Illustrations · Illustration 9
Q.
From the following balances prepare trading and profit and loss account and balance sheet for the year ended March 31, 2026. The value of closing stock on March 31, 2026 was ₹25,400.
| Account Title | Amount (₹) | Account Title | Amount (₹) |
|---|---|---|---|
| Opening stock | 15,310 | Capital | 2,50,000 |
| Purchases | 82,400 | Drawings | 48,000 |
| Sales | 2,56,000 | Sundry debtors | 57,000 |
| Returns (Dr.) | 4,000 | Sundry creditors | 12,000 |
| Returns (Cr.) | 2,400 | Depreciation | 4,200 |
| Factory rent | 18,000 | Charity | 500 |
| Custom duty | 11,500 | Cash balance | 4,460 |
| Coal, gas & power | 6,000 | Bank balance | 4,000 |
| Wages and salary | 36,600 | Bank charges | 180 |
| Discount (Dr.) | 7,500 | Establishment expenses | 3,600 |
| Commission (Cr.) | 1,200 | Plant | 42,000 |
| Bad debts | 5,850 | Leasehold building | 1,50,000 |
| Bad debts recovered | 2,000 | Sales tax collected | 2,000 |
| Apprenticeship premium | 4,800 | Goodwill | 20,000 |
| Production expenses | 2,600 | Patents | 10,000 |
| Administrative expenses | 5,000 | Trademark | 5,000 |
| Carriage | 8,700 | Loan (Cr.) | 25,000 |
| Interest on loan | 3,000 |
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Start your 14-day free trial to unlock the full solution →Gross profit ₹98,690 → net profit ₹76,860 → capital ₹2,50,000 + net profit ₹76,860 − drawings ₹48,000 = ₹2,78,860; balance sheet totals ₹3,17,860.
Solution — Trading and Profit and Loss Account for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| Opening stock | 15,310 | Sales 2,56,000 − Returns 4,000 | 2,52,000 |
| Purchases 82,400 − Returns 2,400 | 80,000 | Closing stock | 25,400 |
| Factory rent | 18,000 | ||
| Custom duty | 11,500 | ||
| Coal, gas & power | 6,000 | ||
| Wages and salary | 36,600 | ||
| Production expenses | 2,600 | ||
| Carriage | 8,700 | ||
| Gross profit c/d | 98,690 | ||
| Total | 2,77,400 | Total | 2,77,400 |
| Discount (Dr.) | 7,500 | Gross profit b/d | 98,690 |
| Bad debts | 5,850 | Commission (Cr.) | 1,200 |
| Administrative expenses | 5,000 | Bad debts recovered | 2,000 |
| Depreciation | 4,200 | Apprenticeship premium | 4,800 |
| Charity | 500 | ||
| Bank charges | 180 | ||
| Establishment expenses | 3,600 | ||
| Interest on loan | 3,000 | ||
| Net profit (transferred to capital account) | 76,860 | ||
| Total | 1,06,690 | Total | 1,06,690 |
Solution — Balance Sheet as at March 31, 2026
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Sales tax collected | 2,000 | Cash balance | 4,460 |
| Sundry creditors | 12,000 | Bank balance | 4,000 |
| Loan | 25,000 | Sundry debtors | 57,000 |
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