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Question
The following is the trial balance obtained from the books of Mr. G. Vishwanath as on 30th June, 2019:
| Debit (₹) | Credit (₹) | |
| Capital | 50,000 | |
| Drawings | 1,000 | |
| Stock as on 1.7.2018 | 28,000 | |
| Loose Tools as on 1.7.2018 | 1,000 | |
| Sundry Debtors and Sundry Creditors | 25,000 | 15,000 |
| Purchases and Sales | 90,000 | 1,72,000 |
| Returns | 750 | 550 |
| Discounts | 250 | 300 |
| Land and Building | 88,000 | |
| Salaries and Wages | 33,000 | |
| Carriage Inward | 1,200 | |
| Carriage Outward | 1,500 | |
| Insurance | 1,000 | |
| Commission | 18,550 | |
| Cash in Hand | 1,700 | |
| Bank Overdraft | 20,000 | |
| Advertisement | 2,000 | |
| Bills Receivable and Bills Payable | 7,500 | 5,500 |
| 2,81,900 | 2,81,900 |
You are required to prepare Mr. Vishwanath's trading account and profit and loss account for the period ended 30 June, 2019 and a balance sheet as on that date after taking into account the following adjustments.
- Stock valued on 30.6.2019 at ₹ 25,000.
Solution
| In the books of Mr. G. Vishwanath |
|||||
| Dr. | Trading and Profit and Loss A/c for the year ended 30.06.2019 |
Cr. | |||
| Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
| To Opening Stock | - | 28,000 | By Sales | 1,72,000 | 1,71,250 |
| To Purchases | 90,000 | 89,450 | Less: Returns | (750) | |
| Less: Returns | (550) | By Closing Stock | - | 25,000 | |
| To Carriage Inward | - | 1,200 | |||
| To Gross Profit | - | 77,600 | |||
| 1,96,250 | 1,96,250 | ||||
| To Discount | - | 250 | By Gross Profit | - | 77,600 |
| To Carriage Outward | - | 1,500 | By Discount Received | - | 300 |
| To Salaries | - | 33,000 | By Commission Received | - | 18,550 |
| To Advertisements | - | 2,000 | |||
| To Insurance | - | 1,000 | |||
| To Net Profit | - | 58,700 | |||
| 96,450 | 96,450 | ||||
| Balance Sheet as on 30.06.2019 | ||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) |
| Capital | 50,000 | 1,07,700 | Cash in Hand | 1,700 |
| Add: Net Profit | 58,700 | Loose tools | 1,000 | |
| 1,08,700 | Land & Building | 88,000 | ||
| Less: Drawings | (1,000) | Sundry Debtors | 25,000 | |
| Sundry Creditors | - | 15,000 | Bills Receivable | 7,500 |
| Bank Overdraft | - | 20,000 | Closing Stock | 25,000 |
| Bills Payable | 5,500 | - | ||
| 1,48,200 | 1,48,200 | |||
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RELATED QUESTIONS
From the following details for the year ended 31st March 2018, prepare a trading account
| Particulars | ₹ | Particulars | ₹ |
| Opening stock | 2,500 | Returns inwards | 7,000 |
| Purchases | 27,000 | Coal and gas | 3,300 |
| Sales | 40,000 | Carriage inwards | 2,600 |
| Wages | 2,500 | Closing stock | 5,200 |
| Returns outwards | 5,200 |
Find out the amount of sales from the following information:
| Particulars | ₹ | Particulars | ₹ |
| Opening stock | 30,000 | Closing stock | 20,000 |
| Purchases less returns | 2,00,000 | Gross profit margin (on sales) | 30% |
From the following balances obtained from the books of Mr. Ganesh, prepare trading and profit and loss account.
| Particulars | ₹ | Particulars | ₹ |
| Stock on 01.01.2017 | 8,000 | Bad debts | 1,200 |
| Purchases for the year | 22,000 | Trade expenses | 1,200 |
| Sales for the year | 42,000 | Discount allowed | 600 |
| Expenses on purchases | 2,500 | Commission allowed | 1,100 |
| Financial charges paid | 3,500 | Selling expenses | 600 |
| Expenses on sale | 1,000 | Repairs on office vehicles | 600 |
Closing stock on December 31.12.2017 was ₹ 4,500
Opening stock is the first item on the ______ side of ______.
Explain the nature of a Trading Account.
