Prepare the trading and profit and loss account

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Reference no: EM13181699

The following is the Balance Sheet of Mr. Raghu as on Mar 31, 2007.

Liabilities		Assets
Capital	1,92,000	Buildings1,30,000
Loan	60,000	Furniture20,000
Creditors	124,000	Motor car36,000
		Stock	80,000
		Debtors	68,000
		Cash in hand	8,000
		Cash at bank	34,000
	3,76,000		3,76,000

A riot occurred on Mar 31, 2008 in which all books and records were lost. The cashier had absconded with the available cash. Mr. Raghu gives the following information:

His sales for the year ended Mar 31, 2008 were 20% higher than the previous years. He always sells goods at cost plus 25%; 20% of total sales for the year ended Mar 31, 2008 were for cash; there were no cash purchases.
On Apr 1, 2007, the stock level was raised to Rs 1,20,000 and the stock was maintained at this level throughout the year.
Collections from debtors amounted to Rs 5,60,000 of which Rs 1,40,000 was received in cash. Business expenses amounted to Rs 80,000 of which Rs 20,000 was outstanding on 31.3.2008 and Rs 24,000 was paid by cheque.
Analysis of pass book revealed the following:

	Rs
Payment to Creditors	5,50,000
Personal drawings	30,000
Cash deposited in bank	2,86,000
Cash withdrawn from bank	48,000

Gross Profit as per last year's audited accounts Rs 1,20,000
Provide depreciation on buildings and furniture at 5% and motor car @ 20%
The amount defalcated by the cashier may be treated as received from him.

Prepare the trading and profit and loss account for the year ended Mar 31, 2008

Reference no: EM13181699

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