Page 146 - DEBK-XI(2020)

Financial Statements of Sole Proprietorship ... 18.5

Solution:
TRADING AND PROFIT AND LOSS ACCOUNT for the year ended 31st March, 2020
Particulars ` Particulars `
To Opening Stock 40,000 By Sales 1,27,500
To Purchases 60,000 Less: Sales Return 2,000 1,25,500
Less: Purchases Return 1,275 58,725 By Closing Stock 35,000
To Wages 10,000
To Freight In 1,000
To Gross Profit c/d 50,775
1,60,500 1,60,500
To Discount Allowed 350 By Gross Profit b/d 50,775
To Bank charges 100 By Discount Received 800
To Salaries 7,000
To Freight out 1,200
To Rent 2,000
To Advertisement 2,000
To Net Profit transferred to
Capital A/c 38,925
51,575 51,575

BALANCE SHEET as at 31st March, 2020
Liabilities ` Assets `
Sundry Creditors 25,000 Cash at Bank 7,000
Capital: Sundry Debtors 45,000
Opening Balance 1,13,075 Closing Stock 35,000
Add: Net Profit 38,925 1,52,000 Plant and Machinery 90,000
1,77,000 1,77,000

8. From the following information of a trader, prepare his Profit and Loss Account for
the year ended 31st March, 2020:
Particulars `
Gross Profit ................................................................................................................................... 5,00,000
Salaries and Wages ................................................................................................................................... 12,000
Discount Allowed ................................................................................................................................... 3,000
Interest Received ................................................................................................................................... 2,000
Commission Paid ................................................................................................................................... 14,000
Freight Outwards ................................................................................................................................... 15,000
Rent Received ................................................................................................................................... 12,500
Entertainment Expenses ................................................................................................................................... 8,000
Sales Promotion Expenses ................................................................................................................................... 4,250
Audit Fees ................................................................................................................................... 8,500
Miscellaneous Income ................................................................................................................................... 12,900
Repairs and Maintenance ................................................................................................................................... 3,400
Water and Electricity Charges (Office) ....................................................................................................................... 3,000
Telephone Expenses ................................................................................................................................... 6,000
Gain on Sale of Machine ................................................................................................................................... 600
Loss by Theft ................................................................................................................................... 1,000
Legal Expenses ................................................................................................................................... 11,250