Particulars Debit Credit Statement

Purchases and Sales 60,000 127,000 PL

Returns 1,000 750 PL
Rent, rates and taxes 10,000 PL
Freight on sales 1,200 PL
Manufacturing wages 10,000 PL
Discount 425 800 PL
Provision for doubtful debts 525
Salaries 7550 PL
Cash in Hand 6,900 BL
Capital 100,000 BL
Prop/plant/equp 80,000 BL
Opening stock 30,000
Debtors/creditors 45,000 25,000 BL
Printing and advertising 2000 PL
Closing Stock 34220
Depreciation 8000
Provision for doubtful debts 500
Goods for personal use 5000
Distributed goods 1000
Purchases and Sales 920
Total 262,075 295,715
33,640

Purhcase A/c …....Dr Closing Stock

…...to Mohit a/c Stock a/c …...Dr
…....to sale a/c
Mohit a/c…....Dr
…....to Purchase a/c (purchase return) Depreciation
Deprciation a/c…...Dr
…..To PPE A/c
0
 Trading & P&L
Particulars Debit Amount
To opening stock 30000
To purchase a/c 60000
To sales return 1000
To wages 10000

To Gross Profit (GP) 67890

168890
To rent/rates/ taxes 10000
To Freight on sales 1200
To discount offered 425
To salary a/c 7550
To Print & adv 2000
To deprciation a/c 8000
To samples a/c 1000
To provision for doubtful doubts (current year) 500
To net profit 38540
Balance 69215
Trading & P&L
Particulars Credit Amount Liabilities
By Sales a/c 127000 Capital a/c
By purchase return 750 Add net profit
By drawing 5000 Less Drawaing
By samples stock 1000 Creditors
By purchase equip 920

By closing stock 34220

168890 Balance
By Gross profit 67890
By Discount received 800
To provision for doubtful doubts (previous year) 525

Balance 69215
 Balance Sheet
Calculation Amount Assets Calculation Amount
100000 Cash a/c 6900
38540 PPE 80000
-5000 133540 Less depreciation -8000 72000
25000 Debtor a/c 45000
Less Provision for doubtful debts -500 44500
Equip purchase 920
Closing stock 34220

158540 Balance 158540

0
All profit & loss gets transferred to capital account

Provision for bad debt will have doubel effect- one it reduce my debtor assets
value & same value it will recorded as expense in P&L

Drawing will have 2 effects- reduce capital & reduce my closing stock
Samples given have 2 effects- increase the expense and it will also reduce the
stock

Purchase book transfer==> asset purchased thru purchase book (trading book),
as asset purchase is to kept separate from goods purchase
 Assets
Description
Cash Debtors Supplies Equipment
Business started 30000
Credit Purchase 9000
Cash Purchase -12000 12000
Fee received 15000 -15000
A/C payble payment -5000
Investment 12000
Billing to customer 19000
Rent paid -2500
Electricity bill paid -1200
Divident paid -4000
Salary Paid -11500
20800 4000 9000 12000
Real A/C Personal A/C Real A/C Real A/C

Assest Side==> Debit Balance always Liabilitites + Capital side ==>Credit balance
Debit means + Debit means -
Credit means - Credit means +

Source of incomes goes to capital in his respective name

E.g. fee, rent,, commision received will impact our cash on asset side & capital on other side, because we are trading any ass
Similarly, all expense goes to capital in his respective name like purchases, payments, fees paid, salary
All service related income & expenses effect the capital side by same amount of other side, as this do not generate any asse
 Liabilities + Capital Balance Sheet
Creditors Capital Liablities Amt. Assets Amt.
30000 0 To Capital ₹ 57,000 By Cash ₹ 20,800
9000 0 By Debtors ₹ 4,000
0 By equipment ₹ 12,000
0 By supplies ₹ 9,000
-5000 0 By creditor advance payment ₹ 11,200
12000 0 ₹ 57,000 ₹ 57,000
19000 0
-2500 0
-1200 0
-4000 0
-11500 0
-11200 57000 0
Personal A/C Personal A/C

se we are trading any assets & it is a source of incomce

do not generate any assets or liabilities

To make -11200 to +11200 in balance sheet, transferred to Assets side as advance payment
Solution) Why Adjustment entries because we follow accrual system of accounting. Note :- Adjustment entries au

