From the following Trial Balance of John & Sons you are require to prepare Trading Account, Profit and Loss Account for the year ending 31st March 2019 and Balance Sheet as on that date

Trial Balance as on 31st March 2019

Debit Balance	Amount	Credit Balance	Amount
Drawings (1st July 2018)	12,000	Sundry Creditors	40,000
Cash in hand	8,000	Returns	4,500
Cash at bank	20,000	Dividend	100
Bills Receivable	15,000	Rent	200
Wages	1,800	Sales	53,200
Discount	700	Bank Loan	5,000
Rent	2,000	Capital	99,700
Advertisement	3,000
Bad Debts	1,200
Travelling Expenses	800
Purchases	40,000
Machinery	15,000
Motor Car	18,000
Returns	1,200
Stock (1st April 2018)	10,000
Sundry Debtors	35,000
Carriage Outwards	1,000
6% Investments (1st Sept 2018)	18,000
	2,02,700		2,02,700

Adjustments:

1. Closing Stock 27,000

2. Charge Depreciation on Machinery and Motor Car @ 10% and 5% respectively.

3. Create R.D.D. 5% on Sundry Debtors

4. Interest on Drawings @5% p.a.

5. Create Discount on Sundry Creditors 3%

6. Advertisement 1,000 is prepaid

7. Outstanding Rent 1,500

Solution:

In the Books of John & Sons Final Account

Trading A/c And Profit & Loss A/c for the year ended 31st march, 2019 

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		10,000	By Sales	53,200
			(-) Sales Return	(1,200)	52,000
To Purchases	40,000
(-) Purchase Return	(4,500)	35.500
To Wages		1,800	By Closing Stock		27,000
To Gross Profit c/d		31,700
		79,000			79,000

To Bad Debt   (T)	1,200		By Gross Profit b/d		31,700
(+) R.D.D.    (A)	1,750	2,950
To Rent	2,000	3,500	BY Dividend		100
(+) Outstanding Rent	1,500
To Discount		700	By Rent		200
To Advertisement	3,000		By Interest Drawings		300
(-) Prepaid Advertisement	(1,000)	2,000
To Travelling Exp		800	By Interest on Investment		630
To Carriage outward		1,000	By R.D.C		1200
To Depreciation on Machine
Motor Car	1,500
	900
		2,400
To Net Profit		20,780
		34,130			34,130

Balance Sheet as on 31st March, 2019

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital	99,700		Cash in hand		8,000
(-) Drawings	(12,000)		Cash at Bank		20,000
(+) Interest on Drawings	300		Bills Receivable		15,000
(+) NetProfit
	20,780	1,08,780
			Machinery	15,000
			(-) Depreciation	1,500	13,500
			Motor Car	18,000
			(-) Depreciation	900	17,100
Bank Loan		5,000	Debtors               (T)	35,000
			(-) R.D.D.              (A)	1,750	33,250
Creditors	40,000		6% Investments (1st Sept 2018)	18,00
(-) R.D.C	(1,200)	38,800	(+) Interest
				630	18,630
Outstanding Rent		1,500	Closing Stock		27,000
			Prepaid Advertisement		1,000
		1,53,480			1,53,480