You are required to prepare the Profit & Loss Account for 2006-07 and the Balance Sheet as on 31st march 2007 from the following Trial Balance of XYZ Ltd.
Trial Balance of XYZ Ltd as on 31st March 2007
Particulars Debit Credit
(Rs.) (Rs.)
Cash in Hand 5,400
Cash at Bank 26,300
Accounts Receivable 1,45,000
Freehold Land 1,00,000
Building 3,20,000
Machinery 1,63,000
Office Equipment 37,000
Patents 75,000
Accounts Payable 63,000
Capital 6,20,000
Drawings 52,450
Opening Stock- Raw Material 20,100
- Work in Progress 10,400
- Finished Goods 27,100
Purchases - Raw Material 3,81,500
- Consumables 25,250
Sales 9,87,800
Return Inward 6,800
Return Outward 5,000
Wages 84,800
Fuel and Power 47,300
Carriage on - Sales 20,400
- Purchases 32,000
Salaries - Office 65,000
- Factory 85,000
General Expenses 30,000
Insurance - Factory 4,000
- Office 2,000
Rent 90,000
-------------- --------------
17,65,800 17,65,800
--------------- --------------
The following adjustments are also to be taken into account:
1. Inventory of raw material on hand on 31st March 2007 is Rs.21,300 work-in-progress is Rs.14,300 and finished goods Rs.32,400.
2. Machinery is to be depreciated @ 10% and office equipment @ 15%. Patents are to be amortized @ 20%.
3. Salaries outstanding for March 2007 is Rs.10,000 for factory and Rs.5,000 for office.
4. Insurance includes a premium of Rs.1,700 on a policy expiring on 30th September 2007 , relating to office.
5. Bad debts to be written off are Rs.7,250.
6. Rent received in advance Rs.10,000.
Solution.
Manufacturing account
for the year endedMarch 31, 2007
for the year ended
| Particulars | Rs. | Rs. | Particulars | Rs. |
| Opening Stock of Work in progress | | 10,400 | Closing stock of work in progress | 14,300 |
| Opening stock of raw material | 20,100 | | Cost of production (balance figure) | 6,91,050 |
| Add:purchases | 3,81,500 | | | |
| | 4,01,600 | | | |
| Less : Return Outward | 5,000 | | | |
| | 3,96,600 | | | |
| Less: closing stock of Raw Material | 21,300 | 3,75,300 | | |
| Consumables | | 25,250 | | |
| Wages | | 84,800 | | |
| Fuel and Power | | 47,300 | | |
| Carriage on Purchases | | 32,000 | | |
| Factory Salaries | 85,000 | | | |
| Add Outstanding Salaries | 10,000 | 95,000 | | |
| Factory Insurance | | 4,000 | | |
| Depreciation on: | | | | |
| Machinery | | 16,300 | | |
| Patents | | 15,000 | | |
| | | 7,05,350 | | 7,05,350 |
Trading Account
for the year ended March 31, 2007
| Particulars | Rs. | Particulars | Rs. | Rs. |
| Opening stock of Finished goods | 27,100 | Sales | 9,87,800 | |
| Cost of Production | 6,91,050 | Less : Return Inward | 6,800 | 9,81,000 |
| Gross Profit c/d | 2,95,250 | Closing stock of finished goods | | 32,400 |
| | | | | |
| | 10,13,400 | | | 10,13,400 |
Profit & Loss Account
for the year endedMarch 31, 2007
for the year ended
| Particulars | | Rs. | Particulars | Rs. |
| Carriage on sales | | 20,400 | Gross profit b/d | 2,95,250 |
| Office Salaries | 65,000 | | Rent | 90,000 |
| Add : Outstanding salaries | 5,000 | 70,000 | | |
| Office Insurance | 2,000 | | | |
| Less: Prepaid Insurance | 850 | 1,150 | | |
| Bad Debts | | 7,250 | | |
| General Expenses | | 30,000 | | |
| Depreciation on Office Equipments | | 5,550 | | |
| Net Profit t/f to capital a/c | | 2,50,900 | | |
| | | 3,85,250 | | 3,85,250 |
Balance Sheet of XYZ Ltd. as on March 31, 2007
| Liabilities | | Rs | Assets | Rs |
| Accounts Payable | | 63,000 | Cash in Hand | 5,400 |
| Salaries Outstanding | | | Cash at Bank | 26,300 |
| Factory | | 10,000 | Accounts Receivable | 1,37,750 |
| Office | | 5,000 | Closing Stock of: | |
| Capital | 6,20,000 | | Raw Material | 21,300 |
| Add:Net Profit | 2,50,900 | | Work in progress | 14,300 |
| | 8,70,900 | | Finished Goods | 32,400 |
| Less : Drawings | 52,450 | 818450 | Prepaid Insurance | 850 |
| | | | Office Equipment | 31,450 |
| | | | Machinery | 1,46,700 |
| | | | Patents | 60,000 |
| | | | Building | 3,20,000 |
| | | | | 1,00,000 |
| | | 8,96,450 | | 8,96,450 |
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