Solution in 1 Table particular 2 amount particiular 2 amount Profit and loss particular 2 amount particiular 2 amount

Here is the Trading and Profit & Loss Account for M/S Raj and Simran for the year ended March 31, 2019, and the Balance Sheet as of that date. Step 1: Prepare the Trading Account The Trading Account calculates the gross profit or gross loss for the year. |l|r|l|r| Particulars & Amount ₹ & Particulars & Amount ₹ \\ To Opening Stock & 25,000 & By Sales & 3,25,000 \\ To Purchases & 2,08,500 & Less: Sales Return & 1,000 \\ Less: Purchase Return & 1,000 & & \\ Net Purchases & 2,07,500 & Net Sales & 3,24,000 \\ To Carriage Inward & 3,000 & By Closing Stock & 32,000 \\ To Gross Profit c/d (transferred to P\&L A/c) & 1,20,500 & & \\ Total & 3,56,000 & Total & 3,56,000 \\ Step 2: Prepare the Profit and Loss Account The Profit and Loss Account calculates the net profit or net loss for the year. |l|r|l|r| Particulars & Amount ₹ & Particulars & Amount ₹ \\ To Carriage Outwards & 4,500 & By Gross Profit b/d & 1,20,500 \\ To General Expenses & 1,800 & & \\ To Export Duty & 900 & & \\ To Advertisement (₹4,800 for 3 years from 1/10/2018, so ₹1,600 per year for 6 months) & 800 & & \\ To Printing \& Stationary & 1,200 & & \\ Add: Outstanding & 500 & 1,700 & \\ To Provision for Doubtful Debts & 2,000 & & \\ To Reserve for Discount on Debtors & & & \\ (3\% on ₹80,500 - ₹2,000) & 2,355 & & \\ To Depreciation on Leasehold Premises & & & \\ (₹1,10,000 - ₹1,00,000) & 10,000 & & \\ To Net Profit (transferred to Capital Accounts) & 96,445 & & \\ Total & 1,20,500 & Total & 1,20,500 \\ Step 3: Prepare the Balance Sheet The Balance Sheet shows the financial position of the firm as of March 31, 2019. |l|r|l|r| Liabilities & Amount ₹ & Assets & Amount ₹ \\ Capital Accounts: & & Leasehold Premises & 1,10,000 \\ Raj & 75,000 & Less: Depreciation & 10,000 \\ Add: Share of Net Profit & 48,222.50 & Net & 1,00,000 \\ Less: Drawings & 3,500 & 1,19,722.50 & Motor Vehicle \\ Simran & 75,000 & Furniture & 55,000 \\ Add: Share of Net Profit & 48,222.50 & Debtors & 8,300 \\ Less: Drawings & 2,000 & 1,21,222.50 & Less: Provision for Doubtful Debts \\ Total Capital & 2,40,945 & & 2,000 \\ Bank Overdraft & 5,000 & Less: Reserve for Discount on Debtors & 2,355 \\ Bills Payable & 12,500 & Net Debtors & 76,145 \\ Creditors & 68,000 & Bills Receivable & 10,000 \\ Outstanding Rent & 2,000 & Cash at Bank & 45,000 \\ Unpaid Wages & 1,500 & Closing Stock & 32,000 \\ Outstanding Printing \& Stationary & 500 & Prepaid Advertisement & 4,000 \\ Total & 3,30,445 & Total & 3,30,445 \\ Final Answer: Gross Profit from Trading Account: ₹1,20,500 Net Profit from Profit & Loss Account: ₹96,445 Balance Sheet Total: ₹3,30,445 Last free one today — make it count tomorrow, or type /upgrade for unlimited.