Vijay commenced business as foodgrains merchant on 1st April, 2017 with a capital of ₹4,00,000. On the same day, he purchased furniture for ₹80,000. From the following particulars obtained from his books which do not conform to Double Entry principles, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2018 and the Balance Sheet as on that date:

₹

Sales (including Cash Sales ₹2,00,000) 5,00,000

Purchases (including Cash Purchases ₹1,20,000 4,00,000

Vijay's Drawings (in cash) 40,000

Salaries to Staff 48,000

Bad Debts written off 4,000

Trade Expenses paid 16,000

Vijay used goods of ₹12,000 for private purposes during the year. On 31st March, 2018, his Debtors amounted to ₹1,40,000 and Creditors ₹80,000. Stock-in-Trade on that date was ₹1,60,000.

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Solution

Trading Account

for the year ended March 31, 2018

Dr.
Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Purchases
4,00,000

Sales
5,00,000

Less: Drawings
12,000

3,88,000
Closing Stock
1,60,000

Gross Profit
2,72,000

6,60,000

6,60,000

Profit & Loss Account

for the year ended March 31, 2018

Dr.
Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Salary
48,000
Gross Profit
2,72,000

Trade Expenses
16,000

Bad Debts
4,000

Net Profit
2,04,000

2,72,000

2,72,000

Balance Sheet

as on March 31, 2018

Dr.
Cr.

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital
4,00,000

Cash in Hand
2,56,000

Less: Drawings
52,000

Debtors
1,40,000

Add: Net Profit
2,04,000

5,52,000
Less: Bad Debts
4,000

1,36,000

Creditors
80,000
Furniture
80,000

Closing Stock
1,60,000

6,32,000

6,32,000

Cash Account

Dr.
Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Capital A/c
4,00,000
Creditors A/c
2,00,000

Debtors A/c
1,60,000
Drawings A/c
40,000

Sales A/c
2,00,000
Furniture A/c
80,000

Purchases A/c
1,20,000

Salaries A/c
48,000

Trade Expenses A/c
16,000

Balance c/d
2,56,000

7,60,000

7,60,000

Debtors Account

Dr.
Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Sales A/c
3,00,000
Cash A/c
1,60,000

Balance c/d
1,40,000

3,00,000

3,00,000

Creditors Account

Dr.
Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Cash A/c
2,00,000
Purchases A/c
2,80,000

Balance c/d
80,000

2,80,000

2,80,000

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Q. Vijay commenced business as food grains merchant on 1st April, 2018 with a capital of ₹ 4,00,000. On the same day, he purchased furniture for ₹ 80,000. From the following particulars obtained from his books which do not conform to Double Entry principles, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2019 and the Balance Sheet as on that date:

	₹
Sales (including Cash Sales ₹ 2,00,000)	5,00,000
Purchases (including Cash Purchases ₹ 1,20,000	4,00,000
Vijay's Drawings (in Cash)	40,000
Salaries to Staff	48,000
Bad Debts written off	4,000
Trade Expenses paid	16,000

Vijay used goods of ₹ 12,000 for personal purposes during the year. On 31st March, 2019, his Debtors amounted to ₹ 1,40,000 and Creditors ₹ 80,000. Stock-in-Trade on that date was ₹ 1,60,000.

Q. Sanjiv Sondhi started business on 1^st April, 2017 with a capital of ₹ 3,00,000. Following Trial Balance was drawn up from his books at t he end of the year:

Heads of Accounts	₹	Heads of Accounts	₹
Drawings	45,000	Capital	4,00,000
Plant and Fixtures	80,000	Sales	16,00,000
Purchases	11,60,000	Sundry Creditors	1,20,000
Carriage Inwards	20,000	Bills Payable	90,000
Returns Inward	40,000
Wages	80,000
Salaries	1,00,000
Printing and Stationery	8,000
Advertisement	12,000
Trade Charges	6,000
Rent and Taxes	14,000
Sundry Debtors	2,50,000
Bills Receivable	50,000
Investments	1,50,000
Discount	5,000
Cash at Bank	1,60,000
Cash in Hand	30,000
	22,10,000		22,10,000

Value of Stock as on 31st March, 2018 was ₹ 2,60,000. You are required to prepare his Trading and Profit and Loss Account for the year ended 31^st March 2018 and Balance Sheet as at that date after taking the following facts into account:
(a) Plant and Fixtures are to be depreciated by 10%.
(b) Salaries outstanding on 31^st March, 2018 amounted to ₹ 35,000.
(c) Accrued Interest on investment amounted to ₹ 7,500.
(d) ₹ 5,000 are Bad Debts and a Provision for Doubtful Debts is to be created at 5% of the balance of debtors.

