Mr. Om Prakash did not keep his books of accounts under double entry system. From the following information available from his records, prepare profit and loss account for the year ending on March 31, 2017 and a balance sheet as at that date, depreciating the washing equipment @ 10%.
Summary of Cash Book
| Receipts | Amount (₹) | Payments | Amount (₹) |
|---|---|---|---|
| Balance b/d | 8,000 | Cash purchases | 14,000 |
| Cash sales | 40,000 | Paid to creditors | 20,000 |
| Received from debtors | 30,000 | Sundry expenses | 6,000 |
| Cartage | 2,000 | ||
| Drawings | 8,000 | ||
| Balance c/d | 28,000 | ||
| Total | 78,000 | Total | 78,000 |
Other information
| Particulars | March 31, 2016 (₹) | March 31, 2017 (₹) |
|---|---|---|
| Debtors | 9,000 | 12,000 |
| Creditors | 14,400 | 6,800 |
| Stock of materials | 10,000 | 16,000 |
| Washing equipment | 40,000 | 40,000 |
| Furniture | 3,000 | 3,000 |
| Discount allowed during the year | 1,400 | |
| Discount received during the year | 1,700 |
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Start your 14-day free trial to unlock the full solution →Credit sales ₹34,400, credit purchases ₹14,100 and opening capital ₹55,600 are worked out first; the Trading and P&L Account then shows gross profit ₹50,300 and net profit ₹40,600, and the Balance Sheet totals ₹95,000.
Books of Om Prakash — Trading and Profit and Loss Account for the year ended on March 31, 2017
| Expenses/Losses | Amount (₹) | Revenues/Gains | Amount (₹) |
|---|---|---|---|
| Opening stock | 10,000 | Sales | 74,400 |
| Purchases | 28,100 | Closing stock | 16,000 |
| Cartage | 2,000 | ||
| Gross profit c/d | 50,300 | ||
| Total | 90,400 | Total | 90,400 |
| Expenses/Losses | Amount (₹) | Revenues/Gains | Amount (₹) |
|---|---|---|---|
| Sundry expenses | 6,000 | Gross profit b/d | 50,300 |
| Discount allowed | 1,400 | Discount received | 1,700 |
| Depreciation | 4,000 | ||
| Net profit (transferred to capital account) | 40,600 | ||
| Total | 52,000 | Total | 52,000 |
Balance Sheet as at March 31, 2017
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital (₹55,600 + Profit ₹40,600 − Drawings ₹8,000) | 88,200 | Washing equipment (₹40,000 − Depreciation ₹4,000) | 36,000 |
| Creditors | 6,800 | Furniture | 3,000 |
| Stock of materials | 16,000 | ||
| Debtors | 12,000 | ||
| Cash | 28,000 | ||
| Total | 95,000 | Total | 95,000 |
Working Notes
Total Debtors Account
| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) |
|---|---|---|---|---|---|---|---|
| Balance b/d | 9,000 | Cash | 30,000 | ||||
| Sales (credit) (balancing figure) | 34,400 | Discount allowed | 1,400 | ||||
| Balance c/d | 12,000 | ||||||
| Total | 43,400 | Total | 43,400 |
Total Creditors Account …
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