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Numerical Questions · Q14
Q.

From the following balances of M/s Nilu Sarees as on March 31, 2026. Prepare trading and profit and loss account and balance sheet as on date.

Account TitleDebit ₹Credit ₹
Opening stock10,000
Purchases78,000
Carriage inwards2,500
Salaries30,000
Commission10,000
Wages11,000
Rent & taxes2,800
Repairs5,000
Telephone expenses1,400
Legal charges1,500
Sundry expenses2,500
cash in hand12,000
Debtors30,000
Machinery60,000
Investments90,000
Drawings18,000
Sales2,28,000
Capital70,000
Interest7,000
Commission8,000
Creditors28,000
Bills payable2,370

Closing stock as on March 31, 2026 ₹22,000.

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Gross Profit is ₹1,48,500 and Net Profit ₹1,10,300; the Balance Sheet totals ₹2,14,000. Because the given trial balance does not tally, a ₹21,330 Difference-in-Trial-Balance (Suspense) is shown on the liabilities side.

Concept & treatment. Direct items give gross profit; indirect items give net profit; net profit is added to capital and drawings deducted. Interest and one Commission are on the credit of the trial balance (incomes); the other Commission is on the debit (expense). Since the trial balance itself does not balance, the unexplained difference is parked in a Suspense A/c so the Balance Sheet can be presented.

Trading Account of M/s Nilu Sarees for the year ended March 31, 2026

ParticularsAmount (₹)ParticularsAmount (₹)
To Opening Stock10,000By Sales2,28,000
To Purchases78,000By Closing Stock22,000
To Carriage Inwards2,500
To Wages11,000
To Gross Profit c/d1,48,500
Total2,50,000Total2,50,000

Profit & Loss Account for the year ended March 31, 2026

ParticularsAmount (₹)ParticularsAmount (₹)
To Salaries30,000By Gross Profit b/d1,48,500
To Commission10,000By Interest7,000
To Rent & Taxes2,800By Commission8,000
To Repairs5,000
To Telephone Expenses1,400
To Legal Charges1,500
To Sundry Expenses2,500
To Net Profit (to Capital)1,10,300
Total1,63,500Total1,63,500

Balance Sheet as on March 31, 2026

LiabilitiesAmount (₹)AssetsAmount (₹)
Capital 70,000Machinery60,000
Add: Net Profit 1,10,300Investments90,000
Less: Drawings 18,0001,62,300Debtors30,000
Creditors28,000Cash in Hand12,000
Bills Payable2,370Closing Stock22,000
Difference in Trial Balance (Suspense)21,330
Total2,14,000Total2,14,000

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