Q. Kuldeep, a general merchant, keeps his accounts on Single Entry System. He wants to know the results of his business on 31st March, 2019 and for that following information is available:

	1st April, 2018 (₹)	31st March, 2019 (₹)
Cash in Hand	1,50,000	1,75,000
Bank Balance	7,50,000	8,00,000
Furniture	1,00,000	1,00,000
Stock	5,00,000	6,50,000
Creditors	3,50,000	4,00,000
Debtors	2,50,000	3,00,000

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	₹
Sales (including cash sales ₹ 30,000)	1,00,000
Purchases (including cash purchases ₹ 10,000)	75,000
Carriage inwards	700
Wages	300
Discount allowed to debtors	800
Salaries	6,200
Bad-Debts written off	1,500
Trade expenses	1,200
Advertisements	2,200

He used goods worth ₹ 1,300 for personal purposes and paid ₹ 500 to his son for examination and college fees.
On 31st March, 2009, his Debtors were worth ₹ 21,000 and Creditors ₹ 15,000. Stock in trade was valued at ₹ 10,000. Furniture to be depreciated by 10% p.a.
Prepare trading and Profit and Loss Account for the year ended on 31st March, 2009, and Balance Sheet as at 31st March, 2009.

Q. On 1st April 2014, Mr, Ghosh started business with a capital of ₹ 5,00,000. He kept his books on single entry basis. Soon after he purchased furniture for ₹ 40,000 and purchased goods for ₹ 3,00,000. During the year he borrowed ₹ 1,00,000 from his brother and introduced further capital of his own amounting to ₹ 80,000.

On 31st March, 2015, there were sundry debtors amounting to ₹ 2,20,000 and creditors amounted to ₹ 1,40,000. Stock was valued at ₹ 4,50,000. Cash in hand ₹ 15,400 and Bank Overdraft ₹ 40,000

During the year Mr. Ghosh withdrew ₹ 2,000 per week for his family expenses. You are informed that included in sundry debtors is an irrecoverable amount of ₹ 5,000. He also took goods from the business for his personal use amounting to ₹ 4,000.
You are required to calculate his profit or loss during the year.

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Debtors Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Sales A/c	3,00,000	Cash A/c	1,60,000
		Balance c/d	1,40,000

	3,00,000		3,00,000

Creditors Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Cash A/c	2,00,000	Purchases A/c	2,80,000
Balance c/d	80,000

	2,80,000		2,80,000

	₹
Sales (including Cash Sales ₹2,00,000)	5,00,000
Purchases (including Cash Purchases ₹1,20,000	4,00,000
Vijay's Drawings (in cash)	40,000
Salaries to Staff	48,000
Bad Debts written off	4,000
Trade Expenses paid	16,000

Trading Account for the year ended March 31, 2018
Dr.				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Purchases	4,00,000		Sales	5,00,000
Less: Drawings	12,000	3,88,000	Closing Stock	1,60,000
Gross Profit		2,72,000
		6,60,000		6,60,000

Profit & Loss Account for the year ended March 31, 2018
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Salary	48,000	Gross Profit	2,72,000
Trade Expenses	16,000
Bad Debts	4,000
Net Profit	2,04,000
	2,72,000		2,72,000

Balance Sheet as on March 31, 2018
Dr.					Cr.
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital	4,00,000		Cash in Hand		2,56,000
Less: Drawings	52,000		Debtors	1,40,000
Add: Net Profit	2,04,000	5,52,000	Less: Bad Debts	4,000	1,36,000
Creditors		80,000	Furniture		80,000
			Closing Stock		1,60,000
		6,32,000			6,32,000

Cash Account
Dr.			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Capital A/c	4,00,000	Creditors A/c	2,00,000
Debtors A/c	1,60,000	Drawings A/c	40,000
Sales A/c	2,00,000	Furniture A/c	80,000
		Purchases A/c	1,20,000
		Salaries A/c	48,000
		Trade Expenses A/c	16,000
		Balance c/d	2,56,000
	7,60,000		7,60,000