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Prepare Trading and Profit & Loss Account for the year ending on 31st March, 2023 and Balance Sheet as on that date from the following balances of Trial Balance:

Particulars Particulars

Debit Balances:

Drawings

Machinery

Stock

Purchases

Returns Inward

Furniture

Carriage

Rent,

Rates and Taxes

Printing and Stationery

Office Expenses

Bad Debts

Sundry Debtors

10,000

50,000

25,000

90,000

2,000

10,000

2,000

5,000

1,000

1,200

1,500

40,000

Bills Receivable

Discount

Wages and Salaries

Cash in Hand

Cash at Bank

Credit Balances

Capital

Returns Outward

Provision for Doubtful Debts

Creditors

Sales

General Reserve

7,000

1,000

5,000

6,000

32,000

1,00,000

1,000

2,000

37,700

1,28,000

20,000

Adjustment:

(i) The value of stock on 31st March, 2023, ₹ 40,000.

(ii) Provision for Doubtful Debts is to be maintained at 5% on Sundry Debtors.

(iii) Charge depreciation on both Furniture and Machinery @ 10% p.a.

(iv) Machinery costing ₹ 20,000 was purchased on 1st January, 2023.

(v) Allow interest on capital @ 5% p.a.

(vi) A fire occurred on 20th March, 2023 and stock of the value of ₹ 7,000 was destroyed. It was fully insured and the insurance company admitted the claim in full.

(vii) 10% of net profit to be carried to General Reserve.

[Gross Profit – ₹ 52,000; Net Profit – ₹ 29,520; Balance Sheet Total – ₹ 1,85,500.]

[Hint: Net Profit, i.e., Profit before transfer to General Reserve – ₹ 32,800. Transfer to General Reserve – ₹ 3,280 (i.e., 10% of ₹ 32,800.)

Anurag Pathak Changed status to publish October 13, 2023
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