Illustration 2 From the following Trial Balance of Mangesh Traders you are required to prepare Final Accounts. Trial Balance as on 31st March, 2018 Particulars Debit (@) Credit (@) Opening stock 32,750 Purchases 55,000 Sales 89,500 Purchases Retums 2,630 Sales Returns 4,480 Royalties 4,000 Wages & Salaries 8,000 Office Salaries 11,000 Bills Receivable 19,250 Bills Payable 12,500 Office Equipments 20,000 Motor Van 30,400 Plant and Machinery 25,000 Bad Debts 2,500 Advertisement 6,000 Cash in Hand 5,000 ‘Sundry Debtors 31,250 Reserve for Bad debts 1,000 Sundry Creditors 24,000 Capital 1,25,000 2,54,630 2,54,630 Adjustments : 1) Closing Stock on 31st March, 2018 was valued at cost price € 19,000, Market price € 20,000 2) Office Salaries outstanding & 1,000 3) Prepaid Wages %1,000 4) Provide depreciation @ 5%, 10% and 15% on Office Equipments, Motor Van and Plant and Machinery respectively. SSS 056Solution : In the Books of Mangesh Traders ‘Trading Account and Profit and loss Account for the year ended 31st March 2018 Dr. cr . ‘Amount | Amount . Amount | Amount Particulars Particulars ® 3) ® 3) To Opening Stock 32,750 | By Sales 89,500 To Purchases 55,000 Less : Sales Return 4,480 | 85,020 Less : Purchase Return 2,630 | 52,370 To Wages and Salaries 8,000 By Closing Stock 19,000 Less : Prepaid Wages 1,000 7,000 To Royalties 4,000 To Gross Profit e/d 7,900 1,04,020 1,04,020 To Office Salaries 11,000 By Gross Profit bid 7,900 Add : Outstanding Salary 1,000 | 12,000 | By Reserve for Bad 1,000 To Bad debts 2,500 | Debts. ‘To Depreciation on By Net Loss 19,390 eee eames 1,000 (Transferred to Capital = Motor Van 3,040 ee) - Plant & Machinery 3,750 | 7,790 To Advertisement 6,000 28,290 28,290Balance Sheet as on 31st March, 2018 Liabilities Amount | Amount Assets Amount | Amount ® @) ®) ®@) Capital 1,25,000 Office Equipments 20,000 Less : Net Loss 19,390 | 1,05610 | Less : Depreciation 5% 1,000 | 19,000 Outstanding Salaries 1,000 | Motor Van 30,400 Bills Payable 12,500 | Less : 10% Depreciation 3,040 27,360 Sundry Creditors 24,000 | Bills Receivable 19,250 Plant & Machinery 25,000 Less : 10% Depreciation | 3,750} 21,250 Debtors 31,250 Closing Stock 19,000 Prepaid Wages 1,000 Cash in hand 5,000 1,43,110 1,43,110 Depreciation : 1) 5% on % 20,000 (Office Equipments) 20,000 x 5/100, So Depreciation on Office Equipments is & 1,000 2) 10% on & 30,400 (Motor Van 30,400 x 10/100, So Depreciation on Motor van is & 3,040 3) 15% on € 25,000 (Plant and Machinery) 25,000 x 15/100, So Depreciation on Plant and Machinery is & 3,750Illustration 03 From the following Tiall Balance of Reena Enterpris you are require to prepare ‘Trading Account, Profit & Loss Account for the year ending on 31st March, 2018 and Balance Sheet as on that date Trial Balance as on 31st March, 2018 Particulars Debit @) Credit) Opening Stock 45,200 Capital 3,00,000 Drawings 20,000 Furniture 60,000 Prepaid Insurance 1,770 Debtors & Creditors 70,000 1,29.250 Purchases & Sales 57,000 1,20,000 Plant & Machinery 50,000 Investment 68,000 Factory Insurance 26,000 Audit Fees 21,000 Carriage Inward 1,800 Land & Building 1,40,000 Rent 7,120 Reserve for Bad debts 6,000 Carriage Outward 8,360 Returns 2,000 9,000 Discount 1,000 7,000 Commission Received 8,000 5,79,250 5,79,250 Adjustments : 1) Write off Bad debts & 2,000 and Provide 2.5% reserve for bad debts on debtors. 