The following is the Trial Balance as on 31 st March, 2026 of Mr. Suresh, a retail trader of books. Particulars ₹ Particulars ₹ Carriage Inward…

CA Foundation · Accounting · PYQS · May 2026
The following is the Trial Balance as on 31 st March, 2026 of Mr. Suresh, a retail trader of books. Particulars ₹ Particulars ₹ Carriage Inward 18,000 Interest received 9,000 Stock on 1.4.2025 1,25,000 Sales 13,50,000 Carriage Outward 22,000 Returns Outward 48,000 Returns Inwards 55,000 Discount received 30,000 Purchases 8,60,000 Capital account as on 01.04.2025 6,29,000 Salaries 1,00,000 Term Loan from Bank 6,00,000 Rent 30,000 Sundry Creditors 1,80,000 Interest on Term Loan 51,000 Printing and stationery 10,000 Sales Promotion 12,000 General Expenses 20,000 Discount allowed 22,000 Audit fees (upto 30.9.2025) 15,000 Electricity charges 14,000 Delivery Van 4,50,000 Furniture & Fixtures 1,50,000 Computers 1,20,000 Cash at bank 1,40,000 Cash in hand 65,000 Drawings 1,20,000 Insurance Premium 7,000 Sundry Debtors 3,50,000 Investments 90,000 28,46,000 28,46,000 Additional information: (i) Value of Stock in trade at the close of the year was - 1,55,000. (ii) A provision for doubtful debts is to be maintained @2.5% of Sundry Debtors. (iii) Depreciation to be provided on Furniture & Fixtures and Delivery Van @15% and Computers @40%. (iv) Audit fees for the half year ended 31 st March, 2026 amounting to 15,000 is outstanding. (v) Term Loan from Bank was obtained on 1 st May, 2025. Interest on the same is payable @10% per annum. (vi) A fire took place in the godown on 27 th March, 2026 and destroyed stock worth - 40,000. The Insurance company has admitted a claim of 50% for the said loss on 31 st March, 2026. You are required to prepare the Trading and Profit and Loss Account of Mr. Suresh for the year ended 31 st March, 2026 and Balance Sheet as at that date.

Suggested Answer and Working Notes:

In the books of Suresh Trading and Profit & Loss Account for the year ended 31 st March, 2026 Particulars ₹ ₹ ₹ To Opening stock 1,25,000 By Sales 13,50,000 To Purchases 8,60,000 Less: Returns Inwards (55, 000) 12,95,000 Less: Return Outward A/c (48, 000) By Closing stock 1,55,000 Less: Loss by fire (40, 000) 7,72,000 To Carriage inwards 18,000 To Gross profit c/d 5,35,000 14,50,000 14,50,000 To Carriage Outward 22,000 By Gross profit b/d 5,35,000 To Salaries 1,00,000 By Interest Received 9,000 To Sales Promotion/ Advertisement expenses 12,000 By Discount received 30,000 To Rent 30,000 To Printing & stationery 10,000 To General expenses 20,000 To Discount allowed 22,000 To Electricity charges 14,000 To insurance premium 7,000 To Interest on Loan 51,000 Add: Outstanding (W.N.2) 4,000 55,000 To Provision for doubtful debts 8,750 To Depreciation (W.N.1) 1,38,000 To Loss by fire 20,000 To Audit fees 15,000 Add: Outstanding 15,000 30,000 To Capital A/c (Net profit transferred) 85,250 5,74,000 5,74,000 Balance Sheet as at 31 st March, 2026 Liabilities Particulars ₹ Assets Particulars ₹ Capital account: Furniture & Fixtures 1,50,000 Balance on 1 st April, 2025 6,29,000 Less: Depreciation (22, 500) 1,27,500 Add: Net profit 85,250 Delivery Van 4,50,000 7,14,250 (-) Depreciation (67, 500) 3,82,500 Less: Drawings (₹ 1,20,000) 5,94,250 Computer 1,20,000 Term Loan 6,00,000 (-) Depreciation (48, 000) 72,000 Add: Outstanding 4,000 6,04,000 Investment 90,000 Audit fees outstanding 15,000 Stock in trade 1,55,000 Sundry creditors 1,80,000 Sundry debtors 3,50,000 Less: Provision (8, 750) 3,41,250 Cash at Bank 1,40,000 Insurance Claim Receivable 20,000 Cash in hand 65,000 13,93,250 13,93,250 Working Notes: (1) Depreciation Furniture & Fixture @15% on 1,50,00022,500 Delivery Van @15% on 4,50,00067,500 Computer @40% on 1,20,00048,000 Total - 1,38,000 (2) Interest on Loan Interest on Loan (₹ 6,00,000 x 10% x 11/12)₹ 55,000 Less: Interest as per Trial Balance (51, 000) Profit &Loss account (Outstanding)₹ 4,000

Topics: Preparation of Final Accounts of Sole Proprietors

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic