Question 29.
From the following Trial Balance and additional information of Mr. Gaurav, a proprietor, prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Seet as at that date:
Closing Stock at cost ₹ 1,00,000 but its market value is ₹ 88,500.
Answers
Answer:
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Trading and P&L A/c with Balance Sheet as at 31/03/2018
Explanation:
Trading and P&L A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
To Wages 26,000 By Sales 1,00,700
To Purchases 56,500 By Closing Stock 88,500
To Gross Profit 1,06,700 (See Notes 1)
(bal.)
To Income Tax 2,000 By Gross Profit 1,06,700
To Salaries 41,600
and Wages
To Net Profit 63,100
(bal.)
106700 106700
Notes: 1) We have taken the value of Closing stock as 88,500(Market value) because of the provisions given in Accounting Standard:2 (Valuation of Inventories) which states that Inventories should be valued at Cost or NRV(Net Realisable Value or Market Value) whichever is lower.
Balance Sheet
as at 31/03/2018
Amount(Rs.)
Non-Current Assets:
Building 1,60,000
Machinery 16000
Current Assets:
Debtors 38700
Input CGST 10000
Input SGST 10000
Total 234700
Non-Current Liabilities:
Capital 223100
less:Drawings (500)
Add: Net profit 63100
285700
Current Liabilities:
Creditors 12500
Output CGST 12500
Output SGST 12500
Total 323200
Notes: As noticed above,the balance sheet is not matching because of some missing values such as Cash in hand and at Bank or wrong values given in the Trial Balance.
The above Balance sheet has been prepared according to the latest Schedule VI.