Final account trading account pl acc balance sheet

1. ,, 11

2. •Final Accounts is the last step in the accounting Final Accounts is the last step in the accounting
process. Trial Balance is prepared at the end of process. Trial Balance is prepared at the end of
all the accounting year to know the balances of all the accounting year to know the balances of
all the accounts & to test the arithmetic accuracy all the accounts & to test the arithmetic accuracy
of accounts. But the basic objective of of accounts. But the basic objective of
accounting is to know about the profit or loss accounting is to know about the profit or loss
during the previous year & present financial during the previous year & present financial
position. This can be known only if Trading position. This can be known only if Trading
account and Profit & Loss account and Balance account and Profit & Loss account and Balance
Sheet are prepared at the end pf year. These Sheet are prepared at the end pf year. These
are also known as are also known as FINANCIAL STSTEMENTSFINANCIAL STSTEMENTS
which are prepared. which are prepared.
FINAL ACCOUNTSFINAL ACCOUNTS

3. From Trial Balance. Final Accounts From Trial Balance. Final Accounts
include the preparation of :include the preparation of :
1) Trading and Profit & Loss account and1) Trading and Profit & Loss account and
2) Balance Sheet 2) Balance Sheet
as these two statements are prepared to as these two statements are prepared to
give the final results of the business, both give the final results of the business, both
of these are collectively called as final of these are collectively called as final
accounts. Accounting cycle finally ends accounts. Accounting cycle finally ends
with these statements as shown in next with these statements as shown in next
slide:slide:

4. Entry in the books of
Original Entry
(ORIGINAL RECORD)
Posting in the concerned
Ledger account
(CLASSIFICATION)
Preparation of
Trial Balance
(CHECKING THE
ACCURACY)
Balancing of Real &
Personal accounts
Preparation of final accounts
(summary)
ACCOUNTING CYCLE
TRANSACTIONS

5. Types of Financial StatementTypes of Financial Statement
Final accounts or financial statements can Final accounts or financial statements can
be divided in two parts:-be divided in two parts:-
1)1)Trading and Profit & Loss AccountTrading and Profit & Loss Account
2)2) Balance Sheet Balance Sheet

6. Trading AccountTrading Account
Trading account is prepared by trading Trading account is prepared by trading
concerns i.e., concerns which purchase concerns i.e., concerns which purchase
and sell finished goods, to know the gross and sell finished goods, to know the gross
profit or gross loss incurred by them from profit or gross loss incurred by them from
buying and selling of goods during a buying and selling of goods during a
particular period of time. Gross profit or particular period of time. Gross profit or
gross loss is the difference between the gross loss is the difference between the
cost of goods sold and the proceeds of cost of goods sold and the proceeds of
their sale. If the sale proceeds exceed the their sale. If the sale proceeds exceed the
cost of goods sold , gross profit is made. cost of goods sold , gross profit is made.
Otherwise,gross loss is made. Otherwise,gross loss is made.

7. Ascertainment of Cost of Goods SoldAscertainment of Cost of Goods Sold
Opening StockOpening Stock ……….……….
Add: PurchasesAdd: Purchases …….…….
Less: Purchase ReturnLess: Purchase Return ……. ……………. ………
Goods Available for SalesGoods Available for Sales
……….……….
Add: Direct ExpensesAdd: Direct Expenses ……….……….
Less: Closing StockLess: Closing Stock
……….……….
Cost of Goods Sold Cost of Goods Sold ……….……….

8. Specimen Proforma of Trading AccountSpecimen Proforma of Trading Account
Dr Trading Account of …….. For the year ending……... Cr
Particulars
To Opening Stock
To Purchases
Less: Returns
To Direct
Expenses:
Carriage Inward
Wages
Wages & salaries
Fuel & power
Coal, water & gas
Octroi
Amt. Particulars
By Sales
Less: Returns
By Closing Stock
By Gross Loss c/d*
Amt.

