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Question
The following Trial Balance was from the books of Ram as on 31st December 2018.
| TRIAL BALANCE | |||
| Dr. (₹) | Cr. (₹) | ||
| Drawings Account | 7,000 | Capital Account | 90,000 |
| Purchases | 82,210 | Purchase Return | 4,240 |
| Sales Return | 1,820 | Sales | 1,49,840 |
| Opening Stock | 11,460 | Bad Debt Reserve | 4,240 |
| Salaries | 6,280 | Discount | 180 |
| Wages | 8,560 | Sundry Creditors | 16,980 |
| Leasehold Premises | 25,000 | ||
| Rent, Rates & Insurance | 6,940 | ||
| Carriage Inward | 2,310 | ||
| Office Expenses | 9,520 | ||
| Plant & Machinery | 24,000 | ||
| Light & Water | 7,950 | ||
| Bills Receivable | 1,240 | ||
| Sundry Debtors | 38,970 | ||
| Cash at Bank | 12,400 | ||
| Cash in Hand | 2,210 | ||
| Office Furniture | 3,500 | ||
| Travelling Expenses | 9,870 | ||
| Bad Debts | 1,000 | ||
| Carriage Outward | 3,240 | ||
| 2,65,480 | 2,65,480 | ||
Prepare a Trading Account and a Profit & Loss Account for the year ended 31st December 2018 and a Balance Sheet as at that date.
The value of Stock on 31st December 2018 was ₹ 14 920.
Solution
| In the Books of Mr. Ram | |||||
| Dr. | Trading and Profit and Loss A/c for the year ended 31.12.2018 |
Cr. | |||
| Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
| To Opening Stock | - | 11,460 | By Sales Cash | 1,49,840 | 1,48,020 |
| To Purchases | 82,210 | 77,970 | Less: Returns | (1,820) | |
| Less: Returns | (4240) | By Closing Stock | - | 14,920 | |
| To Wages | - | 8,560 | |||
| To Carriage Inwards | - | 2,310 | |||
| To Light & Water | - | 7,950 | |||
| To Gross Profit | - | 54,960 | |||
| 1,62,940 | 1,62,940 | ||||
| To Salaries | - | 6,280 | By Gross Profit | - | 54,960 |
| To Rent, Rates & Insurance | - | 6,940 | By Discount Recd. | - | 180 |
| To Office Expenses | - | 9,520 | |||
| To Travelling Expenses | - | 9,870 | |||
| To Carriage Outward | - | 3,240 | |||
| To Bad debt | - | 1,000 | |||
| To Net Profit | - | 18,020 | |||
| 54,870 | 54,870 | ||||
| Balance Sheet as on 31.12.2018 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Capital | 90,000 | 1,01,020 | Leasehold Premises | - | 25,000 |
| Add: Net Profit | 18,020 | Plant & Machinery | - | 24,000 | |
| Less: Drawings | (7,000) | Bills Receivable | - | 1,240 | |
| Sundry Creditors | - | 16,980 | Sundry Debtors | 38,970 | 34,730 |
| Less: Bad Debt Reserve | (4,240) | ||||
| Cash at bank | - | 12,400 | |||
| Cash in Hand | - | 2,210 | |||
| Office Furniture | - | 3,500 | |||
| Closing Stock | - | 14,920 | |||
| 1,18,000 | 1,18,000 | ||||
APPEARS IN
RELATED QUESTIONS
Closing stock appears in the Final Accounts in the ______.
Explain the needs of a Trading Account.
Mr. Patil, the owner of Jai Hind Engineers, submits the following trial balance to you for the year ended 31st March 2019:
| Dr. (₹) | Cr. (₹) | |
| Purchase and Sales | 16,180 | 75,200 |
| Opening Stock | 6,500 | |
| Drawings | 4,000 | |
| Motor Cycle | 12,500 | |
| Cycles and Carts Delivery | 2,500 | |
| Bad Debts | 200 | |
| Debtors and Creditors | 4,000 | 2,000 |
| Vehicle Expenses | 1,100 | |
| Capital | 8,600 | |
| Bills Receivable and Payable | 800 | 1,000 |
| Bank and Cash Balances | 1,800 | |
| Petty Cash | 100 | |
| Insurance Premium | 500 | |
| Salaries | 900 | |
| Petty Expenses | 300 | |
| Wages | 1,500 | |
| Rent | 3,000 | |
| Godown Rent | 1,800 | |
| General Expenditure | 700 | |
| Bank Loan | 2,000 | |
| Carriage Inwards | 500 | |
| Worker's Equipment | 30,000 | |
| Returns | 200 | 280 |
| 89,080 | 89,080 |
Prepare the final accounts for him. Closing stock is valued at ₹ 5,400.
