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Question
From the following Trial Balance of Rinky, prepare a Trading Account and a Profit & Loss Account for the year ended 31.12.2018 and a Balance Sheet on that date.
| TRIAL BALANCE | |||
| Dr. (₹) | Cr. (₹) | ||
| Building | 20,000 | Capital Account | 25,000 |
| Depreciation on above | 1,000 | Provision for Depreciation on Machinery on 1.1.2018 | 800 |
| Machinery | 6,800 | Creditors | 12,000 |
| Furniture | 2,000 | Bank Loan | 6,000 |
| Drawings | 1,500 | Sales | 53,000 |
| Debtors | 8,000 | Outstanding Carriage Inward | 200 |
| Cash | 1,600 | ||
| Opening Stock | 5,000 | ||
| Purchase | 31,000 | ||
| Wages | 3,000 | ||
| Carriage Inwards | 400 | ||
| Salary | 4,000 | ||
| Prepaid Salary | 1,000 | ||
| Advertisement | 300 | ||
| Insurance | 3,500 | ||
| Packing Materials | 7,900 | ||
| 97,000 | 97,000 | ||
Closing Stock ₹ 15,000.
Solution
| In the Books of Ms. Rinky | |||
| Dr. | Trading and.Profit and loss A/c for the year ended 31.03.2018 |
Cr. | |
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| To Opening Stock | 5,000 | By Sales Cash | 53,000 |
| To Purchases | 31,000 | By Closing Stock | 15,000 |
| To Wages | 3,000 | ||
| To Carriage Inwards | 400 | ||
| To Gross Profit | 28,600 | ||
| 68,000 | 68,000 | ||
| To Depreciation | 1,000 | By Gross Profit | 28,600 |
| To Salary | 4,000 | ||
| To Advertisement | 300 | ||
| To Insurance | 3,500 | ||
| To Packing Materials | 7,900 | ||
| To Net Profit | 11,900 | ||
| 1,33,100 | 1,33,100 | ||
| Balance Sheet as on 31.03.2018 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | |
| Capital | 25,000 | 35,400 | Machinery | 6,800 | 6,000 |
| Add: Net Profit | 11,900 | Less: Provision for Depreciation | (800) | ||
| Less: Drawings | (1,500) | Building | 20,000 | ||
| Sundry Creditors | 12,000 | Sundry Debtors | 8,000 | ||
| Bank Overdraft | 6,000 | Furniture | 2,000 | ||
| Outstanding Carriage Inward | 200 | Cash | 1,600 | ||
| Closing Stock | 15,000 | ||||
| Prepaid Salary | 1,000 | ||||
| 53,600 | 53,600 | ||||
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RELATED QUESTIONS
Why is a Trading Account prepared?
Explain the needs of a Trading Account.
Mr. Sputnik, who is always in a hurry, prepares the following trial balance as at 31.12.2019. You are required to prepare the final accounts taking into consideration the trial balance for the year ended 31st December 2018.
| Debit (₹) | Credit (₹) | |
| Capital | 10,180 | |
| Drawings | 3,000 | |
| Opening Stock | 3,500 | |
| Leasehold Premises | 28,000 | |
| Purchases and Sales | 20,300 | 84,180 |
| Salaries and Wages | 5,600 | |
| Carriage Outward | 700 | |
| Rent | 900 | |
| Insurance | 600 | |
| Returns | 160 | 300 |
| Bank of India Current A/c | 2,200 | |
| Union Bank of India Current A/c | 600 | |
| Bad Debts | 300 | |
| Heavy Vehicles | 20,000 | |
| Motor Car | 11,000 | |
| Vehicle and Car Expenses | 2,500 | |
| Rent Earned | 1,500 | |
| Commission Paid | 800 | |
| Debtors and Creditors | 4,000 | 5,000 |
| Cash | 200 | |
| Import Duty and Clearing Charges | 1,600 | |
| Packing Expenses | 2,400 | |
| Loan from Mr. Baxi (long term) | 6,000 | |
| 1,07,760 | 1,07,760 |
Closing stock is ₹ 7,500.