2) Closing stock valued at Cost Price € 46,000 and Market price % 40,000 3) Provide Depreciation @ 5% on Building and 10% on Machinery. 4) Rent prepaid % 3,560 5) Outstanding Carriage Inward is € 1,200Solution : In the Books of Reena Enterprises Dr. Trading Account and Profit and loss Account for the year ended 31st March 2018 Cr. " Amount | Amount " Amount | Amount Particulars © ©) Particulars © © To Opening Stock 45,200 | By Sales 1,20,000 To Purchases 57,000 Less : Sales Return 2,000 | 1,18,000 Less : Purchase Retum 9,000 48,000 To Factory Insurance 26,000 To Carriage Inward 1,800 By Closing Stock 40,000 Add : Outstanding 1,200] 3,000 To Gross Profit c/d 35,800 1,58,000 1,58,000 To Audit fees 21,000 | By Gross Profit b/d 35,800 To Rent 7,120 By Discount 7,000 Less : Prepaid Rent 3,560 | 3,560 | By R.D.D. (Old) 6,000 ‘To Depreciation Less : R.D.D. (New) 1,700 - Land & Building 7,000 4,300 - Plant & Machinery 5,000 | 12,000 | Less: Bad Debts(New)} 2,000] 2,300 To Carriage Outward 8,360 | By Commission 8,000 To Discount 1,000 | Received To Net Profit, 7,180 (Transfered to Capital A/c) 53,100 53,100 Balance Sheet as on 31st March, 2018 Liabilities Amount | Amount Assets Amount | Amount ®@ @) ®@ @ Capital 3,00,000 ‘Sundry Debtors 70,000 Add: Net Profit 7,180 Less : Bad Debts 2,000 3,07,180 68,000 Less : Drawings 20,000 | 2,87,180 | Less : 2.5% R.D.D. 1,700 66,300 Creditors 1,29,250 | Land & Building 1,40,000 Outstanding Carriage 1,200 | Less : 5% Depreciation | 7,000 Inward Plant & Machinery 50,000 Less : 10% Depreciation 5,000 45,000 Prepaid Rent 3,560 Prepaid Insurance 1,770 Furniture 60,000 Investment 68,000 Closing Stock 40,000 4,17,630 4,17,630 eelustration 4 From the following Trial Balance of Khandwala Enterprises prepare Final Accounts, Trial Balance as on 31st March, 2018 Particulars Debit @) Credit @) Capital 35,000 Drawings 3,000 Opening stock 16,400 Purchases 31,100 Direct Expenses 2,500 Sales 50,000 Returns 1,980 Rent & taxes 6,000 Bad Debts 400 Reserve for bad debts 1,500 Discount 2,375 Commission received 255 Debtors and Creditors 20,250 18,500 Furniture 6,000 Machinery 12,000 Goodwill 7,500 Wages & Salaries 7,000 Salaries (for 10 months) 5,000 Advertisement 9,000 Investment in Debentures 8,500 Loans and Advances 13,750 1,39,005 1,39,005 Adjustments : 1) Closing Stock %17,250 2) Rent of € 4,000 has been prepaid 3) Provide 2% reserve for Bad Debts on Debtors. It was realised that our Debtor worth @ 1,000 proved to be bad and has to be written off. 4) Write off Depreciation @ 7.5% on Machinery and 15% on Furniture. 