9. Import Duty
Custom Duty
Excise Duty
Consumable Store
Factory Rent, Rates,
and Taxes
Foreman/ Works Manager’s
Salary
Royalty on manufactured
goods
To Gross Profit c/d*

10. Profit & Loss AccountProfit & Loss Account
For non-corporate business organisation Profit & For non-corporate business organisation Profit &
Loss account is second part of income Loss account is second part of income
statement. It is prepared to know the net loss of statement. It is prepared to know the net loss of
business during a particular period. Every business during a particular period. Every
businessman has to spend on expenses other businessman has to spend on expenses other
than on manufacture or purchase of goods than on manufacture or purchase of goods
which are called indirect expenses. There can which are called indirect expenses. There can
be other incomes except sales. So gross profit be other incomes except sales. So gross profit
or loss is adjusted keeping in view these indirect or loss is adjusted keeping in view these indirect
expenses and other incomes to find out net expenses and other incomes to find out net
profit or net loss. profit or net loss.

11. Proforma of Profit & Loss AccountProforma of Profit & Loss Account

ParticularsParticulars
To Gross Loss b/dTo Gross Loss b/d
To Establishment To Establishment
ChargesCharges
To Administrative To Administrative
ChargesCharges
To Selling & To Selling &
Distribution Distribution
expensesexpenses
To Financial To Financial
ChargesCharges
AmtAmtParticularsParticulars
By Gross Profit b/dBy Gross Profit b/d
By other expensesBy other expenses
By Net Loss By Net Loss
(transferred to capital (transferred to capital
account)account)
AmtAmt

12. To Depreciation To Depreciation
& Provisions& Provisions
To Abnormal To Abnormal
LossesLosses
To Net ProfitTo Net Profit
(transferred to (transferred to
Capital Account)Capital Account)

13. Balance SheetBalance Sheet
Balance Sheet is a component of financial Balance Sheet is a component of financial
statements which shows balances of capital, statements which shows balances of capital,
liabilities & assets. All nominal accounts are liabilities & assets. All nominal accounts are
closed by transferring these to Trading & Profit closed by transferring these to Trading & Profit
& Loss Account. Only personal & real accounts & Loss Account. Only personal & real accounts
are left. are left.
Balance Sheet is the final phase in accounting Balance Sheet is the final phase in accounting
cycle. It is a ‘mirror’ which reflects the true cycle. It is a ‘mirror’ which reflects the true
position of the assets & liabities of the business position of the assets & liabities of the business
on a particular date. on a particular date.
“ “A statement of financial position of economic A statement of financial position of economic
unit disclosing as at a given moment of time its unit disclosing as at a given moment of time its
assets, liabilities & ownership equities. Eric assets, liabilities & ownership equities. Eric
L.kohler L.kohler

14. Balance Sheet as on ……………………
Liabilities Liabilities
Capital Capital
Add: Net ProfitAdd: Net Profit
Less: DrawingsLess: Drawings
Fixed Liabilities:Fixed Liabilities:
Long term loanLong term loan
Public depositsPublic deposits
Current Liabilities:Current Liabilities:
Unexpired IncomeUnexpired Income
Short Term LoansShort Term Loans
Trade CreditorsTrade Creditors
Bank OverdraftBank Overdraft
AmtAmtAssets Assets

Fixed Assets:Fixed Assets:
GoodwillGoodwill
Land and BuildingsLand and Buildings
Plant & Machinery Plant & Machinery
Motor Vehicles Motor Vehicles
FurnitureFurniture
Patents & Trade Marks Patents & Trade Marks
Live StockLive Stock
Loose ToolsLoose Tools
InvestmentsInvestments
Amt Amt

15. Bill PayableBill Payable
Outstanding Outstanding
ExpensesExpenses
Current Assets:Current Assets:
Closing StockClosing Stock
Prepaid Prepaid
ExpensesExpenses
Accrued Accrued
IncomeIncome
DebtorsDebtors
Bill ReceivableBill Receivable
Cash at Bank Cash at Bank
Cash in handCash in hand

