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 ILLUSTRATION 6. The following trial balance is extracted from the books of Panchkula
Traders for the year ending 31st March, 2018:
Ledger Accounts Debit Credit
Balance Balance
Opening Stock.. 8,000
Purchases andSales.. 35,000 80,000
Retums... 2,000 3,000
Drawings and Capital. 8,500 25,000
Furniture. 15,000
interest. 600
Commission. 2,000
 Discount.
******"************'******vs
'***** 700 500
Salaries.

Insurance. *******************''**.****** * 1,600

****°"'''***°
2.500
Wages
***'**
* * * * * * * * ' * * * * * * * * * * * * * * * *

*******
1,200
Building. '***"''*"*'***
''*** **
******7d***
20,000
Postage. ..
********'**********

'*'''*****''*°****'***'' *****
Receivable and
Payable.. 1,000
Bils '*****************"''* '*********** **\**'****
Debtors and Creditors 5,000 1,400
*************"********** s*******
.. ******"°*****************°
*****'********'***°'******°*************
9,600 2,000
Cash. 4,400
1,14,500 1,14,500
You 1uired
are requi to prepare Trading and Profit & Loss
Account for the year ending
nd Balance Sheet at that date, after
considering the
31st
MA losing Stock on 31.3.2018 was valued at 12,500. following adjustments
Insurance prepaid is 100.
(i)
received in advance is 400.
i ) Commission
iy) Interest50 has been earned but not yet received.
(iv)
()Salaries outstanding K b00 and wages outstanding 80.

Slution
Trading and Profit & Loss Account of Panchkula Traders
for the year ending 31st March, 2018
Dr. Cr.
Amount Amount
Particulars Particulars
To Opening Stock 8,000 By Sales 80,000
To Purchases 35,000 Less: Retuns Inward 2.000 78,000
Less: Retuns Outward 3,000 32,000 By Closing Stock 12,500
To Wages 1,200
Adl Wages Due 80 1,280
To Gross Proft c/d 49,220
90,500 90,500
To Discount 700 By Gross Profit b/d 49,220
To Salaries By Interest 600
1,600
Add: Salaries Due Add: Interest Accrued 50 650
500 2,100
To Insurance 2,000
2,500 By Commission
Less: Prepaid Insurance 400 1,600
100 2,400 Less:Commission Unearned
ToPostage 1,000 By Discount
500
To Net Profit
45,770
51,970
51,970

Ddlance Sheet of Panchkula Traders as at 31st March, 2018

Liabilities Amount Assets
Capital 20,000
Add: Net Proft 25,000 Building 15,000
45.770 Furniture 9,600
Less Drawings 70,770 Debtors 12.500
8.500 62,270| ClosingStock
Creditors
2,000 Bils Receivable 5,000
1,400 Insurance Prepaid 100
Bills Payable
Commission received in advance
400 InterestAccrued 50
Salaries Due 500 Cash 4400
Wages Due 80
66,650 66,650
 TLLUSTRATION2 6 . On 31t March 2018, the following trial balance Was extracted from
om
the books of Mohan:
Particulars Dr. Balances Particulars Cr. Balances

Drawings 5,000 Capital 30,000

Debtors 20,000 Loan
9.500
Intereston Loan 300 Creditors
Cash 2,000 Sales
10,00
Stock (1.4.2017) 1,10,000
6,800 Returns 1.500
Motor Vehicles 10,000 Discount 500
Bank 3,500 Bills Payable
2,000
Land&Buildings 12,000 Rent Received 300
Bad Debts 500 Provision for Doubtful debts
700
Purchases 66,000
Advertisement 3,500
General Expenses 3,400
Bills Receivable 6,000
Returns 8,000
Rent& Insurance 3,000
Salaries 9,000
Carriage Inwards 3,000
Cariage Outwards 2,500
1,64,500 1,64,500
Prepare Trading and Profit & Loss Account for the year ended 31st March, 2018 and Balance
Sheet as at that date after taking into account the
following:
) Depreciate Land and Buildings at 2% % and Motor Vehicles at 20%.
i) Salaries outstanding 200.
(ii) Prepaid Insurance 200.
iv) Provision for Bad Debts is to be maintained
(iv) at 5% on Debtors.
(v) Closing Stock was valued at 7 7,000.
Solutio
Trading and Profit& Loss Account of
Mohan
Dr. for the year ended 31s" Cr
March, 2018
Amount Amount
Particulars
Particulars
To Opening Stock 6,800 By Sales 1,10,000
To Purchases 66,000 Less:Returns 1,02,000
8.000
| Less: Returns 1.500 64,500 By Closing Stock 7,000
 To Cariage inward
3,000
Profit c'd
To Gross 34,700
1,09,000 1,09,000
on Loan
To Interest By Gross Profit b/d
To Bad Debts 500 34,700
By Discount 500
Ado New Provision 1.000 By Rent Received
1,500 300
Less: Old Provision 700 800
To Carriage Outward
2,500
To Salaries 9,000
Add:Outstanding 200 9,200
ToRent&Insurance 3,000
Less:Prepaid 200 2,800
To Advertisement 3,500
To General Expenses 3,400
To Depreciation on Land & Building 300
To Depreciation on Motor Vehicles 2,000
To Net Profit c/d 10,700
35,500 35,500
Balance Sheet of Mohan as at 31st March, 2018
.

Liabilities Amount Amount

Assets
Capital 30,000 Land &Buildings 12,000
Less: Drawings 5.000 Less: Depreciation 300 11,700
25,000 Motor vehicles (10,000-2,000) 8,000
Closing Stock 7,000
Add: Net Profit 10.700 35,700 Debtors 20,000
Loan 9,500 Less: Provisions 1.000 19.000
Creditors 10,000 Bills Receivable 6.000
Bills Payable 2,000 Prepaid Insurance 200
Outstanding Salaries 200 Bank 3,500
Cash 2,000
57,400 57,400