From the following Trial Balance of Sanjiv & Sons. Prepare Trading Account and Profit & Loss Account for the year ending on 31st March, 2019 and a Balance Sheet as on that date.

 

Particulars	Debit Amount  (₹)	Credit Amount (₹)
Opening stock	22,000
Purchase and Sales	1,78,000	4,60,000
Carriage Outward	4,800
Plant and Machinery	50,000
Debtors and Creditors	44,000	76,000
Returns	2,000	4,000
Buildings	58,000
Motor Van	40,000
Printing and Stationery	3,000
Wages	28,000
Reserved for Bad debts		3,200
Communication		2,400
Office expenses	5,400
Carriage	9,000
Furniture	20,000
premises	81,000
Loose Tools	20,400
Drawings	24,700
Bank Overdraft		22,00
Cash in hand	71,000
Dividend		3,300
Capital		1,40,000
Salaries	44,000
Bills Receivable and Bill Payable	5,600	8,400
Bad debts	2,400
Advertisements (3years)	6000
	7.19,300	7,19,300

Additional Information: 

1. Closing stock on 31st March, 2019,was at cost ₹ 60,000 and Market Price ₹ 70,000. 

2. Outstanding expenses : Wages ₹ 4,000,Salary ₹ 2,400 

3. Provide depreciation at 10% on Motor Van and 5% on Furniture. 

4. Write off ₹ 2,000 for Bad debts and create R.D.D. at 5% on debtors. 

5. Provide 10% p.a. interest on capital.

Solution:

Final Account 

In the books of M/s Sanjiv & Sons Trading Account for the year ended 31st March,2019.

Particulars	Amount (₹)	Amount (₹)	Particulars	Amount  (₹)	Amount  (₹ )
To Opening stock		22,000	By Sales  (-) Return	4,60,000 (2000)	4,58,000
To Purchase  (-) Return	1,78,000  (4,000)	1,74,000
TO Carriage		9,000
To Wages  (+) Outstanding expenses	28,000  4,000	32,000
			By Closing Stock		60,000
To Gross Profit c/d		2,81,000
		5,18,000			5,18,000

Profit and Loss Account for the year ended 31st March, 2019

Particulars	Amount (₹)	Amount   (₹)	Particulars	Amount (₹)	Amount (₹)
To Carriage Outward		4,800	By Gross Profit b/d		2,81,000
To Printing & Stationery		3,000
To Office Expenses		5,400	By Communication		2,400
To Salaries  (+) Outstanding expenses	44,000  2,400	46,400	By Dividend		3,300
To Depreciation on Motor Van  Furniture		4,000  1,000
To Bad debts  (+)New Bad debts  (+ )New R.D.D    (-) Old R.D.D	2,400  2,000  2,100  6,500  (3,200)	3,300
To Advertisement  (-)Prepaid	6,000  (4,000)	2,000
To Interest on Capital		14,000
To Net Profit/Loss c/d		202800
		2,86,700			2,86,700

Balance sheet as on 31st March, 2019

Liabilities	Amount (₹)	Amount (₹)	Assests	Amount (₹)	Amount (₹)
Bills Overdraft		22,000	Plant and Machinery		50,000
Capital   (-)Drawings    (+) Interest on capital    (+) Net Profit	1,40,000  (24,700)  1,15,300  14,000    1,29,300  2,02,800		Debtors  (-) Bad debts    (-) R.D.D @5%	44,000  (2000)  42,000  (2,100)	3,99,00
Bills Payable		8,400	Buildings		58,000
Creditors		76,000	Motor Van  (-) Depreciation @ 10%	40,000  (4,000)	36,000
Outstanding Expenses  Salaries		2,400	Furniture  (-) Depreciation @ 5%	20,000  (1,000)	19,000
			Premises		81,000
			Loose Tools		20,400
			Cash		71,000
			Bills Receivable		5,600
			Prepaid Advertisement		4,000
			Closing Stock		60,000
		4,44,900			4,44,900