17. ADJUSTMENTSADJUSTMENTS
CLOSING STOCK CLOSING STOCK
The unsold goods lying in store at the The unsold goods lying in store at the
end of accounting year. Treatment:end of accounting year. Treatment:
Stock a/c Dr.Stock a/c Dr.
To Trading a/cTo Trading a/c
Two fold effect of adjustment will be :-Two fold effect of adjustment will be :-
1)1)Show on Credit side of the Trading Show on Credit side of the Trading
accountaccount
2)2)On asset side of Balance SheetOn asset side of Balance Sheet

18. OUTSTANDING EXPENSES
Those expenses which have been incurred & not yet paid.
Treatment:
Expenses a/c Dr
To outstanding expenses
Two fold effect:
1.Will be shown on debit side of trading &
profit & loss a/c by way of addition to
particular expense.
2. Will be shown on liabities side of Balance Sheet.

19. PREPAID EXPENSES
Those expenses which have been paid in advance
i.e., whose benefit will be available in future is
called prepaid expenses. Treatment:
Prepaid Expenses a/c Dr
To Expenses a/c
Two fold effect:
1.Will be shown in profit & loss a/c by way
deduction from particular expense.
2. Will be shown on asset side of Balance Sheet.

20. ACCRUED INCOME
That income which has been earned but not
received during the accounting year is called
accrued income. Treatment:
Accrued Income a/c Dr
To Income a/c
Two fold effect:
1.Will be shown on credit side of P & L a/c
2. Will be shown on asset side of Balance Sheet

21. INCOME RECEIVED IN ADVANCE
Income received but not earned during accounting
year is called income received in advance.
Treatment:
Income a/c Dr
To Income Received in advance
Two fold effect:
1.Will be shown on credit side of P & L a/c by the
way of deduction from particular income.
2. Will be shown on liabilities side of Balance Sheet.

22. DEPRECIATION
Depreciation is the reduction in the value of fixed
asset due to its use, wear & tear. Treatment:
Depreciation a/c Dr
To Asset a/c
Two fold effect:
1.Is shown on debit side of P & L a/c
2.Is shown on the Asset side of the Balance Sheet
by way of deduction from
value of concerned asset

23. BAD DEBTS
Debts which are definitely irrecoverable are called
Bad Debts.
Treatment:
Bad Debts A/c Dr
To Sundry Debtors a/c
Two fold effect:
1.Is shown on debit side of P & L a/c.
2.2. Is shown on assets side of Balance Sheet by
way of deduction from Sundry Debtors.

24. INTEREST ON CAPITALINTEREST ON CAPITAL
To see whether the business is really earning To see whether the business is really earning
profit or not ,interest on capital at a certain rate profit or not ,interest on capital at a certain rate
is provided. Treatment :is provided. Treatment :

Interest on capital A/c Interest on capital A/c
To capital A/cTo capital A/c

TWO FOLD EFFECT :TWO FOLD EFFECT :
1.It will be shown on debit side of Profit and Loss 1.It will be shown on debit side of Profit and Loss
A/cA/c
2.Shown on liabilities side of Balance Sheet by 2.Shown on liabilities side of Balance Sheet by
way of addition to the capital.way of addition to the capital.

25. INTEREST ON DRAWINGSINTEREST ON DRAWINGS
Interest on drawings is charged from proprietor Interest on drawings is charged from proprietor
,as drawings reduce capital.,as drawings reduce capital.
Treatment:Treatment:
Drawings A/cDrawings A/c
To Interest on Drawings A/cTo Interest on Drawings A/c
Two fold effect will be:Two fold effect will be:
1.It will be shown on credit side of Profit and Loss 1.It will be shown on credit side of Profit and Loss
Account.Account.
2.On liabilities side of Balance Sheet by way of 2.On liabilities side of Balance Sheet by way of
addition to the drawings which are ultimately addition to the drawings which are ultimately
deducted from the capital.deducted from the capital.

