E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342

D-Block, Om Nagar, Meethapur

Trading and Profit and Loss Account and Balance Sheet

Format for Trading Account

E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur

Format for Profit and Loss Account

Difference between Trading and Profit and Loss Account

Parameters Trading Account Profit and Loss Account

E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur

Meaning Trading account used to find the Profit and loss account or Income
gross profit/loss of the business for an statement is used to find the net profit/loss
accounting period of the business for an accounting period
Timing Trading Account is prepared first and Profit/Loss Account is prepared after the
then profit and loss account is trading account is prepared.
prepared.
Purpose For knowing the gross profit or gross For knowing the net profit or net loss of a
loss of a business business
Stage It is the first stage in the creation of it is the second stage in the creation of the
the final account. final account.
Dependency It is not dependent on trial balance It is dependent on trading account
Transfer The balance in the form of Gross loss The balance in the form of Net loss or Net
of Balance or Gross Profit of the trading account Profit of the profit and loss account will be
will be transferred to the Profit and transferred to the Balance Sheet
Loss Account
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur

Questions for Practices:

Q1. For the following question, prepare a trading account
Particulars Amount Particulars Amount
Sales 12,25,000 Carriage 65,000
Sales returns 25,000 Octroi 32,000
Purchases 509,000 Custom Duty 13,000
Purchases Manufacturing
9000 55,000
returns Expense
Opening
80,000 Factory Rent 125,000
inventory
Closing Productive
130,000 30,000
inventory Expense
Wages 250,000 Freight Inward 20,000
Ans:

Q2. For the following question, prepare a trading account

Particulars Amount Particulars Amount
Sales 6,05,000 Carriage 23,000
Sales returns 5,000 Octroi \12,000
Purchases 203,000 Custom Duty 5,000
Purchases Manufacturing
3000 35,000
returns Expense
Opening
50,000 Power & fuel 25,000
inventory
Closing Productive
120,000 10,000
inventory Expense
Wages 150,000 Freight Inward 20,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Q3. Prepare a Trading Account from the following particulars for the year ended 31st
March 2017:-

Particulars (₹) Particulars (₹)

Opening Stock 2,50,000 Purchases Returns 22,000
Purchases 7,00,000 Sales Return 36,000
Sales 18,00,000 Gas, Fuel and Power 75,000
Wages 2,06,000 Dock Charges 8,000
Carriage Inward 34,000 Factory Lighting 96,000
Carriage Outward 20,000 Office Lighting 5,000
Manufacturing Expenses 2,48,000

Closing Stock is valued at ₹ 6,00,000.

Ans 769,000

Q4. Prepare a Trading Account from the following particulars for the year ended 31st
March 2017:-

Particulars (₹) Particulars (₹)

Opening Stock 3,50,000 Purchases Returns 15,000
Purchases 9,15,000 Sales Return 10,000
Sales 20,10,000 Gas, Fuel and Power 1,25,000
Wages 3,50,000 Dock Charges 8,000
Carriage Inward 145,000 Factory Lighting 196,000
Carriage Outward 20,000 Office Lighting 5,000
Manufacturing Expenses 2,65,000
Freight Inward 21,000

Closing Stock costing ₹ 4,00,000 but Market value Rs350,000.

Ans

Q3. Prepare a Trading Account from the following particulars for the year ended 31st
March 2017:-

Particulars (₹) Particulars (₹)

Opening Stock 2,50,000 Purchases Returns 22,000
Purchases 7,00,000 Sales Return 36,000
Sales 18,00,000 Gas, Fuel and Power 75,000
Wages 2,06,000 Dock Charges 8,000
Carriage Inward 34,000 Factory Lighting 96,000
Carriage Outward 20,000 Office Lighting 5,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Manufacturing Expenses 2,48,000

Closing Stock is valued at ₹ 6,00,000.

Ans 769,000

Q3. From the following information, prepare the Trading Account for the year
ended 31st March, 2017:
Adjusted Purchases ₹ 15,00,000; Sales ₹ 21,40,000; Returns Inwards ₹ 40,000;
Freight and Packing ₹ 15,000; Packing Expenses on Sales ₹ 20,000; Depreciation
₹ 36,000; Factory Expenses ₹ 60,000; Closing Stock ₹ 1,20,000, Wages 25,000,
custom duty 30,000.

