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Question -

The following balances were extracted from the books of M/s Panchsheel Garments on March 31, 2017.

Account Title

Debit

Amount

₹

Account Title

Credit

Amount

₹

Opening stock

16,000

Sales

1,12,000

Purchases

67,600

Return outwards

3,200

Return Inwards

4,600

Discount

1,400

Carriage inwards

1,400

Bank overdraft

10,000

General expenses

2,400

Commission

1,800

Insurance

4,000

Creditors

16,000

Scooter expenses

200

Capital

50,000

Salary

8,800

 

 

Cash in hand

4,000

 

 

Scooter

8,000

 

 

Furniture

5,200

 

 

Buildings

65,000

 

 

Debtors

6,000

 

 

Wages

1,200

 

 

 

1,94,400

 

1,94,400
Prepare the trading and profit and loss account for the year ended March 31, 2017 and a balance sheet as on that date.
(a) Unexpired insurance ₹ 1,000.
(b) Salary due but not paid ₹ 1,800.
(c) Wages outstanding ₹ 200.
(d) Interest on capital 5%.
(e) Scooter is depreciated @ 5%.
(f) Furniture is depreciated ₹ @ 10%.



Answer -

Trading Account

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Opening Stock

16,000

Sales

1,12,000

Purchases

67,600

Less: Return Inwards

4,600

1,07,400

Less: Return Outwards

3,200

64,400

Closing Stock

15,000

Carriage Inwards

1,400

Wages

1,200

Add: Outstanding Wages

200

1,400

Gross Profit

39,200

1,22,400

1,22,400

Profit and Loss Account

Dr.

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

General Expenses

2,400

Gross Profit

39,200

Insurance

4,000

Discount

1,400

Less: Unexpired Insurance

1,000

3,000

Commission

1,800

Scooter Expenses

200

Salary

8,800

Add: Outstanding Salary

1,800

10,600

Interest on Capital

2,500

Depreciation on Scooter

400

Depreciation on Furniture

520

Net Profit

22,780

 42,400

 42,400

 

Balance Sheet

Liabilities

Amount

₹

Assets

Amount

₹

Capital

50,000

Cash in Hand

4,000

Add: Interest on Capital

2,500

Scooter

8,000

Add: Net Profit

22,780

75,280

Less: Depreciation

400

7,600

Bank Overdraft

10,000

Furniture

5,200

Creditors

16,000

Less: Depreciation

520

4,680

Outstanding Salary

1,800

Buildings

65,000

Outstanding Wages

200

Debtors

6,000

Unexpired Insurance

1,000

Closing Stock

15,000

1,03,280

1,03,280

 

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