwill | 20,000 | |||
| on Creditors @ 5% | 2,350 | 44,650 | Machinery | 40,000 | |
| Bills Payable | 8,000 | Bank | 30,000 | ||
| Outstanding Salaries | 1,000 | Investments | 20,000 | ||
| Outstanding Wages | 225 | Closing Stock | 58,000 | ||
| 2,86,108 | 2,86,108 | ||||
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From the following Trial Balance of Sanjiv & Sons. Prepare Trading Account and Profit & Loss Account for the year ending on 31st March 2019 and a Balance Sheet as on that date.
| Particulars | Debit Amount (₹) | Credit Amount (₹) |
| Opening stock | 22,000 | |
| Purchases & Sales | 1,78,000 | 4,60,000 |
| Carriage Outward | 4,800 | |
| Plant and Machinery | 50,000 | |
| Debtors and Creditors | 44,000 | 76,000 |
| Returns | 2,000 | 4,000 |
| Buildings | 58,000 | |
| Motor Van | 40,000 | |
| Printing & Stationery | 3,000 | |
| Wages | 28,000 | |
| Reserved for Bad debts | 3,200 | |
| Commission | 2,400 | |
| Office expenses | 5,400 | |
| Carriage | 9,000 | |
| Furniture | 20,000 | |
| Premises | 81.000 | |
| Loose Tools | 20,400 | |
| Drawings | 24,700 | |
| Bank Overdraft | 22,000 | |
| Cash in hand | 71,000 | |
| Dividend | 3,300 | |
| Capital | 1,40,000 | |
| Salaries | 44,000 | |
| Bills Receivable & Bills Payable | 5,600 | 8,400 |
| Bad debts | 2,400 | |
| Advertisement (for 3 year) | 6,000 | |
| 7,19,300 | 7,19,300 |
Additional information:
- Closing stock on 31st March, 2019, was at cost ₹ 60,000 and Market Price ₹ 70,000.
- Outstanding expenses: Wages ₹ 4,000, Salary ₹ 2,400
- Provide depreciation at 10% on Motor Van and 5% on Furniture.
- Write off ₹ 2,000 for bad debts and create R.D.D. at 5% on debtors.
- Provide 10% p.a. interest on capital.
Prepare Final accounts of Abdul Traders for the year ending 31st March 2019 with the help of the following Trial Balance and Adjustments.
Trial Balance as of 31st March 2019.
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| Salaries | 10,000 | Interest Received | 2,400 |
| Purchases | 71,400 | Capital | 1,60,000 |
| Rent (11 months) | 2,200 | Sales | 85,000 |
| Machinery | 56,000 | Provision for Bad Debts | 2,000 |
| Advance against wages | 4,000 | Commissions Received | 1,600 |
| Opening stock | 20,000 | Bills Payable | 9,200 |
| Bad debts | 1,000 | Creditors | 56,000 |
| Prepaid Insurance | 2,400 | ||
| Wages | 2,600 | ||
| Loose Tools | 26,000 | ||
| Commission receivable | 400 | ||
| Sundry Debtors | 64,000 | ||
| Cash | 1,000 | ||
| Bank | 3,000 | ||
| Drawings | 7,600 | ||
| Freight Inward | 1,000 | ||
| Bills Receivable | 13,600 | ||
| Loan to Aruna | 30,000 | ||
| 3,16,200 | 3,16,200 |
Adjustments:
1. Closing stock valued at ₹ 89,600
2. Outstanding expenses Salaries ₹ 2,000, Wages ₹ 4,000
3. Charge depreciation on Machinery @ 10%
4. Bad debts are written off ₹ 2,000 and create a provision for bad and doubtful debts 5% on Sundry Debtors.
Following are the closing ledger balances of Deepak & Co. Prepare Trading Account and Profit & Loss Account for the year ended 31st March 2019 and Balance sheet as of that date.