Ans; 470,000

Q4. Prepare Trading Account And Ascertain cost of Goods Sold and Gross Profit from
the following:

₹
Opening Stock 32,000
Purchases 2,80,000
Direct Expenses 20,000
Indirect Expenses 45,000
Closing Stock 50,000
Sales 4,00,000
Sales Returns 8,000
Question 5:

Prepare Profit and Loss Account for the year ended 31st March, 2017 from the following
particulars:-

Particulars (₹) Particulars (₹)

General
12,000 Gross profit 7,69,000
expenses
Charity 3,000 Carriage
20,000
Outwards
Office 5,000 Office
16,000
Lighting Expenses
Law Charges 5,800 Fire Insurance
18,000
Premium
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Advertisement 14,200 Telephone
13,500
Expenses
Bank charges 1,200 Establishment
2,500
expenses
Commission 7,000 Miscellaneous
7,100
Expenses
Rent, Rates 30,000 Discount
6,200
and Taxes Received
Interest on 12,000 Traveller's
60,000
investments salary
Sundry 6,000
Repair 4,300
Receipts
Indirect 2,100 Commission
2,000
expenses Cr.
Printing and 1,500
Stationery
Ans; 572,000

Q6. Calculate the amount of gross profit, operating profit and net profit on the basis of
the following balances extracted from the books of M/s Rajiv & Sons for the year ended
March 31, 2017.
₹
Opening Stock 50,000
Net Sales 11,00,000
Net Purchases 6,00,000
Direct Expenses 60,000
Administration
45,000
Expenses
Selling and
65,000
Distribution Expenses
Loss due to Fire 20,000
Closing Stock 70,000
ANSWER:
Financial Statement of M/s Rajiv & Sons

Trading Account
for the year ended March 31, 2017
Dr. Cr.
Amount
Particulars Particulars Amount (Rs)
(Rs)
Opening Stock 50,000 Net Sales 11,00,000
Net Purchases 6,00,000 Closing Stock 70,000
Direct Expenses 60,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Gross Profit 4,60,000
(Balancing
Figure)
11,70,000 11,70,000

Profit and Loss Account

for the year ended March 31, 2017
Dr. Cr.
Amount
Particulars Particulars Amount (Rs)
(Rs)
Administration
45,000 Gross Profit 4,60,000
Expenses
Selling & 65,000
Distribution
Expenses
Loss by Fire 20,000
Net Profit 3,30,000
4,60,000 4,60,000

Working Notes:
Operating Profit = Net Profit − Non-Operating Income + Non-Operating Expe
nses = 3,30,000 − 0 + 20,000 = Rs 3,50,00
0 Operating Profit = Net Profit − Non-Operating Income + Non-Operating Expenses
= 3,30,000 − 0 + 20,000 = Rs 3,50,000
Loss by Fire is a non-operating expense, thus, added to the net profit to arrive at
operating profit.

Question 7:Calculate GP and operating profit from the following:

₹
Net Profit 5,00,000
Dividend Received 6,000
Loss on sale of
12,000
Furniture
Loss by Fire 50,000
Salaries 1,20,000
Interest on Loan from
10,000
Bank
Rent Received 24,000
Donation 5,100
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Question 8: A merchant has earned a Net Profit of ₹ 57,200 for the year ended 31st
March, 2017. Other balances in his Ledger are as under:-
Cr.
Dr. Balances (₹) (₹)
Balances
Bills
Cash at Bank 4,800 3,200
Payable
Cash in Hand 1,200 Creditors 61,300
Furniture and 7,500
Loan 50,000
Fixtures
Debtors 80,100 Capital 3,32,300
Closing Stock 70,000
Motor Car 40,000
Building 1,50,000
Plant and 1,20,000
Machinery
Bills 4,400
Receivable
Investments 20,000
Drawings 6,000

Prepare his Balance Sheet as at 31st March, 2017.