26. PROVISION FOR DOUBTFUL DEBTSPROVISION FOR DOUBTFUL DEBTS
It is a provision created to cover any possible loss on It is a provision created to cover any possible loss on
account of bad-debts likely to occur in future.account of bad-debts likely to occur in future.
Treatment: Treatment:
Profit and Loss A/c Profit and Loss A/c
To Provision for Doubtful Debts A/c To Provision for Doubtful Debts A/c
Two effected accounts will be:Two effected accounts will be:
1.On debit side of Profit and Loss A/c or by way of 1.On debit side of Profit and Loss A/c or by way of
addition to Bad Debts. (Old provision for doubtful addition to Bad Debts. (Old provision for doubtful
debts at the beginning of the year will be deducted).debts at the beginning of the year will be deducted).
2.Shown on assets side of Balance Sheet by way of 2.Shown on assets side of Balance Sheet by way of
deduction from Sundry Debtors (deducting further deduction from Sundry Debtors (deducting further
bad debts if any).bad debts if any).

27. PROVISION FOR DISCOUNT ON DEBTORSPROVISION FOR DISCOUNT ON DEBTORS
If sales are made by the merchant on condition that if If sales are made by the merchant on condition that if
the amount of sales is paid within a certain period , he the amount of sales is paid within a certain period , he
will allow a certain percentage of discount .will allow a certain percentage of discount .
Treatment :Treatment :
Profit and Loss A/cProfit and Loss A/c
To Provision for Discount on Debtors A/cTo Provision for Discount on Debtors A/c
Two-fold effect will be:Two-fold effect will be:
1.Shown on debit side of Profit and Loss A/c1.Shown on debit side of Profit and Loss A/c
2.Shown by way of deduction from Sundry Debtors (after 2.Shown by way of deduction from Sundry Debtors (after
deduction of further bad debts and provision for deduction of further bad debts and provision for
doubtful debts) on assets side of Balance Sheet.doubtful debts) on assets side of Balance Sheet.

28. RESERVE FOR DISCOUNT ON RESERVE FOR DISCOUNT ON
CREDITORSCREDITORS
Firm may have chance to receive discount on last Firm may have chance to receive discount on last
date of accounting year, if the payment is made date of accounting year, if the payment is made
within the scheduled period .These are within the scheduled period .These are
anticipated profit and therefore this account is anticipated profit and therefore this account is
made.made.
Treatment:Treatment:
Reserve for Discount on Creditors A/cReserve for Discount on Creditors A/c
To Profit & Loss A/c To Profit & Loss A/c
Two fold effect will be:Two fold effect will be:
1.It is shown on the credit side of Profit &Loss A/c1.It is shown on the credit side of Profit &Loss A/c
2.Shown on liabilities side of Balance Sheet by 2.Shown on liabilities side of Balance Sheet by
way of deduction from sundry creditors.way of deduction from sundry creditors.

29. DEFERRED REVENUE DEFERRED REVENUE
EXPENDITUREEXPENDITURE
The expenditure done in initial stage but the benefit of The expenditure done in initial stage but the benefit of
which will also be available in subsequent years is which will also be available in subsequent years is
called deferred revenue expenditure.called deferred revenue expenditure.
Treatment:Treatment:
Profit &loss A/cProfit &loss A/c
To advertisement A/cTo advertisement A/c
The two fold effect will be:The two fold effect will be:
1.It is show on the debit side of Profit &loss A/c1.It is show on the debit side of Profit &loss A/c
2.Shown on assets side by way of deduction from 2.Shown on assets side by way of deduction from
capitalised expenditure.capitalised expenditure.

30. LOSS OF STOCK BY FIRELOSS OF STOCK BY FIRE
Loss of stock may occur due to fire. Loss of stock may occur due to fire.
The position of business may be:The position of business may be:
a)a)All the stock is fully insured.All the stock is fully insured.
b)b)The stock is partly insured.The stock is partly insured.
c)c)The stock is not insured at all.The stock is not insured at all.

