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Question
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.
Solution
| In the Books of Mr. J. Junior | |||||
| Dr. | Trading and Profit and Loss A/c for the year ended 31.03.2019 |
Cr. | |||
| Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
| To Opening Stock | - | 25,000 | By Sales Cash | 2,67,000 | 2,62,000 |
| To Purchases | 1,40,000 | 1,34,000 | Less: Returns | (5,000) | |
| Less: Returns | (6,000) | By Closing Stock | - | 50,000 | |
| To Factory Power | - | 16,000 | |||
| To Carriage Charges | - | 2,500 | |||
| To Wages | - | 18,000 | |||
| To Gross Profit | - | 1,16,500 | |||
| 3,12,000 | 3,12,000 | ||||
| To Salaries | - | 20,400 | By Gross Profit | - | 1,16,500 |
| To Insurance | - | 8,000 | By Commission Received | - | 3,800 |
| To Carriage on Sales | - | 6,000 | By Income From Investments | - | 6,800 |
| To Rent & Taxes | - | 10,800 | By Discount Received | - | 6,000 |
| To Bad Debt w/off | 2,000 | 400 | |||
| Less: Bad Debt Recovered | (1,600) | ||||
| To Discount Allowed | - | 5,000 | |||
| To Net Profit | - | 82,500 | |||
| 1,33,100 | 1,33,100 | ||||
| Balance Sheet as on 31.03.2019 | ||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) |
| Capital | 2,37,000 | 3,04,500 | Machinery | 1,20,000 |
| Add: Net Profit | 82,500 | Loose Tools | 11,000 | |
| Less: Drawings | (15,000) | Sundry Debtors | 45,000 | |
| Bills Payable | 4,000 | Investment | 80,000 | |
| Sundry Creditors | 18,000 | Bills Receivable | 6,000 | |
| Bank Overdraft | 10,000 | Bank Accounts | 22,000 | |
| Cash | 2,500 | |||
| Closing Stock | 50,000 | |||
| 3,36,500 | 3,36,500 | |||
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RELATED QUESTIONS
What are the objectives of preparing trading account?
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
Prepare a Trading, Profit and Loss account of Mr. ABC for the year ending on 31st March, 2023 and a Balance Sheet as on 31st March, 2023.
| Particulars | Amount (Dr.) Rs. | Amount (Cr.) Rs. |
| Capital | 80,000 | |
| Drawings | 4,000 | |
| Cash at Bank | 4,700 | |
| Purchase | 66,000 | |
| Sales | 1,15,000 | |
| 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 | 18,000 | |
| Debtors | 12,000 | |
| Creditors | 30,000 | |
| Stationery | 7,500 | |
| Commission received | 900 | |
| Loan | 43,200 | |
| 2,72,100 | 2,72,100 |
Closing stock on 31st March, 2023 was valued at Rs. 78,000.
Explain the needs of a Trading Account.
Abraham is in business. The following balances were extracted from the books as on 31.12.2018. You are required to prepare a trading account and a profit and loss account for the year ended 31.12.2018 and a balance sheet as on that date.
| Debit (₹) | Credit(₹) | |
| Capital | 32,000 | |
| Drawings | 4,240 | |
| Purchases less Returns | 15,610 | |
| Rates and Taxes | 388 | |
| Salaries | 1,612 | |
| Lighting and Heating | 164 | |
| Electric Power | 384 | |
| Del credere Commission | 414 | |
| Insurance | 206 | |
| Advertising | 214 | |
| Sales less Returns | 34,176 | |
| Bad Debts Written off | 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 | |
| Sundry Creditors | 4,422 | |
| Cash at Bank | 5,268 | |
| 70,598 | 70,598 |
When preparing the accounts it is necessary to take the following matters into consideration: Closing stock on 31.12.2018 was ₹ 8,760.
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.
From the following trial balance of Mr. Roobex, prepare the final accounts of the year ended 31.12.2018.
| Debit (₹) | Credit (₹) | |
| Freehold Land | 60,000 | |
| Office and Factory Buildings | 40,000 | |
| Purchase and Sales | 1,20,000 | 2,05,000 |
| Stock | 30,000 | |
| Returns | 3,500 | 5,500 |
| Wages | 9,000 | |
| Salaries | 10,000 | |
| Office Expenses and Petties | 1,400 | |
| Carriage on Purchases and Import Duty | 2,200 | |
| Stationery and Printing Literature | 2,750 | |
| Discounts | 3,700 | |
| Bad Debts | 1,200 | |
| Capital of Mr. Roobex | 1,15,000 | |
| Loan from Miss Setalwad @ 10% (gainfully employed through the year) | 15,000 | |
| Insurance | 1,800 | |
| Sundry Debtors and Creditors | 40,000 | 12,000 |
| Interest Paid on Loan | 1,500 | |
| Commission for Agency Work | 1,600 | |
| Cash and Bank Balances | 7,700 | |
| Investments | 20,000 | |
| Petty Cash | 250 | |
| Bills Receivable and Payable | 9,000 | 2,000 |
| Bad Debts Recovered | 500 | |
| 3,60,300 | 3,60,300 |
Closing stock on 31.12.2018 was ₹ 56,000.
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.
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.
