From the following Trial Balance of Rajnish & Sons and the additional Information given below prepare Trading & Profit & Loss Account for the year ending on 31st March 2018 and Balance Sheet as on that date.

Trial Balance s on 31st March 2018

Debit Balances Amount Credit Balances  Amount 
Stock (01.04.2017) 1,20,000 Capital 6,00,000 
Purchases 4,00,000 Sales 3,00,000 
Wages 17,000 Return outward 8,000 
Carriage 6,000 Sundry Creditors 1,80,000 
Salaries 60,000 Bills Payable 90,000 
Rent, Rates and Taxes 12,000 8% Loan
(taken on 01.10.2017) 		1,00,000 
Insurance 8,000 Bank Overdraft 79,200 
Royalties 10,000   
Discount 4,500   
Courier charges 5,200   
Bad Debts 7,000   
Trade expenses 2,500   
Drawings 15,000   
Machinery 3,00,000   
Furniture 1,50,000   
Patents 50,000   
Sundry Debtors 1,90,000   
 13,57,200  13,57,200 
Adjustments :
1. Closing Stock valued at 3,00,000 cost ;price and 3,20,000 at Market price.
2. Salaries were paid for 10 months only.
3. Insurance is paid for one year ending on 30.06.2018
4. One of the debtors Mr. Amit became3 insolvent, from whom 10,000 was not received.
5. 5% R.D.D. is to be maintained on Debtors.
6. Depreciation Machinery & Furniture @ 10% and 5%  respectively.
Solution:
In the books of Rajnish & Sons Final Account

Trading A/c And Profit & Loss A/c for the year ended 31st march, 2018 
Particulars Amount Amount Particulars Amount Amount 
To Opening Stock  1,20,000 By Sales  3,00,000 
To Purchases 4,00,000     
(-) Purchase Return (8,000) 3,92,000 
To Wages  17,000    
To Carriage  6,000    
To Royalties  10,000 By Closing Stock  3,00,000 
      
To Gross Profit c/d  55,000    
  6,00,000   6,00,000 
      
      


      
To Bad Debts      (T) 7,000  By Gross Profit b/d  55,000 
(+) Bad Debts     (A) 10,000  
(+) R.D.D. New(A) 9,000 26,000 
To Salaries 60,000     
(+) Outstanding Salaries 12,000 72,000 
To Rent, Rates & Taxes  12,000    
To Insurance 8,000     
(-) Prepaid Insurance (2,000) 6,000 
To Discount  4,500    
To Courier charges  5,200    
To Trade Exp  2,500    
To Depreciation on      
Machinery 30,000 37,500 
Furniture 7,000 
To Interest on loan  4,000    
      
   By Net Loss  1,14,700 
  1,69,700   1,69,700 



Balance Sheet as on 31st March, 2018 
Liabilities Amount Amount Assets Amount Amount 
Capital 6,00,000  Machinery 3,00,000  
(-) Drawings (15,000)  (-) Depreciation 30,000 2,70,000 
 5,85,000  Furniture 1,50,000  
(-) Net Loss (1,14,700) 4,70,300 (-) Depreciation 7,500 1,42,500 
   Patents  50,000 
      
Creditors  1,80,000 Debtors                (T) 1,90,000  
  (-) Bad Debts        (A) (10,000)  
Bills Payable 90,000  1,80,000  
(-) R.D.D.                (A) (9,000) 1,71,000 
8% Loan 1,00,000     
(+) Interest on Loan 4,000 1,04,000 
Bank overdraft  79,200 Closing Stock  3,00,000 
Outstanding Salaries  12,000 Prepaid Insurance  2,000 
      
      
      
  9,35,500   9,35,500 
 

 

 

 

 

 

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