The following is the trial balance of Mr. C. Nariman for the year ended 31st December, 2018. Complete the final accounts for him, after incorporating the adjustments and thereafter complete the required details listed by him.
| Debit (₹) | Credit (₹) | |
| Capital | 65,000 | |
| Drawings | 4,000 | |
| Purchases and Returns Outward | 25,000 | 4,000 |
| Cash Sales | 17,000 | |
| Credit Sales | 54,000 | |
| Stock (1.1.2018) | 9,000 | |
| Salaries | 10,000 | |
| Wages | 3,000 | |
| Carriage Inward | 2,000 | |
| Bad Debts | 500 | |
| Petty Cash | 100 | |
| Cash and Bank | 6,000 | |
| Rent, Rates and Taxes | 4,000 | |
| Discounts | 400 | 500 |
| Telephones, Postage and Stationery | 1,500 | |
| Bank Loan on Mortgage | 14,000 | |
| Premises and Godowns | 35,000 | |
| Machinery | 50,000 | |
| Debtors and Creditors | 10,000 | 6,000 |
| 1,60,500 | 1,60,500 |
Stock on 31.12.2018 is ₹ 30,000.
Mr. P.H. Mehta is in business. The following balances were extracted from the books as on 31.12.2018. You are required to prepare the Trading Account and the Profit and Loss Account for the year ended 31.12.2018 and the Balance Sheet as on that date.
| Debit (₹) | Credit (₹) | |
| Capital | 1,98,000 | |
| Drawings | 10,000 | |
| Purchases and Returns Outward | 1,18,800 | 500 |
| Salaries | 21,650 | |
| Rate and Taxes | 950 | |
| Office Lighting and Cooling | 2,700 | |
| Import Duty | 2,200 | |
| Insurance | 250 | |
| Agency Commission | 900 | |
| Advertising | 5,000 | |
| Returns Inward and Sales | 3,48,500 | |
| Bad Debts | 800 | |
| Postage and Telegrams | 800 | |
| Discount Received | 150 | |
| Carriage for Door Delivery to Customers | 1,400 | |
| Opening Stock | 6,200 | |
| Wages | 27,700 | |
| Plant and Machinery | 2,05,000 | |
| Land and Buildings | 1,10,000 | |
| Furniture and Fittings | 3,000 | |
| Sundry Debtors and Creditors | 39,600 | 20,000 |
| Cash at Bank | 10,000 | |
| Petty Cash Balance | 200 | |
| 5,67,150 | 5,67,150 |
Closing stock on 31.12.2018 was ₹ 48,700.
From the following Trial Balance of Mr. P.H. Planner as on 31.3.2019, prepare final accounts for him:
| Debit (₹) | Credit (₹) | |
| Duty, Clearing and Freight | 10,000 | |
| Stock (1.4.2018) | 30,000 | |
| Goodwill | 30,000 | |
| Salary, Bonus and Travel Allowance | 25,000 | |
| Leasehold Premises | 90,000 | |
| Purchases and Sales | 2,40,000 | 3,80,000 |
| Debtors and Creditors | 20,000 | 15,000 |
| Capital and Drawings | 20,000 | 1,60,000 |
| General Expenses | 16,000 | |
| Factory Equipment and Tools | 18,000 | |
| Bank | 5,000 | |
| Interest-free Loan from Mr. P.H. Planner for four years | 80,000 | |
| Wages and Bonus | 35,000 | |
| Cash and Petty Cash | 17,000 | |
| Plant and Machinery | 50,000 | |
| Bill Payable and Receivable | 12,000 | 8,000 |
| Professional Charges | 18,000 | |
| Returns | 7,000 | 4,000 |
| Insurance and Office Expenses | 14,000 | |
| 6,52,000 | 6,52,000 |
Closing Stock is ₹ 45,000.
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.
From the following trial balance of Mr. A prepare a Trading Account and a Profit and Loss Ale for the year ending 3tst Dec., 2018 and a Balance Sheet as on that date:
| TRIAL BALANCE | |||
| Debit Balance | (₹) | Credit Balance | (₹) |
| Cash | 10,000 | Sales | 1,80,500 |
| Stock | 40,800 | Returns | 195 |
| Wages | 22,525 | Loan | 20,000 |
| Ourchases | 1,30,295 | Creditors | 30,305 |
| Returns Inward | 2,400 | Discount | 530 |
| Repairs | 1,675 | Capital | 37,500 |
| Bad Debts | 2,310 | ||
| Interest on Loan | 600 | ||
| Salaries | 8,000 | ||
| Sales Tax | 800 | ||
| Octroi | 500 | ||
| Insurance | 1,000 | ||
| Charity | 125 | ||
| Rent | 2,000 | ||
| Machinery | 16,000 | ||
| Debtors | 30,000 | ||
| 2,69,030 | 2,69,030 | ||
Stock on 31st Dec., 2018 was ₹ 40,925.
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.
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.
