Question

Following is the Trial Balance of Jitesh and Pritesh. The partners share profits and losses equally.

Trial Balance as on 31st March, 2010
Particulars	Debit Balance  (Rs)	Credit Balance  (Rs)
Capital - Jitesh            - Pritesh Bills Receivable and Bills Payable Opening Stock Purchases and Sales Returns Salaries Wages Conveyance Commission Miscellaneous Expenses Warehouse Rent Brokerage Dock Charges Insurance Goodwill Land and Building Shares in Bajaj Ltd. Cash in hand Sundry Debtors and Creditors Motor Van	40,000 70,000 1,94,000 3,000 15,600 28,400 2,200 − 3,200 9,000 3,000 4,200 4,800 76,000 1,80,000 50,000 3,600 56,000 60,000	2,00,000 1,20,000 50,000 − 3,63,000 4,000 − − − 6,000 − − − − − −       60,000 −
	8,03,000	8,03,000

Adjustments−

(1) Closing stock was valued at Rs. 75,000.

(2) Depreciate land and building and motor van at 5% p. a.

(3) Insurance is paid for the year ended 31st May, 2010.

(4) Jitesh has taken goods of Rs. 3,000 for his personal use.

(5) Books of Rs. 8,000 were destroyed by fire and the Insurance Company admitted a claim of Rs. 6,400 only.

(6) Commission due but not received Rs. 1,600.

Prepare after taking into account the adjustments:

Trading and Profit and Loss account for the year ended 31st March  2010 and Balance Sheet as on that date.

 

Answer 1

Financial Statements of Jitesh and Pritesh
Trading Account  for the year ended March 31, 2010
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Opening Stock			70,000	Sales	3,63,000
Purchases		1,94,000		Less: Return Inwards	3,000	3,60,000
Less: Return Outwards		4000		Closing Stock		75,000
Less: Drawings of Goods		3,000
Less: Goods Lost		8,000	1,79,000
Dock Charges			4,200
Wages			28,400
Gross Profit (Balancing Figure)			1,53,400
			4,35,000			4,35,000

 

Profit and Loss Account  for the year ended March 31, 2010
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Depreciation on Land & Building			9,000	Gross Profit		1,53,400
Depreciation on Motor Van			3,000	Commission	6,000
Insurance		4,800		Add: Accrued Commission	1,600	7,600
Less: Prepaid		800	4,000
Loss by Fire			1,600
Salaries			15,600
Conveyance			2,200
Miscellaneous Expenses			3,200
Warehouse Rent			9,000
Brokerage			3,000
Net Profit transferred to Partners’ Capital A/c
Jitesh		55,200
Pritesh		55,200	1,10,400
			1,61,000			1,61,000

 

Balance Sheet  as on March 31, 2010
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital			Fixed Assets
Jitesh	2,00,000		Land & Building	1,80,000
Add: Share of Profit	55,200		Less: Depreciation @ 5%	9,000	1,71,000
Less: Drawings	3,000	2,52,200	Motor Van	60,000
Pritesh	1,20,000		Less: Depreciation @ 5%	3,000	57,000
Add: Share of Profit	55,200	1,75,200	Goodwill		76,000
Current Liabilities			Share in Bajaj Ltd		50,000
Creditors		60,000	Current Assets
Bills Payable		50,000	Closing Stock		75,000
			Prepaid Insurance		800
			Debtors		56,000
			Accrued Commission		1,600
			Insurance Company		6,400
			Bills Receivable		40,000
			Cash		3,600
		5,37,400			5,37,400

Working Notes:

Calculation of Depreciation

\[\text{On Land & Building} = 1,80,000 \times\frac{5}{100}= Rs 9,000\]

\[\text{On Motor Van} = 60,000 \times\frac{5}{100}= Rs 3,000\]

Calculation of Prepaid Insurance

\[\text{Prepaid Insurance} = 4, 800 \times \frac{2}{12}= Rs 800\]

Distribution of Profit

\[1, 10, 400 \times \hspace{0.167em}\frac{1}{2}= Rs 55,200(\text{each})\]