Question

From the following Trail Balance of A.B. Chandra as on 31st December, 2019.

TRIAL BALANCE of A.B. Chandra As on 31.12.2019
Particulars	Amount (Dr.)	Particulars	Amount (Cr.)
Cash in Hand	2,000	Discount Received	750
Drawings	2,800	Capital	40,000
Opening Stock (01/01/2018)	4,000	Purchases Returns	1,250
Wages	2,000	Sales	83,000
Cash at Bank	3,500	Creditors	15,000
Insurance	700	Bank Loan	10,000
Trade Expenses	1,200
Furniture	20,000
Buildings	61,000
Salaries	5,000
Discount Allowed	750
Sales Returns	3,000
Purchases	31,250
Debtors	10,000
Telephone Charges	1,000
Bills Receivable	1,800
	1,50,000		1,50,000

The closing stock was valued at ₹ 12,000.

You are required to prepare a Trading Account and a Profit and Loss Account for the year ending 31st December 2019 and a Balance Sheet as on 31st December, 2019.

Answer 1

In the Books of A.B. Chandra
Dr.	Trading and Profit & Loss Account for the year ending December 31, 2019				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Opening Stock	-	4,000	By Sales	83,000	80,000
To Purchases	31,250	30,000	Less: Sales Returns	(3,000)
Less: Purchases Returns	(1,250)		By Closing Stock	-	12,000
To Wages	-	2,000
To Gross Profit c/d	-	56,000
		92,000			92,000
To Insurance	-	700	By Gross Profit b/d	-	56,000
To Trade Expenses	-	1,200	By Discount Received	-	750
To Salaries	-	5,000
To Discount Allowed	-	750
To Telephone Charges	-	1,000
To Net Profit	-	48,100
		56,750			56,750

 

Balance Sheet as on December 31, 2019
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Capital	40,000	85,300	Cash in hand	2,000
Add: Net Profit	48,100		Cash at Bank	3,500
	88,100		Furniture	20,000
Less: Drawings	(2,800)		Building	61,000
Creditors	-	15,000	Debtors	10,000
Bank Loan	-	10,000	Bills Receivable	1,800
			Closing Stock	12,000
		1,10,300		1,10,300