5) Create discount on Creditors @ 3%Solution : In the Books of Khandwala Enterprises Dr. Trading Account and Profit and loss Account for the year ended 31st March 2018 Cr. , ‘Amount | Amount i Amount | Amount Particulars @) ©) Particulars ® @) To Opening Stock 16,400 | By Sales 50,000 To Purchases 31,100 | Less : Sales Return 1,980 | 48,020 To Direct Expenses 2,500 To Wages & Salaries 7,000 ‘To Gross Profit c/d 8,270 | By Closing Stock 17,250 65,270 65,270 To Salaries 5,000 By Gross Profit b/d 8,270 Add : Outstanding salaries | _1,000 | 6,000 | By Discount on. $55 To Rent & Taxes 6,000 Creditors Less : Prepaid Rent 4,000 | 2,000 | By Commission 255 To Depreciation on received - Machinery 900 By Net Loss 12,380 - Furniture 900 | 1,800 | (Transferred to Capital To Discount 2,375 | Ale) To Advertisement 9,000 To Bad Debts (Old) 400 ‘Add : Bad Debts (New) 1,000 Add: RD.D. (New) 385 1,785 Less : R.D.D. (Old) 1,500 285 21,460 21,460 Balance Sheet as on 31st March, 2018 ‘Amount | Amount Assets ‘Amount | Amount ® @. ® @ Capital 35,000 Machinery 12,000 Less: Net Loss 12,380 Less : Depreciation 7.5% 900 | 11,100 42,620 Furniture 6,000 Less : Drawings 3,000 | 39,620 | Less : Depreciation 15% 900} 5,100 Creditors 18,500 Debtors 20,250 Less : Reserve for 555 | 17,945 | Less : Bad Debts 1,000 Discount on creditors 79,250 Ny Less : R.D.D. 2% (W.N.) 385 | 18,865 Closing Stock 17,250 Outstanding Salary 1,000 | Prepaid Rent 4,000 ss cvalicce 13,750 | Goodwill 7,500 Investment in Debentures 8,500 72315 T2315 aWorking note : 1) In Trial Balance Salaries are given & 5,000 for 10 months and 2 months are outstanding. Therefore 2 months outstanding amount will be € 1,000 Salaries % 5,000 Add: outstanding —_@ 1,000 % 6,000 2) R.D.D. -2% on 19,250 =% 385 3) 3% Reserve for discount on creditors - 3% on 18,500 =% 555 Illustration 5 From the following Trial Balance of Omkar you are required to prepare Trading Account and Profit and Loss Account for the year ending on 31st March 2018 and Balance Sheet as on that date. Trial Balance as on 31st March, 2018 Credit Balances 2,46,150 2,46,150Adjustments = 1) Closing Stock valued at &. 42,000. 2) Write off 1,200 Bad Debts and create a provision for bad & doubtful debts at 2% on debtors. 3) Outstanding expenses - Legal Expenses % 750 and Wages & 225 4) Charge depreciation on Office Euipments 2.5% and Machinery 5%. 5) Prepaid - Insurance % 900 Solution : In the Books of Omkar ‘Trading Account and Profit and loss Account for the year ended 31st March 2018 Dr. CrBalance Sheet as on 31st March, 2018 Liabilities arc ace Assets cin ci Capital 1,20,000 Office Equipments 42,900 Add: Net Profit 20,356 Less : Depreciation 2.5% | _ 1,073 | 41,827 1,40,356 Machinery 12,000 Less : Drawings 3,000 | 1,37,356 | Less : 5% Depreciation 600 | 11,400 Creditors 37,500 | Furniture & Fixtures 28,500 Outstanding Exp. Debtors. 