ANSWER: 498,000
Question 9: The Trial Balance shows the following balances as at 31st March, 2017:-
Dr. Balances (₹) Cr. Balances (₹)
Purchases 60,000 Capital 1,13,075
Sales Returns 1,500 Sales 1,27,000
Plant and Machinery 90,000 Purchases Returns 1,275
Opening Stock 40,000 Discount Received 800
Discount Allowed 350 Sundry Creditors 20,000
Bank Charges 100 Bills Payable 5,000
Sundry Debtors 45,000
Salaries 7,000
Wages 10,000
Freight : In 1,000
Freight : Out 1,200
Rent, Rates and Taxes 2,000
Advertisements 2,000
Cash at Bank 7,000
2,67,150 2,67,150

Closing Stock was valued at ₹ 35,000. Prepare Trading and Profit and Loss Account for
the year ended 31st March, 2017 and Balance Sheet as at that date.
ANSWER: GP 50,775, NP 38,925, BS 177,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Trading Account
for the year ended March 31, 2017
Dr. Cr.
Amount
Particulars Particulars Amount (Rs)
(Rs)
Opening Stock 40,000 Sales 1,27,000
Purchases 60,000 Less: Sales
1,500 1,25,500
Returns
Less: Purchases 1,275 58,725
Closing Stock 35,000
Returns
Wages 10,000
Freight inwards 1,000
Gross Profit (Balancing 50,775
Figure)
1,60,500 1,60,500

Profit and Loss Account

for the year ended March 31, 2017
Dr. Cr.
Amount (Rs
Particulars Particulars Amount (Rs)
)
Discount Allowed 350 Gross Profit 50,775
Bank Charges 100 Discount Received 800
Salaries 7,000
Freight Outwards 1,200
Rent, Rates and Taxes 2,000
Advertisement 2,000
Net Profit 38,925
51,575 51,575

Balance Sheet
as on March 31, 2017
Amount (Rs
Liabilities Assets Amount (Rs)
)
Capital 1,13,075 Fixed Assets
Add: Net 38,925 1,52,000
Plant & Machinery 90,000
Profit

Current Liabilities Current Assets

Sundry Creditors 20,000 Sundry Debtors 45,000
Bills Payable 5,000 Cash at Bank 7,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Closing Stock 35,000
1,77,000 1,77,000

Question 10: Following is the Trial Balance of Sh. Damodar Parshad as at 31st March,
2016:-

Dr. Balances (₹) Cr. Balances (₹)

Stock 1-4-2015 10,000 Discount 750
Received
Purchases 58,000 Return Outwards 2,600
Wages 4,700 Sales 98,650
Returns Inwards 3,520 B/P 3,000
Carriage on 2,360 Sundry Creditors 5,600
Purchases
Carriage on Creditors for
710 500
Sales Rent
Office Salaries 4,800 Capital 40,000
Rent and Taxes 2,400 Loan from X 10,000
Cash 1,100 Commission 1,200
Bank Balance 7,820
Bad-debts 600
Discount
640
allowed
Land and
20,000
Building
Scooter 6,600
Scooter Repairs 850
B/R 3,500
Commission 1,800
Sundry Debtors 25,400
Interest on X's
1,500
Loan
Drawings 6,000
1,62,300 1,62,300
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Prepare a Trading and Profit and Loss Account for the year ended on 31-3-2016 and
the Balance Sheet as at that date. The Stock on 31st March, 2016 was ₹ 22,000.
ANSWER: GP 44,670, NP 33,320, BS 86,420
Financial Statements of Sh. Damodar Parshad
Trading Account
for the year ended March 31, 2016
Dr. Cr.
Amount (₹
Particulars Particulars Amount (₹)
)
Opening Stock 10,000 Sales 98,650
Purchases 58,000 Less: Return
3,520 95,130
Inwards
Less: Return 2,600 55,400
Closing Stock 22,000
Outwards
Wages 4,700
Carriage on Purchase 2,360
Gross Profit 44,670
(Balancing Figure)
1,17,130 1,17,130

Profit and Loss Account

for the year ended March 31, 2016
Dr Cr
. .
Amount (₹ Amount (₹
Particulars Particulars
) )
Carriage on
710 Gross Profit 44,670
sales
Office 4,800 Discount
750
Salaries Received
Rent & 2,400 Commissio
1,200
Taxes n
Bad Debts 600
Discount 640
Allowed
Scooter 850
Repairs
Commissio 1,800
n
Interest on 1,500
X’s Loan
Net Profit 33,320
46,620 46,620
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur

