Sameer Distributors are carrying on the retail business of electrical goods. They keep their books of account under single entry system. The Balanc...

Question

Sameer Distributors are carrying on the retail business of electrical goods. They keep their books of account under single entry system. The Balance Sheet as on 31st March 2023 was as follows: Liabilities Amount Assets Amount Capital A/ c Trade Creditors Salary Payable 18,15,000 2,25,600 27,000 Motor Vehicle Furniture Stock in Trade Trade Debtors 6% Investments Cash in hand & at bank 3,30,000 2,20,500 5,12,400 4,36,200 1,80,000 3,88,500 20,67,600 20,67,600 The summary of cash and Bank Book for the year ended 31st March, 2024 was given as below: Receipts Amount Payment Amount Cash in hand & at Bank on 1st April,2023 Cash Sales Receipts from Trade Debtors Interest on Investment 3,88,500 3,67,200 2,56,56,000 10,800 Cash Purchases Payment to Trade Creditors Salaries Rent & Taxes Sundry Expenses Drawings Cash in hand & at bank on 31st March, 2024 28,45,200 2,26,35,000 12,38,400 7,54,800 4,15,200 7,20,000 5,13,900 2,91,22,500 2,91,22,500 Additional Information: (i) Gross Profit ratio of 12.5% on Sales is maintained throughout the year. (ii) During the year, discount allowed to Trade debtors was for 1,87,500 and discount received from Trade Creditors amounted to 1,05,000. (iii) As on 31st March, 2024 the closing balances to Trade Debtors and Trade Creditors were 6,61,500 and 3,16,800 respectively. (iv) On 31st March, 2024 an amount of 44,400 was outstanding towards Salary. (v) Depreciation @ 10% p.a. to be charged on Motor Vehicle and Furniture. You are required to prepare Trading and Profit & Loss account for the year ended 31st March, 2024 and Balance Sheet on at that date. [MTP Jan. 2025]

Accepted Answer

Answer Solution: In the Books of Sameer Distributors Trading and Profit and Loss Account for the year ended 31st March, 2024 Particulars Amt Amt Particulars Amt Amt To Opening Stock To Purchases Cash Credit (W.N. 2) To Gross profit c/ d (12.5% of 2,91,36,000) 28,45,200 2,28,31,200 5,12,400 2,56,76,400 36,42,000 By Sales Cash Credit (W.N. 1) By Closing stock (bal. fig.) 30,67,200 2,67,68,800 2,91,36,000 6,94,800 2,98,30,800 2,98,30,800 Particulars Amt Amt Particulars Amt Amt To Rent & taxes To Salaries (W.N. 3) To Sundry expenses To Discount allowed To Depreciation (10% on 3,30,000 & 2,20,500) To Net Profit (b.f.) 33,000 22,050 7,54,800 12,55,800 4,15,200 1,87,500 55,050 10,89,450 By Gross profit b/ d By Discount Received By Interest on Investment 36,42,000 1,05,000 10,800 37,57,800 37,57,800 Balance Sheet as on 31st March, 2024 Liabilities Amount Assets Amount Capital Opening balance 18,15,000 Less: Drawings (7,20,000) Add: Net profit for the years 10,89,450 Trade creditors Outstanding salary 21,84,450 3,16,800 44,400 Motor vehicle 3,30,000 Less: Depreciation (33,000) Furniture 2,20,500 Less: Depreciation (22,050) Closing Stock Trade receivable 6% Investment Cash in hand & at bank 2,97,000 1,98,450 6,94,800 6,61,500 1,80,000 5,13,900 Total 25,45,650 Total 25,45,650 Working Notes: 1. Trade Debtors Account Amount Amount To Balance b/ d To Credit sales (Bal. fig.) 4,36,200 2,60,68,800 By Cash/Bank By Discount allowed By Balance c/d 2,56,56,000 1,87,500 6,61,500 2,65,05,000 2,65,05,000 2. Trade Creditors Account Amount Amount To Cash/Bank To Discount received To Balance c/ d 2,26,35,000 1,05,000 3,16,800 By Balance b/ d By Credit purchases (bal. fig.) 2,25,600 2,28,31,200 2,30,56,800 2,30,56,800 3. Computation of salary to be charged to Profit & Loss A/ c Amount Salary expenses paid (as per cash book) Less: Outstanding expenses as on 31.3.2023 12,38,400 (27,000) 12,11,400 Add.· Outstanding expenses as on 31.3.2024 44,400 12,55,800

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Depreciation

Balance Sheet

Gross Profit

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