Question

The following trial balance is extracted from the books of M/s Ram on March 31, 2017. You are required to prepare trading and profit and loss account and the balance sheet as on date:

Account title	Amount Rs	Account title	Amount Rs
Debtors	12,000	Apprenticeship premium	5,000
Purchases	50,000	Loan	10,000
Coal, gas and water	6,000	Bank overdraft	1,000
Factory wages	11,000	Sales	80,000
Salaries	9,000	Creditors	13,000
Rent	4,000	Capital	20,000
Discount	3,000
Advertisement	500
Drawings	1,000
Loan	6,000
Petty cash	500
Sales return	1,000
Machinery	5,000
Land and building	10,000
Income tax	100
Furniture	9,900

Answer 1

Trading Account as on March 31, 2017
Dr.						Cr.
Particulars					Amount Rs	Particulars			Amount Rs
Purchases					50,000	Sales		80,000
Coal, Gas and Water					6,000		Less: Sales Return	1,000	79,000
Factory Wages					11,000
Profit and Loss (Gross Profit)					12,000
					79,000				79,000

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Salaries	9,000	Trading (Gross Profit)	12,000
Rent	4,000	Apprenticeship Premium	5,000
Discount	3,000
Advertisement	500
Net Profit	500
	17,000		17,000

Balance Sheet as on March 31, 2017
Liabilities			Amount Rs	Assets			Amount Rs
Capital		20,000		Machinery			5,000
	Add: Profit and Loss (Net Profit)	500		Land and Building			10,000
		20,500		Furniture			9,900
	Less: Drawings	(1,000)		Loan (Given)			6,000
	Less: Income Tax	(100)	19,400	Debtors			12,000
				Petty Cash			500
Loan (Taken)			10,000
Creditors			13,000
Bank Overdraft			1,000
			43,400				43,400