The following is the trial balance of Mr. R.P. Sharma for the year ended 31st December, 2018. Compile the final accounts for him, after attending to the adjustments and thereafter also submit the required information, listed by him.
| Debit (₹) | Credit (₹) | |
| Land | 1,00,000 | |
| Freehold Premises | 60,000 | |
| Bills Receivable and Payable | 20,000 | 24,000 |
| Wages | 15,000 | |
| Rejection of Goods Including Price Adjustments | 2,500 | 3,500 |
| Personal Accounts Resulting from Credit Sales and Purchases | 31,000 | 15,000 |
| Purchase and Sales Including Cash Transactions | 40,500 | 96,000 |
| Salaries | 7,000 | |
| Insurance and Municipal Taxes | 1,500 | |
| Rentals | 2,000 | 4,500 |
| Bad Debts | 600 | |
| Carriage | 3,000 | |
| Opening Stock | 5,000 | |
| Commission Accounts | 500 | 600 |
| Vehicles | 62,000 | |
| Machinery | 85,000 | |
| Drawings and Capital Accounts | 8,000 | 1,75,000 |
| Loan from the S.F.C. | 1,25,000 | |
| 4,43,600 | 4,43,600 |
Closing stock value is ₹ 7,500.
The following is the trial balance of Mr. M. Moonlite as on 31.3.2019. The Closing Stock as on 31.3.2019 is ₹ 40,000.
| Debit (₹) | Credit (₹) | |
| Salaries | 20,000 | |
| Royalty | 55,000 | |
| Capital | 2,60,000 | |
| Freehold Land | 60,000 | |
| Stock as on 1.4.2018 | 25,000 | |
| Goods Traded in | 2,05,000 | 3,55,000 |
| Drawings | 5,000 | |
| Brokerage | 4,000 | 6,000 |
| Motive Power & Coke | 6,000 | |
| Insurance | 7,000 | |
| Cash & Bank | 20,000 | 9,900 |
| Administrative & Selling Expenses | 55,900 | |
| Wages | 15,000 | |
| Returns | 10,000 | 5,000 |
| Suppliers & Customers | 30,000 | 15,000 |
| Interest on Overdraft and Borrowings | 18,000 | |
| Electricity | 5,000 | |
| Goodwill | 50,000 | |
| Leasehold Land | 20,000 | |
| Fixed Assets (other than land) | 1,50,000 | |
| 7,05,900 | 7,05,900 |
Compile the final accounts for the owner.
Trial Balance of Mr. J. Junior as on 31.3.2019:
| Debit (₹) | Credit (₹) | |
| Factory Power | 16,000 | |
| Carriage Charges | 2,500 | |
| Salaries | 20,400 | |
| Sales & Purchases of Goods | 1,40,000 | 2,67,000 |
| Machinery | 1,20,000 | |
| Discounts Received and Allowed | 5,000 | 6,000 |
| Wages (manufacturing activity) | 18,000 | |
| Stock | 25,000 | |
| Commission | 3,800 | |
| Insurance | 8,000 | |
| Loose Tools (Fixed Asset) | 11,000 | |
| Returns of Goods | 5,000 | 6,000 |
| Debtors & Creditors | 45,000 | 18,000 |
| Carriage on Sales | 6,000 | |
| Rent & Rates | 10,800 | |
| Bad Debts Written off & Recovered | 2,000 | 1,600 |
| Investments | 80,000 | |
| Bank Accounts | 22,000 | 10,000 |
| Drawings & Capital | 15,000 | 2,37,000 |
| Bills Payable & Receivable | 6,000 | 4,000 |
| Income from Investments | 6,800 | |
| Cash | 2,500 | |
| 5,60,200 | 5,60,200 |
Compile Final Accounts:
- An inventory of the godown on 31.3.2019 reflected stock value stated as ₹ 50,000.
The following is the Trial Balance of Amrit Roy as on 31st December 2018:
| Debit (₹) | Credit (₹) | |
| Capital | 25,000 | |
| Building | 30,000 | |
| Furniture | 2,640 | |
| Scooter | 4,000 | |
| Returns | 2,300 | 1,600 |
| Opening Stock | 8,000 | |
| Purchases and Sales | 33,800 | 56,040 |
| Bad Debts | 400 | |
| Carriage Inwards | 600 | |
| General Expenses | 1,200 | |
| Bad Debts Provision | 700 | |
| Bank Loan | 5,000 | |
| Interest on Bank Loan | 300 | |
| Commission | 900 | |
| Insurance and Taxes | 2,000 | |
| Scooter Expenses | 2,600 | |
| Salaries | 4,400 | |
| Cash in Hand | 2,000 | |
| Debtors and Creditors | 3,000 | 8,000 |
| 97,240 | 97,240 |
You are required to prepare the final accounts for the year ending 31st December 2018.