Balance Sheet
as on March 31, 2016
Amount (₹ Amount (₹
Liabilities Assets
) )
Capital 40,000 Fixed Assets
Add: Net Profit 33,320 Land & Building 20,000
Less: Drawing 6,000 67,320
Scooter 6,600
s
Loan from X 10,000
Current Liabilities Current Assets
Creditors 5,600 Closing Stock 22,000
Bills Payable 3,000 Debtors 25,400
Creditors for Rent 500 Bills Receivable 3,500
Cash at bank 7,820
Cash in hand 1,100
86,420 86,420

Question 11: From the following balances extracted from the books of Sh. Badri Vishal
on 31st March, 2017, prepare a Trading Account, P & L A/c and a Balance Sheet.
Closing Stock valued on that date was ₹ 15,000.
Dr. Cr.
(₹) (₹)
Capital 1,28,200
Household Expenses 10,000
Sales 1,80,000
Return inwards 4,000
Return outwards 6,000
Purchases 1,50,000
Cash at Shop 1,600
Bank Overdraft 15,000
Interest on Overdraft 1,500
Creditors 17,800
Stock at the Commencement 18,000
Freight 8,500
Rent and Taxes 7,000
Debtors 32,600
Commission 3,000 2,200
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Freehold property 30,000
Sundry expenses 3,900
Salaries and wages 20,000
Life Insurance Premium 1,800
Insurance Premium 1,600
Motor Vehicle 39,800
Typewriter 8,000
Interest 800
Carriage inwards 2,000
Carriage outwards 800
Power 2,200
Audit Fee 1,700
Lighting 2,000
3,50,000 3,50,000

ANSWER: GP 16300, NL22,200, BS 127,000

Financial Statements of Sh. Badri Vishal
Trading Account
for the year ended March 31, 2017
D C
r r
. .
Amoun Amoun
Particulars Particulars
t (Rs) t (Rs)
1,80,
Opening Stock 18,000 Sales
000
Purchases 1,50, Less: R
4,00 1,76,00
000 eturn
0 0
Inwards
Less: Ret 6,00 1,44,00
urn 0 0 Closing Stock 15,000
Outwards
Freight 8,500
Carriage Inwards 2,000
Power 2,200
Gross Profit 16,300
(Balancing
Figure)
1,91,00 1,91,00
0 0
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur

Profit and Loss Account

for the year ended March 31, 2017
Dr. Cr.
Amount
Particulars Particulars Amount (Rs)
(Rs)
Interest on
1,500 Gross Profit 16,300
Overdraft
Rent & Taxes 7,000 Commission
2,200
Received
Commission 3,000 Interest Received 800
Sundry Expenses 3,900 Net Loss
(Balancing 22,200
Figure)
Salaries & Wages 20,000
Insurance 1,600
Premium
Carriage Outwards 800
Audit Fees 1,700
Lighting 2,000
41,500 41,500

Balance Sheet
as on March 31, 2017
Amount (Rs
Liabilities Assets Amount (Rs)
)
Capital 1,28,200 Fixed Assets
Less: Net Loss 22,200 Freehold
30,000
Property
Less: Drawings 11,800 94,200
Motor Vehicle 39,800
*
Typewriter 8,000
Current Liabilities Current Assets
Creditors 17,800 Closing Stock 15,000
Bank Overdraft 15,000 Debtors 32,600
Cash in hand 1,600
1,27,000 1,27,000

*Drawings = Household Expenses + Life Insurance Premium = 10,000 + 1,800 = Rs

11,800
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Question 12: From the following balances of the Ledger of Sh. Akhileshwar Singh,
prepare Trading and Profit & Loss Account and Balance Sheet :-

Dr. ₹ Cr. ₹
Stock on 1-4-2016 30,000
Stock on 31-3-2017 46,200
Purchases and Sales 2,30,000 3,45,800
Returns 12,500 15,200
Commission on Purchases 1,200
Freight and Carriage 26,000
Wages and Salary 10,800
Fire Insurance Premium 820
Business Premises 40,000
Sundry Debtors 26,100
Sundry Creditors 26,700
Goodwill 8,000
Patents 8,400
Coal, Gas and Power 12,100
Printing and Stationery 2,100
Postage 710
Travelling Expenses 4,250
Drawings 7,200
Depreciation 1,000
General Expenses 8,350
Capital 89,760
Investments 8,000
Interest on Investments 800
Cash in Hand 2,570
Banker's Account 5,200
Commission 4,600 4,400
Loan on Mortgage 30,000
Interest on Loan 3,000
B/P 2,280
B/R 4,540
Income Tax 3,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Horses and Carts 20,300
Discount on Purchases 1,600
5,21,740 5,21,740

