wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Roshan, whose accounts are maintained by Single Entry System, acquired a retail business on 1st April, 2017. He had ₹40,000 of his own and he borrowed ₹ 20,000 from his wife. He paid ₹15,000 for Goodwill, ₹5,000 for Furniture and ₹35,000 for Stock.
Total cash received by him during the financial year from the Debtors was ₹2,30,000. His payments were:
Purchases 1,56,000
Salary and Wages 21,400
Trade Expenses 7,200
Rent:
For business premises 5,920
For private house 2,960
Payments made for domestic purposes and drawings 26,400

At the end of the year, the Stock was ₹37,500. He owed ₹13,500 to Creditors for goods and his customers owed to him ₹15,000. Provide 5% for Depreciation on Furniture, Interest at 5% on wife's Loan and ₹1,000 for Doubtful Debts.
Prepare the Cash Account, the Profit and Loss Account for the year ended 31st March, 2018 and the Balance Sheet at the close of the year.

Open in App
Solution

Trading Account for the year ended 31st March, 2018
Dr.
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Opening Stock
35,000
Sales
2,45,000
Purchases: Cash
1,56,000
Closing Stock
37,500
Credit
13,500
1,69,500
Gross Profit c/d
78,000
2,82,500
2,82,500
Profit and Loss Account
for the year ended March 31, 2018
Dr.
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Salary and Wages
21,400
Gross Profit b/d
78,000
Trade Expenses
7,200
Rent for Business Premises
5,920
Provision for Doubtful Debts
1,000
Depreciation on Furniture
250
Interest on wife’s loan
1,000
Net Profit t/d to Capital
41,230
78,000
78,000
Balance Sheet
as on March 31, 2018
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
13,500
Cash Balance
15,120
Wife’s Loan from Wife
20,000
Stock
37,500
Add: O/s Interest
1,000
21,000
Furniture
5,000
Capital
40,000
Less: Depreciation
250
4,750
Less: Drawings
29,360
Debtors
15,000
10,640
Less: Provision for Doubtful Debts
1,000
14,000
Add: Net Profit
41,230
51,870
Goodwill
15,000
86,370
86,370
Cash Account
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Capital
40,000
Goodwill
15,000
Wife’s Loan
20,000
Furniture
5,000
Debtors
2,30,000
Stock
35,000
Purchases
1,56,000
Salary and Wages
21,400
Trade Expenses
7,200
Rent for Business Premises
5,920
Drawings( 2,960+26,400)
29,360
Balance c/d
15,120
2,90,000
2,90,000

Working Notes
Dr.
Creditors Account
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance c/d 13,500 Purchases-Credit (B/F) 13,500
13,500
13,500
Dr.
Debtors Account
Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Sales A/c (B/F)
2,45,000
Cash
2,30,000
Balance c/d
15,000
2,45,000
2,45,000

flag
Suggest Corrections
thumbs-up
0
similar_icon
Similar questions
View More
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Tax Computation
MATHEMATICS
Watch in App
Join BYJU'S Learning Program
CrossIcon