Prepare trading and profit and loss account of M/s Sports Equipments for the year ended March 31, 2026 and balance sheet as on that date :
| Account Title | Debit ₹ | Credit ₹ |
|---|---|---|
| Opening stock | 50,000 | |
| Purchases and sales | 3,50,000 | 4,21,000 |
| Sales returns | 5,000 | |
| Capital | 3,00,000 | |
| Commission | 4,000 | |
| Creditors | 1,00,000 | |
| Bank overdraft | 28,000 | |
| Cash in hand | 32,000 | |
| Furniture | 1,28,000 | |
| Debtors | 1,40,000 | |
| Plants | 60,000 | |
| Carriage on purchases | 12,000 | |
| Wages | 8,000 | |
| Rent | 15,000 | |
| Bad debts | 7,000 | |
| Drawings | 24,000 | |
| Stationery | 6,000 | |
| Travelling expenses | 2,000 | |
| Insurance | 7,000 | |
| Discount | 5,000 | |
| Office expenses | 2,000 |
Closing stock as on March 31, 2026 ₹2,500
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Start your 14-day free trial to unlock the full solution →Cost of goods sold slightly exceeds net sales, giving a Gross Loss of ₹1,500; indirect expenses (net of commission) raise this to a Net Loss of ₹41,500. The Balance Sheet totals ₹3,62,500.
Concept & treatment. Carriage on purchases and wages are direct expenses. Sales returns reduce sales. Excess of debit over credit in the Trading A/c is a Gross Loss taken to the P&L A/c debit. Drawings and net loss reduce capital.
Trading Account of M/s Sports Equipments for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 50,000 | By Sales 4,21,000 | |
| To Purchases | 3,50,000 | Less: Sales Returns 5,000 | 4,16,000 |
| To Carriage on Purchases | 12,000 | By Closing Stock | 2,500 |
| To Wages | 8,000 | By Gross Loss c/d | 1,500 |
| Total | 4,20,000 | Total | 4,20,000 |
Profit & Loss Account for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Gross Loss b/d | 1,500 | By Commission | 4,000 |
| To Rent | 15,000 | By Net Loss (to Capital) | 41,500 |
| To Bad Debts | 7,000 | ||
| To Stationery | 6,000 | ||
| To Travelling Expenses | 2,000 | ||
| To Insurance | 7,000 | ||
| To Discount | 5,000 | ||
| To Office Expenses | 2,000 | ||
| Total | 45,500 | Total | 45,500 |
Balance Sheet as on March 31, 2026
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital 3,00,000 | Furniture | 1,28,000 | |
| Less: Drawings 24,000 | Debtors | 1,40,000 |
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