ANSWER: GP 38,400, NP 20,370, BS 164,110

Financial Statement of Sh. Akhilesh Singh
Trading Account
for the year ended March 31,2017
Dr. Cr.
Amount (₹ Amount (₹
Particulars Particulars
) )
Opening Stock 30,000 Sales 3,45,800
Purchases 2,30,000 Less: Sales Return 12,500 3,33,300
Less: Purchases 15,200 2,14,800
Return
Freight and Carriage 26,000
Commission on Purchases 1,200
Wages & Salaries 10,800
Coal, Gas and Power 12,100
Gross Profit (Balancing Figure) 38,400
3,33,300 3,33,300

Profit and Loss Account

for the year ended March. 31, 2017
Dr. Cr.
Amount (₹
Particulars Particulars Amount (₹)
)
Fire Insurance Premium 820 Gross Profit 38,400
Printing & Stationery 2,100 Interest on Investments 800
Postage & Telegram 710 Commission Received 4,400
Travelling Expenses 4,250 Discount Received 1,600
Depreciation 1,000
General Expenses 8,350
Commission 4,600
Interest on Loan 3,000
Net Profit 20,370
45,200 45,200

Balance Sheet
as on March 31, 2017
Liabilities Amount (₹ Assets Amount (₹
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
) )
Capital 89,760 Fixed Assets
Add: Net Profit 20,370 Goodwill 8,000
Less: Income 3,000
Business Premises 40,000
tax
Less: Drawings 7,200 99,930 Patents 8,400
Loan on Mortgage 30,000 Horses and Carts 20,300

Current Liabilities Current Assets

Creditors 26,700 Closing Stock 46,200
Banker’s Account 5,200 Debtors 26,100
Bills Payable 2,280 Cash in Hand 2,570
Bills Receivable 4,540
Investment 8,000

1,64,110 1,64,110

Question 13: From the following balances prepare Final Accounts as at 31st March
2017:-
Particulars (₹) Particulars (₹)
Stock 1-4-2016 23,500 Freight In 1,100
Purchases 46,800 Freight Out 3,000
Sales 1,30,000 Rent (Factory 1/3, Office
7,500
2/3)
Productive Expenses 27,000 Legal Expenses 800
Unproductive Expenses 5,800 Miscellaneous Receipts 500
Trade Expenses 1,200 Sundry Debtors 30,000
Returns In 6,600 Sundry Creditors 16,100
Returns Out 2,800 Donation 600
Loose Tools 7,200 Bad-Debts 4,750
Trade Marks 5,000 Bad-Debts Recovered 4,000
Discount Cr. 2,100 Bank Charges 2,800
Salaries 9,600 Loan on Mortgage 20,000
Fixed Deposit with Punjab 10,000
Interest on Loan 2,400
National Bank
Cash in Hand 1,300
Motor Vehicles 50,000
Leasehold Land 60,000
Capital 1,37,450
Life Insurance Premium 6,000

Value of Closing Stock was ₹ 36,500 on 31st March, 2017.

ANSWER: GP 61,800, NP 32,450, BS 200,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Trading Account
for the year ended March 31, 2017
Dr. Cr.
Amount (Rs
Particulars Particulars Amount (Rs)
)
Opening Stock 23,500 Sales 1,30,000
Purchases 46,800 Less: Return
6,600 1,23,400
Inwards
Less: Return 2,800 44,000
Closing Stock 36,500
Outwards
Freight Inwards 1,100
Productive Expenses 27,000
Rent (1/3 of 7,500) 2,500
Gross Profit 61,800
(Balancing Figure)
1,59,900 1,59,900

Profit and Loss Account

for the year ended March 31, 2017
Dr. Cr.
Amount (Rs
Particulars Particulars Amount (Rs)
)
Freight Outwards 3,000 Gross Profit 61,800
Unproductive 5,800 Discount
2,100
Wages Received
Trade Expenses 1,200 Misc. Receipts 500
Salaries 9,600 Bad Debts
4,000
Recovered
Rent (2/3 of 5,000
7,500)
Legal Expenses 800
Donation 600
Bad Debts 4,750
Bank Charges 2,800
Interest on Loan 2,400
Net Profit 32,450
68,400 68,400

