Question

Mr. P.H. Mehta is in business. The following balances were extracted from the books as on 31.12.2018. You are required to prepare the Trading Account and the Profit and Loss Account for the year ended 31.12.2018 and the Balance Sheet as on that date. 

	Debit (₹)	Credit (₹)
Capital		1,98,000
Drawings	10,000
Purchases and Returns Outward	1,18,800	500
Salaries	21,650
Rate and Taxes	950
Office Lighting and Cooling	2,700
Import Duty	2,200
Insurance	250
Agency Commission	900
Advertising	5,000
Returns Inward and Sales		3,48,500
Bad Debts	800
Postage and Telegrams	800
Discount Received		150
Carriage for Door Delivery to Customers	1,400
Opening Stock	6,200
Wages	27,700
Plant and Machinery	2,05,000
Land and Buildings	1,10,000
Furniture and Fittings	3,000
Sundry Debtors and Creditors	39,600	20,000
Cash at Bank	10,000
Petty Cash Balance	200
	5,67,150	5,67,150

Closing stock on 31.12.2018 was ₹ 48,700.

Answer 1

In the Books of Mr. P.H. Mehta
Dr.	Trading and Profit and Loss A/c for the year ended 31.12.2018			Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)
To Opening Stock	-	6,200	By Sales Cash	3,48,500
To Purchases	1,18,800	1,18,300	By Closing Stock	48,700
Less: Returns	(500)
To Wages	-	27,700
To Import Duty	-	2,200
To Gross Profit	-	2,42,800
		3,97,200		3,97,200
To Salaries	-	21,650	By Gross Profit	2,42,800
To Insurance	-	250	By Discount Earned	150
To Office Lighting and Cooling	-	2,700
To Agency Commission	-	900
To Rent & Rates	-	950
To Advertising	-	5,000
To Bad Debt	-	800
To Postage and Telegrams	-	800
To Carriage for Door Delivery	-	1,400
To Net Profit	-	2,08,500
		2,42,950		2,42,950

 

Balance Sheet as on 31.12.2018
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Capital	1,98,000	3,96,500	Plant & Machinery	2,05,000
Add: Net Profit	2,08,500		Land & Buildings	1,10,000
	4,06,000		Furniture and Fixtures	3,000
Less: Drawings	(10,000)		Petty Cash	200
Sundry Creditors		20,000	Debtors	39,600
			Closing Stock	48,700
			Cash at Bank	10,000
		4,16,500		4,16,500