Shivam Enterprises maintain their books of accounts under single entry system. The Balance-Sheet as on 31st March, 2023 was as follows : Liabilities…

CA Foundation · Accounting · RTP · September 2024
Shivam Enterprises maintain their books of accounts under single entry system. The Balance-Sheet as on 31st March, 2023 was as follows : Liabilities Amount (₹) Assets Amount (₹) Capital A/c 6,75,000 Furniture & fixtures 1,50,000 Trade creditors 7,57,500 Stock 9,15,000 Outstanding expenses 67,500 Trade debtors 3,12,000 Prepaid insurance 3,000 Cash in hand & at bank 1,20,000 Total 15,00,000 Total 15,00,000 The following was the summary of cash and bank book for the year ended 31st March, 2024: Receipts Amount (₹) Payments Amount (₹) Cash in hand & at Bank on 1 st April, 2023 1,20,000 Payment to trade creditors 1,24,83,000 Cash sales 1,10,70,000 Sundry expenses paid 9,31,050 Receipts from trade debtors 27,75,000 Drawings 3,60,000 Cash in hand & at Bank on 31 st March, 2024 1,90,950 Total 1,39,65,000 Total 1,39,65,000 Additional Information: (i) Discount allowed to trade debtors and received from trade creditors amounted to 54,000 and - 42,500 respectively (for the year ended 31 st March, 2024 ). (ii) Annual fire insurance premium of 9,000 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 31 st March, 2024 : Stock - 9,75,000 Trade debtors - 3,43,000 Outstanding expenses - 55,200 (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, 2024, and Balance Sheet as on that date.

Suggested Answer and Working Notes:

Trading and Profit and Loss Account of Shivam Enterprises for the year ended 31st March, 2024. Particulars ₹ ₹ To Opening Stock 9,15,000 By Sales To Purchases (W.N.2) 125,97,000 Cash 110,70,000 To Gross profit c/d 13,93,000 Credit (W.N.1) 28,60,000 (10% of139,30,000) 139,30,000 By Closing stock 9,75,000 149,05,000 149,05,000 To Sundry expenses (W.N.4) 9,18,750 By Gross profit b/d 13,93,000 To Discount allowed 54,000 By Discount received 42,500 To Depreciation 22,500 (15% ₹ 1,50,000) To Net Profit (b.f.) 4,40,250 14,35,500 14,35,500 Balance Sheet of Shivam Enterprises as at 31st March, 2024 Liabilities Amount ₹ Assets Amount ₹ Capital Furniture & Fittings 1,50,000 Opening balance 6,75,000 Less: Depreciation (22, 500) Less: Drawing (₹ 3,60,000) 3,15,000 1,27,500 Add: Net profit for the years 4,40,250 7,55,250 Stock 9,75,000 Trade debtors 3,43,000 Unexpired insurance 3,000 Trade creditors (W.N.3) 8,29,000 Cash in hand & at bank 1,90,950 Outstanding expenses 55,200 16,39,450 16,39,450 Working Notes: 1. Trade Debtors Account Particulars ₹ To Balance b/d 3,12,000 By Cash/Bank 27,75,000 To Credit sales (Bal. fig.) 28,60,000 By Discount allowed 54,000 By Balance c/d 3,43,000 31,72,000 31,72,000 2. Memorandum Trading Account Particulars ₹ To Opening stock 9,15,000 By Sales 139,30,000 To Purchases (Balancing figure) 125,97,000 By Closing stock 9,75,000 To Gross Profit (10% on sales) 13,93,000 149,05,000 149,05,000 3. Trade Creditors Account Particulars ₹ To Cash/Bank 124,83,000 By Balance b/d 7,57,500 To Discount received 42,500 By Purchases (as calculated in W.N.2) 125,97,000 To Balance c/d (balancing figure) 8,29,000 133,54,500 133,54,500 4. Computation of sundry expenses to be charged to Profit & Loss A/c Particulars ₹ Sundry expenses paid (as per cash and Bank book) 9,31,050 Add: Prepaid expenses as on 31- 3- 2023 3,000 9,34,050 Less: Outstanding expenses as on 31- 3- 2023 (67, 500) 8,66,550 Add: Outstanding expenses as on 31- 3- 2024 55,200 9,21,750 Less: Prepaid expenses as on 31- 3- 2024 (Insurance paid till July, 2024) (₹ 9,000 x 4/12) (3, 000) 9,18,750

Topics: Accounts from Incomplete Records

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