Question

The following is the trial balance of Manju Chawla on March 31, 2017. You are required to prepare trading and profit and loss account and a balance sheet as on date:

Account title	Debit Amount Rs	Credit Amount Rs
Opening stock	10,000
Purchases and sales	40,000	80,000
Returns	200	600
Productive wages	6,000
Dock and Clearing charges	4,000
Donation and charity	600
Delivery van expenses	6,000
Lighting	500
Sales tax collected		1,000
Bad debts	600
Misc. incomes		6,000
Rent from tenants		2,000
Royalty	4,000
Capital		40,000
Drawings	2,000
Debtors and Creditors	6,000	7,000
Cash	3,000
Investment	6,000
Patents	4,000
Land and Machinery	43,000

Closing stock Rs 2,000.

Answer 1

Trading Account as on March 31, 2017
Dr.				Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Opening Stock			10,000	Sales		80,000
Purchases		40,000			Less: Sales Returns	(200)	79,800
	Less: Purchases Returns	(600)	39,400
Productive Wages			6,000	Closing Stock			2,000
Dock and Clearing Charges			4,000
Royalty			4,000
Profit and Loss (Gross Profit)			18,400
			81,800				81,800

Profit and Loss Account as on March 31, 2017
Dr.		Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Donation and Charity	600	Trading (Gross Profit)	18,400
Delivery Van Expenses	6,000	Misc. Incomes	6,000
Lighting	500	Rent from Tenants	2,000
Bad Debts	600
Net Profit	18,700
	26,400		26,400

Note: As per the solution, net profit is Rs 18,700; however, according to the answer given in the book, it is Rs 18,400.

Balance Sheet as on March 31, 2017
Liabilities					Amount Rs	Assets			Amount Rs
Capital			40,000			Patents			4,000
	Add: Profit and Loss (Net Profit)			18,700		Land and Machinery			43,000
			58,700			Investment			6,000
	Less: Drawings		(2,000)		56,700	Debtors			6,700
						Cash			3,000
Sales Tax Collected					1,000	Closing Stock			2,000
Creditors					7,000
					64,700				64,700

Note: There is a misprint in the trial balance given in the question. In order to match the trial balance, debtors have been taken as Rs 6,700; however, the debtors given in the trial balance is Rs 60,000.