Prepare the trading account, profit nd loss account and balance sheet
 

2. Following is the trial balance of Mr. Ramesh as on 31st March 2016 Credit balances Debit balances Cash in hand Sales Sundry creditors Bank Loan Sundry Debtors Bills receivable Opening stock Purchases Sales return Salaries Wages Advertisement Discount allowed Machinery Carriage Insurance Drawings Octroi Duty Furniture Office rent 30,000 1,16,500 50,000 80,000 Purchase return 1,89,500 Bills payable 4,000 Discount received 55,000 Capital as on 1.4.2015 10,000 16,000 5,000 2,00,000 12,500 9,000 12,500 4,000 40,000 16,000 8,50,000 Adjustments: 1.Closing stock of goods as on 31.3.2016 was valued at 1,25,000 2. Interest is to be charged at 3% p.a. on capital as on 1.4.2015 3.Depreciate furniture by 10% and machinery by 20% per annum. 4.Outstanding salary 5,000 and wages 2,500 5.Prepaid insurance 3,000 (Ans. GP 1,70,000 NP 27,250; B/s 5,20,500) 3,29,000 75,000 1,00,000 18,500 40,000 12,500 2,75,000 8,50,000