You are required to prepare a Profit & Loss Account” for the year ending 31st December, 2007 and the Balance sheet on that date.

You are required to prepare a Profit & Loss Account” for the year ending 31^st December, 2007 and the Balance sheet on that date. The Trial Balance of XYZ Ltd. For the year ended 31^st December 2007 & as follows:-

Sol.

MANUFACTURING ACCOUNT        Dr.                                              For the year ended 31st Dec,2007                                               Cr.                       Particulars Amount                          Particulars Amount To work in progress            As on 31st Dec,2006 To Material Used To cost of labour To Depreciation  :-      Plant and Machinery To Maintenance:-      Plant and machinery To Wages To Heat, Light, Power To Experimental & Lab    50,000 3,50,000 1,50,000       1,250     12,500     15,000     15,000     10,000 By sale of scrap By work in progress         As on 31st Dec,2007 By cost of goods     Transfer to Trading A/c     100 35,000 5,68,650 6,03,750 6,03,750

TRADING ACCOUNT      Dr.                                               For the year ended 31st Dec,2007                                                 Cr.                   Particulars  Amount                         Particulars Amount To Manufacturing A/c To Carriage To Gross profit transferred  to  profit and loss account 5,68,650      3,300  3,27,690 By Sales                9,18,000 Less:-sale tax            18,360 8,99,640 8,99,640 8,99,640

               

                                         

                                                                 Profit & Loss A/C

Dr.                                                      For the year ended 31^st Dec,2007                                              Cr.   

Particulars	Amount	Particulars	Amount
To Salaries To Provision:-       Taxation       Dividend To Depreciation:-      Office machinery         300       Motor car                 1,625       Furniture                     175 To Maintenance:-        Building To Director Remuneration To Insurance Workmen’s Compensation To Canteen Expenses To Staff Welfare To Motor Expenses To Professional Charges To Postage To Books To Sundry Expenses To Discounts To General, fire etc To Director’s Life insurance To Rent & Rates To Manager’s commission To Net Profit	75,000 75,000   3,300    2,100    1,000  50,000    1,500     5,000     2,500   12,500     2,800     3,500   11,000   10,000     5,000     2,000     1,500    20,000    21,190      32,550	By Gross Profit b/d By Rent Received By Discounts By Recovered against Fire claim	3,27,690 2,000 2,750 5,000
	337440		337440

                                                         BALANCE SHEET

                                                  For the year ended 31^st Dec,2007

Liabilities	Amount	Assets	Amount
Capital                33,000 Add: Net Profit   32,550 Provision for Taxation 1,05,000 Add:-current year’s         75,000 Creditors Profit & Loss Provision for Dividend  Manager’s commission  Sale Tax o/s	65,550 1,80,000 1,56,000    13,750       3,300     21,190       3,360	Bank Plant and Machinery  12,500                            Less:- 1,250 Office Machinery         3,000                     Less:-           300 Furniture & Fixture      3,500                     Less:-           175 Motor Car                      6,500                      Less:-        1,625 Freehold Property Debtors                     1,78,000 Less:-Deposited as           Security              10,000 Security against Government Contract Closing Stock(35,000+1,20,000)	38,000 11,250      2,700         3,325         4,875      50,000 1,68,000       10,000 1,55,000
	4,43,150		4,43,150