Question

The following are the extracts from the trial balance of M/s Bhola and Sons as on March 31, 2011.
$\begin{array}{ccc}\text{Account Title}& \text{Amt. (Dr.)}& \text{Amt. (Cr)}\\ \text{Opening Stock}& 2,00,000& \\ \text{Purchase}& 8,10,000& \\ \text{Sales}& & 10,10,000\\ & \underset{–}{\overline{10,10,000}}& \underset{–}{\overline{10,10,000}}\end{array}$
(only relevant items)
Closing stock as on date was valued at Rs. 3,00,000.
You are required to record the necessary journal entries and show how the above items will appear in the Trading and Profit and Loss account and balance sheet of M/s Bhola and Sons.

Answer 1

Journal Entries
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{LF}& \text{Amt. (Dr)}& \text{Amt. (Cr)}\\ \text{2011}& & & & & \\ \text{Mar 31}& \text{Trading A/c}& \text{Dr}& & 10,10,000& \\ & \text{To Opening Stock A/c}& \text{Dr}& & & 2,00,000\\ & \text{To Purchases A/c}& & & & 8,10,000\\ & \text{(Balance of stock account and purchase account}& & & & \\ & \underset{–}{\text{transferred to trading account)}}& & & & \\ \text{Mar 31}& \text{Sales A/c}& \text{Dr}& & 10,10,000& \\ & \text{Closing Stock A/c}& \text{Dr}& & 3,00,000& \\ & \text{To Trading A/c}& & & & 13,10,000\\ & \text{(Balance from sales account and closing}& & & & \\ & \underset{–}{\text{stock account transferred to trading account)}}& & & & \\ \text{Mar 31}& \text{Trading A/c}& \text{Dr}& & 3,00,000& \\ & \text{To Profit and Loss A/c (GP)}& & & & 3,00,000\\ & \text{(Gross profit transferred to profit and loss account)}& & & & \end{array}$

Trading and Profit and Loss Account
as on 31st March, 2011
$\begin{array}{cccc}\text{Particulars}& \text{Amt. (Rs.)}& \text{Particulars}& \text{Amt. (Rs.)}\\ \text{Opening Stock}& 2,00,000& \text{Sales}& 10,10,000\\ \text{Purchase}& 8,10,000& \text{Closing Stock}& 3,00,000\\ \text{Gross Profit}& 3,00,000& & \\ & \underset{–}{\overline{13,10,000}}& & \underset{–}{\overline{13,10,000}}\end{array}$

Balance Sheet
as on 31st March, 2011
$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ & & \text{Closing Stock}& 3,00,000\end{array}$