31. a) IF THE STOCK IS FULLY INSUREDa) IF THE STOCK IS FULLY INSURED
The whole loss will be claimed from the The whole loss will be claimed from the
insurance company.insurance company.
Entry:- Insurance Co. A/c Dr.Entry:- Insurance Co. A/c Dr.
To Trading A/cTo Trading A/c
Effect:-Effect:-
1.It will be shown on credit side of Trading A/c.1.It will be shown on credit side of Trading A/c.
2.It is shown on Assets Side of Balance Sheet.2.It is shown on Assets Side of Balance Sheet.

32. b) IF STOCK IS PARTLY INSUREDb) IF STOCK IS PARTLY INSURED
The loss of stock covered by insurance policy will be The loss of stock covered by insurance policy will be
claimed from the insurance company and the rest of claimed from the insurance company and the rest of
amount will be loss for the business.amount will be loss for the business.
Entry : Insurance Co. A/c Dr.Entry : Insurance Co. A/c Dr.
Profit & Loss A/c Dr.Profit & Loss A/c Dr.
To Trading A/cTo Trading A/c
Effect of this entry:Effect of this entry:
1.Shown on credit side of Trading A/c with the value of 1.Shown on credit side of Trading A/c with the value of
stock & shown on debit side of P& L A/c for that part stock & shown on debit side of P& L A/c for that part
of the stock which is not insured.of the stock which is not insured.
2.Loss of stock Fire is shown on asset side of the 2.Loss of stock Fire is shown on asset side of the
Balance sheet which amount is to be realised from Balance sheet which amount is to be realised from
the insurance company.the insurance company.

33. c) IF STOCK IS NOT INSUREDc) IF STOCK IS NOT INSURED
Whole loss will be borne by the firm.Whole loss will be borne by the firm.
Entry:- Profit & Loss A/c Dr.Entry:- Profit & Loss A/c Dr.
To Trading A/cTo Trading A/c
Effect of this entry :-Effect of this entry :-
1.It is shown on the credit side of Trading A/c.1.It is shown on the credit side of Trading A/c.
2.It is shown on the debit side of P&L A/c2.It is shown on the debit side of P&L A/c

34. RESERVE FUNDRESERVE FUND
Reserve is created out of profit & Loss A/c and Reserve is created out of profit & Loss A/c and
thus is an appropriation of net profit for thus is an appropriation of net profit for
strengthening the financial position of the strengthening the financial position of the
business. business.
Treatment :Treatment :
Profit & Loss A/c Dr.Profit & Loss A/c Dr.
To Reserve Fund A/cTo Reserve Fund A/c
Two fold effect will be:Two fold effect will be:
1.It is shown on debit side of P&L A/c.1.It is shown on debit side of P&L A/c.
2.It shown on the liabilities side of Balance.2.It shown on the liabilities side of Balance.

35. GOOD DISTRIBUTED AS FREE GOOD DISTRIBUTED AS FREE
SAMPLES.SAMPLES.
To promote the sale of goods, some of the To promote the sale of goods, some of the
produced goods are distributed as free produced goods are distributed as free
samples.samples.
Treatment:Treatment:
Advertisement A/c Dr.Advertisement A/c Dr.
To Purchase A/cTo Purchase A/c
Two fold effect:Two fold effect:
1.Its is deducted from purchases .1.Its is deducted from purchases .
2.It is shown on debit side of P&L A/c2.It is shown on debit side of P&L A/c

36. MANAGER’S COMMISSIONMANAGER’S COMMISSION
To increase the profit, manager is given some % age of To increase the profit, manager is given some % age of
commission on profits .It can be given at a certain commission on profits .It can be given at a certain
percentage on the net profits but before charging percentage on the net profits but before charging
such commission.such commission.
Treatment:Treatment:
Profit & Loss A/cProfit & Loss A/c
To Commission Payable To Commission Payable
After charging such commissionAfter charging such commission
This commission in calculated by a formula :-This commission in calculated by a formula :-
Commission Payable = Commission Payable = % of commission% of commission * Residual * Residual
profitprofit
100+Rate of Commission 100+Rate of Commission

