Closing Entries: ` ` Particulars Trading Account Dr. 30,96,000 To Stock Account (1.4.2012) 4,50,000 To Purchases Account 26,00,000 To Freight & Octroi Account 46,000 (Transfer of various nominal accounts showing debit balances to trading account) Sales Account Dr. 31,00,000 To Trading Account 31,00,000 (Transfer of sales account to trading account) Note: Entry for closing stock has already been passed by way of adjustment Trading Account Dr. 5,34,000 To Profit and Loss Account 5,34,000 (Transfer of profit from trading account to profit and loss Account) Profit and Loss Account Dr. 1,16,500 To Expenses Account 5,000 To Salaries Account 60,000 To Rent Account 24,000 To Advertising Expenses Account 12,500 To Insurance Premium Account 3,000 To Discount Account 2,000 To Depreciation Account 10,000 (Transfer of various nominal accounts showing balances to profit and loss account) Commission Account Dr. 14,220 To Profit and Loss Account 14,220 (Transfer of credit balance in commission account to profit and loss Account) Profit and Loss Account Dr. 3,75,200 To Capital Account 3,75,200 (Transfer of net profit to capital account) Note: Profit and Loss Account has already been debited in respect of provision for bad debts and commission payable to manager. Refer to adjustments entries. Illustration 3: Following are the balances in the ledger of Mr. for the year ended 31st March, 2013: ` Stock (1.4.2012): Raw materials 1,00,000 Semi-finished goods 50,000 Finished 2,60,000 Purchases: Raw materials 8,00,000 Finished goods 1,70,000
Closing Entries: Particulars ` ` Trading Account Dr. 30,96,000 To Stock Account (1.4.2012) 4,50,000 To Purchases Account 26,00,000 To Freight & Octroi Account 46,000 (Transfer of various nominal accounts showing debit balances to trading account) Sales Account Dr. To Trading Account (Transfer of sales account to trading account) Note: Entry for closing stock has already been passed by way of adjustment 31,00,000 31,00,000 Trading Account Dr. To Profit and Loss Account (Transfer of profit from trading account to profit and loss Account) 5,34,000 5,34,000 Profit and Loss Account Dr. To Expenses Account To Salaries Account To Rent Account To Advertising Expenses Account To Insurance Premium Account To Discount Account To Depreciation Account (Transfer of various nominal accounts showing balances to profit and loss account) 1,16,500 5,000 60,000 24,000 12,500 3,000 2,000 10,000 Commission Account Dr. To Profit and Loss Account (Transfer of credit balance in commission account to profit and loss Account) 14,220 14,220 Profit and Loss Account Dr. To Capital Account (Transfer of net profit to capital account) 3,75,200 3,75,200 Note: Profit and Loss Account has already been debited in respect of provision for bad debts and commission payable to manager. Refer to adjustments entries. Illustration 3: Following are the balances in the ledger of Mr. for the year ended 31st March, 2013: ` Stock (1.4.2012): Raw materials 1,00,000 Semi-finished goods 50,000 Finished 2,60,000 Purchases: Raw materials 8,00,000 Finished goods 1,70,000
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