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1. From the following Trial Balance and Adjustments given below, prepare the Trading and Profit & Loss Account for the year ended on 31st March, 2016, and the Balance Sheet as on that date for M/s Durgesh and Dinesh:

Trial Balance as on 31st March, 2016

Adjustments:
1. Closing stock was valued at ₹14,500.
2. Outstanding salary was ₹350.
3. Wages outstanding for the workers were ₹600.
4. Depreciate Building at 5% and Machinery at 10%.
5. Write off ₹500 for further bad debts.



Answer :

GinnyAnswer
Sure! Let's prepare the Trading and Profit & Loss Account along with the Balance Sheet for the year ended 31st March 2016 for M/s Durgesh and Dinesh.

Trading Account for the year ended 31st March 2016

| Particulars | Amount (₹) |
|----------------|------------|
| To Opening Stock | 15,000 |
| To Purchases | 70,000 |
| To Wages | 8,000 |
| To Wages Due | 600 |
| To Gross Profit c/d | 40,900 |
| Total | 1,34,500 |

| Particulars | Amount (₹) |
|---------------------------|------------|
| By Sales | 1,20,000 |
| By Closing Stock | 14,500 |
| Total | 1,34,500 |

Note: Gross Profit is calculated as:
[tex]\[ \text{Gross Profit} = \text{Sales} - (\text{Purchases} + \text{Opening Stock} + \text{Wages} + \text{Wages Due} - \text{Closing Stock}) \][/tex]
[tex]\[ \text{Gross Profit} = 1,20,000 - (70,000 + 15,000 + 8,000 + 600 - 14,500) \][/tex]
[tex]\[ \text{Gross Profit} = 1,20,000 - 79,100 \][/tex]
[tex]\[ \text{Gross Profit} = 40,900 \][/tex]

Profit & Loss Account for the year ended 31st March 2016

| Particulars | Amount (₹) |
|---------------------------|------------|
| To Salaries | 10,000 |
| To Outstanding Salaries | 350 |
| To Bad Debts | 1,000 |
| To Further Bad Debts | 500 |
| To Depreciation on Building (5%) | 1,250 |
| To Depreciation on Machinery (10%)| 3,000 |
| To Net Profit c/d | 24,800 |
| Total | 40,900 |

| Particulars | Amount (₹) |
|---------------------------|------------|
| By Gross Profit b/d | 40,900 |
| Total | 40,900 |

Note: Net Profit is calculated as:
[tex]\[ \text{Net Profit} = \text{Gross Profit} - (\text{Salaries} + \text{Outstanding Salaries} + \text{Bad Debts} + \text{Further Bad Debts} + \text{Depreciation on Building} + \text{Depreciation on Machinery}) \][/tex]
[tex]\[ \text{Net Profit} = 40,900 - (10,000 + 350 + 1,000 + 500 + 1,250 + 3,000) \][/tex]
[tex]\[ \text{Net Profit} = 40,900 - 16,100 \][/tex]
[tex]\[ \text{Net Profit} = 24,800 \][/tex]

Balance Sheet as at 31st March 2016

Liabilities

| Particulars | Amount (₹) |
|---------------------------------|------------|
| Capital | 50,000 |
| Add: Net Profit | 24,800 |
| Adjusted Capital | 74,800 |
| Creditors | 5,000 |
| Outstanding Salaries | 350 |
| Wages Due | 600 |
| Total | 80,750 |

Assets

| Particulars | Amount (₹) |
|---------------------------------|------------|
| Debtors | 20,000 |
| Less: Further Bad Debts | (500) |
| Adjusted Debtors | 19,500 |
| Building | 25,000 |
| Less: Depreciation | (1,250) |
| Adjusted Building | 23,750 |
| Machinery | 30,000 |
| Less: Depreciation | (3,000) |
| Adjusted Machinery | 27,000 |
| Cash | 7,000 |
| Closing Stock | 14,500 |
| Total | 80,750 |

In conclusion:
- The Trading Account shows a Gross Profit of ₹40,900.
- The Profit & Loss Account shows a Net Profit of ₹24,800.
- The Balance Sheet balances with Total Assets and Total Liabilities & Capital equaling ₹80,750.

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