Write off bad debts rs 1000 and maintain the provision for

Question

From the following Trial Balance of Mr. Reddy, you are required to prepare Trading and Profit and Loss Account for the year ended on Mar 31, 2009 and a Balance Sheet on that date:

	Debit Balance	Credit Balance
Particulars	Rs	Rs
Capital	-	1,00,000
Drawings	12,000	-
Sundry Creditors	-	40,000
Cash-in-hand	5,000	-
Cash-at-bank	11,600	-
Sundry Debtors	51,000	-
10% Loan (taken on Sep 1, 2008)	-	20,000
Provision for Doubtful Debts	-	4,000
Furniture	12,000	-
Machinery	28,400	-
Stock (Apr 1, 2008)	80,000	-
Purchases	1,80,000	-
Rent and Taxes	6,800	-
Salaries	18,000	-
Manufacturing Wages	25,000	-
Sales	-	2,80,800
Sundry Expenses	2,000	-
Insurance (including a premium of Rs 600 per annum paid Sep 30, 2009)	800	-
Commission	-	1,400
Carriage	4,000	-
Travelling Expenses	1,600	-
Bills Receivable	8,000	-
	4,46,200	4,46,200

Adjustments

1. Stock on Mar 31, 2009 was Rs 76,000
2. Write off bad debts Rs 1,000 and maintain the provision for doubtful debts at 5% on debtors
3. Manufacturing wages include Rs 1,600 for erection of new machinery on Mar 1, 2009
4. Depreciate machinery by 5% and furniture by 10%