Following are the balances extracted from the books of Narain Lal on 31st March, 2018:

Particulars Amount
(₹)
Particulars

Amount

(₹)

Narain Lal's Capital 3,00,000 Sales 15,00,000

Narain Lal's Drawings 50,000 Sales Return 20,000

Furniture and Fittings 26,000 Discount (Dr.) 16,000

Bank Overdraft 42,000 Discounts (Cr.) 20,000

Creditors 1,38,000 Insurance 20,000

Business Premises 2,00,000 General Expenses 40,000

Stock on 1st April, 2017 2,20,000 Salaries 90,000

Debtors 1,80,000 Commission (Dr.) 22,000

Rent from Tenants 10,000 Carriage on Purchases 18,000

Purchases 11,00,000
Bad Debts Written off

8,000

Additional Information:
(i) Closing Stock as on 31st March, 2018 was ₹2,00,600.
(ii) Depreciate: Business Premises by ₹3,000 and Furniture and Fittings by ₹2,500.
(iii) Make a provision of 5% on debtors for doubtful debts.
(iv) Carry forward ₹2,000 for unexpired insurance.
(v) Outstanding salary was ₹15,000.
Prepare Trading and Profit and Loss Account for the year and Balance Sheet as at that date.

Open in App

Solution

Trading Account

for the year ended March 31, 2018

Dr.
Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock
2,20,000
Sales
15,00,000

Purchases
11,00,000
Less: Returns
20,000

14,80,000

Carriage on Purchases
18,000
Closing Stock
2,00,600

Gross Profit
3,42,600

16,80,600

16,80,600

Profit & Loss Account

for the year ended March 31, 2018

Dr.
Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Commission
22,000
Gross Profit
3,42,600

Insurance Premium
20,000

Discount
20,000

Less: Prepaid
2,000

18,000
Rent from Tenants
10,000

Salaries
90,000

Add: Outstanding Salaries
15,000

1,05,000

Bad Debts Written Off
8,000

Provision for Doubtful Debts
9,000

Discount
16,000

General Expenses
40,000

Depreciation on:

Furniture
2,500

Business Premises
3,000

5,500

Net Profit
1,49,100

3,72,600

3,72,600

Balance Sheet

as on March 31, 2018

Dr.
Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Bank Overdraft
42,000
Furniture & Fittings
26,000

Creditors
1,38,000
Less: Depreciation
2,500

23,500

Outstanding Salaries
15,000
Business Premises
2,00,000

Capital
3,00,000

Less: Depreciation
3,000

1,97,000

Less: Drawings
50,000

Debtors
1,80,000

Add: Net Profit
1,49,100

3,99,100
Less: Provision
9,000

1,71,000

Closing Stock
2,00,600

Prepaid Insurance
2,000

5,94,100

5,94,100

Suggest Corrections

Similar questions

Q. Following are the balances extracted from the books of Narain on 31st March, 2019:


Particulars	Amount (₹)	Particulars	Amount (₹)
Narain's Capital	3,00,000	Sales	15,00,000
Narain's Drawings	50,000	Sales Return	20,000
Furniture and Fittings	26,000	Discounts (Dr.)	16,000
Bank Overdraft	42,000	Discounts (Cr.)	20,000
Creditors	1,38,000	Insurance	20,000
Business Premises	2,00,000	General Expenses	40,000
Stock on 1st April, 2018	2,20,000	Salaries	90,000
Debtors	1,80,000	Commission (Dr.)	22,000
Rent from Tenants	10,000	Carriage on Purchases	18,000
Purchases	11,00,000	Bad Debts Written off	8,000

Additional Information:
(i) Closing Stock as on 31st March, 2019 was ₹ 2,00,600, whereas its Net Realisable Value (Market Value) was ₹ 2,05,000.
(ii) Depreciate: Business Premises by ₹ 3,000 and Furniture and Fittings by ₹ 2,500.
(iii) Make a provision of 5% on debtors for doubtful debts.
(iv) Carry forward ₹ 2,000 for unexpired insurance.
(v) Outstanding salary was ₹ 15,000.
Prepare Trading and Profit and Loss Account for the year and Balance Sheet as at that date.

Q. On 31st March, 2018 the following Trial Balance was extracted from the books of Mohan:


Particulars	Debit Balances (₹)	Credit Balances (₹)
Capital		3,00,000
Plant and Machinery	50,000
Debtors	2,00,000
Creditors		1,00,000
Loan		95,000
Interest on Loan	3,000
Cash	20,000
Provision for Doubtful Debts		7,000
Stock on 1st April, 2017	68,000
Motor Vehicles	1,00,000
Bank	35,000
Land and Building	1,20,000
Bad Debts	5,000
Purchases	6,60,000
Sales		11,00,000
Purchases Return		15,000
Sales Return	80,000
Carriage Outwards	25,000
Carriage Inwards	30,000
Salaries	90,000
Rent and Insurance	30,000
Advertising	35,000
Discount Received		5,000
General Expenses	34,000
Bills Receivable	60,000
Bills Payable		20,000
Rent Received		3,000
Total	16,45,000	16,45,000

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as at that date after taking into account the following:
(a) Stock as at 31st March, 2018 was valued at ₹70,000.
(b) All debtors are considered good for recovery.
(c) Depreciate Motor Vehicles by 20%.
(d) Bank intimation of customer's cheque of ₹10,000 being dishonoured is not recorded in the books.
(e) Travelling expenses of ₹5,000 paid to sales person was wrongly debited to his Personal Account and was included in debtors.
(f) Amount of ₹6,000 received from Ronit was credited to his account and was included in creditors. This amount was written off as bad debt in earlier years.
(g) Drawings included an amount of ₹2,000 being amount drawn in cash. It was used by Mohan for Purchase of stationery used in business.

