Sales Less: Returns inward By Closing Stock , , , , , , , , , , Illustration From the following particulars presented by Thilak for the year ended st March, , prepare profit and loss account. Gross profit Rent paid Salaries Commission (Cr.) Discount received Insurance premium paid , , , , , , , Interest received Bad debts Provision for bad debts ( - - ) Sundry debtors Buildings , , , , , Accountancy Adjustments: (a) Outstanding salaries amounted to ` , (b) Rent paid for months (c) Interest due but not received amounted to ` , (d) Prepaid insurance amounted to ` , (e) Depreciate buildings by % (f) Further bad debts amounted to ` , and make a provision for bad debts @ % on sundry debtors (g) Commission received in advance amounted to ` , Solution Dr. Profit and Loss Account for the year ended st March, Cr. To Rent Add: Outstanding ( ,000x1/ ) To Salaries Add: Outstanding To Insurance premium Less: Prepaid insurance To Provision for bad and doubtful debts (closing) Add: Bad debts Add: Further bad debts Less: Opening provision for bad and doubtful debts To Depreciation on building ( ,000x10%) To Net profit (transferred to capital A/c) , , , , , , , , , , , , , , , , , By Gross profit b/d By Commission Less: Received in advance By Discount received By Interest received Add: Accrued , , , , , , , , , , , , , Working Note: Debtors : , Less: Further bad debts : , , Provision for bad and doubtful debts at % : , x % = ` , Illustration From the following balances as on 31st December, , prepare profit and loss account.
Accountancy Gross profit Salaries Office rent paid Advertisement , , , , Rent received Discount received Carriage outwards Fire insurance premium , , , , Adjustments: (a) Rent accrued but not yet received ` (b) Fire insurance premium prepaid to the extent of ` , (c) Provide manager’s