From the following, prepare trading and profit and Loss Account for the year ended 31st March 2024.

Steps to Solve

1. List the Revenues First, we need to identify the total revenues from sales.

   Sales = Rs. 94,000

2. List the Costs of Goods Sold (COGS) To calculate COGS, we will consider:

   • Opening Stock
   • Purchases
   • Closing Stock (to be accounted from the adjustments)

   COGS = Opening Stock + Purchases - Closing Stock

   Here, Closing Stock = Rs. 16,500

   Hence, $$ \text{COGS} = 11,000 + 60,000 - 16,500 = 54,500 $$

3. Calculate Gross Profit Gross Profit is determined by subtracting COGS from total revenues.

   $$ \text{Gross Profit} = \text{Sales} - \text{COGS} $$ $$ \text{Gross Profit} = 94,000 - 54,500 = 39,500 $$

4. List Operating Expenses Next, sum up all the operating expenses:

   • Salaries = Rs. 7,500
   • General Expenses = Rs. 1,600
   • Wages = Rs. 13,000
   • Sundry Expenses = Rs. 200
   • Insurance (adjusted) = Rs. 350 - Rs. 50 (prepaid) = Rs. 300
   • General Expenses Prepaid = Rs. 1,500 (not included)
   • Rent = Rs. 800 - Rs. 100 (prepaid) = Rs. 700
   • Outstanding Wages = Rs. 2,000 (included)

   Operating Expenses Total = 7,500 + 1,600 + 13,000 + 200 + 300 + 700 + 2,000 = Rs. 25,300

5. Calculate Net Profit or Loss Finally, subtract the total operating expenses from the gross profit to find the net profit or loss.

   $$ \text{Net Profit} = \text{Gross Profit} - \text{Total Operating Expenses} $$ $$ \text{Net Profit} = 39,500 - 25,300 = 14,200 $$