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Question
From the following details, prepare a profit and loss account.
| Particulars | ₹ | Particulars | ₹ |
| Gross profit | 50,000 | Interest received | 2,000 |
| Office rent | 10,000 | Discount received | 3,000 |
| Depreciation on office assets | 8,000 | Carriage outwards | 2,500 |
| Discount allowed | 12,000 | Insurance on office building | 3,500 |
| Advertisement | 4,000 | General expenses | 3,000 |
| Audit fees | 1,000 | Freight inwards | 1,000 |
Solution
Profit and loss account
| Particulars | ₹ | Particulars | ₹ |
| To Office rent | 10,000 | By Gross profit b/d | 50,000 |
| To Depreciation on office assets | 8,000 | By Interest received | 2,000 |
| To Discount allowed | 12,000 | By Discount received | 3,000 |
| To Advertisement | 4,000 | ||
| To Audit fees | 1,000 | ||
| To Carriage outwards | 2,500 | ||
| To Insurance on office building | 3,500 | ||
| To General expenses | 3,000 | ||
| To Net profit c/d | 11,000 | ||
| 55,000 | 55,000 |
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