From the following Trial Balance of Shradha Enterprises, you are required to prepare Final Accounts for the year ending on 31st March, 2019

Trial Balance as on 31st March, 2019

Debit Balance	Amount	Credit balance	Amount
Opening Stock	2,40,000	Capital	13,00,000
Purchases	8,50,000	Sundry Creditors	1,20,000
Returns Inward	15,000	Bills Payable	60,000
Wages	29,000	Sales	25,00,000
Power and Fuel	21,800	Return Outward	8,000
Traveling Expenses	14,700	Discount	2,000
Audit Fees	7,000	Bank Overdraft	1,54,000
Royalty	72,000	Reserve for Bad and doubtful debts	8,000
Discount	1,750
Postage	13,500
Bad debts	3,000
Sundry Debtors	5,20,000
Furniture	1,20,000
Plant & Machinery	15,00,000
Freehold Premises	7,02,000
Rent, Rates and Insurance	42,250
	41,52,000		41,52,000

Adjustments:

1. Insurance is prepaid to the extent of 2,250

2. Closing Stock is valued at 3,80,000 Cost Price and 4,00,000 as Market Price

3. Outstanding Expenses are Wages 6,000 and Rent 5,000

4. Write off further bad debts 1,500 and provide 5% Reverse for doubtful debts

5. Depreciation on Furniture and Plant & Machinery at 10% p.a. and on Freehold Premises at 15% p.a.

Solution:

In the Books of Shradha Enterprises 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		2,40,000	By Sales	25,00,000
			(-) Sales Return	(15,000)	24,85,000
To Purchases	8,50,000
(-) Purchase Return	(8,000)	8,42,000
To wages	29,000	35,000	By Closing Stock		3,80,000
(+) Outstanding wages	6,000
To Power & Fuel		21,800
To Royalty		72,000
To Gross Profit c/d		16,54,200
		28,65,00			28,65,000

To Bad debts       (T)	3,000		By Gross Profit b/d		16,54,200
(+) Bad debt      (A)	1,500
(-) R.D.D.              (A)	(25,925)
	30,425
(-) R.D.D.              (T)	(8,000)	22,425
To Traveling expenses		14,700	By Discount		2,000
To Audit fees		7,000
To Discount		1,750
To Postages		13,500
To Rent, Rates & Insurance	42,250
(-) Prepaid Insurance
	(2,250)
(+) Outstanding Rent	40,000
	5,000	45,000
To Depreciation on
Furniture	12,000
Plant & Machinery	1,50,000
Freehold Premises	1,05,300	2,67,300
To Net Profit		12,84,525
		16,56,200			16,56,200

 

Balance Sheet as on 31st March, 2019

Liabilities	Amount	Amount	Assets			Amount	Amount
Capital	13,00,000		Furniture			1,20,000
(+) Net Profit	12,84,525	25,84,525	(-) Depreciation			(12,000)	1,08,000
			Plant & machinery			15,00,000
			(-) Depreciation			(15,000)	13,50,000
			Freehold Premises			7,02,000
			(-) Depreciation			(1,05,300)	5,96,700
Creditors		1,20,000	Debtors              (T)			5,20,000
			(-) Bad debts      (A)			(1,500)
						5,18,500
			(-) R.D.D.            (A)			(25,025)	4,92,575
Bills Payable		60,000	Prepaid Insurance				2,250
Bank Overdraft		1,54,000
			Closing Stock				3,80,000
Outstanding Rent		5,000
Outstanding Wages		6,000
		29,29,525					29,29,525