Page 183 - ISCDEBK-XI

20.16 Double Entry Book Keeping—ISC XI

Illustration 8.
From the following Trial Balance of Ganesh, prepare Trading and Profit & Loss Account for the
year ending 31st March, 2022 and Balance Sheet as on that date after taking into consideration
the adjustments given at the end of the Trial Balance.

TRIAL BALANCE
as on 31st March, 2022
Particulars Dr. (`) Cr. (`)
Sales .................................................................................................................................................................................. ... 7,40,000
Purchases (adjusted) ................................................................................................................................................... 6,99,200 ...
Wages ............................................................................................................................................................................... 900 ...
Capital A/c ....................................................................................................................................................................... ... 48,500
Insurance Expenses (Accidental Insurance of Employees) ............................................................................ 300 ...
Carriage in ....................................................................................................................................................................... 400 ...
Carriage out .................................................................................................................................................................... 500 ...
Lighting ............................................................................................................................................................................ 600 ...
Rates and Insurance (Including Premium of ` 300 p.a. paid up to 30th September, 2022) .............. 400 ...
Stock as on 31st March, 2022 ................................................................................................................................... 61,250 ...
Cash in hand and at bank .......................................................................................................................................... 1,750 ...
Discount earned ........................................................................................................................................................... ... 600
Buildings .......................................................................................................................................................................... 30,000 ...
Discount allowed .......................................................................................................................................................... 100 ...
Debtors ........................................................................................................................................................................... 6,000 ...
Creditors .......................................................................................................................................................................... ... 20,000
Furniture .......................................................................................................................................................................... 8,000 ...
Dividends received ...................................................................................................................................................... ... 300
Total 8,09,400 8,09,400

Adjustments:

(i) Insurance Expenses includes employers contribution ` 150. Wages are shown ‘net’ after
deducting insurance contribution borne by the employers.
(ii) Owing to the nature of employment, some employees are housed in the building of the
business. The rental value of such portion is assessed at ` 500 p.a.
(iii) Sales as shown in the Trial Balance include the sale of old furniture (effected half way
through the year) realising ` 200. The book value of the furniture at the commencement
of the period was ` 300. The depreciation has been written off at 20% p.a.

(iv) The manager is to get a commission of 1/5th on the net profits after charging his
commission but before considering income from dividend.

(v) Depreciate building by 5%.