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Numerical Questions · Q8
Q.

The following is the trial balance of Manju Chawla on March 31, 2026. You are required to prepare trading and profit and loss account and a balance sheet as on date :

Account titleDebit ₹Credit ₹
Opening stock10,000
Purchases and sales40,00080,000
Returns200600
Productive wages6,000
Dock and Clearing charges4,000
Donation and charity600
Delivery van expenses6,000
Lighting500
Sales tax collected1,000
Bad debts600
Misc. incomes6,000
Rent from tenants2,000
Royalty4,000
Capital40,000
Drawings2,000
Debtors and Creditors6,00007,000
Cash3,000
Investment6,000
Patents4,000
Land and Machinery43,000

Closing stock ₹ 2,000.

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Reading debtors as ₹6,700 (the value that balances the trial balance and matches the official key), Gross profit ₹18,400, Net profit ₹18,700, and the Balance Sheet totals ₹64,700.

Concept & treatment. Royalty is a direct expense (on production) and goes to the Trading Account. Return (Dr. ₹200) is sales return; Return (Cr. ₹600) is purchase return. Sales tax collected ₹1,000 is a liability, not an income. Donation & charity, delivery-van expenses, lighting and bad debts are indirect (Profit and Loss) items; misc. incomes and rent from tenants are incomes.

Trading and Profit and Loss Account for the year ended March 31, 2026

Particulars₹Particulars₹
To Opening stock10,000By Sales 80,000
To Purchases 40,000  Less: Return (200)79,800
  Less: Return (600)39,400By Closing stock2,000
To Productive wages6,000
To Dock and clearing charges4,000
To Royalty4,000
To Gross profit c/d18,400
Total81,800Total81,800
To Donation and charity600By Gross profit b/d18,400
To Delivery van expenses6,000By Misc. incomes6,000
To Lighting500By Rent from tenants2,000
To Bad debts600
To Net profit (to Capital)18,700
Total26,400Total26,400

Balance Sheet as at March 31, 2026

Liabilities₹Assets₹
Sales tax collected1,000Land and Machinery43,000
Creditors7,000Patents4,000
Capital 40,000Investment6,000
  Less: Drawings (2,000)Cash3,000
  Add: Net profit 18,70056,700Debtors6,700
Closing stock2,000
Total64,700Total64,700

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