Question One:

From the following balances taken from the ledger of Shri Krishna on 31st March 2007, prepare the trading and profit and loss account for the year ended 31st March 2007 and the balance sheet as on 31st March 2007 of Shri Krisha.

Particulars	Amount	Particulars	Amount
Sundry creditors Buildings Income tax Lease tools Cash at bank Sundry expenses Bank interest Purchases Wages Carriage inwards Sales Motor van Cash in hand	12,000 15,000 1,025 1,000 16,200 1,990 75 157,000 10,000 1,120 185,000 12,500 335	Bad debts Loan from RAM sundry debtors Investments Bad debts reserve Rent and rates Furniture Stock (1.4.2006) Capital Discount allowed Dividends received Drawings Bills payable	100 600 9,500 6,500 1,600 850 3,000 27,350 47,390 630 535 2,000 10,000

Adjustments to be made.

a) Write off further sh. 300 as bad out of sundry debtors and create a provision for bad debts at 20% of debtors.

b) Dividends accrued and due on investments is sh. 135 rates paid in advance sh. 100 and wages owing sh. 450.

c) On 31.3.2007 stock was valued at sh. 15,000 and loose tools were valued at sh. 800

d) Write off 5% for depreciation on buildings and 40% on motor van.

e) Provide for interest at 12% per annum due on loan taken on 1.6.2006.

f) Income tax paid has been treated as drawings.