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

CA Foundation · Accounting · RTP · May 2025
Saraswati Enterprises maintain their books of accounts under single entry system. The Balance Sheet as on 31st March, 2024 was as follows: Liabilities ₹ Assets ₹ Capital A/c 67,500 Furniture & fixtures 15,000 Trade creditors 75,750 Stock 91,500 Outstanding expenses 6,750 Trade debtors 31,200 Prepaid insurance 300 Cash in hand & at bank 12,000 1,50,000 1,50,000 The following was the summary of cash and bank book for the year ended 31st March, 2025: Receipts ₹ Payments ₹ To Cash in hand & at Bank on 1st April, 2024 12,000 By payment to trade creditors 12,48,300 To Cash sales 11,07,000 By Sundry expenses 93,105 To amount paid to debtors 2,77,500 By Drawings 36,000 By Cash in hand & at Bank on 31st March, 2025 19,095 13,96,500 13,96,500 Additional Information: 1. Discount allowed to trade debtors and received from trade creditors amounted to 5,400 and - 4,250 respectively, (for the year ended 31st March, 2025) 2. Annual fire insurance premium of 900was paid every year on 1st August for the renewal of the policy. These expenses are included in sundry expenses. 3. Furniture & fixtures were subject to depreciation @15% p.a. or diminishing balance method. 4. The following are the balances as on 31st March, 2025: Stock - 97,500 Trade debtors - 34,300 Outstanding expenses - 5,520 5. Gross profit ratio of 10% on sales in maintained throughout the year. 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 for the year ended 31st March, 2025 Particulars ₹ Particulars ₹ To Opening stock 91,500 By Sales To Purchases (bal fig) 12,59,700 Cash 11,07,000 Credit 2,86,000 13,93,000 To Gross Profit @10% 1,39,300 By Closing stock 97,500 14,90,500 14,90,500 To Expenses (WN.2) 90,975 By Gross Profit 1,39,300 To Insurance (WN.3) 900 By Discount Received 4,250 To Discount Allowed 5,400 To Depreciation 2,250 To Net profit (bal fig) 44,025 1,43,550 1,43,550 Balance Sheet as on 31st March, 2025 Liabilities Particulars ₹ Assets Particulars ₹ Capital A/c Furniture 15,000 Opening balance 67,500 (-) Depreciation (2, 250) 12,750 (+) Profit 44,025 Debtors 34,300 1,11,525 Stock 97,500 (-) Drawings (36, 000) 75,525 Bank 19,095 Creditors 82,900 Prepaid Insurance 300 Outstanding exp 5,520 1,63,945 1,63,945 W. N.1 Creditors A/c Particulars ₹ Particulars ₹ To Bank a/c 12,48,300 By Bal b/d 75,750 To Discount 4,250 By Purchase 12,59,700 To Bal c/d (bal fig) 82,900 13,35,450 13,35,450 W.N.2 Expenses A/c Particulars ₹ Particulars ₹ To Bank (93, 105-900) 92,205 By Outstanding expenses as per opening balance sheet 6,750 To Payable 5,520 By P&L (bal fig) 90,975 97,725 97,725 W.N.3 Insurance A/c Particulars ₹ Particulars ₹ To Prepaid as per opening Balance Sheet 300 By Prepaid (₹ 900* 4/12) 300 To Bank 900 By P&L (bal fig) 900 1,200 1,200 W.N.4 Debtors A/c Particulars ₹ Particulars ₹ To Bal b/d 31,200 By bank 2,77,500 To Credit Sales (Bal fig) 2,86,000 By Discount 5,400 By Bal c/d 34,300 3,17,200 3,17,200

Topics: Accounts from Incomplete Records

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