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 Title | Debit ₹ | Credit ₹ |
|---|---|---|
| Opening stock | 10,000 | |
| Purchases | 78,000 | |
| Carriage inwards | 2,500 | |
| Salaries | 30,000 | |
| Commission | 10,000 | |
| Wages | 11,000 | |
| Rent & taxes | 2,800 | |
| Repairs | 5,000 | |
| Telephone expenses | 1,400 | |
| Legal charges | 1,500 | |
| Sundry expenses | 2,500 | |
| cash in hand | 12,000 | |
| Debtors | 30,000 | |
| Machinery | 60,000 | |
| Investments | 90,000 | |
| Drawings | 18,000 | |
| Sales | 2,28,000 | |
| Capital | 70,000 | |
| Interest | 7,000 | |
| Commission | 8,000 | |
| Creditors | 28,000 | |
| Bills payable | 2,370 |
Closing stock as on March 31, 2026 ₹22,000.
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Start your 14-day free trial to unlock the full solution →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
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 10,000 | By Sales | 2,28,000 |
| To Purchases | 78,000 | By Closing Stock | 22,000 |
| To Carriage Inwards | 2,500 | ||
| To Wages | 11,000 | ||
| To Gross Profit c/d | 1,48,500 | ||
| Total | 2,50,000 | Total | 2,50,000 |
Profit & Loss Account for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Salaries | 30,000 | By Gross Profit b/d | 1,48,500 |
| To Commission | 10,000 | By Interest | 7,000 |
| To Rent & Taxes | 2,800 | By Commission | 8,000 |
| To Repairs | 5,000 | ||
| To Telephone Expenses | 1,400 | ||
| To Legal Charges | 1,500 | ||
| To Sundry Expenses | 2,500 | ||
| To Net Profit (to Capital) | 1,10,300 | ||
| Total | 1,63,500 | Total | 1,63,500 |
Balance Sheet as on March 31, 2026
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital 70,000 | Machinery | 60,000 | |
| Add: Net Profit 1,10,300 | Investments | 90,000 | |
| Less: Drawings 18,000 | 1,62,300 | Debtors | 30,000 |
| Creditors | 28,000 | Cash in Hand | 12,000 |
| Bills Payable | 2,370 | Closing Stock | 22,000 |
| Difference in Trial Balance (Suspense) | 21,330 | ||
| Total | 2,14,000 | Total | 2,14,000 |
Working Notes …
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