Ledger Balances of Mr. Deepak and Co. as of 31st March, 2019
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| Bank | 30,000 | Capital | 1,20,000 |
| Bills Payable | 7,500 | Insurance Premium | 18,000 |
| Furniture | 19,500 | (1.1.2019 to 31.12.2019) | |
| Commission Received | 3,000 | Salaries | 30,000 |
| Stock (1.4.2018) | 27,000 | Bank loan | 30,000 |
| Building | 37,500 | Sundry expenses | 7,500 |
| Wages | 7,500 | Interest paid | 1,500 |
| Creditors | 37,500 | Machinery | 25,500 |
| Bad Debts | 4,500 | Sales | 96,000 |
| R.D.D. (old) | 3,000 | Purchases | 42,000 |
| Sales Returns | 1,500 | Debtors | 31,500 |
| Purchases returns | 3,000 | ||
| Cash in hand | 16,500 |
Adjustments:
1. Closing stock was valued at ₹ 60,000
2. An amount of ₹ 3,000 is still to be received on account of commission.
3. Provision for discount on debtors and Provision for discount on Creditors are to be created 2% and 3% respectively.
4. Amount of Furniture is to reduce by ₹ 4,500 and Building by 10%.
5. Outstanding expenses Salaries ₹ 4,500 and Wages ₹ 1,500.
Following is the Trial Balance extracted from the books of Raju Traders. You are required to prepare Trading A/c, Profit and Loss A/c for the year ending on 31st March 2019 and Balance Sheet as on that date after considering the additional information given below.
Trial Balance as of 31st March 2019
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| Raju's Drawings | 5,000 | Capital | 2,00,000 |
| Opening stock | 30,000 | Sales | 1,64,000 |
| Wages | 5,000 | Returns outward | 2,400 |
| Purchases | 60,000 | Creditors | 40,000 |
| Trade Expenses | 800 | Discount | 1,600 |
| Royalties | 1,600 | Bills payable | 13,600 |
| Salaries | 20,000 | ||
| Debtors | 80,000 | ||
| Plant & Machinery | 56,000 | ||
| Printing & Stationery | 2,400 | ||
| Bad debts | 900 | ||
| Discount | 1,200 | ||
| Furniture | 16,000 | ||
| Advertisement | 3,000 | ||
| Carriage outwards | 600 | ||
| Computers | 1,20,000 | ||
| Bills Receivable | 16,000 | ||
| Cash in hand | 1,100 | ||
| Cash at Bank | 2,000 | ||
| 4,21,600 | 4,21,600 |
Adjustments:
- Closing stock is valued at ₹ 40,000 at Cost Price and ₹ 44,000 as Market Price.
- Provide Depreciation on Plant and Machinery, Furniture, Computers @ 5%, 10%, 15%, respectively.
- Salaries are paid for 10 months only.
- Further Bad debts amounted to ₹ 400 and provide 10% R.D.D. on Sundry Debtors.
- Advertisement is paid for 2 years.
From the following Trial Balance of Shradha Enterprises, you are required to prepare Final Accounts for the year ending on 31st March 2019.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Opening Stock | 2,40,000 | Capital | 13,00,000 |
| Purchases | 8,50,000 | Sundry Creditors | 1,20,000 |
| Returns Inward | 15,000 | Bills Payable | 60,000 |
| Wages | 29,000 | Sales | 25,00,000 |
| Power and Fuel | 21,800 | Return Outward | 8,000 |
| Travelling Expenses | 14,700 | Discount | 2,000 |
| Audit fees | 7,000 | Bank Overdraft | 1,54,000 |
| Royalty | 72,000 | Reserve for Bad and doubtful debts | 8,000 |
| Discount | 1,750 | ||
| Postage | 13,500 | ||
| Bad debts | 3,000 | ||
| Sundry Debtors | 5,20,000 | ||
| Furniture | 1,20,000 | ||
| Plant & Machinery | 15,00,000 | ||
| Freehold Premises | 7,02,000 | ||
| Rent, Rates and Insurance | 42,250 | ||
| 41,52,000 | 41,52,000 |
Adjustments:
