Question

From the following Trial Balance of Mangesh Traders as on 31st March, 2023, prepare the Final Accounts: 
Trial Balance Table 

Particulars	Dr. (Rs.)	Cr. (Rs.)
Opening Stock	32,750	--
Purchases	55,000	--
Sales	--	89,500
Purchase Returns	4,480	--
Sales Returns	4,000	--
Royalty	8,000	--
Wages & Salary	11,000	--
Office Salary	19,250	--
Bills Receivable	12,500	--
Bills Payable	--	20,000
Office Equipment	30,400	--
Motor Van	25,000	--
Plant & Machinery	2,500	--
Bad Debts	6,000	--
Advertising	5,000	--
Cash in Hand	31,250	--
Sundry Debtors	40,000	--
Reserve for Doubtful Debts	--	24,000
Sundry Creditors	--	1,25,000
Capital	--	2,54,630
Total	2,54,630	2,54,630

Adjustments: 
(i) Closing stock on 31st March, 2023 valued at Rs. 19,000 (market price Rs. 20,000). 
(ii) Office salary outstanding Rs. 1,000. 
(iii) Prepaid wages Rs. 1,000. 
(iv) Provide depreciation: 5% on Office Equipment, 10% on Motor Van, 15% on Plant & Machinery. 
 

Hint:

Always apply adjustments like closing stock, outstanding/prepaid expenses, and depreciation carefully—they affect both Profit & Loss A/c and Balance Sheet.

Answer 1

Step 1: Trading Account for the year ending 31st March, 2023.
\[ \begin{array}{|l|c|c|} \hline \textbf{Particulars} & \textbf{Amount (Rs.)} & \textbf{Amount (Rs.)} \\ \hline \text{Opening Stock} & 32,750 & -- \\ \text{Purchases} & 55,000 & -- \\ \text{Less: Purchase Returns} & (4,480) & 50,520 \\ \text{Wages \& Salary (11,000 - 1,000 Prepaid)} & 10,000 & -- \\ \textbf{Gross Profit c/d (Balancing Figure)} & 19,230 & -- \\ \hline & 1,12,500 & 1,12,500 \\ \hline \text{Sales} & -- & 89,500 \\ \text{Less: Sales Returns} & -- & (4,000) \\ \text{Net Sales} & -- & 85,500 \\ \text{Closing Stock} & -- & 19,000 \\ \hline & -- & 1,04,500 \\ \hline \end{array} \]
Step 2: Profit & Loss Account for the year ending 31st March, 2023.
\[ \begin{array}{|l|c|c|} \hline \textbf{Particulars} & \textbf{Amount (Rs.)} & \textbf{Amount (Rs.)} \\ \hline \text{Gross Profit b/d} & -- & 19,230 \\ \text{Royalty} & 8,000 & -- \\ \text{Office Salary (19,250 + 1,000 O/s)} & 20,250 & -- \\ \text{Bad Debts} & 6,000 & -- \\ \text{Advertising} & 5,000 & -- \\ \text{Depreciation on:} & & \\ \quad \text{Office Equipment (30,400 × 5\%)} & 1,520 & -- \\ \quad \text{Motor Van (25,000 × 10\%)} & 2,500 & -- \\ \quad \text{Plant \& Machinery (2,500 × 15\%)} & 375 & -- \\ \textbf{Net Loss (Balancing Figure)} & 24,915 & -- \\ \hline & 68,560 & 19,230 \\ \hline \end{array} \]
Step 3: Balance Sheet of Mangesh Traders as on 31st March, 2023.
\[ \begin{array}{|l|c|l|c|} \hline \textbf{Liabilities} & \textbf{Amount (Rs.)} & \textbf{Assets} & \textbf{Amount (Rs.)} \\ \hline \text{Capital} & 1,25,000 & \text{Cash in Hand} & 31,250 \\ \text{Less: Net Loss} & (24,915) & \text{Sundry Debtors} & 40,000 \\ \text{Adjusted Capital} & 1,00,085 & \text{Less: Reserve for Doubtful Debts} & (24,000) \\ \text{Bills Payable} & 20,000 & \text{Net Debtors} & 16,000 \\ \text{Sundry Creditors} & 24,000 & \text{Bills Receivable} & 12,500 \\ \text{Outstanding Office Salary} & 1,000 & \text{Closing Stock} & 19,000 \\ & & \text{Office Equipment (30,400 - 1,520 Dep.)} & 28,880 \\ & & \text{Motor Van (25,000 - 2,500 Dep.)} & 22,500 \\ & & \text{Plant \& Machinery (2,500 - 375 Dep.)} & 2,125 \\ \hline \textbf{Total} & 1,45,085 & \textbf{Total} & 1,45,085 \\ \hline \end{array} \]
Conclusion:
The Final Accounts of Mangesh Traders show a Net Loss of Rs. 24,915 and the Balance Sheet balances at Rs. 1,45,085.