Question

From the following Trial Balance of M/s Mahesh and Umesh, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date. Profit sharing ratio of Mahesh and Umesh was 3/5th and 2/5th respectively.

Trial Balance as on 31st March, 2013
Debit Balance	Amount (₹)	Credit Balance	Amount (₹)
Investments	56,000	Capital A/c:
Carriage	7,000	Mahesh	1,62,000
Loose Tools	17,000	Umesh	1,08,000
Building	1,50,000	Current A/c:
Salary	13,000	Mahesh	16,200
Audit fees	8,500	Umesh	10,800
Opening stock	83,000	Sundry Creditors	99,000
Wages	7,500	Sales	4,20,000
Purchases	1,97,000	Bank Overdraft	56,400
Motive Power	15,000
Bad Debts	6,400
Printing and Stationery	4000
Debtors	96,000
Cash at Bank	52,000
Machinery	72,000
Motor Van	88,000
	8,72,400		8,72,400

Adjustments:

1) Stock on hand on 31st March, 2013 was valued at Rs 76,000.

2) Interest on partner’s capital at 5% p.a. was allowed.

3) Goods worth Rs 2,000 and Rs 1,500 withdrawn by Mahesh and Umesh respectively for their personal use.

4) Mahesh is entitled to get salary of Rs 6,500 and Umesh is to be given 20% commission on sales.

5) Rs. 2,500 due from customer is not recoverable.

6) Depreciate Motor Van at 8% p.a. and Building at 7% p.a.

Answer 1

Dr.		Trading Account for the year ended March 31,2013				Cr.
Particulars		Amount (Rs)	Amount (Rs)	Particulars	Amount (Rs)	Amount (Rs)
Opening Stock			83,000	Sales		4,20,000
Purchases		1,97,000		Closing Stock		76,000
(-) Drawings by Mahesh		(2,000)
(-) Drawings by Umesh		(1,500)	1,93,500
Carriage			7,000
Wages			7,500
Motive Power			15,000
Gross Profit (Balancing Figure)			1,90,000
			4,96,000			4,96,000

 

Dr.		Profit and Loss Account for the year ended March 31, 2013				Cr.
Particulars		Amount (Rs)	Amount (Rs)	Particulars	Amount (Rs)	Amount (Rs)
Interest on Capital:				Gross Profit		1,90,000
Mahesh		8,100
Umesh		5,400	13,500
Depreciation on:
Motor Van		7,040
Building		10,500	17,540
Bad Debts		6,400
(+) Further Bad Debts		2,500	8,900
Salary to Mahesh			6,500
Commission to Umesh			8,400
Salary			13,000
Audit fees			8,500
Printing and Stationery			4,000
Net Profit (Balancing Figure)
Umesh		65,796
Mahesh		43,864	1,09,660
			1,90,000			1,90,000

 

Balance Sheet as on March 31, 2013
Liabilities		Amount (Rs)	Amount (Rs)	Assets		Amount (Rs)	Amount (Rs)
Capital:				Fixed Assets:
Mahesh		1,62,000		Building		1,50,000
Umesh		1,08,000	2,70,000	(-) 7% Depreciation		(10,500)	1,39,500
Current A/c:				Motor Van		88,000
Umesh		94,596		(-) 8% Depreciation		(7,040)	80,960
Mahesh		66,964	1,61,560	Investment			56,000
Current Liabilities:				Machinery			72,000
Creditors			99,000	Current Assets:
Bank Overdraft			56,400	Closing Stock			76,000
				Debtors		96,000
				(-) Further Bad Debts		(2,500)	93,500
				Loose Tools			17,000
				Cash at Bank			52,000
			5,86,960				5,86,960

Working Notes:                                

Dr.	Partners’ Current Accounts				Cr.
Particulars	Umesh	Mahesh	Particulars	Umesh	Mahesh
Drawings	2,000	1,500	Balance b/d	16,200	10,800
Balance c/d	94,596	66,964	Salary to Umesh	6,500	-
			Commission to Mahesh	-	8,400
			Interest on Capital A/c	8,100	5,400
			Profit and Loss A/c	65,796	43,864
	96,596	68,464		96,596	68,464