From the following Trial Balance extracted from the books of A, prepare Trading and Profit and Loss Account for the year ending 31st December, 2007 and a Balance Sheet as on that date:

Dr. Cr.

Rs. Rs.

Furniture 640 Loose Tools 6,250 Buildings 7,500 Capital Account 12,500 Bad Debts 125 Provision for Bad Debts 200 Sundry Debtors and Creditors 3,800 2,500 Stock on January 1,2007 3,460 Purchases and Sales 5,475 15,450 Bank Overdraft 2,850 Sales and Purchases Return 200 125 Advertising 450 Interest Account 118 Commission 375 Cash in hand 650 Tax and Insurance 1,250 General Expenses 782 Salaries 3,300 34,000 34,000 The following adjustments are to be made :

(i) Stock in hand on 31st December, 2007 was Rs. 3,250.

(ii) Depreciate Building at 5% and Furniture at 10%. Loose Tools are revalued at Rs. 5,000 at the end of the year.

(iii) It was decided to place Rs. 1,000 to Bonus fund for staff.

(iv) Salaries Rs. 300 and Taxes Rs. 120 are outstanding.

(v) Insurance amounting to Rs. 100 is prepaid.

(vi) Write off a further Rs. 100 as Bad Debts and provision for Doubtful Debts is to be made equal to 5% on Sundry Debtors.