Question 26.
From the following Trial Balance of M/s. Ram Lal and Sons, prepare Trading, Profit and Loss Account for the year ending 31st March, 2018 and a Balance Sheet as on that date:
Adjustments:
(i) The cost of stock on 31st March, 2018 was ₹ 37,000. However, its market value was ₹ 35,000.
(ii) Wages outstanding were ₹ 6,000 and salaries outstanding were ₹ 5,000 on 31st March, 2018.
(iii) Depreciate Land and Building @ 2 %, Plant and Machinery @ 10% p.a. and Furniture @ 15 p.a.
(iv) Purchase includes purchase of machinery for ₹ 10,000 on 1st October, 2017.
(v) Debtors include bad debts of ₹ 2,000. Maintain a provision for doubtful debts @ 10% on Debtors.
Answers
Trading and P&L with Balance sheet as at 31.3.2018
Explanation:
In the Books of M/s.Ram Lal and Sons
Trading and P&L A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
To Opening Stock 70,000 By Sales 4,00,000
To Return Inwards 8000 By Closing Stock 35000
To Purchases 243000
(-10,000-7000)
To Wages 56000
(+6000)
To Carriage 5000
To Gross profit 53000
To Interest on Loan 15000 By Gross Profit 53000
(+3000) By Disct. Received 6000
To Salaries 50000 By Prov. for DD(Old) 8200
(+5000) (-4800)
To Discount Allowed 7000 By Net Loss 81500
To New Bad debts 2000
To Comm. 15000
To Advt. 15000
To Rent and Taxes 13000
To Depreciation:
Furniture 8250
Land and Building 2450
P&M 21000
148700 148700
Balance Sheet
as at 31.3.2018
Notes to A/c Amount(Rs.)
Non-Current Assets:
Land and Building 95550
P&M 194000
Furniture 46750
Current Assets:
Debtors 43200
(-2000-4800)
Closing Stock 35000
Cash at Bank 20000
Input SGST 3000
Cash in Hand 8000
Total(A) 445500
Non-Current Liabilities:
Capital 253500
(-15000-81500)
Bank Loan 153000
(+3000)
Current Liablities:
O/s Wages 6000
Creditors 28000
O/s Salaries 5000
Total(B) 445500