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19.8 Double Entry Book Keeping—CBSE XI

3. From the books of M/s. Shyam Traders, following Trial Balance has been prepared
on 31st March, 2024:
Debit Balances ` Credit Balances `

Purchases (Adjusted) 1,93,500 Sales 3,00,000
Wages 23,250 Bank Overdraft 24,400
Carriage on Purchases 18,000 Interest on Investment 800
Prepaid Insurance on 1st April, 2023 625 Provision for Doubtful Debts 2,500
Bad Debts 600 Cash Discount 4,500
Rent and Insurance 7,750 Capital 71,175
Salary 13,500 Creditors 18,750
Debtors 37,500 Outstanding Wages on 31st March, 2024 900
Stock on 31st March, 2024 20,500
Investment 10,000
Cash 14,500
Accrued Interest on 31st March, 2024 800
Furniture 10,500
Plant and Machinery 50,000
Income Tax 22,000
4,23,025 4,23,025
Prepare (1) Trading and Profit & Loss Account for the year ended 31st March, 2024
and (2) Balance Sheet as on that date, taking into consideration the adjustment
given below:
(i) On 1st October, 2023 plant of ` 10,000 was purchased on credit but no entry
was passed.
(ii) Outstanding Expenses: Rent ` 500, Salary ` 600.
(iii) Prepaid Expenses: Insurance ` 650.
(iv) Goods of ` 2,750 were taken for personal use by the owner but no entry has
been made.
(v) Depreciate Plant and Furniture @ 10% p.a.
(vi) Write off ` 500 from debtors as bad debts and create provision for doubtful
debts @ 5% and 2% provision for discount on debtors.

Solution:
TRADING AND PROFIT & LOSS ACCOUNT
Dr. for the year ended 31st March, 2024 Cr.
Particulars ` Particulars `
To Purchases (Adjusted) 1,93,500 By Sales 3,00,000
Less: Drawings 2,750 1,90,750
To Wages 23,250
To Carriage on Purchases 18,000
To Gross Profit c/d 68,000
3,00,000 3,00,000