Trial Balance for the year ….
Debit balances Amount Credit balances Amount
Rs. Rs.
Opening stock 40,000 Capital 2,70,00
0
Rent 2,000 Creditors 50,000
Equipment 1,20,00 Bills payable 50,000
0
Buildings 2,55,00 Long-Term Loan from 1,10,00
0 Bank 0
Power 3,500 Discount 1,500
Purchases 75,000 Sales (revenue) 1,50,00
0
Sales return 2,500 Provision for bad 1,000
debts
Telegram and Postage 400 General reserves 50,000
Wages 4,500
Salary 2,500
Insurance Premium Paid 3,200
Discount 1,000
Repair and Renewals 2,000
Legal charges 700
Trade taxes 1,200
Debtors 75,000
Investment 65,000
Bad debts 2,000
Trade expenses 4,500
Commission 1,250
Travelling expenses 1,230
Drawings 20,020
Total 6,82,50 6,82,50
0 0
Adjustments
1. Closing stock for the year was 35500
2. Depreciation charged on equipment 5% andbuilding 6%.
3. Interest on drawing @ 6% and Interest on loan taken @ 5%.
Interest on drawing 0.06
Interest on loan 0.05
4. Interest on investments @ 4%.
5. Further bad debts 2,500 and make provision for doubtful debts on
debtors 5%.
Further Bad Debt 2500
New Provision 3,525
6. Discount allowed to debtors @ 2%. 1450
7. Salary outstanding 200
8. Wages outstanding 100
9. Insurance prepaid 500
Statement of Income and Expenditure for the year
….
Revenue
Sales (revenue) 1,50,000
Less: Sales return 2,500
Net Sales 1,47,500
Discount 1,500
Interest on Drawing 1201
Interest on Investment 2600
Old Provision 1,000
Toatl Income 1,52,801
Expenses
Opening stock 40,000
Add: Purchase 75,000
Less: Purchase Return 0
Less: Closing Stock 35500
Raw Material Consumed 79,500
Depreciation on
Equipment 6000
Building 15300 21300
Outstanding Interest on Loan 5500
Salary 2,500
Add: Salary Outstanding 200
Total Salary Expense 2,700
Wages 4,500
Add:Wages Outstanding 100
Total Wages Expense 4,600
Insuarnce Premium Expense 3,200
Less: Prepaid Insurance Premium Expense 500
Total Insurance Expense 2,700
Bad Debt 2,000
Add: Further Bad debt 2500
Add: New Provision 3553
8,053
7,053
Discount allowed to debtors 1450
Repair and Renewals 2,000
Legal charges 700
Trade taxes 1,200
Trade expenses 4,500
Commission 1,250
Travelling expenses 1,230
Rent 2,000
Telegram and Postage 400
Power 3,500
Discount 1,000
Total Expense 1,42,583
Net Income 10,218
Statement of Sources &
Application of funds as on ….
Owners Liabilities
Equity Share Capital 2,70,000
Add: Reserve & Surpluses 50,000
Less: Drawings 20,020
Less: Interest on Drawing 1201
Add / Less: Profit / Loss 10,218
3,08,997
Long-Term Creditors Liabilities
Long-Term Loan from Bank 1,10,000
Short-Term Creditors Liabilities
Creditors 50,000
Bills payable 50,000
Add: Salary Outstanding 200
Add:Wages Outstanding 100
Outstanding Interest on Loan 5500
Total Sources of Funds 5,24,797
Long-Term Assets
Gross Block of Equipment 1,20,000
Less: Depreciation (5%) 6000
Net Block of Equipment 1,14,000
Gross Block of Building 2,55,000
Less: Depreciation (6%) 15300
Net Block of Building 2,39,700
Investment (Financial) 65,000
Short-Term Assets
Debtors 75,000
Less: Further bad debt 2,500
Less: Discount 1,450
71,050
Less: New Provision@5% 3553
67,497
Closing Stock of Inventories 35500
Add: Prepaid Insurance
Premium 500
Add: Interest on Investment 2600
Total Application of
Funds 524797
