Accountancy · Ch 12 — Final Accounts of Sole Proprietors – I
Worked Illustration — A Complete Set of Final Accounts
6
Worked Illustration — A Complete Set of Final Accounts
Worked Illustration
From the following Trial Balance of a sole trader as on 31st March 2024, the Trading and Profit and Loss Account and the Balance Sheet are prepared (Closing Stock as on 31st March 2024 is given separately at ₹50,000).
| Trial Balance as on 31.03.2024 | Debit (₹) | Credit (₹) |
|---|---|---|
| Opening Stock | 30,000 | |
| Purchases / Sales | 3,00,000 | 4,80,000 |
| Wages | 20,000 | |
| Carriage Inward | 5,000 | |
| Salaries | 40,000 | |
| Rent | 18,000 | |
| Discount Allowed / Discount Received | 3,000 | 2,000 |
| Sundry Debtors / Sundry Creditors | 90,000 | 60,000 |
| Furniture | 50,000 | |
| Cash at Bank | 45,000 | |
| Drawings | 15,000 | |
| Capital | 74,000 | |
| Total | 6,16,000 | 6,16,000 |
Step 1 — Trading Account:
| Dr. Trading Account for the year ended 31.03.2024 | ₹ | Cr. | ₹ |
|---|---|---|---|
| To Opening Stock | 30,000 | By Sales | 4,80,000 |
| To Purchases | 3,00,000 | By Closing Stock | 50,000 |
| To Wages | 20,000 | ||
| To Carriage Inward | 5,000 | ||
| To Gross Profit c/d | 1,75,000 | ||
| Total | 5,30,000 | Total | 5,30,000 |
Gross Profit = 4,80,000 + 50,000 − 30,000 − 3,00,000 − 20,000 − 5,000 = ₹1,75,000.
Step 2 — Profit and Loss Account:
| Dr. Profit and Loss Account for the year ended 31.03.2024 | ₹ | Cr. | ₹ |
|---|---|---|---|
| To Salaries | 40,000 | By Gross Profit b/d | 1,75,000 |
| To Rent | 18,000 | By Discount Received | 2,000 |
| To Discount Allowed | 3,000 | ||
| To Net Profit (to Capital A/c) | 1,16,000 | ||
| Total | 1,77,000 | Total | 1,77,000 |
Net Profit = 1,75,000 + 2,000 − 40,000 − 18,000 − 3,000 = ₹1,16,000.
Step 3 — Balance Sheet as on 31.03.2024:
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Capital | 74,000 | Furniture | 50,000 |