45,000, Legal Expenses 730 Less : Bad Debts (New) 1,200 Wages 225 975 43,800 Bank Overdraft 24,000 | Less : 2% R.D.D. (New) 876 | 42,924 Prepaid Insurance 900 Cash at Bank 32,280 Closing Stock 42,000 1,99,831 1,99,831 Illustration 6 Loss Account & Balance Sheet as on 3 Trial Balance as on 31st March, 2018 From the following Trial Balance and information given to you, prepare Trading Account, Profit & |st March, 2018 in the books of M/s Abhay. Debit Balances Amt @) Amt @) Capital 2,28,000 Fumiture: 40,000 Insurance 10,000 Salaries 17,000 Carriage Inward 1,000 Rent. Rates and Taxes 7,000 Machinery 50,000 Wages 8,000 Drawings 14,000 Carriage Outward 5,600 Purchases & Sales 62,000 1,71,000 Stock (1/4/2017) 31,000 Returns 5,000 6,300 Rent received 6,000 Discount Received 1700 aRDD. 5,000 Bad debts 2,000 Advertisements 10,900 Debtors and Creditors 90,000 54,000 Bills Receivable 36,000 Cash at Bank 8,500 6% Bank Loan (taken on 1/10/2017) 50,000 Brokerage 4,000 Loose Tools 36,000 Bills Payable 16,000 Goodwill 1,00,000 5,38,000 5,38,000 Adjustments : 1) Closing Stock cost price 37,000 and Market price € 40,000 2) Provide for R.D.D. @ 5% on Sundry Debtors. 3) Outstanding expenses - Wages - & 3,000, Salary - & 3,600 4) Provide depreciation on Machinery @ 10% and Furniture 5%. 5) Allowed Interest on Capital 5% pa. 6) Prepaid Insurance & 2,000 Solution : In the Books of M/s Abhay ‘Trading Account and Profit and loss Account for the year ended 31st March 2018 Dr. Cr - Amount | Amount 7 Amount | Amount Particulars @) ‘© Particulars @) @) ‘To Opening Stock 31,000 | By Sales 1,71,000 To Purchases 62,000 Less : Sales Return 5,000 | 1,66,000 Less : Purchase Return 6,300 | $5,700 To Wages 8,000 By Closing Stock 37,000 Add : Outstanding 3,000 | 11,000 To Carriage Inward 1,000 To Gross Profit c/d 1,04,300 2,03,000 2,03,000To Salaries 17,000 By Gross Profit b/d 1,04,300 Add : Outstanding Salaries | __3,600 | 20,600 | By Discount Received 1,700 To Int. on Capital 11,400 | By Rent Received 6,000 To Bad debts (Old) 2,000 Add : R.D.D. (New) 4,500 6,500 Less: R.D.D. (old) 5,000 | 1,500 To Depreciation on Machinery 5,000 Furniture 2,000 | 7,000 To Insurance 10,000 Less : Prepaid Insurance 2,000 | 8,000 To Rent, Rates and Taxes 7,000 To Carriage Outward 5,600 To Advertisement 10,900 To Int. on Bank Loan 1,500 To Brokerage 4,000 To Net Profit 34,500 (Transfered to Capital A/c) 1,12,000 1,12,000 Balance Sheet as on 31st March, 2018 ‘Amount | Amount Amount | Amount Assets ®) ®) ®) @) Capital 2,28,000 ‘Machinery 50,000 Add : Int on Capital 11,400 Less 10% : Depreciation | __5,000| 45,000 2,39,400 Furniture 40,000 Add: Net Profit 34,500 ‘Less 5% : Depreciation 2,000 | 38,000 2,73,900 Bills Receivable 36,000 Less : Drawings 14,000 | 2,59,900 | Closing Stock 37,000 6% Bank Loan 50,000 Sundry Debtors 90,000 Add :Outstanding Int.