You are required to prepare the Balance sheet and Profit and Loss Account

You are required to prepare the Balance sheet and Profit and Loss Account for the year ended December 31, 2005 from the following Trial Balance of Alpha Company.

i)                    On December 31, 2006 Inventory was valued at Rs. 95,000.

ii)                  Office Equipment to be depreciated at 15% and Furniture at 10%.

iii)                Provide for Interest on capital at 10% and Interest on drawings at 6%.

iv)                Provision for following outstanding expenses are to be made:

Wages                               Rs. 10, 000

Salaries                             Rs.   7, 000

General Expenses                        Rs.   5, 000

v)                  Insurance was prepaid to the extent of Rs. 3,000.

vi)                A sum of Rs. 2, 000 was allowed by way of discount on purchases but not yet accounted for.

vii)              Rent received in advance of Rs. 3, 000.

viii)            A provision towards bad and doubtful debts, of 2% is required on Debtors.

ix)                A provision of 30% towards taxation on profits (before taxation) is required.

Trading A/C

Particular	Rs	Particular	Rs
To op Stock To Purchases To Sales Return A/C To freight A/C To wages 15,000 To wages 10,000 Tog. P	60,000 3,70,000 20,000 20,000 25,000 2,10,000	By Sales By Purchase return A/C By  Stock	6,00,000    10,000    95,000
	7,06,000		7,05,000

P&L A/C

Particular	Rs	Particular	Rs
To Depression furniture To Depression off  equipment To Int. on capital To salaries                     15000 O/S salaries                     7000 To G. expenses             34000 Add O/S expenses          5000 To postage, telephone To advertising To petty expenses To Insurance                 10,000 PIP ins.                           3,000 To provision of debts To tanner profit  To net profit	3000 7500 25,000 22,000 39,000 10,000 10,000 6,000 7,000 11,600 26,730 62,370	By G.P By Int. ondsauing By rent               10,000 – 3000 By discount alla by credit By discount on purchase	2,10,000 1,200 7,000 19,000 2,000
	2,30,200		2,30,200

Balance Sheet

Liability	Amount	Asset	Amount
Account Receivable Is ans. Salaries                        7,000 Wages                        10,000 Gn. Expenses               5,000 Rent in advance Creditor                      40,000 Discount                       2,000 Taxation provision Provision for debt. Capital                    2,50,000 + Account on ca.       25,000 - Draw                       20,000 - int on Dre.                 1,200 + net profit                 62,370	70,000 22,000 3,000 36,000 26,730 11,600 3,16,170	Account receivable Land & buildings Freehold property Office equipment           50,000 Less                                  7,500 Furniture                        30,000 Less                                 3,000 Closing stock Debtor PIP insurance Cash in bank	1,00,000 1,50,000 50,000 2,70,000 95,000 3,000 20,000
	4,87,500		4,87,500

Debtor value are not given in the Trail balance we taken net sales (sales – sales return) as a Debtor and ascertain 2% provision debtor.