Question

The following is the trial balance of Manju Chawla on March 31, 2017. You are required to prepare trading and profit and loss account and a balance sheet as on date:

Account title	Debit Amount ₹	Credit Amount ₹
Opening stock	10,000
Purchases and sales	40,000	80,000
Returns	200	600
Productive wages	6,000
Dock and Clearing charges	4,000
Donation and charity	600
Delivery van expenses	6,000
Lighting	500
Sales tax collected		1,000
Bad debts	600
Misc. incomes		6,000
Rent from tenants		2,000
Royalty	4,000
Capital		40,000
Drawings	2,000
Debtors and Creditors	6,000	7,000
Cash	3,000
Investment	6,000
Patents	4,000
Land and Machinery	43,000

Closing stock ₹ 2,000

Answer 1

Dr.	Trading Account as on March 31, 2017		Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Opening Stock	10,000	Sales 80,000
Purchases 40,000		Less: Sales Returns (200)	79,800
Less: Purchases Returns (600)	39,400
Productive Wages	6,000	Closing Stock	2,00(
Dock and Clearing Charges	4,000
Royalty	4,000
Profit and Loss (Gross Profit)	18,400
	81,800		81,800

 

Dr.	Profit and Loss Account as on March 31, 2017		Cr.
Particulars	Amount ₹	Particulars	Amount ₹
Donation and Charity	600	Trading (Gross Profit)	18,400
Delivery Van Expenses	6,000	Misc. Incomes	6,000
Lighting	500	Rent from Tenants	2,000
Bad Debts	600
Net Profit	18,700
	26,400		26,400

 

Balance Sheet as on March 31, 2017
Liabilities		Amount ₹	Assets	Amount ₹
Capital	40,000		Patents	4,000
Add: Profit and Loss
(Net Profit)	18,700		Land and Machinery	43,000
	58,700		Investment	6,000
Less: Drawings	(2,000)	56,700	Debtors	6,700
			Cash	3,000
Sales Tax Collected		1,000	Closing Stock	2,000
Creditors		7,000
		64,700		64,700

Note:

As per the solution, net profit is ₹ 18,700; however, according to the answer given in the book, it is ₹ 18,400.

There is a misprint in the trial balance given in the question.

In order to match the trial balance, debtors have been taken as ₹ 6,700; however, the debtors given in the trial balance is ₹ 60,000.