Deep Enterprises maintain their books of accounts under single entry system. The Balance-Sheet as on 31st March, 2024 was as follows : Liabilities…

CA Foundation · Accounting · RTP · January 2026
Deep Enterprises maintain their books of accounts under single entry system. The Balance-Sheet as on 31st March, 2024 was as follows : Liabilities Amount (₹) Assets Amount (₹) Capital A/c 3,37,500 Furniture & fixtures 75,000 Trade creditors 3,78,750 Stock 4,57,500 Outstanding expenses 33,750 Trade debtors 1,56,000 Prepaid insurance 1,500 Cash in hand & at bank 60,000 7,50,000 7,50,000 The following was the summary of cash and bank book for the year ended 31st March, 2025: Receipts Amount (₹) Payments Amount (₹) Cash in hand & at Bank on 1st April, 2024 60,000 Payment to trade creditors 62,41,500 Cash sales 55,35,000 Sundry expenses paid 4,65,525 Receipts from trade debtors 13,87,500 Drawings 1,80,000 Cash in hand & at Bank on 31st March, 2025 95,475 69,82,500 69,82,500 Additional Information: (i) Discount allowed to trade debtors and received from trade creditors amounted to 27,000 and - 21,250 respectively (for the year ended 31st March, 2025). (ii) Annual fire insurance premium of 4,500 was paid every year on 1st August for the renewal of the policy. (iii) Furniture & fixtures were subject to depreciation @15% p.a. on diminishing balance method. (iv) The following are the balances as on 31st March, 2025: Stock - 4,87,500Trade debtors - 1,71,500Outstanding expenses - 27,600 (v) Gross profit is to be maintained at 10% on total sales. You are required to prepare Trading and Profit & Loss account for the year ended 31st March, 2025, and Balance Sheet as on that date.

Suggested Answer and Working Notes:

Trading and Profit and Loss Account of Deep Enterprises for the year ended 31st March, 2025. Particulars Amount (₹) Particulars Amount (₹) To Opening Stock 4,57,500 By Sales To Purchases (W.N.2) 62,98,500 Cash 55,35,000 To Gross profit c/d (10% of69,65,000) 6,96,500 Credit (W.N.1) 14,30,000 69,65,000 By Closing stock 4,87,500 74,52,500 74,52,500 To Sundry expenses (W.N.4) 4,59,375 By Gross profit b/d 6,96,500 To Discount allowed 27,000 By Discount received 21,250 To Depreciation (15% ₹ 75,000) 11,250 To Net Profit (b.f.) 2,20,125 7,17,750 7,17,750 Balance Sheet of Deep Enterprises as at 31st March, 2025 Liabilities Amount ₹ Assets Amount ₹ Capital Furniture & Fittings 75,000 Opening balance 3,37,500 Less: Depreciation (11, 250) 63,750 Less: Drawing (₹ 1,80,000) 1,57,500 Stock 4,87,500 Add: Net profit for the years 2,20,125 3,77,625 Trade Debtors 1,71,500 Trade creditors (W.N.3) 4,14,500 Unexpired insurance 1,500 Outstanding expenses 27,600 Cash in hand & at bank 95,475 8,19,725 8,19,725 Working Notes: 1. Trade Debtors Account Particulars ₹ Particulars ₹ To Balance b/d 1,56,000 By Cash/Bank 13,87,500 To Credit sales (Bal. fig.) 14,30,000 By Discount allowed 27,000 By Balance c/d 1,71,500 15,86,000 15,86,000 2. Memorandum Trading Account Particulars ₹ Particulars ₹ To Opening stock 4,57,500 By Sales 69,65,000 To Purchases (Balancing figure) 62,98,500 By Closing stock 4,87,500 To Gross Profit (10% on sales) 6,96,500 74,52,500 74,52,500 3. Trade Creditors Account Particulars ₹ Particulars ₹ To Cash/Bank 62,41,500 By Balance b/d 3,78,750 To Discount received 21,250 By Purchases (as calculated in W.N.2) 62,98,500 To Balance c/d (balancing figure) 4,14,500 66,77,250 66,77,250 4. Computation of sundry expenses to be charged to Profit & Loss A/c Particulars ₹ Sundry expenses paid (as per cash and Bank book) 4,65,525 Add: Prepaid expenses as on 31- 3- 2024 1,500 4,67,025 Less: Outstanding expenses as on 31- 3- 2024 (33, 750) 4,33,275 Add: Outstanding expenses as on 31- 3- 2025 27,600 4,60,875 Less: Prepaid expenses as on 31- 3- 2025 (Insurance paid till July, 2024) (₹ 4,500 x 4/12) (1, 500) 4,59,375

Topics: Accounts from Incomplete Records

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