Sameer Distributors are carrying on the retail business of electrical goods. They keep their books of account under single entry system. The Balance…

CA Foundation · Accounting · MTP · January 2025
Sameer Distributors are carrying on the retail business of electrical goods. They keep their books of account under single entry system. The Balance Sheet as on 31 st March, 2023 was as follows: Liabilities Amount (₹) Assets Amount (₹) Capital A/c 18,15,000 Motor Vehicle 3,30,000 Trade Creditors 2,25,600 Furniture 2,20,500 Salary payable 27,000 Stock in trade 5,12,400 Trade Debtors 4,36,200 6% Investments 1,80,000 Cash in hand & at Bank 3,88,500 20,67,600 20,67,600 The summary of Cash and Bank Book for the year ended 31 st March, 2024 was given as below: Receipts Amount (₹) Payments Amount (₹) Cash in hand & at Bank on 1 st April, 2023 3,88,500 Cash Purchases 28,45,200 Cash Sales 30,67,200 Payment to Trade Creditors 2,26,35,000 Receipts from Trade Debtors 2,56,56,000 Salaries 12,38,400 Interest on investments 10,800 Rent & taxes 7,54,800 Sundry Expenses 4,15,200 Drawings 7,20,000 Cash in hand & at Bank on 31st March, 2024 5,13,900 2,91,22,500 2,91,22,500 Additional Information: (i) Gross Profit ratio of 12.5% on Sales is maintained throughout the year. (ii) During the year, discount allowed to Trade debtors was for 1,87,500 and discount received from Trade Creditors amounted to 1,05,000. (iii) As on 31st March, 2024. The closing balances to Trade Debtors and Trade Creditors were - 6,61,500 and - 3,16,800 respectively. (iv) On 31 st March, 2024 an amount of 44,400 was outstanding towards Salary. (v) Depreciation @10% p.a. to be charged on Motor Vehicle and Furniture. You are required to prepare Trading and Profit & Loss account for the year ended 31 st March, 2024 and Balance Sheet on at that date.

Suggested Answer and Working Notes:

In the books of Sameer Distributors Trading and Profit and Loss Account for the year ended 31 st March, 2024 Particulars Amount (₹) Amount (₹) Amount (₹) Amount (₹) To Opening Stock 5,12,400 By Sales To Purchases Cash 30,67,200 Cash 28,45,200 Credit (W.N.1) 2,60,68,800 2,91,36,000 Credit (W.N.2) 2,28,31,200 2,56,76,400 By Closing stock 6,94,800 To Gross profit c/d (bal fig) (12.5% of2,91,36,000) 36,42,000 2,98,30,800 2,98,30,800 To Rent & taxes 7,54,800 By Gross profit b/d 36,42,000 To Salaries (W.N.3) 12,55,800 By Discount received 1,05,000 To Sundry expenses 4,15,200 By Interest on investment 10,800 To Discount allowed 1,87,500 To Depreciation (10% on (₹ 3,30,000 &₹ 2,20,500)) 33,000 22,050 55,050 To Net Profit (b.f.) 10,89,450 37,57,800 37,57,800 Balance Sheet as at 31st March, 2024 Liabilities Amount Assets Amount Capital Motor vehicle 3,30,000 Opening balance 18,15,000 Less: Depreciation (33, 000) Less: Drawings (₹ 7,20,000) 2,97,000 10,95,000 Furniture 2,20,500 Add: Net profit for the years 10,89,450 21,84,450 Less: Depreciation (22, 050) 1,98,450 Trade creditors 3,16,800 Closing Stock 6,94,800 Outstanding salary 44,400 Trade receivable 6,61,500 6% Investment 1,80,000 Cash in hand & at bank 5,13,900 25,45,650 25,45,650 Working Notes: 1. Trade Debtors Account Particulars ₹ ₹ To Balance b/d 4,36,200 By Cash/Bank 2,56,56,000 To Credit sales (Bal. fig.) 260,68,800 By Discount allowed 1,87,500 By Balance c/d 6,61,500 265,05,000 265,05,000 2. Trade Creditors Account Particulars ₹ ₹ To Cash/Bank 226,35,000 By Balance b/d 2,25,600 To Discount received 1,05,000 By Credit purchases (bal fig) 2,28,31,200 To Balance c/d 3,16,800 230,56,800 230,56,800 3. Computation of salary to be charged to Profit & Loss A/c Particulars ₹ Salary expenses paid (as per cash book) 12,38,400 Less: Outstanding expenses as on 31.3.2023 (27, 000) 12,11,400 Add: Outstanding expenses as on 31.3.2024 44,400 12,55,800

Topics: Accounts from Incomplete Records

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