Following is the Trial Balance of Mr. Roy, as on 31st December, 2017:
| Particulars | Dr. (Rs.) | Cr. (Rs.) |
|---|---|---|
| Capital | 1,00,000 | |
| Bills Payable | 22,000 | |
| Cash | 1,200 | |
| Purchases | 1,20,000 | |
| Opening Stock | 35,000 | |
| Creditors | 24,000 | |
| Debtors | 50,000 | |
| Machinery | 60,000 | |
| Sales | 2,00,000 | |
| Furniture | 15,000 | |
| Bills Receivable | 20,000 | |
| Rent & Rates | 10,000 | |
| Provision for Bad Debts | 1,200 | |
| Wages | 16,000 | |
| Salaries | 20,000 | |
| Total | 3,47,200 | 3,47,200 |
Prepare Trading and Profit & Loss Account of Mr. Roy for the year ended 31st December, 2017 and Balance Sheet as on that date after taking into consideration the following information:
- Closing Stock on 31st December, 2017 was Rs. 50,000.
- Depreciation on furniture is to be charged @ 5% p.a.
- Provision on Debtors is to be maintained @ 2%.
- Outstanding salary on 31st December, 2017 was Rs. 2,000.
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Start your 14-day free trial to unlock the full solution →For Mr. Roy, year ended 31 Dec 2017: Gross Profit Rs. 79,000, Net Profit Rs. 46,450, and a Balance Sheet totalling Rs. 1,94,450 after closing stock, depreciation on furniture, provision for doubtful debts and outstanding salary.
This is a standard WBCHSE Class 11 Accountancy final-accounts problem (Trading A/c, Profit & Loss A/c and Balance Sheet), the same final-accounts pattern used in the NCERT/CBSE commerce curriculum.
Working notes:
- Depreciation on furniture @ 5% on Rs. 15,000 = Rs. 750.
- New provision for doubtful debts @ 2% on debtors Rs. 50,000 = Rs. 1,000. Old provision Rs. 1,200 (no bad debts given), so the excess Rs. 1,200 - 1,000 = Rs. 200 is written back (credited to P&L).
- Outstanding salary Rs. 2,000 is added to salaries and shown as a liability.
Trading Account of Mr. Roy for the year ended 31st December, 2017
| Dr. | Rs. | Cr. | Rs. |
|---|---|---|---|
| To Opening Stock | 35,000 | By Sales | 2,00,000 |
| To Purchases | 1,20,000 | By Closing Stock | 50,000 |
| To Wages | 16,000 | ||
| To Gross Profit c/d | 79,000 | ||
| Total | 2,50,000 | Total | 2,50,000 |
Profit & Loss Account for the year ended 31st December, 2017
| Dr. | Rs. | Cr. | Rs. |
|---|---|---|---|
| To Rent & Rates | 10,000 | By Gross Profit b/d | 79,000 |
| To Salaries 20,000 + Outstanding 2,000 | 22,000 | By Provision for Doubtful Debts (excess written back: 1,200 - 1,000) | 200 |
| To Depreciation on Furniture | 750 | ||
| To Net Profit (transferred to Capital) | 46,450 |
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