Prepare Trading and Profit and Loss A/c and Balance Sheet from the given details.
| Particulars | ₹ |
|---|---|
| Opening Stock | 20,000 |
| Purchases | 60,000 |
| Sales | 1,20,000 |
| Carriage Inwards | 5,000 |
| Wages | 10,000 |
| Capital | 1,50,000 |
| Cash in hand | 50,000 |
| Furniture | 40,000 |
| Sundry Creditors | 30,000 |
| Bank Loan | 20,000 |
| Land and Building | 80,000 |
| Rent received | 15,000 |
| Salary | 6,000 |
| Insurance | 4,000 |
| Interest paid | 3,000 |
| Stationery | 2,000 |
| Rates and Taxes | 5,000 |
| It is given that closing stock is valued at | 30,000 |
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Start your 14-day free trial to unlock the full solution →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 Stock | 20,000 | By Sales | 1,20,000 |
| To Purchases | 60,000 | By Closing Stock | 30,000 |
| To Carriage Inwards | 5,000 | ||
| To Wages | 10,000 | ||
| To Gross Profit c/d | 55,000 | ||
| Total | 1,50,000 | Total | 1,50,000 |
| To Salary | 6,000 | By Gross Profit b/d | 55,000 |
| To Insurance | 4,000 | By Rent Received | 15,000 |
| To Interest Paid | 3,000 | ||
| To Stationery | 2,000 | ||
| To Rates and Taxes | 5,000 | ||
| To Net Profit (to Capital) | 50,000 | ||
| Total | 70,000 | Total | 70,000 |
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 1,50,000 | Land and Building | 80,000 | |
| Add: Net Profit 50,000 | 2,00,000 | Furniture | 40,000 |
| Bank Loan | 20,000 | Closing Stock | 30,000 |
| Sundry Creditors | 30,000 | Cash in hand | 50,000 |
| Suspense A/c (difference in trial balance) | 50,000 | ||
| Total | 2,50,000 | Total | 2,50,000 |
| … |
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