Hari Om 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 · January 2026
Hari Om 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 1.4.2024 As on 31.3.2025 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 Vimal - 1,00,000 taken on 1.10.2024 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 31.3.2025. (ii) Balance Sheet as at 31st March, 2025.

Suggested Answer and Working Notes:

Trading A/c for the year ended 31st March, 2025 Particulars Amount ₹ Particulars Amount ₹ 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 31st March, 2025 Particulars Amount ₹ Particulars Amount ₹ 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, 2025 Liabilities Particulars ₹ Assets ₹ Hari Om’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 Vimal (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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