Question

The following are the extracts from the trial balance of M/s Bhola and Sons as on March 31, 2017

Account title	Debit ₹	Credit ₹
Opening Stock	2,00,000
Purchases	8,10,000
Sales		10,10,000
	10,10,000	10,10,000

(Only relevant items)
Closing Stock as on date was valued at ₹ 3,00,000.
You are required to record the necessary journal entries and show how the above items will appear in the trading and profit and loss account and balance sheet of M/s Bhola and Sons.

Answer 1

Books of M/s Bhola and Sons Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2017
Mar.31	Trading A/c Dr.		10,10,000
	To Opening Stock A/c			2,00,000
	To Purchases A/c			8,10,000
	(Balances from Purchases Account and Stock Account transferred to Trading Account)
Mar.31	Sales A/c Dr.		10,10,000
	Closing Stock A/c		3,00,000
	To Trading A/c			13,10,000
	(Balance from sales and closing stock transferred to Trading Account)
Mar.31	Trading A/c Dr.		3,00,000
	To Profit and Loss (Gross Profit) A/c			3,00,000
	(Balance of Trading Account (gross profit) transferred to Profit and Loss Account)

 

Dr.	Trading Account as on March 31, 2017		Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	2,00,000	Sales	10,10,000
Purchases	8,10,000	Closing Stock	3,00,000
Profit and Loss A/c - Gross Profit	3,00,000
	13,10,000		13,10,000

 

Balance Sheet as on March 31, 2017
Liabilities	Amount ₹	Assets	Amount ₹
		Closing Stock	3,00,000