The following is the Balance Sheet of Manish and Suresh as on 1st April, 2025: Liabilities ₹ Assets ₹ Capital Accounts: Building 1,00,000 Manish…

Trading and Profit and Loss account for the year ending 31st March, 2026 Particulars ₹ Particulars ₹ To Opening Stock 40,000 By Sales (WN (ii)) 4,31,250 To Purchases (WN (iii)) 3,45,000 By Closing Stock 40,000 To Gross Profit c/d (20% on sales) 86,250 4,71,250 4,71,250 To Business Expenses 50,000 By Gross Profit b/d 86,250 To Depreciation on: Machinery 6,500 Building 5,000 11,500 To Net profit 24,750 86,250 86,250 Working Note: (i) Calculation of Rate of Gross Profit earned during previous year ₹ A Sales during previous year 3,00,000 B Purchases 2,40,000 C Cost of Goods Sold (₹ 40,000 + ₹ 2,40,000 – ₹ 40,000) 2,40,000 D Gross Profit (A-C) 60,000 E Rate of Gross Profit = (₹ 60,000 / ₹ 3,00,000) x 100 20% (ii) Calculation of sales during current year ₹ A Cost of goods sold during previous year 2,40,000 B Add: Increases in volume @ 43.75% 1,05,000 C Cost of goods sold during Current Year 3,45,000 D Add: Gross profit @ 25% on cost (20% on sales) 86,250 E Sales for current year [C+D] 4,31,250 (iii) Calculation of Purchases during current year Cost of Goods Sold 3,45,000 Add: Closing Stock 40,000 Less: Opening Stock 40,000 Purchases 3,45,000