A/c) , , , , , , , , , , , , , , By Sales Less: Returns inward By Closing stock By Gross Profit b/d By Interest on investments , , , , , , , , , , , , , , , , Accountancy Balance Sheet as on 31st December, Liabilities Assets Capital Add: Net profit Less: Drawings % Loan Add: Interest outstanding Sundry creditors , , , , , , , , , , , Investments Stock in trade Sundry debtors Less: Provision for bad and doubtful debts ( , x / ) Less: Provision for discount on debtors ( , x / ) Petty cash , , , , , , , , , , , , Illustration Given below are the balances of Pandian as on 31st March, . Debit ` Credit ` Capital Sundry debtors and creditors Sales Drawings Cash in hand Cash at bank Wages Purchases Opening stock Business premises Bills receivable Office telephone expenses General expenses Goodwill , , , , , , , , , , , , , , , , , , , , Adjustments: (a) The stock value at the end of the accounting period was ` , (b) Interest on capital at % is to be provided (c) Interest on drawing at % is to be provided (d) Write off bad debts amounting to ` , (e) Create provision for bad and doubtful debts on sundry debtors @ % Prepare final accounts for the year ended 31st March, . Accountancy Solution In the books of Pandian Dr. Trading and Profit and Loss Account for the year ended 31st March, Cr.
To Opening stock To Purchases To Wages To Gross Profit c/d To Office telephone expenses To General expenses To Interest on capital ( , , x / ) To Bad debts To Provision for bad and doubtful debts , , , , , , , , , , By Sales By Closing Stock By Gross profit b/d By Interest on drawings ( x5/ ) By Net loss (transferred to capital account) , , , , , , , Balance Sheet as on