Q. Following is the Trial Balance as on 31st March, 2019. Prepare Trading and Profit and Loss Account and Balance Sheet:


Particulars	Dr. (₹)	Cr. (₹)
Stock on 1st April, 2018	8,000
Sales		2,20,000
Purchases	1,26,000
Productive Wages	56,500
Salaries	16,000
Stores Consumed	6,050
Carriage	3,050
Rent	5,200
Insurance	1,320
Machinery	52,000
Building	67,000
Capital Less Drawings		1,45,600
Sundry Debtors	44,000
Sundry Creditors		20,000
Secured Loan		16,000
Furniture	3,350
General Expenses	2,600
Cash in Hand	1,930
Bad Debts	1,020
Bank	6,580
Input CGST	3,000
Input SGST	3,000
Output CGST		2,500
Output SGST		2,500
Total	4,06,600	4,06,600

Stock on 31st March, 2019, ₹ 20,600.
You are to make adjustments in respect of the following:
(a) Depreciate Machinery at 10% p.a.
(b) Make a provision @ 5% for Doubtful Debts.
(c) Provide discount on debtors @

2 \frac{1}{2}

%.
(d) Rent includes Rent deposit of ₹ 400.
(e) Insurance Prepaid ₹ 120.

Q. Prepare Trading and Profit and Loss Account and Balance Sheet of Jagat Shah as at 31st March, 2019 from the following balances:

	₹		₹
Capital (Cr.)	3,60,000	Salaries	60,000
Machinery	70,000	General Expenses	20,000
Sales	8,20,000	Rent	50,000
Purchases	4,00,000	Purchases Return	5,000
Sales Return	10,000	Debtors	3,00,000
Stock on 1st April, 2018	1,00,000	Cash	40,000
Drawings	40,000	Carriage Outwards	20,000
Wages	1,00,000	Advertising	20,000
Carriage Inwards	5,000	Creditors	50,000

The Closing Stock was valued at ₹ 2,00,000.

Q. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date from the following Trial Balance:

Particulars	Dr. (₹)	Cr. (₹)
Capital	…	1,00,000
Cash	15,000	…
Bank Loan	…	20,000
Purchases	1,20,000	…
Sales	…	1,50,000
Sales Return	10,000	…
Purchases Return	…	20,000
Establishment Expenses	22,000	…
Taxes and Insurance	5,000	...
Bad Debts	5,000	…
Provision for Doubtful Debts	…	7,000
Debtors	50,000	…
Creditors	…	20,000
Commission	…	5,000
Deposits	40,000	…
Opening Stock	30,000	…
Drawings	14,000	…
Furniture	6,000	…
Bills Receivable	32,000	…
Bills Payable	…	25,000
Input CGST	10,000	...
Input SGST	10,000	…
Output CGST	…	8,000
Output SGST	…	8,000
Output IGST	…	6,000
Total	3,69,000	3,69,000

Adjustments:
(i) Taxes ₹ 3,000 are outstanding but Insurance ₹ 500 is prepaid.
(ii) Commission ₹ 1,000 received in advance for the next year.
(iii) Interest ₹ 2,100 is to be received on Deposits and Interest on Bank Loan ₹ 3,000 is to be paid.
(iv) Provision for Doubtful Debts to be maintained at ₹ 10,000.
(v) Depreciate Furniture by 10%.
(vi) Stock on 31st March, 2019 is ₹ 45,000.
(vii) A fire occurred on 1st April, 2019 destroying goods costing ₹ 10,000. These goods were purchased paying CGST and SGST @ 6% each.

Join BYJU'S Learning Program

Trading Account for the year ended March 31, 2018
Dr.				Cr.
Particulars	Amount (₹)	Particulars		Amount (₹)
Opening Stock	2,20,000	Sales	15,00,000
Purchases	11,00,000	Less: Returns	20,000	14,80,000
Carriage on Purchases	18,000	Closing Stock		2,00,600
Gross Profit	3,42,600
	16,80,600			16,80,600

Profit & Loss Account for the year ended March 31, 2018
Dr.					Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Commission			22,000	Gross Profit	3,42,600
Insurance Premium	20,000			Discount	20,000
Less: Prepaid	2,000		18,000	Rent from Tenants	10,000
Salaries	90,000
Add: Outstanding Salaries	15,000		1,05,000
Bad Debts Written Off			8,000
Provision for Doubtful Debts			9,000
Discount			16,000
General Expenses			40,000
Depreciation on:
Furniture		2,500
Business Premises		3,000	5,500
Net Profit			1,49,100
			3,72,600		3,72,600

Balance Sheet as on March 31, 2018
Dr.					Cr.
Liabilities		Amount (₹)	Assets		Amount (₹)
Bank Overdraft		42,000	Furniture & Fittings	26,000
Creditors		1,38,000	Less: Depreciation	2,500	23,500
Outstanding Salaries		15,000	Business Premises	2,00,000
Capital	3,00,000		Less: Depreciation	3,000	1,97,000
Less: Drawings	50,000		Debtors	1,80,000
Add: Net Profit	1,49,100	3,99,100	Less: Provision	9,000	1,71,000
			Closing Stock		2,00,600
			Prepaid Insurance		2,000
		5,94,100			5,94,100