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Question -

The following balances has been extracted from the trial of M/s Runway Shine Ltd. Prepare a trading and profit and loss account and a balance sheet as on March 31, 2017.

Account Title

Amount

₹

Account Title

Amount

₹

Purchases

1,50,000

Sales

2,50,000

Opening stock

50,000

Return outwards

4,500

Return inwards

2,000

Interest received

3,500

Carriage inwards

4,500

Discount received

400

Cash in hand

77,800

Creditors

1,25,000

Cash at bank

60,800

Bill payable

6,040

Wages

2,400

Capital

1,00,000

Printing and Stationery

4,500

Discount

400

Bad debts

1,500

Insurance

2,500

Investment

32,000

Debtors

53,000

Bills receivable

20,000

Postage and Telegraph

400

Commission

200

Interest

1,000

Repair

440

Lighting Charges

500

Telephone charges

100

Carriage outward

400

Motor car

25,000

4,89,440

4,89,440
Adjustments
1. Further bad debts ₹ 1,000. Discount on debtors ₹ 500 and make a provision on debtors @ 5%.
2. Interest received on investment @ 5%.
3. Wages and interest outstanding ₹ 100 and ₹ 200 respectively.
4. Depreciation charged on motor car @ 5% p.a.
5. Closing Stock ₹ 32,500.



Answer -

Trading Account

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Opening Stock

50,000

Sales

2,50,000

Purchases

1,50,000

Less: Return Inwards

2,000

2,48,000

Less: Return Outwards

4,500

1,45,500

Closing Stock

32,500

Carriage Inwards

4,500

Wages

2,400

Add: Outstanding Wages

100

2,500

Gross Profit

78,000

2,80,500

2,80,500

Profit and Loss Account

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Carriage Outward

400

Gross Profit

78,000

Printing and Stationery

4,500

Interest Received

3,500

Discount

400

Discount Received

400

Bad Debts

1,500

Interest Received on Investment

1,600

Add: Further Bad Debts

1,000

Add: New Provision

2,600

5,100

Discount on Debtors

500

Insurance

2,500

Postage and Telegraph

400

Commission

200

Interest

1,000

Add: Outstanding Interest

200

1,200

Repair

440

Lighting Charges

500

Telephone Charges

100

Depreciation on Motor Car

1,250

Net Profit

66,010

83,500

83,500

 

Balance Sheet

Liabilities

Amount

₹

Assets

Amount

₹

Creditors

1,25,000

Cash in Hand

77,800

Add: Interest Received

1,600

79,400

Bills Payable

6,040

Cash at Bank

60,800

Capital

1,00,000

Investment

32,000

Add: Net Profit

66,010

1,66,010

Debtors

53,000

Less: Further Bad Debts

1,000

Outstanding Interest

100

Less: New Provision

2,600

Outstanding Wages

200

Less: Discount on Debtors

500

48,900

Motor Car

25,000

Less: Depreciation

1,250

23,750

Bills Receivable

20,000

Closing Stock

32,500

2,97,350

2,97,350

 

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