37. GOODS ON SALE OR APPROVAL GOODS ON SALE OR APPROVAL
BASISBASIS
Sometimes goods are sold to customers on approval basis. If they Sometimes goods are sold to customers on approval basis. If they
approve, it will become sale. If such goods are lying with approve, it will become sale. If such goods are lying with
customers on last day of the accounting year and these can be customers on last day of the accounting year and these can be
yet returned , it should be treated as stock lying with customers.yet returned , it should be treated as stock lying with customers.
Treatment :Treatment :
1. Sales A/c Dr.1. Sales A/c Dr.
To debtors A/c (with sales price)To debtors A/c (with sales price)
2. Stock A/c Dr. 2. Stock A/c Dr.
To trading A/c ( at cost Price of goods)To trading A/c ( at cost Price of goods)
Effects :-Effects :-
1.Shown on the credit side of trading account by way of deduction 1.Shown on the credit side of trading account by way of deduction
from sales at sales price and added at closing stock at cost from sales at sales price and added at closing stock at cost
priceprice
2.Shown on assets side as deduction from sundry debtors (sale 2.Shown on assets side as deduction from sundry debtors (sale
price )and stock at cost on the assets side of balance sheet.price )and stock at cost on the assets side of balance sheet.

38. EXAMPLEEXAMPLE
M gives the following trial balance as on 31M gives the following trial balance as on 31
stst
March ,2010 March ,2010

Dr.Dr. Cr.Cr.
Plant &machineryPlant &machinery 6000060000 capitalcapital 5000050000
Fixture & fittings (for Fixture & fittings (for
office)office)
24002400 M’s currents A/cM’s currents A/c 25002500
Stock as on April 1, 2009:Stock as on April 1, 2009:
Raw materialsRaw materials
Finished GoodsFinished Goods 1630016300
2540025400
Sundry creditorsSundry creditors 2230022300
PurchasesPurchases 9310093100 Loan at 18% from Indian Loan at 18% from Indian
BankBank
2000020000
WagesWages 5130051300 SalesSales 250600250600
Other manufacturing Other manufacturing
expensesexpenses
1620016200 Sale of scrapSale of scrap 36003600
Office expensesOffice expenses 1870018700
Sundry expenses Sundry expenses 2600026000
Cash at bank Cash at bank 66006600
PatentsPatents 1800018000
Selling expensesSelling expenses 1500015000

39. On 31On 31
stst
march ,2010 the stock of raw material was march ,2010 the stock of raw material was
13,300. deprecation provided by M is 15 % on Plant and 13,300. deprecation provided by M is 15 % on Plant and
Machinery and 10% on fixtures & fittings (on book Machinery and 10% on fixtures & fittings (on book
value). Patents have two more years to run and concern value). Patents have two more years to run and concern
a vital production process .Manufactured goods were a vital production process .Manufactured goods were
transferred to selling department at a value of Rs. transferred to selling department at a value of Rs.
2,00,000. 2,00,000.
The value of finished goods (at transfer price ) on The value of finished goods (at transfer price ) on
hand on 31hand on 31
stst
March ,2010 was Rs.30,000; the value of March ,2010 was Rs.30,000; the value of
the finished goods as on April 1,2009 was at cost to M.the finished goods as on April 1,2009 was at cost to M.
Draw the Manufacturing, trading & P&L a/c for 2009- Draw the Manufacturing, trading & P&L a/c for 2009-
10 and the Balance Sheet of M as at the end of the year.10 and the Balance Sheet of M as at the end of the year.

