The following is the Trial Balance of a merchant on Mar 31, 2009
|
Particulars
|
Dr. Rs
|
Cr. Rs
|
|
Capital/Drawings
|
30,000
|
4,00,000
|
|
Opening Stock
|
37,500
|
-
|
|
Purchases/Sales
|
7,97,500
|
11,55,000
|
|
Freight on Purchases
|
12,500
|
-
|
|
Wages (11 months upto Feb 28, 2009)
|
33,000
|
-
|
|
Salaries
|
70,000
|
-
|
|
Postage, Telegrams, Telephone
|
6,000
|
-
|
|
Printing and Stationery
|
9,000
|
-
|
|
Miscellaneous Expenses
|
15,000
|
-
|
|
Debtors/Creditors
|
1,25,000
|
1,50,000
|
|
Investments
|
50,000
|
-
|
|
Discount Received
|
-
|
7,500
|
|
Bad Debts
|
7,500
|
-
|
|
Provision for Bad Debts
|
-
|
4,000
|
|
Building
|
15,0000
|
-
|
|
Machinery
|
2,50,000
|
-
|
|
Furniture
|
20,000
|
-
|
|
Commission on Sales
|
22,500
|
-
|
|
Interest on Investments
|
-
|
6,000
|
|
Insurance (up to Aug 31, 2009)
|
12,000
|
-
|
|
Bank Balance
|
75,000
|
-
|
|
17,22,500
|
17,22,500
|
Adjustments
- Closing Stock Rs 1,12,500
- Machinery worth Rs 22,500 purchased on Oct 1, 2008 was shown as purchases. Freight paid on the machinery was Rs 2,500, which was included in freight on purchases
- Commission is payable at 2½ on sales
- Investments were sold @ 10% profit but the entire sale proceeds have been taken as sales
- Write off bad debts Rs 5,000
- Create a provision for doubtful debts at 5% on debtors
- Depreciate Building by 2½12; %; Plant and Machinery at 10% p.a. you are required to prepare Trading and Profit and Loss Account for the year ended on Mar 31, 2009 and a Balance Sheet as on that date.