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Manufacturing Account For the year ended

The following is the Trial Balance of Ram Chandra on 31st March, 2009. Draw the final accounts from the balances therefrom:
 

Trial Balance

As at 31st March, 2009
 

Particulars

 

Dr.(Rs.)

Cr.(Rs.)

Capital

 

 

1,50,000

Stock (1st April, 2008)

 

30,000

 

Cash at Bank

 

10,000

 

Cash in Hand

 

5,000

 

Machinery

 

1,00,000

 

Furniture

 

13,000

 

Purchases

 

2,00,000

 

Wages

 

50,000

 

Carriage

 

33,000

 

Salaries

 

70,000

 

Discount Allowed

 

4,000

 

Discount Received

 

 

5,000

Advertising

 

50,000

 

Office Expenses

 

40,000

 

Sales

 

 

5,00,000

Sundry Debtors

 

90,000

 

Sundry Creditors

 

 

40,000

 

6,95,000

6,95,000

 

Value of Closing Stock as at 31st March, 2009 was Rs. 50,000

 

Solution:
 

Trading and Profit and loss account of Ram Chandra

for the year ended 31st March, 2009

   

Dr.

 

 Cr.

Particulars

 

Rs.

Particulars

Rs.

To Opening Stock

 

30,000

By Sales

5,00,000

To Purchases

 

2,00,000

By Closing Stock

50,000

To Wages

 

50,000

 

 

To Carriage

 

33,000

 

 

To Gross Profit c/d

 

2,37,000

 

 

 

 

5,50,000

 

5,50,000

To Salaries

 

70,000

By Gross Profit b/d

2,37,000

To Discount Allowed

 

4,000

By Discount Received

5,000

To Advertising

 

50,000

 

 

To Office Expenses

 

40,000

 

 

To Net Profit transferred to Capital A/c

 

78,000

 

 

 

2,42,000

 

2,42,000

 

Balance Sheet of Ram Chandra as at 31st March, 2009

 

Liabilities

 

Rs.

Assets

Rs.

Current Liabilities

 

 

Current Assets

 

Sundry Creditors

 

40,000

Cash in Hand

5,000

Capital

 

 

Cash in Bank

10,000

Opening Balance       1,50,000

 

 

Sundry Debtors

90,000

Add: Net Profit             78,000

 

2,28,000

Closing Stock

50,000

 

 

Fixed Assets

 

 

 

 

Furniture

 

13,000

 

 

Machinery

 

1,00,000

 

 

2,68,000

 

2,68,000

 

Balance Sheet

The balance sheet may be defined as “a statement which sets out the assets and liabilities of a firm or an institution as at a certain date.” A single transaction will make a difference to some of the assets or liabilities, the balance sheet is true only at a particular point of time.

 

 


Characteristics

The balance sheet has certain characteristics:–

1.  It is prepared at a particular date and not for a period.

2.  The balance sheet is prepared only after the preparation of the Profit and Loss Account.

3.  Since capital always equals the difference between assets and liabilities and since the capital account will independently arrive at this figure.





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