From the following Trial Balance of Ayub & Co. as on 31st March 2019, you are required to prepare Trading Account, Profit & Loss Account for the year ending 31st March 2019 and Balance Sheet as on that date after making necessary adjustments

Trail Balance as on 31st March, 2019

Debit Balance	Amount	Credit Balance	Amount
Cash in Hand	4,575	Discount	900
Cash at bank	15,450	Loans from Abhay	15,000
Drawings	18,000	Creditors	18,225
Furniture	6,000	Sales	1,95,000
Plant & Machinery	45,000	Return Outward	3,000
Opening Stock	30,000	Capital	90,000
Purchases	1,20,000
Salaries & Wages	33,600
Debtors	30,600
Return Inward	7,500
Audit Fees	2,250
Rent, Rates & Taxes	5,400
Bad Debts	600
Traveling Expenses	750
Insurance	1,200
Interest on Loan from Abhay	450
Trade expenses	300
Sundry expenses	450
	3,22,125		3,22,125

Adjustments: 

1. Stock on hand on 31st March, 2019 valued at 60,000. 

2. Rent amounting to 600 prepaid. 

3. Bad Debts 600 and create a Provision for Doubtful debts 5%. 

4. Depreciation on Plant & Machinery by 10% and Furniture is valued at 4,500. 

5. Outstanding Salaries 900.   
 
 

Solution: 

In the Books of Ayub & Co.  

Trading A/c And Profit & Loss A/c for the year ended 31st March, 2019 

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		30,000	By Sales   (-) Return Inward	1,95,000  (7,500)	1,87,500
To Purchase  (-) Return Outward	1,20,000  (3,000)	1,17,000
			By Closing Stock		60,000
To Gross Profit c/d		1,00,500
		2,47,500			2,47,500

To Bad Debt    (T)	600		By Gross Profit b/d		1,00,500
(+) Bad Debt   (A)	600
(+)R.D.D.New(A)	1,500	2,700
To salaries & Wages	33,600		By Discount		900
(+) Outstanding Salaries
	900	34,500
To Audit fees		2,250
To Rent, Rates & Taxes	5,400
(-) Prepaid Rent
	(600)	4,800
To Traveling Exp		750
To Insurance		1,200
To Interest on loan from Abhay		450
To Sundry Exp		300
To Depreciation on Furniture
Plant & Machinery	4,500
	4,500	9,000
To Net Profit		45,000
		1,01,400			1,01,400

Balance Sheet as on 31st March, 2019

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital	90,000		Cash in hand		4,575
(-) Drawings	(18,000)		Cash at Bank		15,450
	72,000
(+) Net Profit	54,800	1,26,800
			Furniture	6,000	1,500
			(-) Depreciation	(4,500)
Loan from Abhay		15,000	Plant & Machinery	45,000
			(-) Depreciation	4,500	40,500
Creditors		18,255	Debtors	30,600
			(-) Bad Debts      (A)	(600)
				30,000
			(-) R.D.D. New    (A)	(1,500)	28,500
Outstanding Salaries		900	Prepaid Rent		6,000
			Closing stock		60,000
		1,51,925			1,51,925