Question

A retail trader did not keep his books on the double entry system. Following balances were obtained from his books:

	1st April 2013	31st March 2014
	₹	₹
Sundry Debtors	32,000	38,800
Sundry Creditors	20,300	24,600
Cash	6,000	–
Stock	22,000	28,000
Office Equipments	8,000	8,000
Machinery	30,000	40,000

Following further details of the transactions for the year ended 31st March, 2014 are available from his incomplete records:

	₹
Sales (including Cash Sales ₹ 62,000)	1,20,000
Purchases (including Cash Purchases ₹ 25,000)	72,000
Salaries	16,500
Drawings	8,500
Rent, Taxes & Insurance	7,100
Bad-Debts written off	2,400

You are required to prepare his Trading, P & L A/c and Balance Sheet after considering the following:
1. ₹ 1,500 are outstanding for salaries.
2. Insurance was unexpired to the extent of ₹ 800.
3. Goods worth ₹ 2,000 were used by the proprietor for personal use.

Answer 1

Trading Account for the year ended March 31, 2014
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening Stock	22,000	Sales (Cash + Credit)	1,20,000
Purchases (Cash + Credit - Drawings)	70,000	Closing Stock	28,000
Gross Profit	56,000
	1,48,000		1,48,000

Profit & Loss Account for the year ended March 31, 2014
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Salaries	16,500		Gross Profit	56,000
Add: Outstanding	1,500	18,000
Rent, Rates & Insurance	7,100
Less: Prepaid	800	6,300
Bad Debts		2,400
Net Profit		29,300
		56,000		56,000

Balance Sheet as on March 31, 2014
Dr.				Cr.
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital	77,700		Debtors	38,800
Less: Drawings	10,500		Cash	7,000
Add: Net Profit	29,300	96,500	Stock	28,000
Closing Creditors		24,600	Office Equipment	8,000
Outstanding Salary		1,500	Machinery	40,000
			Unexpired Insurance	800
		1,22,600		1,22,600

Working Notes:

Balance Sheet as on March 31, 2013
Dr.			Cr.
Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors	20,300	Debtors	32,000
Capital (Balancing figure)	77,700	Cash	6,000
		Stock	22,000
		Office Equipments	8,000
		Machinery	30,000
	98,000		98,000

Cash Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	6,000	Creditors A/c	42,700
Debtors A/c	48,800	Purchases A/c	25,000
Sales A/c	62,000	Salary A/c	16,500
		Drawings	8,500
		Rent, Rates & Insurance	7,100
		Machinery A/c	10,000
		Balance c/d Balancing Figure)	7,000
	1,16,800		1,16,800

Debtors Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	32,000	Cash A/c	48,800
Sales A/c	58,000	Bad-Debts A/c	2,400
		Balance c/d	38,800
	90,000		90,000

Creditors Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Cash A/c	42,700	Balance b/d	20,300
Balance c/d	24,600	Purchases A/c	47,000
	67,300		67,300