In the books of Dinesh Trading and Profit and Loss Account For the year ended on 31st March 2007 Particulars To Opening stock Amt Particulars 30,000 By Sales To Purchase 2,20,000 Return Amt 2,80,000 2.000 2,78,000 Less return 5.500 2.14.500 Less Drawing Dinesh 5.000 2,09,500 By Closing stock TO Carriage 5,000 By Goods destroyed by To Gross Profit fire 41,000 5,000 (transferred to P & L A/c) 79,500 3,24,000 3,24,000 To Salary 21,000 By Gross Profit (From To Office expenses 1,100 Trading A/c) 79,500 To Rent 1,100 To Printing and stationery 1,500 Less Stock 500 1,000 Travelling exp. 5,500 To Old Bad Debts 1,000 + New Bad debts + New RDD 800 1.800 Old RDD 1,800 To Insurance 9,500 To Advertisement 12,000 Less PrepaidTo Depreciation 9.000 3,000 Machinery 4,000 Furniture 1,000 5,000 To Loss due to fire 1,000 To Net Profit 29,500 79,500 79,500 In the books of Dinesh Balance Sheet As on 31st March 2007 Liabilities Amt Assets Amt Capital 1,78,000 Land and Building 55,000 Less Drawings Goods 5.000 Machinery 40,000 1,73,000 Less Depreciation 4,000 36,000 Add Profit 29,500 2,02,500 Cash 41,000 Motor Vehicle 20,000 Bills payable Creditors +O/s salary 34,000 Debtors 32,800 20,000 Less Bad debts reserve 800 32,000 1,000 Furniture 20,000 Prepaid Insurance 1,000 19,000 Closing stock 41,000 Due from Insurance Co. 4,000 Stock of stationery Prepaid advertisement 2,57,500 500 9,000 2,57,500