, , , Furniture and fixtures Sundry debtors Less: Further bad debts Less: Provision for bad and doubtful debts ( , × %) Less: Provision for discount ( , × %) Stock-in-trade Cash at bank , , , , , , , , , Illustration The following trial balance has been extracted from the books of Rajesh on 31st December, . Debit balance Credit balance Drawings Plant and machinery Opening stock Purchases Wages Salaries Insurance Rent and taxes Sundry debtors Suspense A/c , , , , , , , , , , , , Capital Cash sales Provision for bad and doubtful debts Bank overdraft Discount received Credit sales Sundry creditors , , , , , , , , , , , , , , The following adjustments are to be made: (a) Stock on 31st December, was ` , (b) Unexpired insurance was ` , (c) Provision for doubtful debts is to be maintained at % on sundry debtors. (d) Depreciate plant and machinery at %. You are required to prepare trading and profit and loss account for the year ended 31st December, and a balance sheet as on that date.
Accountancy Solution In the books of Rajesh Dr. Trading and Profit and Loss Account for the year ended 31st December, Cr. To Opening stock To Purchases To Wages To Gross profit c/d To Salaries To Insurance Less: Unexpired To Rent and taxes To Depreciation on plant and machinery ( , , × %) To Net profit (transferred to capital A/c) , , , , , , , , , , , , , , , By Sales: Cash Credit By Closing stock By Gross profit b/d By Discount received By Provision for bad and doubtful debts (opening) Less: Closing provision , , , , , , , , , , , , , , , , , , , Balance Sheet as on 31st December, Liabilities Assets Capital Add: Net profit Less: Drawings Sundry creditors Bank overdraft , , , , , , , , , , Plant & Machinery Less: Depreciation Stock-in-trade Sundry debtors Less: Provision for bad and doubtful debts ( %) Unexpired insurance Suspense A/c , ,