Q.From the following Trial Balance of Mr. Anil as on 31st March, 2024, prepare Trading Account and Profit and Loss Account for the year ended 31st March, 2024 and a Balance Sheet as on that date: Debit balances: Opening Stock ₹15,000; Purchases ₹1,20,000; Wages ₹8,000; Sundry Debtors ₹60,000; Salaries ₹14,000; Rent ₹6,000; Furniture ₹40,000; Cash at Bank ₹64,000; Sales Return ₹2,000.
Credit balances: Capital ₹1,00,000; Sales ₹1,90,000; Sundry Creditors ₹20,000; Purchases Return ₹3,000; Discount Received ₹1,000; Bank Loan ₹15,000. Adjustments:

With opening/closing stock, purchases/sales (net of returns), and two simple adjustments, this reduces to a standard three-statement final-accounts exercise.

Trading Account for the year ended 31st March, 2024

Gross Profit = (1,88,000 + 25,000) − (15,000 + 1,17,000 + 8,000) = 2,13,000 − 1,40,000 = ₹73,000.

Profit and Loss Account for the year ended 31st March, 2024

Net Profit = (73,000 + 1,000) − (16,000 + 6,000 + 4,000) = 74,000 − 26,000 = ₹48,000.

Balance Sheet as on 31st March, 2024

Both sides of the Balance Sheet correctly total to ₹1,85,000, confirming the trial balance, the Trading Account, the Profit and Loss Account and the adjustments have all been applied consistently.

Alternative check: recompute Cost of Goods Sold = Opening Stock + Net Purchases + Wages − Closing Stock = 15,000 + 1,17,000 + 8,000 − 25,000 = 1,15,000; Gross Profit = Net Sales − COGS = 1,88,000 − 1,15,000 = ₹73,000 (confirms the Trading Account figure independently).

Forgetting to net Sales Return against Sales, and Purchases Return against Purchases, before starting the Trading Account; charging Outstanding Salaries only in the P&L Account and forgetting the matching Current Liability in the Balance Sheet.