Question

From the following information, prepare trading and profit and loss account and balance sheet in the books of Sangeetha for the year ending 31st March, 2018.

Particulars	₹	Particulars	₹
Capital	20,000	Salaries	6,600
Bills receivable	8,000	Establishment expenses	4,500
Bills payable	10,500	Advertisement	2,300
Purchases	75,000	Furniture	10,000
Sales	95,000	Cash at bank	3,200
Opening stock	12,000	Miscellaneous receipts	600
Drawings	4,500

Adjustments:

1. Stock on 31st March, 2018 ₹ 14,200
2. Income tax of Sangeetha paid ₹ 800
3. Charge interest on drawings @ 12% p.a.
4. Provide managerial remuneration @ 10% of net profit before charging such commission.

Answer 1

Trading and Profit & Loss Account of Sangeetha
for the year ended 31.03.2018

Dr.				Cr.
Particulars		₹	Particulars	₹
To Opening Stock		12,000	By Sales	95,000
To Purchases		75,000	By Closing Stock	14,200
To Gross profit c/d		22,200
		1,09,200		1,09,200
To Salaries		6,600	By Gross profit b/d	22,200
To Establishment expenses		4,500	By Miscellaneous receipts	600
To Advertisement		2,300
To Managre's Commission		740
To Interest on capital		2,000
To Net Profit c/d		6,660
		22,800		22,800

Balance Sheet of Sangeetha
as on 31.03.2018

Liabilities	₹	₹	Assets	₹	₹
Capital	20,000	23,360	Cash at bank	3,200	2,400
Add: Net profit	6,660		Less: Income tax	800
	26,660		Bills receivable		8,000
Add: Interest on capital	2,000		Furniture		10,000
	28,660		Closing Stock		14,200
Less: Income tax	800
Less: Drawings	4,500
Bills payable		10,500
Manager's commission		740
		34,600			34,600