ILLUSTRATION 6. After and Loss Account of M/s date:

taking into consideration the following points prepare Trading and Profit Bros. for the year ending 31st March, 2015 and Balance Sheet at that

(i) Closing Stock $9,800.

(ii) A plant which stood in the books at $6,000 on 1st April, 2014 was sold for $2,000 in exchange for a new machine costing $5,500. The net invoice of $3,500 was passed through the Purchases Day Book.

(iii) An amount of $50 received as final dividend from the Official Receiver of the firm Snow White, the balance of whose account had in the previous year been written off as a bad debt, was standing to the credit of a newly opened account under the same name and was included in the list of sundry creditors.

(iv) Bills Receivable include a dishonoured Bill of $400. (v) Sundry Debtors include an item of $300 for the goods supplied to the proprietor.

(vi) Write off Building, Machinery and Patents by 10 per cent. (vii) Make a provision for Doubtful Debts at 5 per cent.

Dr. Balances Salaries 17,000 Cash in hand 3,050 General Expenses 3,000 Purchases 40,650 Insurance 600 Wages 11,000 Sundry Debtors 8,700 Opening Stock 7,800 Bills Receivable 1,200 Building A/C 30,000 Cr. Balances Land 5,000 Sales 99,000 Machinery 25,000 Sundry Creditors 6,000 Patents 8,000 Capital 56,000