From the following transactions of Mr.
Rajesh for the year ended 31st March 2025, prepare:
1. Journal Entries
2. Ledger Accounts
3. Trading and Profit & Loss Account
4. Profit and Loss Appropriation Account
5. Balance Sheet
### **Transactions:**
| Date | Details |
| -------- | ---------------------------------------------------------- |
| April 1 | Started business with cash ₹1,00,000 and bank ₹50,000 |
| April 5 | Purchased goods for ₹40,000 (Cash ₹20,000; Credit ₹20,000) |
| April 10 | Sold goods for ₹60,000 (Cash ₹30,000; Credit ₹30,000) |
| May 15 | Paid rent ₹5,000 and salary ₹10,000 |
| June 20 | Received ₹20,000 from credit customers |
| July 25 | Paid ₹10,000 to creditors |
| Dec 31 | Depreciation on machinery ₹2,000 |
| Jan 10 | Paid electricity bill ₹1,000 |
| March 31 | Closing stock ₹25,000 |
**Additional Information:**
* Transfer ₹5,000 to General Reserve
* Drawings during the year ₹8,000
* Capital at the beginning: ₹1,50,000
* Machinery: ₹20,000 (no purchase/sale during the year)
---
Here is the complete accounting solution for **Mr. Rajesh** for the **year ended 31st March
2025**, based on the provided transactions and adjustments:
---
## **1. Journal Entries**
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
| ------ | ----------------------------------- | ---- | --------- | ---------- |
| Apr 1 | Cash A/c Dr. | | 1,00,000 | |
| | Bank A/c Dr. | | 50,000 | |
| | To Capital A/c | | | 1,50,000 |
| Apr 5 | Purchases A/c Dr. | | 40,000 | |
| | To Cash A/c | | | 20,000 |
| | To Creditors A/c | | | 20,000 |
| Apr 10 | Cash A/c Dr. | | 30,000 | |
| | Debtors A/c Dr. | | 30,000 | |
| | To Sales A/c | | | 60,000 |
| May 15 | Rent A/c Dr. | | 5,000 | |
| | Salary A/c Dr. | | 10,000 | |
| | To Cash A/c | | | 15,000 |
| Jun 20 | Cash A/c Dr. | | 20,000 | |
| | To Debtors A/c | | | 20,000 |
| Jul 25 | Creditors A/c Dr. | | 10,000 | |
| | To Cash A/c | | | 10,000 |
| Dec 31 | Depreciation A/c Dr. | | 2,000 | |
| | To Machinery A/c | | | 2,000 |
| Jan 10 | Electricity A/c Dr. | | 1,000 | |
| | To Cash A/c | | | 1,000 |
| Mar 31 | Drawings A/c Dr. | | 8,000 | |
| | To Cash A/c | | | 8,000 |
| Mar 31 | Profit & Loss Appropriation A/c Dr. | | 5,000 | |
| | To General Reserve A/c | | | 5,000 |
---
## **2. Ledger Accounts** *(Main ones)*
### a) **Capital Account**
| Particulars | Debit (₹) | Credit (₹) |
| ------------ | --------- | ---------- |
| Drawings A/c | 8,000 | |
| | | 1,50,000 |
| Balance c/d | | 1,42,000 |
---
### b) **Cash Account**
| Particulars | Debit (₹) | Credit (₹) | |
| ------------ | --------- | ----------- | ------ |
| Capital | 1,00,000 | Purchases | 20,000 |
| Debtors | 20,000 | Rent | 5,000 |
| Sales (cash) | 30,000 | Salary | 10,000 |
| | | Creditors | 10,000 |
| | | Electricity | 1,000 |
| | | Drawings | 8,000 |
| Balance c/d | | 96,000 | |
---
### c) **Bank Account**
| Particulars | Debit (₹) | Credit (₹) |
| ----------- | --------- | ---------- |
| Capital | 50,000 | |
| Balance c/d | 50,000 | |
---
### d) **Debtors Account**
| Particulars | Debit (₹) | Credit (₹) | |
| -------------- | --------- | ---------- | ------ |
| Sales (credit) | 30,000 | Cash | 20,000 |
| Balance c/d | 10,000 | | |
---
### e) **Creditors Account**
| Particulars | Debit (₹) | Credit (₹) | |
| ----------- | --------- | ---------- | ------ |
| Cash | 10,000 | Purchases | 20,000 |
| Balance c/d | 10,000 | | |
---
### f) **Machinery Account**
| Particulars | Debit (₹) | Credit (₹) | |
| --------------- | --------- | ------------ | ----- |
| Opening Balance | 20,000 | Depreciation | 2,000 |
| Balance c/d | 18,000 | | |
---
## **3. Trading and Profit & Loss Account for the year ended 31st March 2025**
### **Trading Account**
| Dr. |₹ | Cr. |₹ |
| ------------------- | ------ | ---------------- | ------ |
| To Purchases | 40,000 | By Sales | 60,000 |
| To Gross Profit c/d | 45,000 | By Closing Stock | 25,000 |
| **Total** | 85,000 | **Total** | 85,000 |
---
### **Profit & Loss Account**
| Dr. |₹ | Cr. |₹ |
| ---------------------------- | ------ | ------------------- | ------ |
| To Rent | 5,000 | By Gross Profit b/d | 45,000 |
| To Salary | 10,000 | | |
| To Electricity | 1,000 | | |
| To Depreciation on Machinery | 2,000 | | |
| To Net Profit c/d | 27,000 | | |
| **Total** | 45,000 | **Total** | 45,000 |
---
## **4. Profit & Loss Appropriation Account**
| Dr. |₹ | Cr. |₹ |
| ---------------------------- | ------ | ------------- | ------ |
| To General Reserve | 5,000 | By Net Profit | 27,000 |
| To Capital A/c (Transferred) | 22,000 | | |
| **Total** | 27,000 | **Total** | 27,000 |
---
## **5. Balance Sheet as on 31st March 2025**
### **Liabilities**
| Particulars | Amount (₹) |
| ---------------- | ------------ |
| Capital | 1,50,000 |
| Less: Drawings | (8,000) |
| Add: Net Profit | 22,000 |
| Adjusted Capital | **1,64,000** |
| Creditors | 10,000 |
| General Reserve | 5,000 |
| **Total** | **1,79,000** |
---
### **Assets**
| Particulars | Amount (₹) |
| ------------------------------ | ------------ |
| Cash | 96,000 |
| Bank | 50,000 |
| Debtors | 10,000 |
| Machinery (after depreciation) | 18,000 |
| Closing Stock | 25,000 |
| **Total** | **1,79,000** |
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