957 200 Liabilities Assets Capital 30,000 Furniture 15,000 Add: Net Profit 560 Less: Depreciation @5% p.a. 750 14,250 30,560 Machinery 30,000 Less: Drawings 3,500 Less: Depreciation @ 10% pa 1,500 28,500 27,060 Debtors 9,000 Less: Drawings of Goods 1,000 26,060 Less: Set Off (Due to P) 1,000 Creditors 5,000 8,000 Less: Set off 1,000 4,000 Less: Further Bad Debt 1.000 Bank Loan 32,400 7,000 Outstanding Interest on Loan 3,040 Less: Provision for Doubtful Debts 350 6,650 Advertisement Carry forward)) 400 Insurance Claim (Admitted) 2,000 Closing Stock 9,000 Cash 4.700 65,500 65,500 Note 2: Interest on Loan - 32,400 10% 3.240 Less: paid during the year Outstanding 3.040 Illustration 13 The following Trial Balance is extracted from the books of Mr. S.K. Sen as on 31.3.2017: Debit Balance Credit Balance Plant and Machinery 4,00,000 Capital 5,70,000 Opening Stock 45,000 Sundry Creditors 36,000 Sundry Debtors 50,000 Sales 2,40,000 Wages 15,000 Return Outward 30.000 Salaries 20,000 Provision for Doubtful Debts 2,000 22,000 Income Tax 2,500 Purchases 1,80,000 Return Inward 15,000 Bad Debt 12,500 Insurance 4,000 Office Expenses 7,000 Cash in Hand 45,000 Cash at Bank 60,000 8,78,000 8,78,000 Additional infromation: (1) Stock as on 31.03.2017 50,000. (ii) Machinery purchased on 01.10.2014 for 40,000 was wrongly debited in Purchases Account. Depreciation @ 15% p.a. to be charged on machinery. (iii) Outstanding office expenses amounted to 1,500. (iv) Goods worth $7,000 was distributed as free sample. (v) Create a provision for doubtful debts @ 5% on Sundry Debtors after writing off 2,500 as further bad debts. You are required to prepare Trading and Profit and Loss Account for the year ended 31.3.2017 and Balance Sheet as on the same date. Rent