TRADING, PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31/0

Stock as on 1-4-07
Purchases
Less: Return Outwards
Add:Marterials not yet Booked
Less: Closing Stock (7000 + 8000)
Less: Stock Destroyed
Wages
GROSS PROFIT

Advertisements
Less: Deferred
Office Expenses
Loss on Stock Destroyed (3000-2000)

8,000
20,000
400
19,600
1,000
20,600
15,000
5,600
3,000

5,500
5,000

2,600
6,900
51,000
68500

500
8,050
1000

Itt. On Capital
Managerial comm.
NET PROFIT

2500
3630
36,300
51,980

Managerial comm.

3,630

GP RATIO

74.45%

NT FOR THE YEAR ENDED 31/0308

Sales
Less: Return Inwards
Less: Sales on Return Basis

80,000
1,500
78,500
10000

68,500

68500
GROSS PROFIT
Apprenticeship Premium
Less: Advance
Itt. On Drawings
Interest on Smith's Loan
Add: Accrued

51,000
1,200
800

400
80

300
200

500

51,980

BALANCE SHEET AS ON 31/03/08

LIABILITIES
Capital as on 1-4-07
Add: Intt. On Capital
Less: Intt. On Drawings

Less: Drawings

50,000
2500
52,500
80
52,420
36300
88,720
3,000

Advance Apprentice Premium

800

Bill Payables
O/s Managerial Comm.
Sundry Creditors
Add: Materials not yet Booked

85,720

2,500
3630
15,800
1000

16,800
109,450

T AS ON 31/03/08
ASSETS
Business Premises
Furniture and Fixtures
Packing Machinery
Investment
Bill Receivables
Sundry Debtors
Less: Sales on Return Basis
Smith's Loan
Add: Accrued Intt.
Closing Stock (7000+8000)
Ins. Claim Receivables
Deferred Advertisement
Cash in Hand
Cash at Bank

CR

55,000
2,500
4,500
3,000
3,500
20,000
10000

10,000

5,000
200

5,200
15000
2000
5000
250
3,500
109,450
1.49

DR
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*

Business Premises
Stock as on 1-4-07
Purchases
Furniture and Fixtures
Return Inwards
Bill Receivables
Wages
Advertisements
Sundry Debtors
Packing Machinery
Proprietor's Withdrawals
Office Expenses
Smith's Loan (Dr.) @ 10% on 1-4-0
Investment
Cash in Hand
Cash at Bank

55,000
8,000
20,000
2,500
1,500
3,500
6,900
5,500
20,000
4,500
3,000
8,050
5,000
3,000
250
3,500
150,200

CR.
Bill Payables
Sundry Creditors
Capital as on 1-4-07
Sales
Return Outwards
Apprenticeship Premium
Interest on Smith's Loan

2,500
15,800
50,000
80,000
400
1,200
300

150,200

*
*
*
*
*
*
*

PROBLEM-1
From the following Ledger Balances extracted at the close of trading year ended 31st March, 2008,
prepare a Trading Account, Profit & Loss Account and Balance Sheet at that date, after giving
effect to the under mentioned adjustments.:
Capital as on 1-4-07
Stock as on 1-4-07
Purchases
Sales
Return Inwards
Return Outwards
Wages
Advertisements
Apprenticeship Premium
Interest on Smith's Loan
Proprietor's Withdrawals
Office Expenses

50,000
8,000
20,000
80,000
1,500
400
6,900
5,500
1,200
300
3,000
8,050

Business Premises
Furniture and Fixtures
Bill Receivables
Bill Payables
Sundry Debtors
Sundry Creditors
Packing Machinery
Smith's Loan (Dr.) @ 10% on 1-4-07
Investment
Cash in Hand
Cash at Bank

Adjustments to be made for the current period are:

1. Stock in hand at 31st March, 08 Rs. 7000
2. Apprenticeship Premium is for three years, paid in advance on 1st April, 07
3. Interest on Capital to be allowed at 5% for the year
4. Interest on Drawings to be charged to him as ascertained for the year Rs. 80
5. Rs. 5000 out of the Advertisement Expenses are to be carried forward
6. Stock valued at Rs. 3000 destroyed by the fire on 25-03-08 but the insurance company admitted a claim
Rs. 2000 only and paid it in April, 2008
7. The Manager is entitled to a commission of 10% of the Net Profit calculated after charging such commis
8. Included in sales is an amount of Rs. 10000 representing goods on "sale or return", the customer still ha
the right to return the goods. The goods were invoiced charging at profit of 20% sales.
9. The stock included materials worth Rs. 1000 for which bills had not been received and therefore, not ye
accounted for.

arch, 2008,
giving

55,000
2,500
3,500
2,500
20,000
15,800
4,500
5,000
3,000
250
3,500

ny admitted a claim of

rging such commission

he customer still having

d therefore, not yet

JOURNAL ENTRIES
Dt

Particulars

Dr. (Rs.)

1 BY Closing Stock
TO Purchase/COGS
A/C
A/C

800

3 By Interest on Capital
To Capital

A/C
A/C

2500

4 By Capital
To Interest on Drawings

A/C
A/C

80

5 By Deferred Advertisement
To Advertisement

A/C
A/C

5000

6 By Stock Destroyed
To Purchase

A/C
A/C

3000

A/C
A/C

2000

A/C
A/C

10000

A/C
A/C

8000

8 By Purchase
To Sundry Creditors

A/C
A/C

1000

9 By Smith's Loan
To Interest on Smith's Loan

A/C
A/C

200

7 By Sales
To Sundry Debtors
By Stock on Sale or Return
To Purchase

10 By Managerial Comm.
To O/s Managerial Comm.

1
7000

2 By Apprentice Premium
To Advance Apprentice Premium

By Insurqnce Claim Receivables

To Stock Destroyed

Cr. (Rs.)

7000

1
800
1
2500
1
80
1
5000
1
3000

2000
1
10000

8000
1
1000
1
200
3630
3630