c2 Mustration 1 From the following balances. prepare the trading and profit and loss account and balance sheet as on March 31, 2005. Debit Balances Amount Credit Balances Amount Rs. Rs. Drawings 6,300 Capital 1,50.000 Cash at bank 13,870 Discount received 2.980 Bills receivable 1.860 Loans 15,000 Loan and Building 42.580 Purchases retum 1.450 Furniture 5,130 Sales 2.81.500 Discount allowed 3,960 Reserve for bad debts 4.650 Bank charges 100 Creditors 18,670 Salaries 6,420 Purchases 1.99,080 Stock (opening 60.220 Sales return 1,870 Carriage 5,170 Rent and Taxes 7.680 General expenses 3.630 Plant and Machinery 31.640 Book debts 82,740 Bad debts 1.250 Insurance 750 4.74,250 4.74.250 Adjustments 1. Closing stock Rs. 70,000 2. Create a reserve for bad and doubtful debts @ 10% on book debts 3. Insurance prepaid Rs. 50 Rent outstanding Rs. 150 5. Interest on loan is due 6% p.a. 4