40. MANUFACTURING ,TRADING AND PROFIT AND LOSS ACOOUNT MANUFACTURING ,TRADING AND PROFIT AND LOSS ACOOUNT
OF MOF M
for the year ending 31 for the year ending 31
stst
March ,2010 March ,2010
To raw material consumed: Rs.To raw material consumed: Rs.
Opening stock 16,300Opening stock 16,300
Add: Purchases Add: Purchases 93,10093,100
1,094001,09400
Less: Closing Stock Less: Closing Stock 13,30013,300
96,10096,100
By Trading A/c (Transfer)By Trading A/c (Transfer) 2,00,0002,00,000
To wages To wages 51,30051,300
To Manufacturing ExpensesTo Manufacturing Expenses 16,20016,200
To Depreciation on Plant & To Depreciation on Plant &
machinery(15% on Rs 60,000)machinery(15% on Rs 60,000)
9,0009,000
To Depreciation on Patents(1/3 of To Depreciation on Patents(1/3 of
Rs.18,000)Rs.18,000)

6,0006,000
Less: Sale of ScrapLess: Sale of Scrap
1,78,6001,78,600
3,6003,600
Cost of Goods ProducedCost of Goods Produced 1,75,0001,75,000
To profit transferred to To profit transferred to
P&L a/c (12.5% of Transfer Price P&L a/c (12.5% of Transfer Price
i.e., i.e., Rs.25,000 Rs.25,000 X 100 )X 100 )
Rs. 2,00,000Rs. 2,00,000
25,00025,000
2,00,0002,00,000

41. To opening stock of finished To opening stock of finished
Goods Goods
To value of goods To value of goods
manufactured transferred from manufactured transferred from
manufacturing a/cmanufacturing a/c
To gross Profit c/d to profit & To gross Profit c/d to profit &
Loss A/cLoss A/c
To office ExpensesTo office Expenses
To Depreciation on fixtures & To Depreciation on fixtures &
fittingsfittings
To selling expensesTo selling expenses
To Interest on Loan from Indian To Interest on Loan from Indian
Bank(18% on Rs 20000)Bank(18% on Rs 20000)
To stock reserve (12.5% on To stock reserve (12.5% on
Rs.30,000 Closing Stock of Rs.30,000 Closing Stock of
Finished Goods)Finished Goods)
To Net Profit Transferred to M’s To Net Profit Transferred to M’s
Current A/cCurrent A/c
25,60025,600
2,00,0002,00,000
55,20055,200
2,80,6002,80,600
18,70018,700
240240
15,00015,000
3,6003,600
3,7503,750
38,91038,910
80,20080,200
By Sales By Sales
By Closing Stock Of finished By Closing Stock Of finished
GoodsGoods
By Gross Profit b/dBy Gross Profit b/d
By Profit transferred from By Profit transferred from
Manufacturing a/cManufacturing a/c
2,50,6002,50,600
30,00030,000
2,80,0002,80,000
55,20055,200
25,00025,000
80,20080,200

42. BALANCE SHEET MBALANCE SHEET M
as on 31 as on 31
stst
March ,2010 March ,2010
Sundry creditors Sundry creditors
Loan at 18%from Indian Bank Loan at 18%from Indian Bank
20,000 20,000

Add: Interest outstanding Add: Interest outstanding
for 1 year @18% 3,600for 1 year @18% 3,600
M’s current Account :M’s current Account :
Balance as on 1-4-2009 2,500 Balance as on 1-4-2009 2,500
Add: Net Profit 38,910Add: Net Profit 38,910
Capital Capital

22,30022,300
23,60023,600
41,41041,410
50,00050,000
1,37,3101,37,310
Cash at the bankCash at the bank
Sundry debtorsSundry debtors
Closing stock of raw materialsClosing stock of raw materials
Closing stock of Closing stock of
finished goods 30,000finished goods 30,000
Less: Reserve @12.5% toLess: Reserve @12.5% to
bring goods to cost value 3,750bring goods to cost value 3,750

Patents 18,000Patents 18,000
Less: written off 6,000Less: written off 6,000
Furniture & fittings 2,400Furniture & fittings 2,400
Less: 10% Depreciation 240Less: 10% Depreciation 240
Plant & Machinery 60,000Plant & Machinery 60,000
Less: 15% Depreciation 9,000Less: 15% Depreciation 9,000
6,6006,600
26,00026,000
13,30013,300
26,25026,250
12,00012,000
2,1602,160
51,00051,000
1,37,3101,37,310