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Question -

The following is the trial balance of Manju Chawla on March 31, 2017. You are required to prepare trading and profit and loss account and a balance sheet as on date:

Account title

Debit Amount Rs

Credit Amount Rs

Opening stock

10,000

 

Purchases and sales

40,000

80,000

Returns

200

600

Productive wages

6,000

 

Dock and Clearing charges

4,000

 

Donation and charity

600

 

Delivery van expenses

6,000

 

Lighting

500

 

Sales tax collected

 

1,000

Bad debts

600

 

Misc. incomes

 

6,000

Rent from tenants

 

2,000

Royalty

4,000

 

Capital

 

40,000

Drawings

2,000

 

Debtors and Creditors

6,000

7,000

Cash

3,000

 

Investment

6,000

 

Patents

4,000

 

Land and Machinery

43,000

 

Closing stock Rs 2,000.



Answer -

Trading Account as on March 31, 2017

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Opening Stock

10,000

Sales

80,000

 

Purchases

40,000

 

 

Less: Sales Returns

(200)

79,800

 

Less: Purchases Returns

(600)

39,400

 

 

Productive Wages

6,000

Closing Stock

2,000

Dock and Clearing Charges

4,000

 

 

Royalty

4,000

 

 

Profit and Loss (Gross Profit)

18,400

 

 

 

 

 

 

 

 

 

 

 

81,800

 

81,800

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit and Loss Account as on March 31, 2017

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Donation and Charity

600

Trading (Gross Profit)

18,400

Delivery Van Expenses

6,000

Misc. Incomes

6,000

Lighting

500

Rent from Tenants

2,000

Bad Debts

600

 

 

Net Profit

18,700

 

 

 

 

 

 

 

26,400

 

26,400

 

 

 

 

 

Note: As per the solution, net profit is Rs 18,700;however, according to the answer given in the book, it is Rs 18,400.

 

Balance Sheet as on March 31, 2017

Liabilities

 

Amount

Rs

Assets

 

Amount

Rs

Capital

40,000

 

Patents

 

4,000

 

Add: Profit and Loss (Net Profit)

18,700

 

Land and Machinery

 

43,000

 

 

58,700

 

Investment

 

6,000

 

Less: Drawings

(2,000)

56,700

Debtors

 

6,700

 

 

 

 

Cash

 

3,000

Sales Tax Collected

 

1,000

Closing Stock

 

2,000

Creditors

 

7,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64,700

 

 

 

64,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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