Prepare trading and profit and loss account and balance sheet of M/s Royal Traders from the following balances as on March 31, 2026.
| Account | Debit ₹ | Credit ₹ |
|---|---|---|
| Stock | 20,000 | |
| Cash | 5,000 | |
| Bank | 10,000 | |
| Carriage on purchases | 1,500 | |
| Purchases | 1,90,000 | |
| Drawings | 9,000 | |
| Wages | 55,000 | |
| Machinery | 1,00,000 | |
| Debtors | 27,000 | |
| Postage | 300 | |
| Sundry expenses | 1,700 | |
| Rent | 4,500 | |
| Furniture | 35,000 | |
| Sales | 2,45,000 | |
| Creditors | 10,000 | |
| Bills payable | 4,000 | |
| Capital | 2,00,000 |
Closing stock ₹8,000.
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →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
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 20,000 | By Sales | 2,45,000 |
| To Purchases | 1,90,000 | By Closing Stock | 8,000 |
| To Carriage on Purchases | 1,500 | By Gross Loss c/d | 13,500 |
| To Wages | 55,000 | ||
| Total | 2,66,500 | Total | 2,66,500 |
Profit & Loss Account for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Gross Loss b/d | 13,500 | By Net Loss (to Capital) | 20,000 |
| To Postage | 300 | ||
| To Sundry Expenses | 1,700 | ||
| To Rent | 4,500 | ||
| Total | 20,000 | Total | 20,000 |
Balance Sheet as on March 31, 2026
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital 2,00,000 | Machinery | 1,00,000 | |
| Less: Drawings 9,000 | Furniture | 35,000 |
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