From the following Trial Balance of Raghu Ram Associates, prepare Trading and Profit & Loss Account for the year ended 31st December, 2019 and a Balance Sheet as on that date:-
| Dr. Balances | Rs. | Cr. Balances | Rs. |
| Opening Stock | 22,000 | Sales | 3,70,000 |
| Purchases | 1,80,000 | Purchase Return | 5,000 |
| Sales Return | 7,000 | Discount | 6,200 |
| Carriage Inwards | 2,600 | Sundry Creditors | 27,000 |
| Carriage Outwards | 800 | Bills Payable | 2,800 |
| Wages | 40,000 | Capital | 70,000 |
| Salaries | 27,500 | ||
| Plant & Machinery | 1,00,000 | ||
| Furniture | 8,000 | ||
| Sundry Debtors | 42,000 | ||
| Bills Receivable | 2,500 | ||
| Cash in Hand | 6,500 | ||
| Travelling Expenses | 3,500 | ||
| Lighting | 2,400 | ||
| Rent and Taxes | 6,200 | ||
| General Expenses | 8,500 | ||
| Insurance | 1,500 | ||
| Drawings | 20,000 | ||
| 4,81,000 | 4,81,000 |
Adjustments:-
(1) Stock on 31st December, 2019 was valued at Rs. 25,000 (Market Value Rs. 35,000).
(2) Wages outstanding for December, 2019 amounted to Rs. 5,000.
(3) Salaries outstanding for December, 2019 amounted to Rs. 3000.
(4) Prepaid insurance amounted to Rs. 500.
(5) Provide depreciation on Plant and Machinery at 5% and on Furniture at 20%.
To prepare the Trading and Profit & Loss Account, and Balance Sheet for Raghu Ram Associates as of December 31, 2019, we first need to adjust the trial balance figures based on the given adjustments and apply the relevant accounting principles.
### Trading and Profit & Loss Account
#### Trading Account (for the year ended 31st December, 2019)
The trading account primarily reflects the results of buying and selling goods. The gross profit or loss is determined by calculating the difference between the net sales and the cost of goods sold.
Dr. Side
- Opening Stock: Rs. 22,000
- Purchases: Rs. 1,80,000
- Carriage Inwards: Rs. 2,600
- Wages: Rs. 40,000 (after adjusting for the outstanding wages)
Cr. Side
- Sales: Rs. 3,70,000
- Sales Return: Rs. 7,000
- Closing Stock: Rs. 25,000 (valued at cost as per the adjustment)
#### Net Sales
Net Sales = Sales - Sales Return
Net Sales = Rs. 3,70,000 - Rs. 7,000 = Rs. 3,63,000
#### Cost of Goods Sold (COGS)
COGS = Opening Stock + Purchases + Carriage Inwards + Wages + (-) Closing Stock
COGS = Rs. 22,000 + Rs. 1,80,000 + Rs. 2,600 + Rs. 40,000 + (-) Rs. 25,000
COGS = Rs. 2,19,600
Gross Profit = Net Sales - COGS
Gross Profit = Rs. 3,63,000 - _________ ______ _____ ____ ________ ___ _____ ____ _________ ______.
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