Page 212 - ISCDEBK-XI

Final Accounts—With Adjustments 20.45
5. From the following Trial Balance of M/s. Shradha & Sons as on 31st March, 2022, prepare Trading and
Profit & Loss Account and Balance Sheet:
Particulars Debit Credit
` `
Capital ....................................................................................................................................................... ... 8,00,000
Drawings ....................................................................................................................................................... 1,80,000 ...
Sales ....................................................................................................................................................... ... 15,50,000
Purchases ....................................................................................................................................................... 8,26,000 ...
Stock on 1.4.2021 ....................................................................................................................................................... 4,20,000 ...
Returns Outward ....................................................................................................................................................... ... 16,000
Carriage Inwards ....................................................................................................................................................... 12,000 ...
Wages ....................................................................................................................................................... 40,000 ...
Power ....................................................................................................................................................... 60,000 ...
Machinery ....................................................................................................................................................... 5,00,000 ...
Furniture ....................................................................................................................................................... 1,40,000 ...
Rent ....................................................................................................................................................... 2,20,000 ...
Salary ....................................................................................................................................................... 1,50,000 ...
Insurance ....................................................................................................................................................... 36,000 ...
8% Bank Loan ....................................................................................................................................................... ... 2,50,000
Debtors ....................................................................................................................................................... 2,06,000 ...
Creditors ....................................................................................................................................................... ... 1,89,000
Cash in Hand ....................................................................................................................................................... 15,000 ...
Total 28,05,000 28,05,000

Adjustments:
(i) Closing Stock ` 6,40,000.
(ii) Wages outstanding ` 24,000.
(iii) Bad Debts ` 6,000.
(iv) Provision for Doubtful Debts to be 5%.
(v) Rent is paid for 11 months.
(vi) Insurance premium is paid per annum, benefit of which will end on 31st May, 2022.
(vii) Loan from the bank was taken on 1st October, 2021.
(viii) Provide depreciation on machinery @ 10% and on furniture @ 5%.

GUIDE TO ANSWERS

1. Gross Profit—` 1,40,500; Net Profit—` 46,497; Balance Sheet Total—` 5,11,997.
[Hints:
1. Rectification Entries. (a) Dr. Sales Return A/c and Cr. Purchases A/c by ` 5,000; Dr. Sales A/c and
Cr. Purchases Return A/c by ` 4,000. (b) Dr. Drawings A/c and Cr. Purchases A/c by ` 2,000. (c) Dr. Plant
and Machinery A/c and Cr. Wages A/c by ` 2,000. (d) Dr. Advertisement or Sales Promotion Expenses
A/c and Cr. Purchases A/c by ` 2,500. (e) Dr. Advance to Supplier and Cr. Sundry Debtors by ` 5,000.
(f) Dr. Sundry Debtors and Cr. Bills Receivable A/c by ` 2,000.
2. Calculation of Purchases. Purchases – Returns Inward wrongly included in Purchases – Returns
Outward – Goods drawn by Proprietor – Free Samples = ` 1,86,500.]

5. Gross Profit—` 8,24,000; Net Profit—` 3,21,000; Balance Sheet Total—` 14,34,000.