Trading and Profit & Loss Account for the year ended 31 March 2017

Particulars | Amount (Rs.)
--- | ---
Opening Stock | 50,000
Purchases | 1,20,000
Direct Expenses | 10,000
Freight Inwards | 2,000
Wages | 12,000
Gross Profit c/d | 56,000
| 2,50,000
Sales | 2,80,000
Closing Stock | 30,000
Direct Expenses | 8,000
Gross Profit b/d | 56,000
| 2,80,000
Gross Profit | 56,000
Less:
Operating Expenses:
Rent | 6,000
Salaries | 8,000
Carriage Outwards | 4,000
Bad Debts | 2,000
Depreciation on Furniture | 1,200
Interest on Loan | 800
Net Profit | 33,000
| 56,000

Balance Sheet as on 31 March 2017

Liabilities | Amount (Rs.) | Assets | Amount (Rs.)
--- | --- | --- | ---
Capital | 1,00,000 | Fixed Assets: |
Add: Net Profit | 33,000 | Furniture | 12,000
| 1,33,000 | Less: Depreciation | (1,200)
| | | 10,800
Current Liabilities: | | Stock | 30,000
Creditors | 20,000 | Debtors | 40,000
| 20,000 | Less: Bad Debts | (2,000)
| | | 38,000
| 1,53,000 | Cash in Hand | 5,000
| | Bank Balance | 12,000
| | | 57,000
| 1,53,000 | | 1,53,000

Explanation:

Trading and Profit & Loss Account:
- The account starts with the opening stock of Rs. 50,000 and shows the purchases made during the year amounting to Rs. 1,20,000.
- The direct expenses incurred are Rs. 10,000 and freight inwards is Rs. 2,000.
- The wages paid during the year are Rs. 12,000. The gross profit of Rs. 56,000 is calculated by subtracting the cost of goods sold (opening stock + purchases + direct expenses + freight inwards - closing stock) from the sales made during the year (Rs. 2,80,000).
- The operating expenses incurred during the year are Rs. 21,000 and include rent, salaries, carriage outwards, bad debts, depreciation on furniture, and interest on loan.
- The net profit of Rs. 33,000 is calculated by subtracting the operating expenses from the gross profit.

Balance Sheet:
- The balance sheet shows the assets and liabilities of the business as on 31 March 2017.
- The capital of the business is Rs. 1,00,000 and the net profit earned during the year (Rs. 33,000) is added to it to arrive at the total capital of Rs. 1,33,000.
- The current liabilities of

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