Introduction
Sh Kailash Chand is a business owner and requires the preparation of trading and profit and loss accounts for the year ending on March 31, 2018.

Trial Balance
To prepare the trading and profit and loss accounts, we need to start with the trial balance as follows:

| Account | Debit | Credit |
| --- | --- | --- |
| Capital | 50,000 | - |
| Sales | - | 1,20,000 |
| Purchase | 80,000 | - |
| Wages | 7,000 | - |
| Rent | 4,000 | - |
| Insurance | 1,500 | - |
| Carriage Inward | 2,000 | - |
| Carriage Outward | - | 3,000 |
| Stationery | 1,500 | - |
| Sundry Expenses | 2,000 | - |
| Bad Debts | 1,500 | - |
| Debtors | - | 40,000 |
| Creditors | 30,000 | - |
| Cash | 3,500 | - |
| Bank | 10,000 | - |
| Stock | 20,000 | - |
| Furniture | 7,500 | - |
| Machinery | 50,000 | - |
| Total | 2,70,500 | 2,70,500 |

Trading Account
Trading account is prepared to calculate the gross profit earned by the business by taking the difference between the sales and cost of goods sold.

| Particulars | Amount |
| --- | --- |
| Sales | 1,20,000 |
| Less: Cost of Goods Sold | 60,000 |
| Gross Profit | 60,000 |

Profit and Loss Account
Profit and Loss account is prepared to calculate the net profit of the business by taking into account all the indirect expenses and losses and gains incurred during the year.

| Particulars | Amount |
| --- | --- |
| Gross Profit | 60,000 |
| Less: Indirect Expenses | 22,500 |
| Rent | 4,000 |
| Insurance | 1,500 |
| Carriage Inward | 2,000 |
| Stationery | 1,500 |
| Sundry Expenses | 2,000 |
| Bad Debts | 1,500 |
| Wages | 7,000 |
| Carriage Outward | 3,000 |
| Net Profit before Interest and Depreciation | 37,500 |
| Less: Interest on Capital | 1,500 |
| Net Profit before Depreciation | 36,000 |
| Less: Depreciation on Furniture | 750 |
| Depreciation on Machinery | 5,000 |
| Net Profit for the year | 30,250 |

Conclusion
The preparation of trading and profit and loss accounts for Sh Kailash Chand has helped in determining the gross profit and net profit for the business. It also provides insights into the indirect expenses incurred by the business and the depreciation on furniture and machinery.