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Q.

Prepare Trading and Profit and Loss A/c and Balance Sheet from the given details.

Particulars₹
Opening Stock20,000
Purchases60,000
Sales1,20,000
Carriage Inwards5,000
Wages10,000
Capital1,50,000
Cash in hand50,000
Furniture40,000
Sundry Creditors30,000
Bank Loan20,000
Land and Building80,000
Rent received15,000
Salary6,000
Insurance4,000
Interest paid3,000
Stationery2,000
Rates and Taxes5,000
It is given that closing stock is valued at30,000
Kerala DhseKerala DHSE Plus One Commerce Board 2021Subjective· 8mImportance★★★★★
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Trading A/c: Gross Profit = ₹55,000. P&L A/c: Net Profit = ₹50,000. Balance Sheet totals ₹2,50,000 on each side. The given data is short by ₹50,000 on the debit side, so that difference is carried to a Suspense A/c (asset side) so the Balance Sheet agrees.

Trading and Profit & Loss Account for the year ended (Dr. | Cr.)

Particulars (Dr.)₹Particulars (Cr.)₹
To Opening Stock20,000By Sales1,20,000
To Purchases60,000By Closing Stock30,000
To Carriage Inwards5,000
To Wages10,000
To Gross Profit c/d55,000
Total1,50,000Total1,50,000
To Salary6,000By Gross Profit b/d55,000
To Insurance4,000By Rent Received15,000
To Interest Paid3,000
To Stationery2,000
To Rates and Taxes5,000
To Net Profit (to Capital)50,000
Total70,000Total70,000

Gross Profit = Sales 1,20,000 + Closing Stock 30,000 − (Opening Stock 20,000 + Purchases 60,000 + Carriage Inwards 5,000 + Wages 10,000) = 1,50,000 − 95,000 = ₹55,000. ✓

Net Profit = (Gross Profit 55,000 + Rent Received 15,000) − (Salary 6,000 + Insurance 4,000 + Interest Paid 3,000 + Stationery 2,000 + Rates and Taxes 5,000) = 70,000 − 20,000 = ₹50,000. ✓

Balance Sheet as at year end

Liabilities₹Assets₹
Capital 1,50,000Land and Building80,000
 Add: Net Profit 50,0002,00,000Furniture40,000
Bank Loan20,000Closing Stock30,000
Sundry Creditors30,000Cash in hand50,000
Suspense A/c (difference in trial balance)50,000
Total2,50,000Total2,50,000
…

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