Question 4.
From the following Trial Balance of M/s. Shradha & Sons as on 31st March, 2018, prepare Trading and Profit and Loss Account and Balance Sheet.
Adjustments:
(i) Closing Stock ₹ 64,000.
(ii) Wages outstanding ₹ 2,400.
(iii) Bad Debts ₹ 600.
(iv) Provision for Doubtful Debts to be 5%.
(v) Rent is paid for 11 months.
(vi) Insurance premium is paid per annum, ended 31st May, 2018.
(vii) Loan from the bank was taken on 1st October, 2017.
(viii) Provide Depreciation on machinery @ 10% and on Furniture @ 5%.
Answers
Hey dude your answer is
(a) Depreciate Plant and Machinery @ 10% and Furniture @ 5%.
(b) Provision for Doubtful Debts to be maintained at ₹ 1,50,000.
(c) Insurance includes annual premium of ₹ 7,200 on a policy which will expire on 30th September, 2018.
(d) Purchases include a computer costing ₹ 60,000 purchased on 1st July, 2017 and is subject
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Trading and P&L A/c with Balance sheet as at 31.3.2018
Explanation:
In the Books of M/s Shradha
Trading and P&L A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
To Opening Stock 42000 By Sales 155000
To Purchases 81000 By Closing Stock 64000
(-1600)
To Carraige Inwards 1200
To Wages 6400
(+2400)
To Power 6000
To Gross Profit(bal.) 82400
To Salary 15000 By Gross Profit 82400
To Rent 24000
(2000)
To O/s Interest 1000
()
To Bad debts 1600
To Insurance 3000
(-600)
To Depreciation on:
Machninery 5000
Furniture 700
To Net Profit 32100
(bal. fig.)
82400 82400
Balance Sheet
as at 31.3.2018
Notes to A/cs Amount(Rs.)
Non-Current Assets:
Machinery 45000
Furniture 13300
Current Assets:
Closing Stock 64000
Debtors 19000
(-600-1000)
Prepaid Insurance 600
Cash in Hand 1500
Total(A) 143400
Non-Current Liabilities:
Capital 94100
(+32100-18000)
Bank Loan 26000
(+1000)
Current Liabilities:
Creditors 18900
O/s Wages 2400
O/s Rent 2000
.
Total(B) 143400