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Final Accounts—With Adjustments 20.39
Solution:
Dr. TRADING AND PROFIT & LOSS ACCOUNT for the year ended 31st March, 2022 Cr.
Particulars ` Particulars `
To Opening Stock 1,50,000 By Sales 12,00,000
To Purchases 8,20,000 By Closing Stock 1,50,000
To Freight Inwards 20,000 By Loss of Stock by Fire 10,000
To Wages 13,000
Add: Outstanding 5,000 18,000
To Gross Profit c/d 3,52,000
13,60,000 13,60,000
To Postage and Courier 8,000 By Gross Profit b/d 3,52,000
To Printing and Stationery 8,000 By Discount Received 4,000
To Rent, Rates and Taxes 46,000 By Rent 12,000
To Carriage Outwards 5,000
To Depreciation on Plant and Machinery 31,000
To Bad Debts 4,000
Add: Provision for Doubtful
Debts (Required) 9,800
13,800
Less: Provision for Doubtful
Debts (Old) 8,000 5,800
To Insurance 7,000
To Salaries 2,00,000
To Depreciation on Furniture (5% of ` 50,000) 2,500
To Loss of Stock by Fire (` 10,000 – ` 7,500) 2,500
To Net Profit transferred to Capital A/c 52,200
3,68,000 3,68,000

BALANCE SHEET as at 31st March, 2022
Liabilities ` Assets `
Capital 8,50,000 Plant and Machinery 4,00,000
Less: Drawings 50,000 Less: Accumulated Depreciation 1,21,000 2,79,000
8,00,000 (` 90,000 + 10% of ` 3,10,000)
Add: Net Profit 52,200 8,52,200 Sundry Debtors 2,06,000
Outstanding Wages 5,000 Less: Amount due from Nayak 10,000
General Reserve 50,000 1,96,000
Sundry Creditors 95,000 Less: Provision for Doubtful Debts 9,800 1,86,200
Less: Amount due to Nayak 10,000 85,000 Input SGST A/c 5,000
Cash in Hand 62,000
Cash at Bank 2,55,000
Furniture 50,000
Less: Depreciation 2,500 47,500
Insurance Company 7,500
Closing Stock 1,50,000
9,92,200 9,92,200
Notes:
1. Modern Traders filed the claim for loss by fire for ` 10,000. Since the accounts were finalised on 1st July, 2022
and Insurance Company admitted claim for ` 7,500, Loss of Stock by fire of ` 2,500 is debited to Profit & Loss
Account.
2. Old furniture, which was exchanged for ` 2,000, had the same book value. Hence, no entry is passed.