Following are balances from the trial balance of Ritesh Traders as at 31st March 2023 Opening Stock ₹ 5,620 Purchases ₹ 1,54,200
Following are balances from the trial balance of Ritesh Traders as at 31st March 2023:
Prepare Trading and Profit & Loss Account for the year ended 31st March 2023 and Balance Sheet as at that date after taking into account the following adjustments:
(i) Closing Stock was valued at ₹ 19,000.
(ii) Depreciation to be provided on Land and Building @ 5% p.a. and on Plant & Machinery @ 10% p.a.
(iii) Write off ₹ 2,000 as Bad Debt.
(iv) Insurance was prepaid ₹ 700.
(v) Create provision for doubtful debts @ 5% on debtors.
(vi) Wages include ₹ 4,800 for installation of a new machinery.
[Ans. Gross Profit ₹ 1,06,980; Net Profit ₹ 27,930; Balance Sheet Total ₹ 17,83,530.]
Solution:-
| Particulars | ₹ | Particulars | ₹ |
| Opening Stock | 5,620 | Interest on Securities | 6,400 |
| Purchases | 1,54,200 | Land and Building | 10,00,000 |
| Sales | 3,74,800 | Securites | 6,00,000 |
| Wages | 1,26,000 | Cash in Hand | 25,600 |
| Carriage Inward | 900 | Bank Overdraft | 3,40,000 |
| Freight on Purchase | 4,900 | Discount Allowed | 1,500 |
| Salaries | 8,000 | Discount Received | 420 |
| Insurance | 2,800 | Bills Payable | 4,000 |
| Repair to Machinery | 1,400 | Loan (Cr.) | 11,000 |
| Drawings | 5,600 | Bills Receivable | 7,000 |
| Customer’s A/c | 15,800 | Capital Account | 13,47,600 |
| Postage | 500 | Suppliers A/c | 40,000 |
| Trade Expenses | 1,000 | X’s Loan (Cr.) | 18,600 |
| Plant and Machinery | 1,82,000 |
Anurag Pathak Answered question
Solution:-
Hints:
(i) Customer’s A/c means Debtors A/c
(ii) Supplier’s A/c means Creditors A/c
(iii) Repairs to Machinery will appear on Dr. side of P & L A/c
(iv) Securities means Investments. It will appear on the assets side of Balance Sheet.
(v) Interest on Securities will appear on the Cr. side of P & L A/c.
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