Rubyj8024idn
Answered

IDNLearn.com is the place where your questions are met with thoughtful and precise answers. Join our community to access reliable and comprehensive responses to your questions from experienced professionals.

210 Office Practice and Accountancy

Following is the trial balance drawn from the books of Mr. Chaudhary:

\begin{tabular}{|c|c|c|c|}
\hline
Debit Balance & Rs. & Credit Balance & Rs. \\
\hline
300,000 & Sales & 435,000 \\
\hline
Purchases & 25,000 & Capital & 81,300 \\
\hline
\begin{tabular}{l}
Salaries \\
Opening stock
\end{tabular} & 72,000 & \begin{tabular}{l}
Creditors \\
Commission
\end{tabular} & 40,000 \\
\hline
Sales return & 3,000 & Commission & 1,200 \\
\hline
\begin{tabular}{l}
Manufacturing expenses \\
Miscellaneous expenses
\end{tabular} & 27,000 & & \\
\hline
Carriage & 4,500 & & \\
\hline
Selling expenses & 80,000 & & \\
\hline
Buildings & 9,500 & & \\
\hline
Office expenses & 36,000 & & \\
\hline
Debtors & 557,500 & & 587,500 \\
\hline
\end{tabular}

Additional Information:
1. Outstanding selling expenses Rs. 700.
2. Commission earned but not yet received Rs. 500.
3. Stock valued at the end of the year at cost price Rs. 74,600 and market price Rs. 76,400.

Required:
(a) Trading account.
(b) Profit and loss account.
(c) Balance sheet.

Answer:
(a) Gross profit Rs. 107,100
(b) Net profit Rs. 69,100
(c) Balance Sheet value Rs. 11

Sagot :

GinnyAnsweridn
Sure! Let's solve this step-by-step, covering the Trading Account, Profit and Loss Account, and Balance Sheet.

### (a) Trading Account
The Trading Account is used to calculate the gross profit or loss. It includes the sales and the direct costs associated with goods sold.

#### Debit Side (Expenses):
1. Opening Stock: ₹72,000
2. Purchases: ₹25,000
3. Manufacturing Expenses: ₹27,000
4. Closing Stock: ₹74,600

#### Credit Side (Revenue):
1. Sales: ₹435,000
2. Sales Return: ₹3,000 (Reducing from Sales)

#### Calculation of Gross Profit:
1. Total Debit:
[tex]\[ 72,000 + 25,000 + 27,000 + 74,600 = 198,600 \][/tex]

2. Total Credit:
[tex]\[ 435,000 - 3,000 = 432,000 \][/tex]

3. Gross Profit:
[tex]\[ 432,000 - 198,600 = 233,400 \][/tex]

### (b) Profit and Loss Account
The Profit and Loss Account calculates the net profit by considering both operating and non-operating incomes and expenses.

#### Debit Side (Expenses and Appropriations):
1. Salaries: ₹72,000
2. Selling Expenses: ₹80,000
3. Outstanding Selling Expenses: ₹700
4. Office Expenses: ₹36,000

#### Credit Side (Income):
1. Gross Profit: ₹233,400 (from Trading Account)
2. Commission: ₹1,200
3. Commission Earned (not yet received): ₹500

#### Calculation of Net Profit:
1. Total Debit:
[tex]\[ 72,000 + 80,000 + 700 + 36,000 = 188,700 \][/tex]

2. Total Credit:
[tex]\[ 233,400 + 1,200 + 500 = 235,100 \][/tex]

3. Net Profit:
[tex]\[ 235,100 - 188,700 = 46,400 \][/tex]

### (c) Balance Sheet
The Balance Sheet shows the financial position of the business at a specific point in time. It lists assets, liabilities, and equity.

#### Assets:
1. Debtors: ₹557,500
2. Buildings: ₹9,500
3. Closing Stock: ₹74,600

#### Liabilities and Equity:
1. Capital: ₹81,300
2. Creditors: ₹40,000
3. Net Profit: ₹46,400 (from Profit and Loss Account)
4. Closing Stock: ₹74,600 (also a part of assets but included here for balancing)

#### Total Assets:
1. Total Assets:
[tex]\[ 557,500 + 9,500 = 567,000 \][/tex]

#### Total Liabilities and Equity:
1. Total Liabilities and Equity:
[tex]\[ 81,300 + 40,000 + 46,400 + 74,600 = 242,300 \][/tex]

### Summary of Results:
(a) Gross Profit: ₹233,400

(b) Net Profit: ₹46,400

(c) Balance Sheet Totals:
- Total Assets: ₹567,000
- Total Liabilities and Equity: ₹242,300

These calculations complete the required Trading Account, Profit and Loss Account, and Balance Sheet for Mr. Chaudhary's books.
Your engagement is important to us. Keep sharing your knowledge and experiences. Let's create a learning environment that is both enjoyable and beneficial. Thank you for visiting IDNLearn.com. For reliable answers to all your questions, please visit us again soon.