From the following trial balance of Mr. A. Lal, prepare trading, profit and loss account and balance sheet as on March 31, 2026.
| Account Title | Debit ₹ | Credit ₹ |
|---|---|---|
| Stock as on April 01, 2016 | 16,000 | |
| Purchases and Sales | 67,600 | 1,12,000 |
| Returns inwards and outwards | 4,600 | 3,200 |
| Carriage inwards | 1,400 | |
| General expenses | 2,400 | |
| Bad debts | 600 | |
| Discount received | 1,400 | |
| Bank over draft | 10,000 | |
| Interest on bank overdraft | 600 | |
| Commission received | 1,800 | |
| Insurance and taxes | 4,000 | |
| Scooter expenses | 200 | |
| Salaries | 8,800 | |
| Cash in hand | 4,000 | |
| Scooter | 8,000 | |
| Furniture | 5,200 | |
| Building | 65,000 | |
| Debtors and Creditors | 6,000 | 16,000 |
| Capital | 50,000 |
Closing stock ₹ 15,000.
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Start your 14-day free trial to unlock the full solution →Prepare the Trading A/c (direct trading items) to get Gross Profit ₹40,600, carry it to the Profit & Loss A/c for Net Profit ₹27,200, and place all assets, liabilities, capital and net profit in the Balance Sheet, which totals ₹1,03,200.
Concept & treatment. Direct items (opening stock, purchases, returns, carriage inwards, sales, closing stock) go to the Trading A/c. Purchases returns reduce purchases; sales returns reduce sales. Closing stock is credited to Trading and shown as a current asset. Indirect expenses and incomes go to the P&L A/c. Net profit is added to Capital in the Balance Sheet.
Trading Account of Mr. A. Lal for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 16,000 | By Sales 1,12,000 | |
| To Purchases 67,600 | Less: Returns inwards 4,600 | 1,07,400 | |
| Less: Returns outwards 3,200 | 64,400 | By Closing Stock | 15,000 |
| To Carriage Inwards | 1,400 | ||
| To Gross Profit c/d | 40,600 | ||
| Total | 1,22,400 | Total | 1,22,400 |
Profit & Loss Account for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To General Expenses | 2,400 | By Gross Profit b/d | 40,600 |
| To Bad Debts | 600 | By Discount Received | 1,400 |
| To Interest on Bank Overdraft | 600 | By Commission Received | 1,800 |
| To Insurance & Taxes | 4,000 | ||
| To Scooter Expenses | 200 | ||
| To Salaries | 8,800 | ||
| To Net Profit (to Capital) | 27,200 | ||
| Total | 43,800 | Total | 43,800 |
Balance Sheet as on March 31, 2026
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital 50,000 | Building | 65,000 |
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