Question 36.
Vijay commenced business as foodgrains merchant on 1st April, 2017 with a capital of ₹ 4,00,000. On the same day, he purchased furniture for ₹ 80,000. From the following particulars obtained from his books which do not conform to Double Entry principles, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2018 and the Balance Sheet as on that date:
Sales (including Cash Sales ₹ 2,00,000) – ₹ 5,00,000
Purchases (including Cash Purchases ₹ 1,20,000) – ₹ 4,00,000
Vijay’s Drawings (in cash) – ₹ 40,000
Salaries to Staff – ₹ 48,000
Bad Debts written off – ₹ 4,000
Trade Expenses paid – ₹ 16,000
Vijay used goods of ₹ 12,000 for private purposes during the year. On 31st March, 2018, his Debtors amounted to ₹ 1,40,000 and Creditors ₹ 80,000. Stock-in-Trade on that date was ₹ 1,60,000.
Answers
Trading and P&L A/c with Balance sheet as at 31.3.2018
Explanation:
Trading and P&L A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
To Purchases 388000 By Sales 500000
(-12000) By Drawings 160000
To Gross Profit 272000
660000 660000
To Bad debts 4000 By Gross Profit 272000
To Salary 48000
To Trade Expenses 16000
To Net Profit 204000
272000 272000
Balance Sheet
as at 31.3.2018
Notes to A/c Amount(Rs.)
Non-Current Assets:
Furniture 80000
Current Assets:
Debtors 100000
(-40000)
Cash in hand 256000
Closing Stock 160000
Total(A) 632000
Non-Current Liabilities:
Capital(-52000+204000) 552000
Current Liabilities:
Creditors 80000
Total(B) 632000