Illustration 12: Prepare a Trading A/C, Profit & Loss A/c for the year ended 31st December, 1988 and Balance Sheet as at that date from the following information available from the books of a Trader. 31.12.1987 31.12.1988 32 Rs. Rs. 1. Liabilities & Assets: Bank Balance 20,000 9,400 Cash in hand 3,000 2,000 Prepaid Expenses 5,000 7,000 Stock 70,000 60,000 Debtors for sales 2,30,000 ? Bill Receivable ? Furniture at written down value 70,000 82,000 Creditors for purchases 2,20,000 2,60,000 Outstanding Liabilities 30,000 15,000 2. Receipts and Payments during 1988: Collection from debtors (after allowing 24 % discount) 5,85,000 Proprietor's Drawings 50,000 Capital introduced by proprietor 95,150 Purchase of Furniture at the middle of the year 20,000 4% Govt. securities purchased at 96% on 1.7.88 96,000 Expenses 2,00,000 Sale of Scrap 5,000 Payment of Creditors (after receiving 2% discount) 3,92,000 Proceeds of Bills Receivable discounted at 2% 61,2503 3. Sales are made so as to realise 3311% on sale proceeds 4. Goods worth Rs. 5,000 were taken by the proprietor. 5. During the year Bills Receivable worth Rs. 1,50,000 were drawn on Debtors. Of these, bills amounting to Rs. 30,000 were endorsed in favour of the creditors. Out of this later amount, a bill for Rs. 5,000 was dis-honoured by the debtor. 6. Sales and Purchases are made on credit