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Financial Statements - II 355 Adjustments 1. Wages include ` 4,000 for erection of new machinery on April 01, 2016. 2. Provide 5% depreciation on furniture. 3. Salaries unpaid `1,600. 4. Closing stock ` 81,850. 5. Create a provision at 5% on debtors. 6. Half the amount of bill is recoverable. 7. Rent is paid up to July 30, 2017. 8. Insurance unexpired ` 600. Books of Fair Brothers Ltd. Trading and Profit and Loss Account for the year ended March 31, 2017 Dr. Cr. Expenses/Losses  Amount Revenue/Gains  Amount ` ` Opening stock 81,600 Sales 3,61,000 Purchases 2,60,590  Less Sales return (4,800) 3,56,200 Less Purchases return (390)  2,60,200 Closing stock 81,850 Wages  45,050 Less Prepaid wages (4,000) 41,050 including erection of machines Octroi  1,000 Gross profit c/d 54,200 4,38,050   4,38,050 Salaries 16,000 Gross profit b/d 54,200 Add Outstanding salary 1,600 17,600 Discount received 1,060 Repairs 3,350    Bad debts 4,620 Add Further bad debts 800 Add New provision 2,960 8,380 Interest on loan 1,200     Add Outstanding interest 2,400 3,600    Sales tax  1,600    Insurance 2,000     Less Prepaid insurance (600) 1,400    Charity  250    Rent 4,000     Less Prepaid rent 1,000 3,000    Depreciation on machinery 1,800 Net profit (transferred to 14,280 capital account)     55,260   55,260 Reprint 2026-27