From the following balances extracted from the books of Karan and the additional information, prepare the trading and profit and loss account for the year ended 31st March, 2023 and also show the balance sheet as at that date:

From the following balances extracted from the books of Karan and the additional information, prepare the trading and profit and loss account for the year ended 31st March, 2023 and also show the balance sheet as at that date:

	Debit Balance (₹ ‘000)	Credit Balance (₹ ‘000)
Stock on 1st April, 2022	625
Purchases and Sales	903	1,372
Returns	22	13
Capital Account		300
Drawings	45
Land and Buildings	300
Furniture and Fittings	80
Trade Debtors and Trade Creditors	250
Cash in Hand	35
Investments	100
Interest		5
Commission		30
Direct Expenses	75
Postage, Stationery and Telephone	25
Fire Insurance Premium	20
Salaries	90
Bank Overdraft		400
	2,570	2,570

Additional Information: (i) Closing stock on 31st March, 2023 is valued at ₹ 6,50,000. Goods worth ₹ 5,000 are reported to have been taken away by the proprietor for his personal use at home during the year. (ii) Interest on investments ₹ 5,000 is yet to be received while ₹ 10,000 of the commission received is yet to be earned. (iii) ₹ 5,000 of the fire insurance premium paid is in respect of the quarter ending 30th June, 2023. (iv) Salaries ₹ 10,000 for March, 2023 and bank overdraft interest estimated at ₹ 20,000 are yet to be recorded as oustanding charges. (v) Depreciation is to be provided on land and buildings @ 5% per annum and on furniture and fitting @ 10% per annum. (vi) Make a provision for doubtful debts @ 5% of trade debtors. [Ans. Gross Profit ₹ 4,15,000; Net Profit ₹ 2,49,500; Balance Sheet Total ₹ 13,89,500.] Solution:-