Page 147 - debkxi

Adjustments in Preparation of Financial Statements 19.7

Solution:

Dr. TRADING AND PROFIT & LOSS ACCOUNT for the year ended 31st March, 2024 Cr.
Particulars ` Particulars `
To Opening Stock 50,000 By Sales 1,80,000
To Purchases 1,75,000 Less: Sales Return 3,000 1,77,000
Less: Purchases Return 2,000 1,73,000 By Closing Stock 32,000
To Wages 3,000 By Gross Loss c/d 17,000
2,26,000 2,26,000
To Gross Loss b/d 17,000 By Discount Received 500
To Salary 8,000 By Commission Received 4,000
Add: Outstanding Salary 1,000 9,000 Less: Advance 1,000 3,000
To Discount Allowed 1,000 By Rent 6,000
To Insurance 3,200 Add: Rent Receivable 2,000 8,000
Less: Prepaid 800 2,400 By Net Loss Transferred to
To Rent, Rates and Taxes 4,300 Capital A/c 43,189
To Trade Expenses 1,500
To Bad Debts 2,000
Add: Further Bad Debts 1,000
Provision for Bad Debts (New) 4,050
7,050
Less: Provision for Bad Debts 2,500 4,550
To Provision for Discount on Debtors 1,539
To Repairs and Renewals 1,600
To Travelling Expenses 4,200
To Postage 300
To Telegram Expenses 200
To Legal Fees 500
To Depreciation on Building 6,600
54,689 54,689

BALANCE SHEET as at 31st March, 2024

Liabilities ` Assets `
Loan 34,800 Sundry Debtors 82,000
Creditors 22,000 Less: Further Bad Debts 1,000
Outstanding Salary 1,000 81,000
Commission Received in Advance 1,000 Less: Provision for Bad Debts 4,050
Capital 3,00,000 76,950
Less: Net Loss 43,189 Less: Provision for Discount on Debtors 1,539 75,411
Drawings 32,000 75,189 2,24,811 Rent Receivable 2,000
Prepaid Insurance 800
Closing Stock 32,000
Fixtures and Fittings 70,000
Building 1,10,000
Less: Depreciation 6,600 1,03,400
2,83,611 2,83,611