|__1,500 | 51,500 | Less 5% : R.D.D. 4,500 | 85,500 Creditors 54,000 | Cash at Bank 8,500 Outstanding Exp : Loose Tools 36,000 Salaries 3,600 Goodwill 1,00,000 Wages 3,000 6,600 | Prepaid Insurance 2,000 Bills Payable 16,000 3,88,000 3,88,000 eeWorking Note : 1) Interest on Capital 5% p.a. on & 2,28,000 = & 11,400 2) Hidden Adjustment in Trial Balance 6% Bank Loan, taken on Ist Oct, 2017 -& 50,000 Interest should be charged for 6 months only. 6% on % 50,000 for 6 months = % 1,500 Illustration 7 From the following Trial Balance and additional information given of M/s Laxmi Enterprises you are required to prepare Trading Account, Profit & Loss Account for the year ending 31st March, 2019 and Balance Sheet as on that date. In the books of M/s Laxmi Enterprises Trial Balance as on 31st March, 2019 Debit Balances Amt () Credit Balances ‘Amt @) Machinery 1,00,000 Discount 2,000 ‘Sundry Debtors 1,20,800 Sales 77,500 Furniture 36,000 Purchases Returns 4,800 Stock (Ist April, 2018) 20,000 Creditors 52,000 Wages 1,800 10% Bank Loan (taken 76,000 Electricity Charges 4,600 on Ist Oct. 2018) Insurance 5,000 RDD. 1,600 Factory Rent 4,600 Bank Overdraft 53,300 Travelling Expenses 3,600 Capital 1,00,000 Advertisement 2,500 Office Rent 3,000 Purchases 49,300 Sales Returns 2,800 Bad Debts 1,200 Drawings 3,67,200 Adjustments : 1) Stock as on 31st March 2019, amounted to @ 57,000 2) Depreciate Machinery and Furniture @ 5% 3) Unexpired Insurance & 1,000. 4) © 800 are written off as bad debts and create a Provision for Reserve for Doubtful Debts 5% on Sundry Debtors and Reserve for Discount on Debtors 2% and discount on Creditors 3%. 5) Outstanding Expenses - Wages & 2,200 and Office Rent & 1,400. 6) Goods withdrawn worth & 2,000 by owner for personal use eeSolution : In the Books of M/s Laxmi Enterprises ‘Trading Account and Profit and loss Account for the year ended 31st March 2019 Dr. Cr. Particulars Amount | Amount Particulars Amount | Amount ®) ® @) @) To Opening Stock 20,000 | By Sales 77,500 To Purchases 49,300 Less : Sales Return 2,800 | 74,700 Less : Purchase Return 4,800 44,500 To Wages 1,800 By Goods withdrawn 2,000 Add : Outstanding Wages 2,200 4,000 | for personal use To Factory Rent 4,600 | By Closing Stock 57,000 To Gross Profit c/d 60.600 1,33,700 1,33,700 To Office Rent 3,000 By Gross Profit b/d 60,600 Add : Outstanding Rent 1,400 | 4,400 | By Discount received 2,000 To Electricity Charges 4,600 | By Provision for 1,560 To Insurance 5,000 Discount on Creditors Less : Prepaid Insurance 1,000 | 4,000 To Travelling Expenses 3,600 To Depreciation on: Machinery 5,000 Furniture 1,800 6,800 To Bad debts (Old) 1,200 Add : Bad debts (New) 800 Add : R.D.D. (New) 6,000 8,000 Less : R.D.D. (Old) 1,600 6,400 To Provision for Discount 2,280 on Debtors ‘To Advertisement 2,500 ‘To Interest on Bank Loan 3,800 To Net Profit 25,780 (Transferred to Capital A/c) 64,160 64,160Balance Sheet as on 31st March, 2019 domries, Amount | Amount Amount | Amount Liabilities ® ®@) Assets. ®@ ®@) Capital 1.00.000 Machinery 1,00,000 Add : Net Profit 25,780, Less 5% : Depreciation 5,000, 95.000 1,25,780 Fumiture 36,000 Less : Drawings 14,000 | 1,11,780 | Less : 5% Depreciation. 