Question

Prepare trading and profit and loss account from the following particulars of M/s Neema Traders as on March 31, 2017.

Account Title	Debit Amount Rs	Account Title	Credit Amount Rs
Buildings	23,000	Sales	1,80,000
Plant	16,930	Loan	8,000
Carriage inwards	1,000	Bills payable	2,520
Wages	3,300	Bank overdraft	4,720
Purchases	1,64,000	Creditors	8,000
Sales return	1,820	Capital	2,36,000
Opening stock	9,000	Purchases return	1,910
Machinery	2,10,940
Insurance	1,610
Interest	1,100
Bad debts	250
Postage	300
Discount	1,000
Salaries	3,000
Debtors	3,900

Stock on March 31, 2017 Rs 16,000.

Answer 1

Trading Account as on March 31, 2017
Dr.											Cr.
Liabilities						Amount Rs	Assets				Amount Rs
Opening Stock						9,000	Sales		1,80,000
Purchases				1,64,000				Less: Sales Return	(1,820)		1,78,180
	Less: Purchases Return			(1,910)		1,62,090	Closing Stock				16,000
Carriage Inwards						1,000
Wages						3,300
Profit and Loss (Gross Profit)						18,790
						1,94,180					1,94,180

Profit and Loss Account as on March 31, 2017
Dr.			Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Insurance	1,610	Trading (Gross Profit)	18,790
Interest	1,100
Bad Debts	250
Postage	300
Discount	1,000
Salaries	3,000
Net Profit	11,530
	18,790		18,790

Balance Sheet as on March 31, 2017
Liabilities				Amount Rs	Assets	Amount Rs
Capital			2,36,000		Building	23,000
		Add: Net Profit	11,530	2,47,530	Plant	16,930
					Machinery	2,10,940
Loan				8,000	Debtors	3,900
Creditors				8,000	Closing Stock	16,000
Bills Payable				2,520
Bank Overdraft				4,720
				2,70,770		2,70,770

Note: As per the solution, the gross profit, net profit and the total of balance sheet are Rs 18,790, Rs 11,530 and Rs 2,70,770 respectively; whereas, as per the answer given in the book, these are Rs 17,850, Rs 10,590 and Rs 2,69,830.