Question

From the following balances extracted from the book of M/s Manju Chawla on March 31, 2017. You are requested to prepare the trading and profit and loss account and a balance sheet as on this date.

Account Title	Amount Rs	Amount Rs
Opening stock	10,000
Purchases and Sales	40,000	80,000
Returns	200	600
Wages	6,000
Dock and cleaning charges	4,000
Lighting	500
Misc. Income		6,000
Rent		2,000
Capital		40,000
Drawings	2,000
Debtors and Creditors	6,000	7,000
Cash	3,000
Investment	6,000
Patent	4,000
Land and Machinery	43,000
Donations and Charity	600
Sales tax collected		1,000
Furniture	11,300
	1,36,600	1,36,600

Closing stock was Rs 2,000.
(a) Interest on drawings @ 7% and interest on capital @ 5%.
(b) Land and Machinery is depreciated at 5%.
(c) Interest on investment @ 6%.
(d) Unexpired rent Rs 100.
(e) Charge 5% depreciation on furniture.

Answer 1

Trading Account
Dr.								Cr.
Particulars				Amount Rs	Particulars			Amount Rs
Opening Stock				10,000	Sales	80,000
Purchases			40,000		Less: Sales Return	200		79,800
	Less: Purchases Return		600	39,400	Closing Stock			2,000
Wages				6,000
Dock and Cleaning Charges				4,000
Gross Profit				22,400
				81,800				81,800

 

Profit and Loss Account
Dr.				Cr.
Particulars	Amount Rs	Particulars		Amount Rs
Lighting	500	Gross Profit		22,400
Donations and Charity	600	Miscellaneous Income		6,000
Interest on Capital	2,000	Rent	2,000
Depreciation on Furniture	565	Less: Unexpried	100	1,900
Depreciation on Land and Machinery	2,150	Interest on Drawings		140
Net Profit	24,985	Interest on Investment		360
	30,800			30,800

 

Balance Sheet
Liabilities		Amount Rs	Assets					Amount Rs
Capital	40,000		Debtors					6,000
Add: Interest on Capital	2,000		Cash					3,000
Add: Net Profit	24,985		Investment				6,000
Less: Drawings	2,000		Add: Interest on Investment				360	6,360
Less: Interest on Drawings	140	64,845	Patent					4,000
Creditors		7,000	Land and Machinery				43,000
Sales Tax Collected		1,000	Less: Depreciation				2,150	40,850
Unexpired rent		100	Furniture				11,300
			Less: Depreciation				565	10,735
			Closing Stock					2,000
		72,945						72,945

Note:

In the NCERT textbook, the answer provided for question number 11 is different from the solution.

However, the answer should be

Gross profit = Rs 22,400 instead of Rs 21,900

Net profit = Rs 24,985 instead of Rs 25,185

Total of Balance Sheet = Rs 72,945 instead of Rs 71,185