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Adjustments in Preparation of Financial Statements 19.23

6. Following Trial Balance is extracted from the books of Merchant Mr. Negi on 31st March, 2024:

Particulars Dr. (`) Cr. (`)
Furniture and Fittings .......................................................................................................................................... 640 ...
Motor Vehicle .......................................................................................................................................... 6,250 ...
Building .......................................................................................................................................... 7,500 ...
Capital .......................................................................................................................................... ... 12,500
Bad Debts .......................................................................................................................................... 125 ...
Provision for Doubtful Debts ................................................................................................................................... ... 200
Sundry Debtors and Creditors ................................................................................................................................. 3,800 2,500
Stock as on 1st April, 2023 ........................................................................................................................................ 3,460 ...
Purchases and Sales .......................................................................................................................................... 5,475 15,450
Bank Loan .......................................................................................................................................... ... 2,850
Sales Return and Purchases Return ....................................................................................................................... 200 125
Advertising .......................................................................................................................................... 450 ...
Interest on Bank Loan .......................................................................................................................................... 118 ...
Commission .......................................................................................................................................... ... 375
Cash .......................................................................................................................................... 650 ...
Taxes and Insurance Premium ................................................................................................................................. 782 ...
General Expenses .......................................................................................................................................... 1,250 ...
Salaries .......................................................................................................................................... 3,300 ...
34,000 34,000
Adjustments:
(a) Stock in hand on 31st March, 2024 ` 3,250.

(b) Depreciate Building @ 5% p.a., Furniture @ 10% p.a. and Motor Vehicle @ 20% p.a.
(c) ` 85 is due for interest on Bank Loan.
(d) Salaries ` 300 and Taxes ` 200 are outstanding.

(e) Insurance Premium amounting ` 100 prepaid.
(f) One-third of the commission received is in respect of work to be done next year.
(g) Write off a further sum of ` 100 as bad debts from Debtors and create Provision for Doubtful
Debts @ 5% on debtors.
Complete the following Trading Account, Profit & Loss Account and Balance Sheet.

Dr. TRADING AND PROFIT & LOSS ACCOUNT for the year ended 31st March, 2024 Cr.
Particulars ` Particulars `

To ...(1)... ..(2).. By Sales 15,450
To Purchases 5,475 Less: Returns ...(3)... ...(4)...
Less: Returns ...(5)... ...(6)... By ...(7)... ...(8)...
To Gross Profit c/d ...(9)...
...(10)... ...(11)...