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Numerical Questions · Q12
Q.

Prepare trading and profit and loss account and balance sheet of M/s Royal Traders from the following balances as on March 31, 2026.

AccountDebit ₹Credit ₹
Stock20,000
Cash5,000
Bank10,000
Carriage on purchases1,500
Purchases1,90,000
Drawings9,000
Wages55,000
Machinery1,00,000
Debtors27,000
Postage300
Sundry expenses1,700
Rent4,500
Furniture35,000
Sales2,45,000
Creditors10,000
Bills payable4,000
Capital2,00,000

Closing stock ₹8,000.

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The cost of goods sold exceeds sales, so there is a Gross Loss of ₹13,500; adding indirect expenses gives a Net Loss of ₹20,000. The Balance Sheet totals ₹1,85,000, with the net loss and drawings reducing capital.

Concept & treatment. Wages and carriage on purchases are direct expenses (Trading A/c). When the debit side of the Trading A/c exceeds the credit side, the balancing figure is a Gross Loss carried to the debit of the P&L A/c. Drawings and net loss are both deducted from Capital.

Trading Account of M/s Royal Traders for the year ended March 31, 2026

ParticularsAmount (₹)ParticularsAmount (₹)
To Opening Stock20,000By Sales2,45,000
To Purchases1,90,000By Closing Stock8,000
To Carriage on Purchases1,500By Gross Loss c/d13,500
To Wages55,000
Total2,66,500Total2,66,500

Profit & Loss Account for the year ended March 31, 2026

ParticularsAmount (₹)ParticularsAmount (₹)
To Gross Loss b/d13,500By Net Loss (to Capital)20,000
To Postage300
To Sundry Expenses1,700
To Rent4,500
Total20,000Total20,000

Balance Sheet as on March 31, 2026

LiabilitiesAmount (₹)AssetsAmount (₹)
Capital 2,00,000Machinery1,00,000
Less: Drawings 9,000Furniture35,000

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