Closing Stock on 31.12.2018 was valued at ₹ 4,340.
On 31st December, 2018 the following Trial Balance, was extracted from the books of Mohan:
| Debit (₹) | Credit (₹) | |
| Capital | 30,000 | |
| Drawings | 5,000 | |
| Drs. and Crs. | 20,000 | 10,000 |
| Loan | 9,500 | |
| Interest on Loan | 300 | |
| Cash | 2,000 | |
| Provision for Bad Debts | 700 | |
| Stock (1.1.2018) | 6,800 | |
| Motor Vehicles | 10,000 | |
| Bank | 3,500 | |
| Land and Building | 12,000 | |
| Bad Debts | 500 | |
| Purchases and Sales | 66,000 | 1,10,000 |
| Returns | 8,000 | 1,500 |
| Carriage Outward | 2,500 | |
| Carriage Inward | 3,000 | |
| Salaries | 9,000 | |
| Rent and Insurance | 3,000 | |
| Advertising | 3,500 | |
| Discount | 500 | |
| General Expenses | 3,400 | |
| B/R and B/P | 6,000 | 2,000 |
| Rent Received | 300 | |
| 1,64,500 | 1,64,500 |
Prepare a Trading Account and a Profit and Loss Account for the year ended 31st December, 2018 and a Balance Sheet as on that date after taking into account the following:
Stock on 31st December, 2018 was valued at ₹ 7,000.
Prepare a Trading, Profit and Loss A/c. and Balance Sheet of M/s. Sultan Enterprises for the year ended 31st March, 2010 from the following Trial Balance:
| Trial Balance as on 31.03.2010 | ||
| Heads of Accounts | Dr. (₹) | CR. (₹) |
| Opening Stock | 15,000 | |
| Salary | 2,400 | |
| Purchase & Sales | 80,000 | 1,20,000 |
| Machinery | 40,000 | |
| Returns | 4,000 | 5,000 |
| Commission Received | 6,000 | |
| Investments | 10,000 | |
| Interest on Investment | 1,200 | |
| Carriage on Purchase | 3,000 | |
| Rent & Rates | 4,000 | |
| Debtors & Creditors | 22,800 | 15,700 |
| Bills Receivable & Bills Payable | 3,400 | 4,100 |
| Cash-in-hand | 6,400 | |
| Wages | 18,600 | |
| Discount Allowed | 5,200 | |
| Royalty Paid | 12,000 | |
| Discount Received | 6,000 | |
| Drawings and Capital | 1,200 | 70,000 |
| 2,28,000 | 2,28,000 | |
Closing Stock was ₹ 15,250.
From the following trial balance of Shri Rai Bahadur, prepare Trading, Profit and Loss Account for the year ending 31st March, 2018 and a Balance Sheet as on that date:
| TRIAL BALANCE | |||
| Debit Balance | (₹) | Credit Balance | (₹) |
| Drawings | 4,240 | Capital | 32,000 |
| Purchase less returns | 15,610 | Sales less Returns | 34,176 |
| Rates and Taxes | 388 | Sundry Creditors | 4,422 |
| Salaries | 1,612 | ||
| Lighting and Heating | 164 | ||
| Electric Power | 384 | ||
| Commission | 414 | ||
| Insurance | 206 | ||
| Advertising | 214 | ||
| Bad Debts | 62 | ||
| Postage, Telegrams, etc. | 826 | ||
| Carriage | 754 | ||
| Opening Stock | 6,160 | ||
| Wages | 7,962 | ||
| Land and Building | 15,840 | ||
| Plant and Machinery | 4,034 | ||
| Furniture and Fittings | 378 | ||
| Sundry Debtors | 6,082 | ||
| Cash at Bank | 5,268 | ||
| 70,598 | 70,598 | ||
The closing stock on 31st March was valued at ₹ 8,760.