1. Meaning : Incurred or due but not paid yet. For ex :- At the end of month Electricity bill or salary is due but will be paid ne
* Example

2. Paid in advance but not due (For Ex:- Insurance paid for 3 Years)
3

4
5
Note :- Adjustment entries aur bhi hoti hai.

lary is due but will be paid next month

 Date Particulars Dr Cr Account Type Ca
1-Mar Cash A/c..............Dr 50,000 Real Date
…........To Capital A/c 50000 Personal 1-Mar
2-Mar Cash A/c..............Dr 20000 Real 2-Mar
….......To V A/c 20000 Personal 19-Mar
3-Mar Purchase a/c…...Dr 58000 Nominal
…........To cash A/c 58000 Real
4-Mar Purchase a/c…...Dr 6000 Nominal
…........To Payable a/c 6000 Personal
19-Mar Cash A/c..............Dr 12000 Real
…........To sales a/c 12000 Nominal Cap
21-Mar Payable A/c…...Dr 2000 Personal Date
…........To cash A/c 2000 Real
29-Mar Salary A/c….......Dr 4000 Nominal
Rent A/c….........Dr 1000 Nominal V
…........To cash A/c 5000 Real Date
30-Mar A/C receibale…...Dr 8000 Personal
…........To sales a/c 8000 Nominal
31-Mar Drawing a/c….Dr 3500 Personal Purc
…........To cash A/c 3500 Real Date
164,500 164,500 3-Mar
4-Mar

Paya
Date
21-Mar

Sa
Date

Sala
Date
29-Mar

Re
Date
29-Mar

Recei
Date
30-Mar
 Withdr
Date
31-Mar
 Cash A/c
Particulars Debit Date Particulars Cr
To capital a/c 50000 3-Mar By Purchase a/c 58000
To V a/c 20000 21-Mar By Payable a/c 2000
To sales a/c 12000 29-Mar By Salary account 4000
29-Mar By rent a/c 1000
31-Mar By Withdraing a/c 3500
By Balanced Carrried down 13500
82000 82000

Capital A/C
Particulars Debit Date Particulars Cr
To balance carried 50000 1-Mar By cash a/c 50000

V A/c
Particulars Debit Date Particulars Cr
To balance carried 20000 2-Mar By cash a/c 20000

Purchase a/c
Particulars Debit Date Particulars Cr
To cash a/c 58000 By Balanced Carrried down 64000
To payable a/c 6000
64000 64000
Payable a/c
Particulars Debit Date Particulars Cr
To cash a/c 2000 4-Mar By Purchase a/c 6000
To balance carried 4000
6000 6000
Sales a/c
Particulars Debit Date Particulars Cr
To balance carried 20000 19-Mar By cash a/c 12000
30-Mar By receivable a/c 8000
20000 20000

Salary A/c
Particulars Debit Date Particulars Cr
To cash a/c 4000 By Balanced Carrried down 4000

Rent a/c
Particulars Debit Date Particulars Cr
To cash a/c 1000 By Balanced Carrried down 1000

Receivable a/c
Particulars Debit Date Particulars Cr
To sales a/c 8000 By Balanced Carrried down 8000
 Withdrawing a/c
Particulars Debit Date Particulars Cr
To cash a/c 3500 By Balanced Carrried down 3500
 Units Price Value
Inventory 100 5 500
Purchases 600 6 3600
Purchases 300 8 2400
Purchases 400 9 3600
Sales 400 0
Sales 500 0
Sales 200 0

On FIFO Basis 100 5 500

600 6 3600
300 8 2400
100 9 900
Total Sales 1100 7400
Inventory 300 9 2700

On LIFO 400 9 3600

300 8 2400
400 6 2400
Total Sales 1100 8400
Inventory 200 6 1200
100 5 500
300 1700

Weighted ave cost

Ave purchasing cost 7
Total sales 1100 7 7936
Inventory 300 7 2164