Satish and Pramod are Partners. Prepare Trading Account and Profit and Loss Account for the year 31st March, 2019. You have to find out Gross Profit and Net Profit only.

Trial Balance as on 31st March, 2019

Debit Balance	Amount	Credit balance	Amount
Stock (01/04/2018)	8,700	Sales	68,000
Purchases	18,300	Dividend	2,000
Wages	1,000	Purchases Return	500
Insurance	800	Sundry Creditors	13,000
Unproductive Wages	1,400	10% Bank Loan	8,000
Warehouse Rent	600	(w.e.f. 01/07/2018)
Carriage Outward	1,200	Other Receipts	1,000
Sales Return	600
Export Duty	1,400
Customs Duty	800
Sundry debtors	40,000
Investments	15,700
Factory rent	1,600
Postage & Telegram	400
	92,500		92,500

Adjustments:

1. The Closing Stock is valued at 15,400.

2. Outstanding Wages 500.

3. Create provision for bad debts 800 and maintain R.D.D. 3% on Sundry Debtors.

4. Goods of 1,800 distributed as a free sample.

5. Goods of 2,000 were sold and delivered on 31st March 2019 but no entry is passed in the Books of Account.

Solution: 

Final Account

In the Books of Satish and Pramod

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

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		8,700	By Sales	68,000
			(+) Unrecorded Sales	2,000
			(-) sales return	(600)	69,400
To Purchases	18,300
(-) Purchase Return	(500)	17,800
To Wages	1,000
(+) Outstanding Wages	500	1,500
To Customs Duty		800	By Closing Stock		15,400
To Factory Rent		1,600	By Goods distributed as free sample		1,800
To Gross Profit		56,200
		86,600			86,600

To Bad debts (A)	800		By Gross Profit		56,200
(+) R.D.D.  (A)	1,236	2,036
To Insurance		800	By Dividend		2,000
To Unproductive wages		1,400	By Other Receipts		1,000
To Warehouse Rent		600
To Carriage Outward		1,200
To Export Duty		1,400
To Postage & Telegram		400
To Advertisement		1,800
To Interest on loan		600
To Net Profit		48,964
		59,200			59,200