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Question -

Prepare a trading and profit and loss account of M/s Green Club Ltd. for the year ending March 31, 2017 from the following figures taken from his trial balance:

Account Title

Amount

₹

Account Title

Amount

₹

Opening stock

35,000

Sales

2,50,000

Purchases

1,25,000

Purchase return

6,000

Return inwards

25,000

Creditors

10,000

Postage and Telegram

600

Bills payable

20,000

Salary

12,300

Discount

1,000

Wages

3,000

Provision for bad debts

4,500

Rent and Rates

1,000

Interest received

5,400

Packing and Transport

500

Capital

75,000

General expense

400

Insurance

4,000

Debtors

50,000

Cash in hand

20,000

Cash at bank

40,000

Machinery

20,000

Lighting and Heating

5,000

Discount

3,500

Bad debts

3,500

Investment

23,100

3,71,900

3,71,900
Adjustments
1. Depreciation charged on machinery @ 5% p.a.
2. Further bad debts ₹ 1,500, discount on debtors @ 5% and make a provision on debtors @ 6%.
3. Wages prepaid ₹ 1,000.
4. Interest on investment @ 5% p.a.
5. Closing stock 10,000.



Answer -

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Opening Stock

35,000

Sales

2,50,000

Purchases

1,25,000

Less: Sales Returns

(25,000)

2,25,000

Less: Purchase Returns

(6,000)

1,19,000

Closing Stock

10,000

Wages

3,000

Less: Prepaid Wages

(1,000)

2,000

Gross Profit

79,000

2,35,000

2,35,000

Profit and Loss Account for the year ending March 31, 2017

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Bad Debts

3,500

Gross Profit

79,000

Add: Further Bad-debts

1,500

Interest on Accrued Investment

1,155

Add: New Provision

2,910

Discount

1,000

Less: Old Provision

4,500

3,410

Interest Received

5,400

Discount on Debtors

2,280

Postage and Telegram

600

Salary

12,300

Rent and Rates

1,000

Packing and Transport

500

General Expenses

400

Insurance

4,000

Discount

3,500

Depreciation on Machinery

1,000

Lighting and Heating

5,000

Net Profit

52,565

86,555

86,555

 

Balance Sheet

as on March 31, 2017

Liabilities

Amount

₹

Assets

Amount

₹

Creditors

10,000

Cash in Hand

20,000

Bills Payable

20,000

Cash at Bank

40,000

Capital

75,000

Add: Net Profit

52,565

1,27,565

Debtors

50,000

Less: Further Bad-Debts

1,500

Less New Provision

2,910

Less: Discount on Debtors

2,280

43,310

Investment

23,100

Add: Interest on Investment

1,155

24,255

Machinery

20,000

Less: Depreciation

1,000

19,000

Prepaid Wages

1,000

Closing Stock

10,000

1,57,565

1,57,565

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