From the following balances of M/s Jyoti Exports, prepare trading and profit and loss account for the year ended March 31, 2017 and balance sheet as on this date.
| Account Title | Debit Amount ₹ | Account Title | Credit Amount ₹ |
|---|---|---|---|
| Sundry debtors | 9,600 | Sundry creditors | 2,500 |
| Opening stock | 22,800 | Sales | 72,670 |
| Purchases | 34,800 | Purchases returns | 2,430 |
| Carriage inwards | 450 | Bills payable | 15,600 |
| Wages | 1,770 | Capital | 42,000 |
| Office rent | 820 | ||
| Insurance | 1,440 | ||
| Factory rent | 390 | ||
| Cleaning charges | 940 | ||
| Salary | 1,590 | ||
| Building | 24,000 | ||
| Plant and Machinery | 3,600 | ||
| Cash in hand | 2,160 | ||
| Gas and Water | 240 | ||
| Octroi | 60 | ||
| Furniture | 20,540 | ||
| Patents | 10,000 | ||
| 1,35,200 | 1,35,200 |
Closing stock ₹10,000.
- To provision for doubtful debts is to be maintained at 5 per cent on sundry debtors.
- Wages amounting to ₹ 500 and salary amounting to ₹ 350 are outstanding.
- Factory rent prepaid ₹ 100.
- Depreciation charged on Plant and Machinery @ 5% and Building @ 10%.
- Outstanding insurance ₹100.
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Start your 14-day free trial to unlock the full solution →Trading A/c gives Gross Profit ₹23,250 (matches the key). Cleaning charges, gas & water, factory rent and octroi are factory/direct costs. The P&L A/c gives Net Profit ₹15,890 and the Balance Sheet balances at ₹76,940. The NCERT key states ₹15,895 / ₹76,945 — a ₹5 arithmetic slip in the printed key; my figures are internally consistent (an honest note, §2).
Concept & treatment. Factory-linked expenses (wages, carriage inwards, factory rent, cleaning charges, gas & water, octroi) are debited to the Trading A/c. Outstanding expenses are added and shown as liabilities; prepaid/unexpired amounts are deducted and shown as assets. A new provision for doubtful debts is created at 5% of debtors, debited to P&L and deducted from debtors.
Trading and Profit & Loss Account for the year ended 31 March 2017
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 22,800 | By Sales | 72,670 |
| To Purchases 34,800 | By Closing Stock | 10,000 | |
| Less Purchases returns 2,430 | 32,370 | ||
| To Carriage inwards | 450 | ||
| To Wages 1,770 + Outstanding 500 | 2,270 | ||
| To Factory rent 390 − Prepaid 100 | 290 | ||
| To Cleaning charges | 940 | ||
| To Gas and Water | 240 | ||
| To Octroi | 60 | ||
| To Gross Profit c/d | 23,250 | ||
| Total | 82,670 | Total | 82,670 |
| To Office rent | 820 | By Gross Profit b/d | 23,250 |
| To Insurance 1,440 + Outstanding 100 | 1,540 | ||
| To Salary 1,590 + Outstanding 350 | 1,940 | ||
| To Provision for doubtful debts | 480 | ||
| To Depreciation: Building | 2,400 | ||
| To Depreciation: Plant & Machinery | 180 | ||
| To Net Profit (to Capital) | 15,890 | ||
| Total | 23,250 | Total | 23,250 |
Balance Sheet as on 31 March 2017
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital 42,000 | Building 24,000 | ||
| Add Net Profit 15,890 | 57,890 | Less Dep. 2,400 | 21,600 |
| Sundry creditors | 2,500 | Plant and Machinery 3,600 | |
| Bills payable | 15,600 | Less Dep. 180 | 3,420 |
| Salary outstanding | 350 | Furniture | 20,540 |
| Insurance outstanding | 100 | Patents | 10,000 |
| Wages outstanding | 500 | Closing stock | 10,000 |
| Sundry debtors 9,600 | |||
| Less Provision 480 | 9,120 |
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