The following is the Trial Balance of Mr. V. Iyer for the year ended 31st December, 2018. Compile the final accounts for him, after incorporating the adjustments given.
| Dr. (₹) | Cr. (₹) | |
| 10% Loan on Mortgage of Premises | 34,000 | |
| Machinery | 50,000 | |
| Debtors and Creditors | 24,000 | 21,400 |
| Loose Tools | 5,000 | |
| Premises (owner built and mortgaged) | 75,000 | |
| Capital Invested and Cash Drawn | 4,000 | 1,00,000 |
| Stock (1.1.2018) | 18,000 | |
| Sales Against Cash | 48,000 | |
| Sales Against Credit | 72,000 | |
| Salaries | 10,000 | |
| Wages | 4,000 | |
| Carriage Outward | 2,000 | |
| Bad Debts Written off | 500 | |
| Royalty (Direct Expenses) | 3,000 | |
| Cash and Bank Balances | 6,000 | |
| Rent Paid | 5,000 | |
| Commissions | 400 | 500 |
| Purchases (Cash and Credit) and Returns | 66,000 | 6,000 |
| Rates and Taxes | 3,000 | |
| Miscellaneous Expenses | 6,000 | |
| 2,81,900 | 2,81,900 |
Closing stock is valued at ₹ 50,000.
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.
Prepare Trading, Profit and Loss A/c and Balance Sheet of M/s Banerjee Enterprises for the Year ended 31st March, 2010 from the following Trial Balance.
| Heads of Accounts | (Dr.) (₹) | (Cr.) (₹) |
| Opening Stock | 25,000 | - |
| Purchases and Sales | 75,000 | 2,00,000 |
| Discounts | 3,600 | 6,000 |
| Debtors and Creditors | 32,000 | 15,000 |
| Bad debts | 400 | - |
| Cash-in-Hand | 3,000 | - |
| Machinery | 50,000 | - |
| Salaries | 8,000 | - |
| Carriage Inwards | 2,000 | - |
| Wages | 6,000 | - |
| Investments | 20,000 | - |
| Land and Building | 90,300 | - |
| Bank Overdraft | - | 20,000 |
| Commissions | 1,350 | 3,510 |
| Interest on Investments | - | 2,000 |
| Electricity | 2,000 | - |
| Rent | 2,500 | - |
| Insurance | 1,800 | - |
| Capital | - | 76,440 |
| 3,22,950 | 3,22,950 |
Closing stock was ₹ 10,360.
From the following Trail Balance of A.B. Chandra as on 31st December, 2019.
| TRIAL BALANCE of A.B. Chandra As on 31.12.2019 | |||
| Particulars | Amount (Dr.) | Particulars | Amount (Cr.) |
| Cash in Hand | 2,000 | Discount Received | 750 |
| Drawings | 2,800 | Capital | 40,000 |
| Opening Stock (01/01/2018) | 4,000 | Purchases Returns | 1,250 |
| Wages | 2,000 | Sales | 83,000 |
| Cash at Bank | 3,500 | Creditors | 15,000 |
| Insurance | 700 | Bank Loan | 10,000 |
| Trade Expenses | 1,200 | ||
| Furniture | 20,000 | ||
| Buildings | 61,000 | ||
| Salaries | 5,000 | ||
| Discount Allowed | 750 | ||
| Sales Returns | 3,000 | ||
| Purchases | 31,250 | ||
| Debtors | 10,000 | ||
| Telephone Charges | 1,000 | ||
| Bills Receivable | 1,800 | ||
| 1,50,000 | 1,50,000 | ||
The closing stock was valued at ₹ 12,000.
You are required to prepare a Trading Account and a Profit and Loss Account for the year ending 31st December 2019 and a Balance Sheet as on 31st December, 2019.
Prepare a Trading, Profit and Loss account of Mr. A. Awasthi for the year ending on 31st March, 2022 and a Balance Sheet as on 31st March, 2022.
| Particulars | Amount (Dr.) Rs. | Amount (Cr.) Rs. |
| Capital | 60,000 | |
| Drawings | 4,500 | |
| Cash at Bank | 4,200 | |
| Purchase | 66,000 | |
| Sales | 1,35,000 | |
| Purchase Returns | 3,000 | |
| Sales Returns | 6,000 | |
| Discount | 1,200 | |
| Carriage Outwards | 1,800 | |
| Salaries | 18,000 | |
| Trade expenses | 3,600 | |
| Opening stock | 15,000 | |
| Bad debts | 1,800 | |
| Rent | 4,500 | |
| Machinery | 1,08,000 | |
| Furniture | 15,000 | |
| Debtors | 15,000 | |
| Creditors | 30,000 | |
| Stationary | 7,500 | |
| Commission received | 900 | |
| Loan | 43,200 | |
| 2,72,100 | 2,72,100 |
Closing stock on 31st March, 2022 was valued at ₹ 78,000.