Balance Sheet
as on March 31, 2017
Liabilities Amount (Rs) Assets Amount (Rs)
Capital 1,37,450 Fixed Assets
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Add: Net Profit 32,450 Trade Marks 5,000
Less: Drawings (Life 6,000 1,63,900 Fixed Deposit
10,000
Insurance Premium) with PNB
Loan on Mortgage 20,000 Motor Vehicles 50,000
Leasehold Land 60,000
Current Liabilities Current Assets
Sundry Creditors 16,100 Closing Stock 36,500
Sundry Debtors 30,000
Cash in Hand 1,300
Loose Tools 7,200
2,00,000 2,00,000

Q14. Prepare final account.

Trial Balance
as on March 31, 2017
Debit Credit
Name of Accounts L.F. Balance Balance
(Rs) (Rs)
Cash in Hand 4,500
Overdraft 8,000
Opening Stock 20,000
Purchases 80,000
Purchases Return 2,000
Sales 1,30,000
Sales Return 5,000
Travelling Expenses 1,800
Discount Allowed 600
Discount Received 1,500
Machinery 24,000
Land & Building 50,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Debtors 18,400
Creditors 8,500
Bills Receivable 2,850
Bills Payable 1,650
Capital 60,000
Drawings 6,000
Rent 3,700
Salary 3,600
Loan 10,000
Interest on Loan 1,200 –
Total 2,21,650 2,21,650

Question 15:

Prepare a Trial Balance from the following balances as at 31st March 2017 and then
prepare final account :−
(₹) (₹)
Stock on 1-4- 28,800 Returns 7,500
2016 Inwards
Purchases 82,000 Returns 5,600
Outwards
Sales 1,60,00 Carriage 1,640
0 Inwards
Wages 16,160 Carriage 3,200
Outwards
Salaries 6,400 Furniture 12,000
Repair 500 Motor Car 80,000
Charges
Commission 800 Cash in Hand 4,700
Received
Sundry 24,200 Bank Overdraft 25,400
Debtors
Sundry 7,300 Investments 20,000
Creditors
Capital 90,000 Interest on 2,400
Investments
Drawings 4,400
ANSWER:
Trial Balance
as on March 31, 2017
Debit Credit
Name of Accounts L.F. Balance Balance
(Rs) (Rs)
Stock 28,800
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Purchases 82,000
Sales 1,60,000
Salary 6,400
Repair Charges 500
Wages 16,160
Commission Received 800
Sundry Debtors 24,200
Sundry Creditors 7,300
Capital 90,000
Drawings 4,400
Return Inwards 7,520
Return Outwards 5,600
Carriage Inwards 1,640
Carriage Outwards 3,200
Furniture 12,000
Motor Car 80,000
Cash In Hand 4,700
Bank Overdraft 25,400
Investment 20,000
Interest on Investment 2,400
Total 2,91,500 2,91,500

Question 16:

Prepare a Trial Balance from the following balances taken as at 31st March 2017 and
also prepare final account:−
(₹) (₹)
Capital 2,50,00 Purchases 2,15,300
0
Drawings 24,000 Sales 3,80,000
Debtors 57,000 Miscellaneous 8,200
Expenses
Creditors 28,500 Miscellaneous 3,600
Receipts
Land & 1,80,00 Bad Debts 7,100
Building 0
Plant 1,20,00 Bills Receivable 5,000
0
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Stock on 1-4- 22,800 Loan from X 20,000
2016
Factory 16,600 Interest on X's 3,000
Expenses Loan
Office 7,700 Cash in hand 8,400
Expenses
Purchases 6,000 Goodwill 10,000
Return
Stationery 500
Freight 2,500
ANSWER:
Trial Balance
as on March 31, 2017
Debit Credit
Name of Accounts L.F. Balance Balance
(Rs) (Rs)
Capital 2,50,000
Drawings 24,000
Debtors 57,000
Creditors 28,500
Land & Building 1,80,000
Plant 1,20,000
Stock on 1-4-2007 22,800
Factory Expenses 16,600
Office Expenses 7,700
Purchases Return 6,000
Stationery 500
Freight 2,500
Purchases 2,15,300
Sales 3,80,000
Miscellaneous Expenses 8,200
Miscellaneous Receipts 3,600
Bad Debts 7,100
Bills Receivable 5,000
Loan from X 20,000
Interest on X’s Loan 3,000
Cash 8,400
Goodwill 10,000
Total 6,88,100 6,88,100

