Example2_finalaccount

Example -2 Following Trial Balance of trading concern for the year ending Chaitra 3,2069 is given.

Debit Balance	Amount	Credit Balance	Amount
Land and Building	15,000	Unearned commission	2,000
Good will	10,000	Bank over draft	12,000
Life insurance premium paid	5,000	Reserve of doubtful debt	1,000
Freight on sales	500	Creditors	13,000
Closing stock	7,000	Purchase return	1,500
Discount allowed	500	Sales	90,000
Cash at bank	2,200	Capital	45,000
Bad debts	500
Plants and Machinery	42,000
Rent , Rate and insurance	900
Debtors	10,000
salaries	7,400
Wages	3,000
Sales Return	500
Purchases(Adjusted)	48,000
Custom duty	12,000
Total	164500	Total	164500

 Additional Information:

1.          i.   Depreciate plant and Machinery by 10%

       ii.            Reserve for doubtful debts is to be maintained at 5%

      iii.            Unearned commission is earned to the extent of Rs. 1700.

     iv.            Salary is payable @ Rs.600 per month.

       v.            Write off goodwill by 10%

     vi.            Manager’s commission is payable @10% of the net profit charging such commission

 Required: a)      Trading account  b)      Profit and Loss Accountc)    Balance Sheet as at the end of Chaitra 

Step -1 

Step -2

Step -3 

 Examples :       1     2     3   4    5    6