Question

Question 11.
Sanjiv Sondhi started business on 1st April, 2017 with a capital of ₹ 3,00,000. Following Trial Balance was drawn up from his books at t he end of the year:

Value of Stock as on 31st March, 2018 was ₹ 2,60,000. You are required to prepare his Trading and Profit and Loss Account for the year ended 31st March 2018 and Balance Sheet as at that date after taking the following facts into account:
(a) Plant and Fixtures are to be depreciated by 10%.
(b) Salaries outstanding on 31st March, 2018 amounted to ₹ 35,000.
(c) Accrued Interest on investment amounted to ₹ 7,500.
(d) ₹ 5,000 are Bad Debts and a Provision for Doubtful Debts is to be created at 5% of the balance of debtors.

Answer 1

The Balance Sheet of Sanjiv Sondhi for year ending 31st march 2018 is Rs.9,96,750.

Explanation:

By adding the below given adjustments, such as:

• the depreciation to be deducted from the plant and fixtures  

• the accrued interest to be added to the investment account  

• the outstanding salary to be added to the salary’s account

• The bad debts and provision for the bad debts are adjusted towards the sundry debtors account.

        The above adjustments are adjusted in the profit and loss account as well as the balance sheet, because the adjustments will appear two times in the final accounts. Please refer the below attached manual calculation for your reference