Question 17:
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Following balances were extracted from the books of Ravinder Associates as at 31st
March, 2017 :
(₹) (₹)
Sundry 4,10,000 Stock (April 2,30,000
Debtors 1, 2016)
Sundry 80,000 Premises 12,00,000
Creditors
Rent and 48,000 Fixtures & 3,10,000
Taxes Fittings
Purchases 34,00,00 Bad Debts 8,000
0 written off
Sales 56,00,00 Rent received 30,000
0 from sub-let
of part of
premises
Trade 12,000 Loan from 1,50,000
Expenses Mukul
Returns 80,000 Interest on 15,000
Outwards Mukul's Loan
Returns 1,20,000 Drawings 40,000
Inwards
Expenses 4,000 Cash in hand 75,000
Motor 6,50,000 Stock on 31st
Vehicles March, 2017
Electricity 25,000 (not adjusted) 3,80,000

You are required to prepare the trial balance treating the difference as his capital and
also prepare final account.
ANSWER:
Books of Ravinder Associates
Trial Balance
as on March 31, 2017
Debit Credit
Name of Accounts L.F. Balance Balance
(Rs) (Rs)
Sundry Debtors 4,10,000
Sundry Creditors 80,000
Rent & Taxes 48,000
Purchases 34,00,000
Sales 56,00,000
Trade Expenses 12,000
Return Outwards 80,000
Return Inwards 1,20,000
Expenses 4,000
Motor Vehicles 6,50,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Electricity 25,000
Opening Stock (on April 01,
2,30,000
2004)
Premises 12,00,000
Fixture & Fittings 3,10,000
Bad Debts written off 8,000
Loan from Mukul 1,50,000
Interest on Mukul’s Loan 15,000
Drawings 40,000
Cash in Hand 75,000
Rent received from Sub-let of
30,000
part of Premises
Capital (Balancing Figure) 6,07,000
Total 65,47,000 65,47,000

Note: Closing Stock of Rs 3,80,000 will not appear in Trial Balance, because it has not
been accounted yet.

Question 18:

The following trial balance has been prepared by an inexperienced accountant. Redraft
it in a correct form :−
Balance Balance
Name of Accounts
Dr. Cr.
₹ ₹
Land and Building 1,20,000
Plant and Machinery 92,000
Wages 18,200
Discount Allowed 1,620
Discount Received 730
Purchases 1,26,000
Sales 2,40,000
Return Inwards 6,500
Return Outwards 3,370
Opening Stock 15,000
Debtors 30,000
Creditors 20,000
Carriage on Sales 3,280
Carriage on Purchase 2,800
Insurance 1,500
General Expenses 6,100
Cash in Hand 2,400
Bank Overdraft 12,100
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Capital 1,54,000
Drawings 4,800
Total 4,30,200 4,30,200
ANSWER:
Trial Balance
Debit Credit
Name of
L.F. Balance Balance
Accounts
(Rs) (Rs)
Land & 1,20,00
Building 0
Plant &
92,000
Machinery
Wages 18,200
Discount
1,620
Allowed
Discount
730
Received
1,26,00
Purchases
0
Sales 2,40,000
Return
6,500
Inwards
Return
3,370
Outwards
Opening
15,000
Stock
Debtors 30,000
Creditors 20,000
Carriage on
3,280
Sales
Carriage on
2,800
Purchases
Insurance
1,500
A/c
General
6,100
Expenses
Cash in
2,400
Hand
Bank
12,100
Overdraft
Capital 1,54,000
Drawings 4,800
4,30,20
Total 4,30,200
0
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur

Question 19:

Following is the Trial Balance as at 31st March, 2015 :

Heads of
L.F. Debit Credit
Account
₹ ₹
Capital 3,20,000
Fixed Assets 1,80,000
Drawings 60,000
Debtors 2,40,000
Creditors 1,80,000
Purchases 7,10,000
Sales 10,50,000
Bank
45,000
Balance
Cash in
30,000
Hand
Salary 1,65,000
Rent 1,20,000
15,50,000 15,50,000

Additional Information :
(i) Closing Stock amounting to ₹ 140,000.
(ii) Rent Payable Rs 30,000
(iii) Goods worth ₹ 7,000 were returned to a supplier.
(iv) Bad Debt Rs 10,000.
Required: Prepare final account.

