From the following Trial Balance of John & Sons you are require to prepare Trading Account, Profit and Loss Account for the year ending 31st March 2019 and Balance Sheet as on that date

Trial Balance as on 31st March 2019

Debit Balance Amount Credit Balance Amount 
Drawings (1st July 2018) 12,000 Sundry Creditors 40,000 
Cash in hand 8,000 Returns 4,500 
Cash at bank 20,000 Dividend 100 
Bills Receivable 15,000 Rent 200 
Wages 1,800 Sales 53,200 
Discount 700 Bank Loan 5,000 
Rent 2,000 Capital 99,700 
Advertisement 3,000   
Bad Debts 1,200   
Travelling Expenses 800   
Purchases 40,000   
Machinery 15,000   
Motor Car 18,000   
Returns 1,200   
Stock (1st April 2018) 10,000   
Sundry Debtors 35,000   
Carriage Outwards 1,000   
6% Investments
(1st Sept 2018) 
18,000   
    
 2,02,700  2,02,700 
Adjustments:
1. Closing Stock 27,000
2. Charge Depreciation on Machinery and Motor Car @ 10% and 5% respectively.
3. Create R.D.D. 5% on Sundry Debtors
4. Interest on Drawings @5% p.a.
5. Create Discount on Sundry Creditors 3%
6. Advertisement 1,000 is prepaid
7. Outstanding Rent 1,500

Solution:

In the Books of John & Sons Final Account

Trading A/c And Profit & Loss A/c for the year ended 31st march, 2019 
Particulars Amount Amount Particulars Amount Amount 
To Opening Stock  10,000 By Sales 53,200  
(-) Sales Return  (1,200) 52,000 
To Purchases 40,000     
(-) Purchase Return (4,500) 35.500 
To Wages  1,800 By Closing Stock  27,000 
      
To Gross Profit c/d  31,700    
  79,000   79,000 
      


      
To Bad Debt   (T) 1,200  By Gross Profit b/d  31,700 
(+) R.D.D.    (A) 1,750 2,950 
To Rent  2,000 3,500 BY Dividend  100 
(+) Outstanding Rent 1,500 
To Discount  700 By Rent  200 
To Advertisement 3,000  By Interest Drawings  300 
(-) Prepaid
Advertisement 
(1,000) 2,000 
 
To Travelling Exp  800 By Interest on
Investment 
 630 
To Carriage outward  1,000 By R.D.C  1200 
To Depreciation
on Machine 
     
Motor Car 1,500  
900  
2,400 
      
To Net Profit  20,780    
  34,130   34,130 
      



Balance Sheet as on 31st March, 2019
Liabilities  Amount Amount Assets Amount Amount 
Capital 99,700  Cash in hand  8,000 
(-) Drawings (12,000)  Cash at Bank 20,000 
(+) Interest on
Drawings 
300  Bills Receivable 15,000 
(+) NetProfit   
20,780 1,08,780 
   Machinery 15,000  
(-) Depreciation  1,500 13,500 
   Motor Car 18,000  
(-) Depreciation 900 17,100 
      
Bank Loan  5,000 Debtors               (T) 35,000  
 (-) R.D.D.              (A) 1,750 33,250 
Creditors 40,000  6% Investments
(1st Sept 2018)  
18,00  
(-) R.D.C (1,200) 38,800 (+) Interest    
630 18,630 
Outstanding Rent  1,500 Closing Stock  27,000 
   Prepaid
Advertisement 
 1,000 
      
  1,53,480   1,53,480 
      

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