(a) Prepare the trial balance from the following balances of Babu as on 31st March, 2016.
| Particulars | ₹ |
|---|---|
| Cash in hand | 7,000 |
| Sundry debtors | 5,400 |
| Salaries | 6,800 |
| Bad debts | 200 |
| Opening stock | 15,400 |
| Bills receivable | 7,000 |
| Creditors | 11,800 |
| Capital | 25,000 |
| Purchases | 45,000 |
| Sales | 50,000 |
OR
(b) Given below are the balances extracted from the books of Nicholas as on 31st March 2016.
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| Purchases | 10,000 | Sales | 15,100 |
| Wages | 600 | Commission received | 1,900 |
| Freight Inwards | 750 | Rent received | 600 |
| Advertisement | 500 | ||
| Carriage outwards | 400 | ||
| Stock on (01/01/2016) | 1,000 |
Prepare trading and profit & loss account for the year ended 31 March, 2016 after adjusting the following.
- Commission received in advance ₹ 400.
- Wages outstanding ₹ 200.
- Advertisement paid in advance ₹ 150.
- Closing stock on 31st March 2016 ₹ 2,100.
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Start your 14-day free trial to unlock the full solution →(a) Babu's Trial Balance totals ₹86,800 on each side; (b) Nicholas's Trading & P&L Account after the four adjustments → Gross Profit ₹4,650, Net Profit ₹6,000.
(a) Trial Balance of Babu as on 31st March 2016
Assets, expenses and losses carry debit balances; liabilities, capital and incomes carry credit balances.
| Particulars | Dr (₹) | Cr (₹) |
|---|---|---|
| Cash in hand | 7,000 | |
| Sundry debtors | 5,400 | |
| Salaries | 6,800 | |
| Bad debts | 200 | |
| Opening stock | 15,400 | |
| Bills receivable | 7,000 | |
| Purchases | 45,000 | |
| Creditors | 11,800 | |
| Capital | 25,000 | |
| Sales | 50,000 | |
| Total | 86,800 | 86,800 |
The two sides agree, so the trial balance is arithmetically correct.
(b) Trading and Profit & Loss Account of Mr. Nicholas for the year ended 31 March 2016
Trading Account
| Dr — Particulars | ₹ | Cr — Particulars | ₹ |
|---|---|---|---|
| To Opening stock | 1,000 | By Sales | 15,100 |
| To Purchases | 10,000 | By Closing stock | 2,100 |
| To Wages (600 + 200 o/s) | 800 | ||
| To Freight inwards | 750 | ||
| To Gross profit c/d | 4,650 | ||
| Total | 17,200 | Total | 17,200 |
Profit & Loss Account
| Dr — Particulars | ₹ | Cr — Particulars | ₹ |
|---|---|---|---|
| To Advertisement (500 − 150 prepaid) | 350 | By Gross profit b/d | 4,650 |
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