Question 20:

The following is the Trial Balance prepared by an inexperienced accountant. Redraft it

in a correct form and give necessary notes : −
TRIAL BALANCE
for the year ending 31st March, 2017
Particulars Amount Particulars Amount
₹ ₹
Cash in Hand 5,200 Bank Overdraft 16,400
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Plant & Machinery 75,000 Capital 50,000
Typewriter 6,400 Goodwill 8,000
Stock (1-4-2016) 13,100 Sundry 8,200
Creditors
Purchases 84,100 Sales 1,60,000
Carriage Inwards 2,800 Return Inwards 2,400
Carriage Outwards 1,600 Drawings 2,120
Sundry Debtors 18,300 Investments 4,000
Bills Payable 12,000
Rent Paid 9,600
Wages 16,500
Advertisement 4,500
Discount Received 3,200
2,52,300 2,51,120

ANSWER:
Trial Balance
as on March 31, 2017
Debit Credit
Name of Accounts L.F. Balance Balance
(Rs) (Rs)
Cash in Hand 5,200
Plant & Machinery 75,000
Typewriter 6,400
Stock (1-4-2003) 13,100
Purchases 84,100
Carriage Inwards 2,800
Carriage Outwards 1,600
Sundry Debtors 18,300
Bills Payable 12,000
Rent Paid 9,600
Wages 16,500
Advertisement 4,500
Discount Received 3,200
Bank Overdraft 16,400
Capital 50,000
Goodwill 8,000
Sundry Creditors 8,200
Sales 1,60,000
Return Inwards 2,400
Drawings 2,120
Investment 4,000
Suspense A/c (Balancing Figure) 3,820
Total 2,53,620 2,53,620
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Note: Since, the Trial Balance does not tally, thus, the difference of Rs 3,820 is
transferred to the Credit Balance Column of Trial Balance.
Page No 14.30:
Question 21:

A book-keeper extracted the following Trial Balance as at 31st March, 2017 :

Balance Balance
Name of Accounts
Dr. Cr.
₹ ₹
Stock on 1.4.2016 2,50,000
Purchases 6,50,000
Sales 10,00,000
Motor Vans 3,80,000
Debtors and Creditors 1,50,000 94,000
Premises 3,00,000
Shop fittings 20,000
Interest on Bank Overdraft 16,000
Purchases Returns 10,000
Sales Returns 20,000
Lighting and heating 18,000
Capital 5,00,000
Discount Received 2,000
Repairs 2,500
Electricity 6,500
Bank Overdraft 2,00,000
Stock on 31.3.2017 3,30,000
Rent from subletting 15,000
Bills Receivable 8,000
Suspense Account (difference in books) 13,000
Total 19,92,50 19,92,500
0

You are required to redraft the trial balance correctly. Also prepare final account by
taking any 5 adjustment entry.
ANSWER:
Trial Balance
as on March 31, 2017
Debit Credit
Name of
L.F. Balance Balance
Accounts
(Rs) (Rs)
Stock on
2,50,000
1.4.2004
Purchases 6,50,000
E-Life Institute of Arts & Commerce Cont; 8802887240, 8700843342
D-Block, Om Nagar, Meethapur
Sales 10,00,000
Motor Van 3,80,000
Debtors 1,50,000
Creditors 94,000
Premises 3,00,000
Shop Fittings 20,000
Interest on Bank
16,000
Overdraft
Purchases
10,000
Return
Sales Return 20,000
Lighting &
18,000
Heating
Capital 5,00,000
Discount
2,000
Received
Repairs 2,500
Electricity 6,500
Bank Overdraft 2,00,000
Rent from
15,000
subletting
Bills Receivable 8,000
Total 18,21,000 18,21,000

Note: Closing Stock of Rs 3,30,000 will not appear in Trial Balance, because it has not
been accounted yet.