1,800 | 34,200 (12,000 + 2,000) Prepaid Insurance 1,000 Outstanding Exp : Sundry Debtors 1,20,800 Wages 2,200 Less : Bad debts 800 Office Rent 1,400 3,600 1,20,000 Creditors 52,000 Less 5% : RDD. 6,000. less 3% : Discount on 1,560 | 50,440 1,14,000 Creditors Less 2% Provision for 2,280 | 1,11,720 10% Bank Loan 76,000 discount Add : Interest 3,800 | 79,800 | Closing Stock 57,000 Outstanding Bank Overdraft 53,300 2,98,920 2,98,920 Illustration 8 Shreyas requested you, to prepare Trading Account, Profit & Loss Account for the year ended on 31st, March 2018. and Balance Sheet as on that date. Trial Balance as on 31st March, 2018 Debit Balances Amt @) Credit Balances Amt @) Opening Stock 14,400 Geditors 19,300 Debtors 30,000 Returns outward 750 Returns Inward 1,650 Sales 20,000 Rent, Rates & Insurance 2,250 Discount 365 Productive Wages 2,525 Capital 75,000 Discount 390 Outstanding Interest 650 Interest 475 Loan 7,500 Loss by fire 1,650 Salaries 1,850 Purchases 24,350 Drawings 2,500 Carriage Outward 1,275 Loose Tools 17,500 Plant & Machinery 14,000 Cash in hand 1,250 Cash at Bank 7,500 1,23,565 1,23,565 SaAdjustments : 1) Stock as on 31st March 2018, amounted to €48,500 2) Charge depreciation on Loose Tools @ 10% and on Plant & Machinery @ 15% 3) Prepaid Insurance amounted to 500 and outstanding Rent & 400. 4) Charge Interest on Capital @ 5% and on Drawings 7% 5) Outstanding Salary & 650 Solution : In the Books of Shreyas ‘Trading Account and Profit and loss Account for the year ended 31st March 2018 Dr. Cr. Particulars Amount] Amount |p. | Amount | Amount ®@ @ ®@ ® To Opening Stock 14,400 | By Sales 20,000 To Purchases 24,350 Less : Sales Return 1,650} 18,350 Less : Purchase Return 750 23,600, To Productive Wages 2,525 | By Closing Stock ‘To Gross Profit e/d 26,325 48,500 66,850 66,850 To Rent, Rates & Insurance | 2,250 By Gross Profit e/d 26,325 Add : Outstanding Rent 400 By Discount Received 365 2,650 By Interest on 88 Less : Prepaid Insurance 500] 2,150 Drawings To Discount 390 ‘To Interest on Capital 3,750 ‘To Depreciation on : Loose Tools 1,750 Plant & Machinery 2,100} 3,850 To Interest 475 To Salaries 1,850 Add : Outstanding Salary 650] 2,500 To Loss by Fire 1,650 To Carriage Outwards 1.275 To Net Profit 10,738 (Transferred to Capital A/c) 26,778 26,778Balance Shi as on 31st March, 2018 sabilit Amount | Amount ‘Amount | Amount Liabilities @) @) Assets @) @) Capital 75,000 Loose Tools 17,500 Add : Net Profit, 10,738 Less 10% : Depreciation | _1,750| 15,750 Add : Interest 5% on 3,750 Plant & Machinery 14,000 Capital 89,488 Less 15% : Depreciation | 2,100 | 11,900 Less : Drawings 2,500 Cash at Bank 7,500 36988 Closing Stock 48.500 Less : Int on Drawings 88 | 86,900 | Prepaid Insurance 500 Creditors 19,300 | Debtors 30,000 Loan 7,500 | Cash in hand 1,250 Outstanding Interest 650 Outstanding Rent 400 Outstanding Salary 650 1,15,400 1,15,400 Note : Interest on Drawing is charged for 6 months only as date of Drawing is not given. Amount of Drawing given in Trial Balance is € 2,500, So 7% on 2500 = 175 Interest on Drawing is charged for 6 months on] Tt means, Drawings € 2,500 + 88 = 2,588 Illustration 9 ; Therefore 175/2 = 88, From the following Trial Balance