Sure, let's work through this step-by-step to create the Profit and Loss account and the Balance Sheet.
### Profit and Loss Account for the year ended [Date]
Particulars | Amount (Rs.) | Particulars | Amount (Rs.)
--- |---|---|---
To Salary | 5000 | By Gross Profit | 76000
To Salary Payable | 5000 | |
To Rent | 10000 | |
To Insurance | 15000 | |
To Depreciation (10% of 100000) | 10000 | |
To Bad Debt | 2000 | |
To New Bad Debt | 1000 | |
To Travelling Expenses | 10000 | |
To Interest | 10000 | |
Total Expenditure | 68000 | |
Net Profit | 8000 | | 76000
### Balance Sheet as of [Date]
Liabilities | Amount (Rs.) | Assets | Amount (Rs.)
--- |---|---|---
Creditors | 45000 | Plant and Machinery | 100000
Bank Loan | 30000 | Less: Depreciation | 10000
Provision for Bad Debt | 2000 | | 90000
Capital | 11500 | Cash | 15000
Net Profit | 8000 | Sundry Debtors | 51000
| | Less: Total Bad Debts | 3000
| | | 48000
| | Investment | 50000
| | Closing Stock | 0 (assumed)
Total Liabilities | 96500 | Total Assets | 203000
Explanation:
1. Depreciation Calculation:
Depreciation on Plant and Machinery for the year is calculated at 10% of Rs. 100,000 which is Rs. 10,000.
2. Total Salary:
Salary for the year is Rs. 5,000, and salary payable is Rs. 5,000. Therefore, total salary expense is Rs. 10,000.
3. Total Bad Debt:
Initial Bad Debt for the year is Rs. 2,000, plus New Bad Debt Rs. 1,000; thus, total bad debt expense is Rs. 3,000.
4. Total Expenditure:
Total expenditure is the sum of: depreciation (Rs. 10,000), total salary (Rs. 10,000), rent (Rs. 10,000), insurance (Rs. 15,000), total bad debt (Rs. 3,000), travelling expenses (Rs. 10,000), and interest (Rs. 10,000), which equals Rs. 68,000.
5. Net Profit Calculation:
Net profit is determined by subtracting the total expenditure from the gross profit: Rs. 76,000 (gross profit) - Rs. 68,000 (total expenditure) = Rs. 8,000 net profit.
6. Total Assets Calculation:
Plant and Machinery (Rs. 100,000) minus depreciation (Rs. 10,000) equals Rs. 90,000. Adding cash (Rs. 15,000), sundry debtors (Rs. 51,000) minus total bad debt (Rs. 3,000) equals Rs. 48,000, and investment (Rs. 50,000). Therefore, the total assets amount to Rs. 203,000.
7. Total Liabilities Calculation:
The sum of the creditors (Rs. 45,000), bank loan (Rs. 30,000), provision for bad debt (Rs. 2,000), capital (Rs. 11,500), and net profit (Rs. 8,000) results in total liabilities of Rs. 96,500.
Thus, the final Profit and Loss Account and Balance Sheet have been provided based on the given values and additional information.
