Question

On 31st December, 2018 the following Trial Balance, was extracted from the books of Mohan:

	Debit (₹)	Credit (₹)
Capital		30,000
Drawings	5,000
Drs. and Crs.	20,000	10,000
Loan		9,500
Interest on Loan	300
Cash	2,000
Provision for Bad Debts		700
Stock (1.1.2018)	6,800
Motor Vehicles	10,000
Bank	3,500
Land and Building	12,000
Bad Debts	500
Purchases and Sales	66,000	1,10,000
Returns	8,000	1,500
Carriage Outward	2,500
Carriage Inward	3,000
Salaries	9,000
Rent and Insurance	3,000
Advertising	3,500
Discount		500
General Expenses	3,400
B/R and B/P	6,000	2,000
Rent Received		300
	1,64,500	1,64,500

Prepare a Trading Account and a Profit and Loss Account for the year ended 31st December, 2018 and a Balance Sheet as on that date after taking into account the following: 

Stock on 31st December, 2018 was valued at ₹ 7,000.

Answer 1

In the Books of Mr. Mohan
Dr.	Trading and Profit and Loss A/c for the year ended 31.12.2018				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Opening Stock	-	6,800	By Sales Cash	1,10,000	1,02,000
To Purchases	66,000	64,500	Less: Returns	(8,000)
Less: Returns	(1,500)		By Closing Stock	-	7,000
To Carriage Inwards	-	3,000
To Gross Profit	-	34,700
		58,080			58,080
To Advertising	-	3,500	By Gross Profit	-	34,700
To Interest on Loan	-	300	By Discount earned	-	500
To Bad debt	-	500	By Rent Received	-	300
To Carriage outward	-	2,500
To Salaries	-	9,000
To Rent & Insurance	-	3,000
To General Expenses	-	3,400
To Net Profit	-	13,300
		35,500			35,500

 

Balance Sheet as on 31.12.2018
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital	30,000	38,300	Land & Building	-	12,000
Add: Net Profit	13,300		Bank	-	3,500
Less: Drawings	(5,000)		Motor Vehicles	-	10,000
Bank Loan	-	9,500	Sundry Debtors	20,000	19,300
Sundry Creditors	-	10,000	Less: Bad Debt Provision	(700)
Bills Payable	-	2,000	Cash in hand	-	2,000
			Bills Receivable	-	6,000
			Closing Stock	-	7,000
		59,800			59,800