1. Insurance is prepaid to the extent of ₹ 2,250
2. Closing stock is valued at ₹ 3,80,000 Cost price and ₹ 4,00,000 as Market price.
3. Outstanding Expenses are Wages ₹ 6,000 and Rent ₹ 5,000
4. Write off further had debts ₹ 1,500 and provide 5% Reserve for doubtful debts.
5. Depreciation on Furniture and Plant and Machinery at 10% p.a. and on Freehold Premises at 15% p.a.
From the following Trial Balance of Ayub & Co. as of 31st March 2019, you are required to prepare Trading Account, Profit and Loss Account for the year ending 31st March 2019, and Balance Sheet as of that date after making necessary adjustments.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Cash in hand | 4,575 | Discount | 900 |
| Cash at Bank | 15,450 | Loan from Abhay | 15,000 |
| Drawings | 18,000 | Creditors | 18,225 |
| Furniture | 6,000 | Sales | 1,95,000 |
| Plant & Machinery | 45,000 | Returns Outward | 3,000 |
| Opening Stock | 30,000 | Capital | 90,000 |
| Purchases | 1,20,000 | ||
| Salaries and Wages | 33,600 | ||
| Debtors | 30,600 | ||
| Returns Inward | 7,500 | ||
| Audit Fees | 2,250 | ||
| Rent. Rates and Taxes | 5,400 | ||
| Bad debts | 600 | ||
| Travelling Expenses | 750 | ||
| Insurance | 1,200 | ||
| Interest on Loan from Abhay | 450 | ||
| Trade Expenses | 300 | ||
| Sundry expenses | 450 | ||
| 3,22,125 | 3,22,125 |
Adjustments:
1. Stock on hand on 31st March 2019 valued at ₹ 60,000
2. Rent amounting to ₹ 600 Prepaid.
3. Bad Debts ₹ 600 and create a Provision for Doubtful Debts 5%
4. Depreciation on Plant & Machinery by 10% and Furniture is valued at ₹ 4,500
5. Outstanding Salaries ₹ 900
From the following Trial Balance of Pushkraj, you are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Drawings | 2,000 | Capital | 80,000 |
| Motor Car | 30,000 | Sundry Creditors | 25,000 |
| Cash in hand | 1,000 | Dividend | 4,800 |
| Bills Receivable | 20,000 | Commission | 2,535 |
| Wages | 1,000 | 8% Loan (taken on | 13,700 |
| Discount | 235 | 1.7.2018) | |
| Rent | 300 | Purchases Returns | 400 |
| Advertisement | 2,500 | Sales | 38,680 |
| Bad Debts | 500 | ||
| Travelling expenses | 1,000 | ||
| Purchases | 27,400 | ||
| Machinery | 30,000 | ||
| Office expenses | 500 | ||
| Sales Returns | 680 | ||
| Opening Stock | 10,000 | ||
| Sundry Debtors | 35,500 | ||
| Carriage Outward | 500 | ||
| Cash at Bank | 2,000 | ||
| 1,65,115 | 1,65,115 |
Adjustments:
1. Stock on 31st March 2019 was valued at ₹ 28,000
2. Create a Provision for doubtful debts on Sundry Debtors @ 5%
3. Depreciate Motor car by 5% p.a. and Machinery by 7% p.a.
4. Outstanding expenses Rent ₹ 800 & Wages ₹ 1,000
5. Charge interest on Capital @ 3% p.a.
6. Goods of ₹ 4,000 withdrawn by the proprietor for personal use.
From the following Trial Balance of Manish Enterprise, Prepare the Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Cash in hand | 5,200 | Capital | 50,000 |
| Opening stock | 10,370 | Bank Loan | 15,000 |
| Goodwill | 10,000 | Bills Payable | 8,500 |
| Patents | 4,000 | Creditors | 38,260 |
| Cash at Bank | 4,400 | General Reserve | 1,500 |
| Freight | 2,500 | Dividend | 2,000 |
| Power & Fuel | 1,500 | Interest on Fixed Deposit | 3,440 |
| Furniture | 12,000 | Sales | 40,000 |
| Purchases | 35,260 | ||
| Mobile charges | 3,200 | ||
| Factory Salaries | 2,400 | ||
| Repairs | 800 | ||
| Lighting | 1,000 | ||
| Carriage outward | 360 | ||
| Professional charges | 1,240 | ||
| Debtors | 40,000 | ||
| Plant & Machinery | 13,700 | ||
| Office Equipments | 10,000 | ||
| Carriage Inwards | 770 | ||
| 1,58,700 | 1,58,700 |
Adjustments:
1. Closing Stock was ₹ 32,000.
2. Write off 50% of patents, depreciate Plant & Machinery by 10% p.a and Office Equipment by 20%.
3. Reserve for bad debts is to be created 5% and discount on Debtors 2%.
4. Outstanding expenses Mobile charges ₹ 300 and Freight ₹ 500
5. Charge Interest on Capital @ 5%.
6. Goods of ₹ 2,000 distributed on free samples.
