1
Question
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.
| 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.
Open in App
Solution
Trading Account
for the year ended March 31, 2019
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
Note: As per the prudence concept, closing stock is taken to be at the market value or the book value whichever is less.
Profit & Loss Account
for the year ended March 31, 2019
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, 2019
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
|
Trading Account
for the year ended March 31, 2019
|
||||
| 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, 2019
|
|||||
| 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, 2019
|
|||||
| 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
|
||||
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