Question

The following trial balance is extracted from the books of M/s Ram on 31st March, 2016, You are required to prepare trading and profit and loss account and the balance sheet as on date.

$\begin{array}{cccc}\text{Name of Account}& \text{Debit (Rs.)}& \text{Name of Account}& \text{Credit (Rs.)}\\ \text{Debtors}& 12,000& \text{Apprenticeship Premium}& 5,000\\ \text{Purchases}& 50,000& \text{Loan}& 10,000\\ \text{Coal, Gas and Water}& 6,000& \text{Bank Overdraft}& 1,000\\ \text{Factory Wages}& 11,000& \text{Sales}& 80,000\\ \text{Salaries}& 9,000& \text{Creditors}& 13,000\\ \text{Rent}& 4,000& \text{Capital}& 20,000\\ \text{Discount}& 3,000& & \\ \text{Advertisement}& 500& & \\ \text{Drawings}& 1,000& & \\ \text{Loan}& 6,000& & \\ \text{Petty Cash}& 500& & \\ \text{Sales Return}& 1,000& & \\ \text{Machinery}& 5,000& & \\ \text{Land and Building}& 10,000& & \\ \text{Income Tax}& 100& & \\ \text{Furniture}& 9,900& & \end{array}$

Answer 1

Trading and Profit and Loss Account
$\begin{array}{cccccccc}\text{Dr}& & & & \text{for the year ended 31st, March, 2016}& & & \text{Cr}\end{array}\begin{array}{cccc}\text{Particulars}& \text{Amt. (Rs.)}& \text{Particulars}& \text{Amt. (Rs.)}\\ \text{Purchases}& 50,000& \text{Sales}80,000& \\ \text{Coal, Gas and Water}& 6,000& (-)\text{Sales Return}\underset{–}{1,000}& 79,000\\ \text{Factory Wages}& 11,000& & \\ \text{Gross Profit Transferred to}& 12,000& & \\ \text{Profit and Loss A/c}& & & \\ & \overline{\underset{–}{\underset{–}{79,000}}}& & \overline{\underset{–}{\underset{–}{79,000}}}\\ \text{Salaries}& 9,000& \text{Gross Profit b/d}& 12,000\\ \text{Rent}& 4,000& \text{Apprenticeship Premium}& 5,000\\ \text{Discount}& 3,000& & \\ \text{Advertisement}& 500& & \\ \text{Net Profit transferred to Capital A/c}& 500& & \\ & \overline{\underset{–}{\underset{–}{17,000}}}& & \overline{\underset{–}{\underset{–}{17,000}}}\end{array}$

Balance Sheet
as at 31st March, 2016
$\begin{array}{cccc}\text{Liabilities}& \text{Amt (Rs.)}& \text{Assests}& \text{Amt (Rs.)}\\ \text{Capital}20,000& & \text{Machinery}& 5,000\\ (+)\text{Net Profit}\underset{–}{500}& & \text{Land and Building}& 10,000\\ 20,500& & \text{Furniture}& 9,900\\ (-)\text{Drawings}1,000& & \text{Loan and Advances}& 6,000\\ (-)\text{Income Tax}\underset{–}{100}& 19,400& \text{Debtors}& 12,000\\ \text{Creditors}& 13,000& \text{Petty Cash}& 500\\ \text{Loan}& 10,000& & \\ \text{Bank Overdraft}& 1,000& & \\ & \overline{\underset{–}{\underset{–}{43,000}}}& & \overline{\underset{–}{\underset{–}{43,000}}}\end{array}$