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Numerical Questions · Q15
Q.

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 TitleDebit ₹Credit ₹
Opening stock50,000
Purchases and sales3,50,0004,21,000
Sales returns5,000
Capital3,00,000
Commission4,000
Creditors1,00,000
Bank overdraft28,000
Cash in hand32,000
Furniture1,28,000
Debtors1,40,000
Plants60,000
Carriage on purchases12,000
Wages8,000
Rent15,000
Bad debts7,000
Drawings24,000
Stationery6,000
Travelling expenses2,000
Insurance7,000
Discount5,000
Office expenses2,000

Closing stock as on March 31, 2026 ₹2,500

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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

ParticularsAmount (₹)ParticularsAmount (₹)
To Opening Stock50,000By Sales 4,21,000
To Purchases3,50,000Less: Sales Returns 5,0004,16,000
To Carriage on Purchases12,000By Closing Stock2,500
To Wages8,000By Gross Loss c/d1,500
Total4,20,000Total4,20,000

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

ParticularsAmount (₹)ParticularsAmount (₹)
To Gross Loss b/d1,500By Commission4,000
To Rent15,000By Net Loss (to Capital)41,500
To Bad Debts7,000
To Stationery6,000
To Travelling Expenses2,000
To Insurance7,000
To Discount5,000
To Office Expenses2,000
Total45,500Total45,500

Balance Sheet as on March 31, 2026

LiabilitiesAmount (₹)AssetsAmount (₹)
Capital 3,00,000Furniture1,28,000
Less: Drawings 24,000Debtors1,40,000

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