From the following balances extracted from the books of Sharma, prepare the Trading and Profit & Loss Account for the year ended 31st March 2023 and Balance Sheet as at that date after taking into consideration the adjustments given below:
From the following balances extracted from the books of Sharma, prepare the Trading and Profit & Loss Account for the year ended 31st March 2023 and Balance Sheet as at that date after taking into consideration the adjustments given below:
Adjustments:
(i) Closing Stock was valued at ₹ 61,700.
(ii) Depreciate Furniture and Machinery @ 10% p.a. and Sale Van @ 20% p.a.
(iii) Outstanding Rent amounted to ₹ 900.
(iv) Bad Debts ₹ 200.
(v) Make a provision for Doubtful Debts @ 5% on Debtors.
(vi) Charge one-fourth of salaries and wages to the Trading Account.
(vii) A new machinery was purchased on credit and installed on 31st December 2022 costing ₹ 15,000. No entry for the same has yet been passed in the books.
[Ans. Gross Profit ₹ 57,875; Net Profit ₹ 5,075; Balance Sheet Total ₹ 1,22,225]
Trial Balance as at 31st March, 2023
| Particulars | Dr. (₹) | Cr. (₹) |
| Drawings and Capital | 7,500 | 50,000 |
| Purchases and Sales | 72,100 | 95,000 |
| Returns | 1,300 | 2,700 |
| Sundry Debtors and Creditors | 18,200 | 35,750 |
| Stock (1.04.2022) | 19,800 | |
| Bad Debts | 3,000 | |
| Bill Receivable and Payable | 12,000 | 23,000 |
| Cash in Hand | 300 | |
| Office Expenses | 6,210 | |
| Sales Van | 15,000 | |
| Sales Van Expenses | 1,400 | |
| Discount | 2,910 | |
| Rent and Taxes | 10,700 | |
| Telphone Chages | 1,050 | |
| Postage | 950 | |
| Furniture | 5,000 | |
| Printing and Stationery | 2,750 | |
| Commission | 8,400 | |
| Carriage Inwards | 3,200 | |
| Salaries and Wages | 20,500 | |
| 2,09,360 | 2,09,360 |
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