The following are the balances extracted from the books of Narain Lal Daaba on 31st Dec. 2006:

Adjustments:

1. Stock on hand on 31st Dec. 2006 was 2006. 2. Write off Depreciation: Business Premises 300, Furniture and fittings * 250. 3. Make a provision of 5% on Debtors for doubtful debts. 4. Allow interest on capital at 5%. 5. Carry forward 200 for unexpired insurance. Prepare Trading and Profit and Loss Account for the year and a Balance Sheet as on that date.

Transcribed Image Text:

Narain Lal's Capital 30,000 Sales 150,000 Narain Lal's Drawings 5000 Sales Return 2000 Furniture and Fittings 2600 Discounts (Dr.) 1600 Bank Overdraft 4200 Discounts (Cr.) 2000 Creditors 13,800 Taxes and Insurance 2000 Business premises 20,000 General Expenses 4000 Stock, 1.1.2006 22,000 Salaries 9000 Debtors 18,000 Commission (Dr.) 2200 Rent from tenants 1000 Carriage on Purchases 1800 Purchases 110,000 Bad Debts written off 800