Question

From the following Trial Balance of Mahesh, prepare his Final Accounts for the year ended 31st March, 2018:

TRIAL BALANCE as on 31st March, 2018
Heads of Accounts		Debit Balances (₹)	Credit Balances (₹)
Purchases	................................................................................	2,50,000	…
Sales	................................................................................	…	5,00,000
Returns Inward	................................................................................	12,000	...
Returns Outward	................................................................................	…	10,000
Carriage	................................................................................	8,000	…
Wages	................................................................................	60,000	…
Trade Expenses	................................................................................	2,000	…
Insurance	................................................................................	1,200	…
Repairs	................................................................................	8,000	…
Debtors	................................................................................	1,15,000	…
Creditors	................................................................................	…	1,00,000
Printing and Stationery	................................................................................	6,000	…
Advertisement	................................................................................	15,000	…
Bills Receivable	................................................................................	4,000	…
Bills Payable	................................................................................	…	2,000
Opening Stock	................................................................................	30,000	…
Cash in Hand	................................................................................	12,000	…
Interest on Bank Loan	................................................................................	2,800	…
Machinery	................................................................................	2,80,000	…
Furniture	................................................................................	34,000	…
Drawings	................................................................................	20,000	…
Commission	................................................................................	…	1,000
12% Bank Loan	................................................................................	…	30,000
Capital	................................................................................	…	2,40,000
Rent Received	................................................................................	…	5,000
Cash at Bank	................................................................................	28,000	…
Total		8,88,000	8,88,000

Additional Information:
(i) Closing Stock on 31st March, 2018 was ₹ 21,000.
(ii) Rent of ₹ 1,200 has been received in advance.
(iii) Outstanding liability for trade expenses ₹ 12,000.
(iv) Commission earned during the year but not received was ₹ 2,100.
(v) Goods costing ₹ 2,000 were taken by the proprietor for his personal use but no entry has been passed in the books of account.

Answer 1

Financial Statement of Shri O.P. Yadav
Trading Account for the year ended March 31, 2018
Dr.					Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
Opening stock		30,000
Purchases 2,50,000			Sales	5,00,000
Less: Drawings	(2,000)		Less: Return Inwards	(12,000)	4,88,000
Less: Return Outwards	(10,000)	2,38,000	Closing Stock		21,000
Carriage		8,000
Wages		60,000
Gross Profit (Balancing Figure)		1,73,000
		5,09,000			5,09,000

Profit and Loss Account for the year ended March 31, 2018
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Trade expenses		2,000		Gross Profit		1,73,000
Add: Outstanding Trade Expenses		12,000	14,000	Commission	1,000
Insurance			1,200	Add: Accrued Commission	2,100	3,100
Repairs			8,000	Rent Received	5,000
Advertisement			15,000	Less: Advance Rent	1,200	3,800
Interest on Bank Loan		2,800
Add: Interest Outstanding		800	3,600
Printing and Stationary			6,000
Net Profit (Balancing Figure)			1,32,100
			1,79,900			1,79,900

Balance Sheet as on March 31, 2018
Liabilities		Amount (Rs)	Assets	Amount (Rs)
Capital	2,40,000		Fixed Assets
Less: Drawings	(22,000)		Machinery	2,80,000
Add: Net Profit	1,32,100	3,50,100	Furniture	34,000
10% Loan from Bank	30,000		Current Assets
Add: Outstanding Interest	800	30,800	Closing Stock	21,000
Current Liabilities			Debtors	1,15,000
Creditors		1,00,000	Bills Receivable	4,000
Bills Payable		2,000	Cash at Bank	28,000
Advance Rent		1,200	Cash in Hand	12,000
Outstanding Trade Expenses		12,000	Commission Accrued	2,100
		4,96,100		4,96,100

Working Notes:

Calculation of Outstanding Interest on Loan

Interest on loan (30,000 × 12%)	3,600
Less: Interest Paid	(2,800)
Interest Outstanding on Loan	800