Question

Given below is the Trial Balance of M/s Seeta and Geeta as on 31^st March, 2010. You are required to prepare Trading and Profit and Loss Account for the year ended 31^st March, 2010 and Balance Sheet on that date.

                   Trial Balance as on 31^st March, 2010

Debit Balance	Amount (Rs)	Credit Balance	Amount (Rs)
Current A/c-		Capital A/c-
Geeta	4000	Seeta	120000
Opening stock	88,000	Geeta	120000
Purchases	1,76,000	Current A/c- Seeta	5000
Wages	23,500	Sundry Creditors	103000
Salaries	15,000	Bank overdraft	60000
Office Expenses	8000	Sales	308000
Bank Charges	2600
Legal Charges	3000
Machinery	90000
Land and building	130000
Interest	3600
Export Duty	3800
Bad -Debts	4000
Sundry Debtors	82000
Travelling Expenses	3200
Electricity charges	2300
Furniture	37000
8% Debentures (Purchased on 1.10.2009)	40000
	716000		716000

Adjustments:

1) Stock on hand on 31st March, 2010 was valued at Rs 80,000.

2) Goods costing Rs 16,000 destroyed by fire and Insurance Company admitted a claim of Rs 13,000.

3) Provide for outstanding expenses: Salaries Rs 3,000, Wages Rs 2,400.

4) Depreciate Machinery at 10% p.a. Land and Building at 5% p.a.

5) Create Reserve for Bad and doubtful debts at 5% on Sundry Debtors.

6) Legal charges paid in advance Rs 1,200.

7) Provide interest on capital at 8% p.a.

Answer 1

Trading Account

for the year ended March 31,2010

Dr.                                                                                              Cr.

Particulars		Amount (Rs)	Particulars	Amount (Rs)
Opening Stock		88000	Sales	308000
Purchases		176000	Closing Stock	80000
Wages	23500	25900	Goods Destroyed by fire	16000
Add : Outstanding  Wages	2400
Gross Profit (Balancing Figure)		114100
		404000		404000

 

Profit and Loss Account 
for the year ended March 31, 2010

Dr.                                                                                         Cr.

Particulars		Amount (Rs)	Particulars	Amount (Rs)
Salaries	15000	18000	Gross Profit	114100
Add : Outstanding Salaries	3000		Accrued Interest `(40000 xx 8/100 xx 6/12)`	1600
Office Expenses		8000
Bank Charges		2600
Legal Charges	3000	1800
Less : Prepaid	(1200)
Interest		3600
Export Duty		3800
Bad-Debts	4000	8100
Add : Reserve for Bad and doubtful Debts	4100
Travelling Expenses		3200
Electricity Charges		2300
Goods destroyed by fire (not received from Insurance  company)		3000
Depreciation on:
Land and Building	6500	15500
Machinery	9000
Interest on Capital:
Seeta	9600
Geeta	9600
Net Profit (Balancing Figure)
Seeta’s Current A/c	13300	26600
Geeta's Current A/c	13300
		115700		115700

 

Balance Sheet

as on March 31, 2010

Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital		240000	Fixed Assets
Seeta	120000		Land and Building	130000	123500
Geeta	120000		Less : 5% Depreciation	(6500)
Current A/c:			Machinery	90000	81000
Seeta	27900	46800	Less : 10% Depreciation	(9000)
Geeta	18900		Furniture		37000
Current Liabilities			Current Assets
Creditors		103000	Closing Stock		80000
Bank Overdraft		60000	Debtors	82000	77900
Outstanding Expenses:			Less : Reserve for Bad and Doubtful Debts	(4100)
Salaries	3000	5400	Prepaid Legal Charges		1200
Wages	2400		Cash		13000
			8% Debentures	40000	41600
			Add : Accrued Interest	1600
		455200			455200

Working Note : 

                        Partners' Current Accounts

Particulars	Seeta	Geeta	Particulars	Seeta	Geeta
Balance b/d		4000	Balance b/d	5000
Balance c/d	27900	18900	Interest on Capital A/c	9600	9600
			Profit and loss A/c - Profit	13300	13300
	27900	22900		27900	22900