Department of Technical Education

Andhra Pradesh
Name N.sambaiah
Designation Head of Section
Branch DCCP
Instititute Suvr & SR Govt.Polytechnic
for Women,Ethamukkala.

Year I year
Subject Accountancy –I
Subject code CCP-102
Topic Final Accounts
Duration 50 minutes
Sub-topic Preparation of Trading and
Profit and Loss account and
Balance Sheet
Teaching aids PPT, Animations
CCP102.132 1
OBJECTIVES OF THE LESSON
 On completion of the period, the student would be
able to
 Prepare Trading account, Profit and Loss account
and Balance Sheet (without adjustments)
 Consolidate his subject by doing two home work
problems

CCP102.132 2
Assignment -1
From the following trial balance of Radha & company,
Gudoor as on 31-03-08 prepare Trading and Profit and Loss
account and Balance sheet.
Trial balance
particulars debit credit
Rs Ps Rs Ps
Purchases 20000
Wages 7000
Discount 1500
sales returns 3000
Traveling expenses 500
carriage 300
Insurance 150
Commission 400
Rent 1000
cash 6300 cond..
CCP102.132 3
 Assignment – 1 contd.
Bank account 2800
Repairs 300
Sundry expenses 50
Interest on mortgage 105
Buildings 3000
Machinery 2500
5800
Opening stock 3200
Debtors 10600
capital 42205
Sales 3100
mortgage loan 2000
----------- --------------
creditors 57905 57905
------------ --------------

CCP102.132 4
Closing stock 8000
 Solution (Assignment)
Radha & company, Gudur Trading account as on 31-12-07.
Dr Cr
particulars Amount Particulars Amount
Rs. Ps Rs Ps
To opening stock 5800 By sales 42205
To purchases 20000 Less: returns 3000
To wages 7000 --------- 39205
To carriage 300 By closing stock 8000
To gross profit
(transferred to profit & 14105
loss account)
----------- -----------
47205 47205
----------- -----------

CCP102.132 5
Solution contd.
Profit and loss account of Radha & Company, Gudur as on
31-12-07.
Dr Cr
particulars Amount particulars Amount
Rs. Ps Rs. Ps

To discount 1500 By gross profit 14105

To traveling expenses 500
To insurance 150
To commission 400
To rent 1000
To repairs 300
To sundry expenses 50
To interest on mortgage 105
To net profit ( transferred 10100
to capital account) ------------- -------------
14105 14105
------------- ------------

CCP102.132 6
 Solution - contd.
Balance sheet of Radha & Company, Gudur as on 31-12-07

Liabilities Amount Assets Amount

Rs. Ps Rs. Ps
Creditors 2000 Cash 6300
Mortgage 3100 Bank 2800
Buildings 3000
Capital 10600 Machinery 2500
Add. Net profit 10100 20700 Debtors 3200
--------- Closing stock 8000
----------- -----------
25800 25800
----------- ------------

CCP102.132 7
Assignment - 2
Prepare Trading account, Profit and loss account and Balance sheet
from the following trial balance of Mr. Shah Brothers, Delhi as on
31 03-2007.

particulars debit credit

Rs Ps. Rs Ps
Creditors 35500
Bills payable 10950
Legal charges 450
General expenses 7500
Cash at bank 18500
Capital 170000
Buildings 50000
Bank loan 30000
Purchase returns 2000
Provision to doubtful debtors 1500
Cash in hand 7000
Discount allowed 4000
Salaries and wages 53000
Interest on bank loan 6000 contd..

CCP102.132 8
Assignment—2 contd.
Discount received 5500
Bills receivable 6500
Purchases 118000
Stock (opening) 65000
Trade debtors 60000
Carriage inwards 3000
Sales returns 2000
Bad debts 2500
Rates and taxes 12000
Plant and machinery 70000
Sales 230000
--------------- -----------
485450 485450
-------------- ----------

Closing stock Rs.30000

CCP102.132 9
 Solution-2
Shaw Brothers, Calcutta Trading account as on 31-3-07.
Dr Cr

particulars Amount Particulars Amount

Rs. Ps Rs Ps
To opening stock 65000 By sales 230000
To purchases 118000 Less: returns 2000
Less : returns 2000 ------------- 228000
-------- 116000 By closing stock 3000
To carriage inwards 3000
To gross profit (transferred 74000
to profit & loss account)
------------ -----------
258000 258000
------------ -----------

CCP102.132 10
Solution-2 contd.
Profit and loss account of Shah Brothers, Calcutta as on 31-3-07.
Dr Cr

particulars Amount particulars Amount

Rs. Ps Rs. Ps
To legal charges 450 By gross profit 74000
To general expenses 7500 By provision for doubtful 1500
To discount allowed 4000
To salaries and wages 53000 debtors 5500
To interest on bank loan 6000 By discount received 4450
To bad debts 2500 By net loss (transferred
to capital account)
To rates and taxes 12000
------------- ------------
85450 85450
------------- ------------

CCP102.132 11
 Solution-2 contd.
Balance sheet of Shah Brothers, Calcutta as on 31-12-07

Liabilities Amount Assets Amount

Rs. Ps Rs. Ps
Creditors 35500 Cash in hand 7000
Bills payable 10950 Cash at Bank 18500
Bank loan 30000 Buildings 50000
Capital 170000 Bills Receivable 6500
Less: net loss 4450 Trade debtors 60000
------- 165550 Plant and 70000
machinery
Closing stock 30000
----------- -----------
242000 242000
----------- -----------

CCP102.132 12
Summary
 Preparation of Balance sheet should be after
preparing Trading and P & L A/c
 Assets appear on the Right hand side
 Liabilities appear on the Left hand side
 Finally the Liabilities side total and Assets side
total should be equal

CCP102.132 13
Quiz
1. Net profit transferred to :
b) Capital a/c
c) Drawings a/c
d) None of above

6. Sales Returns appears on ______side of Trial

Balance
g) Debit
h) credit
i) None

CCP102.132 14
 Frequently asked questions

1. Give the important items on liabilities side of B/S

2. Give proforma of B/S

CCP102.132 15