From the following Trial Balance of Mr. Ravi as on 31st March 2024, prepare the Trading and Profit and Loss Account for the year ended 31st March 2024 and the Balance Sheet as on that date. Closing Stock as on 31.03.2024 was valued at ₹60,000.

| Particulars | Debit (₹) | Credit

Question

From the following Trial Balance of Mr. Ravi as on 31st March 2024, prepare the Trading and Profit and Loss Account for the year ended 31st March 2024 and the Balance Sheet as on that date. Closing Stock as on 31.03.2024 was valued at ₹60,000.

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Opening Stock | 50,000 | |
| Purchases / Sales | 3,80,000 | 6,00,000 |
| Wages | 25,000 | |
| Carriage Inward | 8,000 | |
| Salaries | 45,000 | |
| Rent | 20,000 | |
| Advertisement | 10,000 | |
| Commission Received | | 6,000 |
| Sundry Debtors / Sundry Creditors | 1,00,000 | 70,000 |
| Plant and Machinery | 2,20,000 | |
| Cash at Bank | 58,000 | |
| Drawings | 20,000 | |
| Capital | | 2,60,000 |
| **Total** | **9,36,000** | **9,36,000** |

Accepted Answer

**Step 1 — Trading Account:**

| Dr. Trading Account for the year ended 31.03.2024 | ₹ | Cr. | ₹ |
|---|---|---|---|
| To Opening Stock | 50,000 | By Sales | 6,00,000 |
| To Purchases | 3,80,000 | By Closing Stock | 60,000 |
| To Wages | 25,000 | | |
| To Carriage Inward | 8,000 | | |
| To Gross Profit c/d | 1,97,000 | | |
| **Total** | **6,60,000** | **Total** | **6,60,000** |

Gross Profit = 6,00,000 + 60,000 − 50,000 − 3,80,000 − 25,000 − 8,000 = **₹1,97,000**.

**Step 2 — Profit and Loss Account:**

| Dr. Profit and Loss Account for the year ended 31.03.2024 | ₹ | Cr. | ₹ |
|---|---|---|---|
| To Salaries | 45,000 | By Gross Profit b/d | 1,97,000 |
| To Rent | 20,000 | By Commission Received | 6,000 |
| To Advertisement | 10,000 | | |
| To Net Profit (to Capital A/c) | 1,28,000 | | |
| **Total** | **2,03,000** | **Total** | **2,03,000** |

Net Profit = 1,97,000 + 6,000 − 45,000 − 20,000 − 10,000 = **₹1,28,000**.

**Step 3 — Balance Sheet as on 31.03.2024:**

| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Capital | 2,60,000 | Plant and Machinery | 2,20,000 |
| Add: Net Profit | 1,28,000 | Closing Stock | 60,000 |
| | 3,88,000 | Sundry Debtors | 1,00,000 |
| Less: Drawings | (20,000) | Cash at Bank | 58,000 | …

Particulars	Debit (₹)	Credit (₹)
Opening Stock	50,000
Purchases / Sales	3,80,000	6,00,000
Wages	25,000
Carriage Inward	8,000
Salaries	45,000
Rent	20,000
Advertisement	10,000
Commission Received		6,000
Sundry Debtors / Sundry Creditors	1,00,000	70,000
Plant and Machinery	2,20,000
Cash at Bank	58,000
Drawings	20,000
Capital		2,60,000
Total	9,36,000	9,36,000

Dr. Trading Account for the year ended 31.03.2024	₹	Cr.	₹
To Opening Stock	50,000	By Sales	6,00,000
To Purchases	3,80,000	By Closing Stock	60,000
To Wages	25,000
To Carriage Inward	8,000
To Gross Profit c/d	1,97,000
Total	6,60,000	Total	6,60,000

Dr. Profit and Loss Account for the year ended 31.03.2024	₹	Cr.	₹
To Salaries	45,000	By Gross Profit b/d	1,97,000
To Rent	20,000	By Commission Received	6,000
To Advertisement	10,000
To Net Profit (to Capital A/c)	1,28,000
Total	2,03,000	Total	2,03,000

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