of Kisan Traders prepare Trading Account, Profit & Loss Account for the year ended on 31st, March 2019. and Balance Sheet as on that date. Trial Balance as on 31st March, 2019 Debit Balances Amt @) Credit Balances Amt @) Stock (1.4.2018) 1,50,000 Sundry Creditors 2,00,000 Purchases 8,50,000 Bank Overdraft 1,80,000 Wages 1,20,000 Interest Received 60,000 Indirect Expenses 80,000 Reserve for doubtful debts 10,000 Return Inward 20,000 Sales 13,95,300 Power & Fuel 95,000 Retums Outward 30,000 Advertisement 70,000 Capital 6,00,000 ‘Travelling Expenses 30,000 Sundry Debtors 2,20,000 Plant & Machinery 1,80,000 Printing & Stationery 18,000 ‘Computers & Printers 5,20,000 Insurance Premium. 20,000 Cash in hand 42,300 Bad Debts 11,000 Drawings 49,000 24,75,300 24,75,300 SS —eEEEEEeAdjustments : 1) Closing Stock is valued at € 2,80,000 2) Wages unpaid % 30,000, Indireet Expenses outstanding & 22,000. 3) Machinery includes % 40,000 for the purchase of a new Machinery on Ist Oct, 2018 depreciate Plant and Machinery at 10% and Computers & Printers at 10%. 4) Reserve for doubtful debts is to be maintained at 5%. 5) _ Insurance Premium is paid for one year up to 30th June, 2019. 8) welling expenses include ® 10,000 for personal travelling expenses of owner. Solution : In the Books of Kisan Traders. Trading Account and Profit and loss Account for the year ended 31st March 2019 Dr. Cr. ‘ ‘Amount | Amount , ‘Amount | Amount Particulars ® ® Particulars ® ® To Opening Stock 150,000 | By Sales 13,9530 To Purchases 8,50,000, Less : Sales Return 20,000 | 13,75,300 Less : Purchase Return | 30,000 | 8,20,000 To Wages 1,20,000 ‘Add : Unpaid wages 30,000 | 1,50,000 | By Closing Stock 220-000 To Power & Fuel 95,000 To Gross Profit e/d 4,40,300 16,55,300 16,55,300 To Indirect Expenses 80,000 By Gross Profit b/d 4,40,300 Add : Outstanding 22,000 | 1,02,000 | By Interest 60,000 To Advertisement 70,000 | Received To Travelling expenses | 30,000 Less :Personal 10,000 | 20,000 Travelling To Printing & Stationery 18,000 To Insurance Premium | 20,000 Less : Prepaid Insurance | 5,000] 15,000 To Bad Debts 11,000 Add: New RD.D. 11,000 22,000 Less : Od RDD. 10,000} 12,000 To Depreciation on : Plant & Machinery 16,000 Computers & printers | 52,000 | 68,000 To Net Profit 1,95,300 (transfer to Capital A/c) 5,00,300 5,00,300 eeBalance Sheet of Kishan Traders as on 31st March, 2019 Liabilities Amount | Amount iets Amount | Amount ® @) ® @) Capital 600,000, Cash in hand 42,300 Add Net Profit 1,95,300 Sundry Debtors 2,20,000 Less Drawings 7,95,300 Less : 5% New R.D.D. 11,000 | 2,09,000. (49,000 + 10,000 ) 59,000 Plant & Machinery 1,80,000 7,36,300 | Less : Depreciation 16,000 | 1,64,000 Sundry Creditors 2,00,000 | VN) pee 1,80,000 | Computers & Printers | 5,20,000 Outstanding expenses Less : 10% Depreciation | 52,000 | 4,68,000 Wages 30,000 Closing Stock 2,80,000 Indirect Expenses 22,000 | 52,000 | Prepaid Insurance 5,000 11,68,300 11,68,300 Working Note : 1) Insurance Premium for | year % 20,000 