The following are the balances as at 31st March, 2017 extracted from the books of Mr. XYZ. ₹ ₹ Plant and Machinery 19,550 Bad debts recovered 450…

RECTIFICATION ENTRIES Particulars Dr. Amount ₹ Cr. Amount ₹ (i) Returns inward account Dr. Sales account Dr. To Purchases account To Returns outward account (Being sales return and purchases return wrongly included in purchases and sales respectively, now rectified) 2,575 1,725 2,575 1,725 (ii) Drawings account Dr. To Purchases account (Being goods withdrawn for own consumption included in purchases, now rectified) 3,500 3,500 (iii) Plant and machinery account Dr. To Wages account (Being wages paid for installation of plant and machinery wrongly debited to wages, now rectified) 450 450 (iv) Advertisement expenses account Dr. To Purchases A/c (Being free samples distributed for publicity out of purchases, now rectified) 825 825 Trading and Profit and Loss Account of Mr. XYZ for the year ended 31st March, 2017 Dr. Amount ₹ Amount ₹ Cr. Amount ₹ Amount ₹ To Opening stock 32,250 By Sales 2,13,575 To Purchases 1,53,100 Less: Sales return 2,575 2,11,000 Less: Purchases return 1,725 1,51,375 By Closing stock 1,25,000 To Carriage inward 1,125 To Wages 11,715 To Gross profit c/d 1,39,535 3,36,000 3,36,000 To Salaries 22,550 By Gross profit b/d 1,39,535 To Rent 4,300 By Bad debts recovered 450 To Advertisement expenses 4,175 To Printing and stationery 1,250 To Bad debts 1,100 To Carriage outward 1,350 To Provision for doubtful debts 6,000 5% of 1,20,000 Less: Existing provision 3,200 2,800 To Provision for discount on Debtors 2,850 2.5% of 1,14,000 Less: Existing provision 1,375 1,475 To Depreciation: Plant and machinery 3,000 Furniture and fittings 1,025 4,025 To Office expenses 10,160 To Interest on loan 3,000 To Net profit (Transferred to capital account) 83,800 1,39,985 1,39,985 Balance Sheet of Mr. XYZ as on 31st March, 2017 Liabilities Amount ₹ Amount ₹ Assets Amount ₹ Amount ₹ Capital account 65,000 Plant and machinery 20,000 Add: Net profit 83,800 Less: Depreciation 3,000 17,000 1,48,800 Furniture and fittings 10,250 Less: Drawings 11,500 1,37,300 Less: Depreciation 1,025 9,225 Bank overdraft 80,000 Closing stock 1,25,000 Sundry creditors 47,500 Sundry debtors 1,20,000 Payable salaries 2,450 Less: Provision for doubtful debts 6,000 Provision for bad debts 2,850 1,11,150 Prepaid rent 300 Cash in hand 1,450 Cash at bank 3,125 2,67,250 2,67,250