Prepare trading and profit and loss account from the following particulars of M/s Neema Traders as on March 31, 2026.
| Account Title | Debit ₹ | Credit ₹ |
|---|---|---|
| Buildings | 23,000 | |
| Plant | 16,930 | |
| Carriage inwards | 1,000 | |
| Wages | 3,300 | |
| Purchases | 1,64,000 | |
| Sales return | 1,820 | |
| Opening stock | 9,000 | |
| Machinery | 2,10,940 | |
| Insurance | 1,610 | |
| Interest | 1,100 | |
| Bad debts | 250 | |
| Postage | 300 | |
| Discount | 1,000 | |
| Salaries | 3,000 | |
| Debtors | 3,900 | |
| Sales | 1,80,000 | |
| Loan | 8,000 | |
| Bills payable | 2,520 | |
| Bank overdraft | 4,720 | |
| Creditors | 8,000 | |
| Capital | 2,36,000 | |
| Purchases return | 1,910 |
Stock on March 31, 2026 ₹16,000.
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Start your 14-day free trial to unlock the full solution →Direct items give a Gross Profit of ₹18,790 on the figures as given; carried to the P&L A/c (indirect expenses ₹7,260) this yields a Net Profit of ₹11,530. The NCERT key prints Gross Profit ₹17,850 / Net Profit ₹10,590 — ₹940 lower — which is flagged honestly below.
Concept & treatment. Only direct items enter the Trading A/c: opening stock, net purchases (purchases less purchases return), carriage inwards and wages on the debit; net sales (sales less sales return) and closing stock on the credit. Interest and discount here are on the debit of the trial balance, so they are treated as interest paid and discount allowed (P&L expenses).
Trading Account of M/s Neema Traders for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 9,000 | By Sales 1,80,000 | |
| To Purchases 1,64,000 | Less: Sales Return 1,820 | 1,78,180 | |
| Less: Purchases Return 1,910 | 1,62,090 | By Closing Stock | 16,000 |
| To Carriage Inwards | 1,000 | ||
| To Wages | 3,300 | ||
| To Gross Profit c/d | 18,790 | ||
| Total | 1,94,180 | Total | 1,94,180 |
Profit & Loss Account for the year ended March 31, 2026
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Insurance | 1,610 | By Gross Profit b/d | 18,790 |
| To Interest | 1,100 | ||
| To Bad Debts | 250 | ||
| To Postage | 300 | ||
| To Discount | 1,000 | ||
| To Salaries | 3,000 | ||
| To Net Profit (to Capital) | 11,530 | ||
| Total | 18,790 | Total | 18,790 |
Working Notes
- Net purchases = ₹1,64,000 − ₹1,910 = ₹1,62,090; Net sales = ₹1,80,000 − ₹1,820 = ₹1,78,180.
- Gross profit = (Net sales 1,78,180 + Closing stock 16,000) − (Opening stock 9,000 + Net purchases 1,62,090 + Carriage 1,000 + Wages 3,300) = 1,94,180 − 1,75,390 = ₹18,790. …
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