paid upt 30th June 2019. Prepaid Insurance for 3 months 20,000/1 x 3/12 = % 5,000 2) New R.DD. is $% on Debtors i.e. 2,20,000/1 x 5/100 = 11,000 3) Balance on Machinery A/c = 1,80,000 Cost of New Machinery Purchased on Ist Oct. 2018 % 40,000 Balance of old Machinery = 1,40,000 a) Depreciation on old Machinery for 12 months 1,40,000/1 x 10/100 z 14,000 Add : b) Depreciation on New Machinery (for 6 months) 40,000/1 x 10/100 x 6/12 = 2,000 = 16,000 Total Depreciation on Machinery is € 16,000Uustration 10 Prepare Trading, Profit and Loss Account and Balance Sheet in the Books of Arun J. with the help of following information and Trial Balance given below for the year ending 31st March, 2019. Trial Balance as on 31st March, 2019 Debit Balances Amt @) Credit Balances Amt @) Debtors 24,000 Capital 25,000 Opening Stock 8,000 Sales 20,000 Royalties 1,500 Creditors 10,000 ‘Wages 1,000 Returns, 1,000 Salaries 2,500 Loans & Advances 8,000 Drawings 000 Bills Payable 12,000 Goodwill 8,000 Interest Received 1,000 Returns 500 Telephone Charges 1,000 Carriage Inwards 1,000 Carriage Outward 1,000 Trade Expenses 500 Insurance 2,000 Plant & Machinery 6,000 Furniture 5,000 Purchases 12,000 77,000 77,000 Adjustments : 1) Closing Stock is valued at Cost Price % 13,000 where as Market Price = 15,000 2) Depreciate Plant & Machinery by 5% and Furniture by 10% 3) Insurance € 700 is unexpired. 4) Outstanding Salary and Wages € 800 and € 1,000 respectively. 5) R.D.D. is to be created 5% on Sundry Debtors 6) Goods of % 3,000 distributed as free sampleSolution : In the Books of Arun. Dr. _ Trading Account and Profit and loss Account for the year ended 31st March 2019 Cr. i Amount | Amount . Amount | Amount Particulars @) @) Particulars @) @) To Opening Stock 8,000 | By Sales 20,000 To Purchases 12,000 Less : Sales Return 500 | 19,500 Less : Returns 1,000 | 11,000 To Royalties 1,500 ‘To Wages 1,000 By Closing Stock 13,000 Add : Outstanding 1,000 2,000 | By Goods 3,000 To Carriage Inwards 1,000 | distributed as free To Gross Profit c/d 12,000 | sample 35,500 35,500 To Insurance 2,000 By Gross Profit b/d 12,000 Less : Prepaid 700 1,300 | By Interest 1,000 To Salaries 2,500 Received Add : Outstanding 800 3,300, To Depreciation on : Plant & Machinery 300 Furniture 500 800 ToRD.D. 1,200 To Telephone Charges 1,000 To Carriage Outward 1,000 To Trade Expenses 500 To Advertisements 3,000 (Goods distributed as free sample) To Net Profit 900 (Transfer to Capital A/c) 13,000 13,000 Balance Sheet as on 31st March, 2019 ee, Amount | Amount Amount | Amount Liabilities ® ®@) Assets ® ® Capital 25,000 Closing Stock 13,000 Add : Net Profit 900 Plant & Machinery 6,000 25,900 Less : depreciation 5% 300] 5,700 Less : Drawings 3,000 | 22,900 | Furniture 5,000 Creditors 10,000 | Less : Depreciation 10% 500 4,500 Outstanding Expenses Prepaid Insurance 700 Salaries 800 Goodwill 8,000 Wages 1,000 | 1,800 | Debtors 24,000 Loans & Advances 8,000 | Less : R.D.D. 5% 1,200} 22,800 Bills Payables 12,000 54,700 54,700 NN