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Question -

From the following balances extracted from the book of M/s Manju Chawla on March 31, 2017. You are requested to prepare the trading and profit and loss account and a balance sheet as on this date.

Account Title

Amount

₹

Amount

₹

Opening stock

10,000

Purchases and Sales

40,000

80,000

Returns

200

600

Wages

6,000

Dock and cleaning charges

4,000

Lighting

500

Misc. Income

6,000

Rent

2,000

Capital

40,000

Drawings

2,000

Debtors and Creditors

6,000

7,000

Cash

3,000

Investment

6,000

Patent

4,000

Land and Machinery

43,000

Donations and Charity

600

Sales tax collected

1,000

Furniture

11,300

1,36,600

1,36,600
Closing stock was ₹ 2,000.
(a) Interest on drawings @ 7% and interest on capital @ 5%.
(b) Land and Machinery is depreciated at 5%.
(c) Interest on investment @ 6%.
(d) Unexpired rent ₹ 100.
(e) Charge 5% depreciation on furniture.



Answer -

Trading Account

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Opening Stock

10,000

Sales

80,000

Purchases

40,000

Less: Sales Return

200

79,800

Less: Purchases Return

600

39,400

Closing Stock

2,000

Wages

6,000

Dock and Cleaning Charges

4,000

Gross Profit

22,400

81,800

81,800

Profit and Loss Account

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Lighting

500

Gross Profit

22,400

Donations and Charity

600

Miscellaneous Income

6,000

Interest on Capital

2,000

Rent

2,000

Depreciation on Furniture

565

Less: Unearned Rent

100

1,900

Depreciation on Land and Machinery

2,150

Interest on Drawings

140

Net Profit

24,985

Interest on Investment

360

30,800

30,800

 

Balance Sheet

Liabilities

Amount

₹

Assets

Amount

₹

Capital

40,000

Debtors

6,000

Add: Interest on Capital

2,000

Cash

3,000

Add: Net Profit

24,985

Investment

6,000

Less: Drawings

2,000

Add: Interest on Investment

360

6,360

Less: Interest on Drawings

140

64,845

Patent

4,000

Creditors

7,000

Land and Machinery

43,000

Sales Tax Collected

1,000

Less: Depreciation

2,150

40,850

Unearned Rent

100

Furniture

11,300

Less: Depreciation

565

10,735

Closing Stock

2,000

72,945

72,945

 

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