959 Liabilities Assets Capital 3,25,000 Goodwill 15,600 Add: Net Profit 1,34,550 Freehold Land and Building 1.17,000 4,59,550 Furniture and Fittings 17,420 Less: Drawings 75,400 Less: Depreciation 1.742 15,678 3,84,150 Closing Stock 2,05,400 Less: Sale of Motor Van (Drawings) 1.040 3.83,110 Trade Debtors 1,23,500 Trade Creditors 99,450 Provision for Bad Debts 5,980 1,17,520 Prepaid Rates and Insurance 650 Bank 10,712 4,82.560 4,82,560 Working Notes: Dr. (1) Motor Van Account Cr. Date Particulars Date Particulars To Balance b/d 3,120 By Drawings (Sold) 1,040 By Profit and Loss (Loss on Sale) 2,080 3.120 3,120 (2) It is assumed that wages and salaries are indirect in nature. If it is treated as direct, the gross profit will be ? 2,08,390. However, there will be no change in the Net Profit figure, Illustration 16 The following Trial Balance was extracted from the books of Mr A Bose as on 31st December, 2016: Debit Balance Credit Balance Plant and Machinery 40,000 Capital 1,60,000 Manufacturing Wages 69,000 Sundry Creditors 89,120 Salaries 31,700 Bank Loan 30,000 Furniture 20,000 Purchase Returns 3,480 Freight on Purchases 3,720 Sales 5,01,700 Freight on Sales 4,280 Provision for Bad Debts 4,000 Building 48,000 Manufacturing Expenses 19,000 Insurance and Tax 8,500 Goodwill 50,000 Factory Fuel and Power 2,560 Sundry Debtors 1,56,400 General Expenses 16,400 Factory Lighting 1,900 Opening Stock 68,400 Motor Car 24,000 Purchases 2,04,000 Sales Returns 6,200 Bad Debts 2,800 Interest and Bank Charges 800 Cash at Bank 8,400 Cash in Hand 2,240 7.88,300 7,88,300 Prepare a Trading and Profit and Loss Account for the year ended 31st December, 2016 and the Balance Sheet as on that date after taking into consideration the following information: (a) Closing stock 61,000. (b) Depreciate Plant and Machinery by 10%, Furniture by 5% and Motor Car by 2,000. (c) Maintain Provision for Bad Debts at 5% on Sundry Debtors. (d) A commission of 1% on the gross profit is to be provided for works manager