Illustration 5 From the following figures extracted from the books of Govind, you are required to prepare a Trading and Profit and Loss Account for the year ended 31st March, 2017 and a Balance Sheet as on that date after making the necessary adjustments: Particulars Shri Govind's capital 2,28,800 Shri Govind's drawings 13.200 Plant and Machinery 99.000 Freehold property 66.000 Purchases 1.10.000 Returns outwards 1.100 Salaries 13.200 Office expenses 2.750 Office furniture 5.500 Discounts Alc. (Dr.) 1,320 Sundry Debtors 29.260 Loan to Shri Krishna @ 10% p.a. balance on 1.4.2016 44,000 Cash at bank 29.260 Bills payable 5,500 Sales 2.31.440 Stock 1.4.2016 38,500 Wages 35.200 Sundry Creditors 44,000 Postage & Telegrams 1.540 Insurance 1.760 Gas and fuel 2.970 Bad debts 660 Office rent 2,860 950 1.100 Freight 9,900 Loose tools 2,200 Factory lighting 1.100 Provision for Doubtful Debts 880 Interest on loan to Shri Krishna Cash in hand 2640 Adjustments : 1. Stock on 31st March, 2017 was valued at * 72,600. 2. A new machine was installed during the year costing? 15.400 but it was not recorded in the books as no payment was made for it. Wages * 1,100 paid for its erection have been debited to wages account. 3. Depreciate Plant and Machinery by 33'3%; Furniture by 10%; and Freehold property by 5%. 4. Loose tools were valued at $ 1,760 on 31.3.2017. 5. Of the Sundry Debtors * 660 are bad and should be written-off. 6. Maintain a provision of 5% on Sundry Debtors for doubtful debts. 7. The manager is entitled to a commission of 10% of the net profits after charging such commission