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From the following trial balance of Geeta, you are required to prepare
1. Trading and profit and loss account for the year ended on 31st March 2019.
2. Balance sheet as at that date.

[Debit balances]
Stock on 01.04.2018 70000
Plant and Machinery 350000
Rent 30000
Depreciation on plant and machinery 15000
Wages 20000.
Salary for 11 months, 11000
Cash 27000
Purchases 270000
Debtors 80000
Discount 2000
Carriage inwards 4000
Bad debts 6000

[Credit balances]
Capital 300000
Wages outstanding 4000
Sales 500000
Creditors 45000
Bills payable 16000
Discount 12000
Commission 8000

Adjustments-
1. Stocks on 31st March 2019 was 96000
2. Stock, destroyed by fire worth 6000 and the insurance company accepted a claim of 3600
3. 1500 paid as rent of the office was debited to landlord’s Account (included in Debtors)
4. Write of further bad debts 4000
5. Sales include sales on return basis. Approval of sale of 2500 has not been received till 31.03.2019. The rate of gross profit on this sale was 25% on cost
6. Create a provision for doubtful debts on debtors, 5%.

Answer-
1. Gross profit 237500
2. Net profit 181000.
3. Balance sheet total 547000

Hints-
1. 2500 will be deducted from the sales and debtors for cancellation of sales on return basis. Also, the cost of such goods that is, 2000 will be added to closing stock.
2. The new provision will be 5% on 72000

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