Ram carried on business as retail merchant. He has not maintained regular account books. However, he always maintained - 10,000 in cash and…
CA Foundation · Accounting · MTP · June 2024
Ram carried on business as retail merchant. He has not maintained regular account books. However, he always maintained - 10,000 in cash and deposited the balance into the bank account. He informs you that he has sold goods at profit of 25% on sales. Following information is given to you: Assets and Liabilities As on 1.4.2023 As on 31.3.2024 Cash in Hand 10,000 10,000 Sundry Creditors 40,000 90,000 Cash at Bank 50,000 (Cr.) 80,000 (Dr.) Sundry Debtors 1,00,000 3,50,000 Stock in Trade 2,80,000 ? Analysis of his bank pass book reveals the following information: (a) Payment to creditors - 7,00,000 (b) Payment for business expenses - 1,20,000 (c) Receipts from debtors - 7,50,000 (d) Loan from Laxman - 1,00,000 taken on 1.10.2023 at 10% per annum (e) Cash deposited in the bank - 1,00,000 He informs you that he paid creditors for goods - 20,000 in cash and salaries - 40,000 in cash. He has drawn - 80,000 in cash for personal expenses. During the year Ram had not introduced any additional capital. Surplus cash if any, to be taken as cash sales. Prepare: (i) Trading and Profit and Loss Account for the year ended 31.3.2024. (ii) Balance Sheet as at 31st March, 2024.
Suggested Answer and Working Notes:
Trading A/c for the year ended 31 st March, 2024 Particulars ₹ Particulars ₹ To Opening stock 2,80,000 By Sales To Purchases 7,70,000 Cash 2,40,000 To Gross Profit @ 25% 3,10,000 Credit 10,00,000 12,40,000 By Closing Stock (bal.fig.) 1,20,000 13,60,000 13,60,000 Profit and Loss Account for the year ended 31 st March, 2024 Particulars ₹ Particulars ₹ To Salaries 40,000 By Gross Profit 3,10,000 To Business expenses 1,20,000 To Interest on loan (10% of 1,00,000*6/12) 5,000 To Net Profit 1,45,000 3,10,000 3,10,000 Balance Sheet as at 31st March, 2024 Liabilities ₹ Assets ₹ Ram’s capital: Cash in hand 10,000 Opening 3,00,000 Cash at Bank 80,000 Add: Net Profit 1,45,000 Sundry Debtors 3,50,000 4,45,000 Stock in trade 1,20,000 Less: Drawings (80,000) 3,65,000 Loan from Laxman (including interest due) 1,05,000 Sundry Creditors 90,000 5,60,000 5,60,000
Topics: Accounts from Incomplete Records
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