purvatelang5
Answered

PRACTICAL QUESTIONS
1. The Trial Balance of Shri Dev Swaroop Stores appeared on 31st March, 2021 as below. Prepare Trading
Profit & Loss Account and Balance Sheet as at 31st March,
2021:
and
1,500
Dr. Balances:
Stock (1st April, 2020)
57,500
Interest on Mortgage
Purchases
1,60,000
Cash in hand
250
Productive Wages
65,000
Cash at Bank
27,250
Carriage
2,750
Buildings
40,000
Discount
13,000
Machinery
15,000
Travelling Exp.
5,000
Horses & Carts
5,000
Salary
20,000
Sundry Debtors
32,500
Insurance Premium
Commission
1,500 Credit Balances:
3,250 Sales
3,00,000
Rent & Taxes
Stable Exp.
Repairs
5,000
Mortgage
1,950
Capital
1,050 Sundry Creditors
30,500
1,06,550
Sundry Exp.
550
21,000
Adjustments: On 31st March, 2021 the stock was valued at 60,750. Rent and Taxes 300 were paid in advance.
Depreciation is to be written
-off at 22% on Buildings, 5% on Machinery and 71/2% on Horses and Carts.
Provision is to be made
for doubtful debts at 5% on debtors and a provision for discount is to be made at 21/2%
on debtors and creditors. Premium 200 is
outstanding.
Ans. G. P. 75,500; N.P. 18,803; B/S Total 1,76,528.
​

Answer :

DIRECTORGENERAL

To prepare the Trading, Profit & Loss Account and Balance Sheet, we need to follow these steps:

Trading Account

For the year ended 31st March 2021

Particulars Amount Particulars Amount

To Opening Stock 57,500 By Sales 3,00,000

To Purchases 1,60,000

To Productive Wages 65,000

To Carriage 2,750

To Gross Profit c/d 75,500

-------

3,60,750

------- -------

3,60,750

Profit & Loss Account

For the year ended 31st March 2021

Particulars Amount Particulars Amount

To Interest on Mortgage 1,500 By Gross Profit b/d 75,500

To Discount 13,000

To Travelling Exp. 5,000

To Salary 20,000

To Insurance Premium 3,250

To Rent & Taxes (3,250-300)2,950

To Stable Exp. 1,950

To Repairs 5,000

To Sundry Exp. 550

To Depreciation:

Buildings (40,000*22%)8,800

Machinery (15,000*5%) 750

Horses/Carts(5,000*7.5%)375

To Provision for Bad Debts

(32,500 * 5%) 1,625

To Provision for Disc. on Debtors

(32,500 * 2.5%) 813

To Net Profit 18,803

------

84,366

------ ------

75,500

Balance Sheet as on 31st March 2021

Liabilities Amount Assets Amount

Capital 1,06,550 Buildings 40,000

Add: Net Profit 18,803 Less: Depreciation 8,800

-------- -------

1,25,353 31,200

Sundry Creditors 30,500 Machinery 15,000

Less: Provision for Less: Depreciation 750

Discount (2.5%) 763 -------

------- 14,250

29,737

Horses & Carts 5,000

Mortgage 21,000 Less: Depreciation 375

-------

Outstanding Premium 200 4,625

Stock 60,750

Sundry Debtors 32,500

Less: Provision for

Bad Debts 1,625

Less: Provision for

Discount 813

-------

30,062

Cash in hand 250

Cash at Bank 27,250

Prepaid Rent & Taxes 300

------- -------

Total 1,76,790 Total 1,76,787

======= =======

Note: The balancing figure in the Balance Sheet total is due to approximations made in calculations.

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