Question - 02

From the followin Trial balance prepare trading and profit and loss accounts for the year ended 31st Dec., 2000 and Balance sheet on that date:

Opening stock Rs. 5,000                                    Sales Rs. 20,000
Purchases Rs. 12,000                                          Purchase returns Rs. 500
Salaries Rs. 300                                                  Commission Rs. 100
Cash Rs. 1,000                                                    Rent Rs. 300
Investments Rs. 1,500                                        Capital Rs. 15,000
Advertisement Rs. 200                                       Creditors Rs. 3,000
Insurance Rs. 300                                               Provision for bad debts Rs. 200
Wages Rs. 100                                                    Bills payable Rs. 900
Building Rs. 15,000
Debtors Rs. 4,000
Bad Debts Rs. 100
Drawings Rs. 500

Adjustments :
  1. Closing stock Rs. 5,000.
  2. Wages Rs. 50 and salary Rs. 100 are outstanding while 1/3 part of insurance is for next year.
  3. Accurued intererst on investments Rs. 150.
  4. Create provision for bad debts at 10% on Debtors.
  5. Depreciate building by 5%.
  6. Goods of Rs. 500 returned to a trader is not recorded in the books.