Question

Sanjay and Sudhir are partners sharing profit and losses in the ratio 3: 2. The Trial Balance of the firm on 31st March, 2010 was follows:

Trial Balance as on 31st March, 2010
Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
Opening stock	20,000	Capital A/c's
Purchases	30,000	Sanjay	40,000
Debtors	12,000	Sudhir	30,000
Wages	5,000	Sales	70,000
Salaries	10,000	Sundry Creditors	21,000
Land and building	30,000	Bills Payable	20,000
Plant and machinery	25,000	Discount	5,000
Furniture	16,000	Outstanding Rent	1,500
Advertisement (for 2 years)	6,000
Bills Receivable	8,000
Insurance	2,000
Drawings:
Sanjay	2,000
Sudhir	3,000
Cash in hand	5,500
Rent	10,000
Power and Fuel	3,000
	1,87,500		1,87,500

Adjustments:

1) Stock on hand on 31st March, 2010 was at Rs. 35,000.

2) Write off Rs. 2,000, for further Bad debts and maintain R.D.D. at 5% on debtors.

3) Depreciate Land and Building at 5% and Machinery at 10%.

4) Outstanding expenses were wages Rs 2,000 and salary Rs 1,000.

5) Credit purchases amounted to Rs 4,000 were not recorded in the books of accounts.

6) Provide interest on Partners Capital at 5% p.a.

From the above Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that data.

Answer 1

Dr.	Trading Account for the year ended 31st March, 2010				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
Opening Stock		20,000	Sales		70,000
Purchases	30,000		Closing Stock		35,000
Add: Further Purchases	4,000	34,000
Wages	5,000
Add: Outstanding wages	2,000	7,000
Powe and fuel		3,000
Gross Profit		41,000
		105,000			105,000

 

Dr.	Profit and Loss Account for the year ended 31st March, 2010				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
Interest on Capital:			Gross Profit		41,000
Sanjay	2,000		Discount Received		5,000
Sudhir	1,500	3,500
Salaries	10,000
Add: Outstanding Salaries	1,000	11,000
Advertisement	6,000
Less: Prepaid Advertisement	(3,000)	3,000
Insurance		2,000
Rent		10,000
Bad debts	2,000
Add: R.D.D.	500	2,500
Depreciation on:
Land and Building	1,500
Plant and Machinery	2,500	4,000
Net Profit
Sanjay	6,000
Sudhir	4,000	10,000
		46,000			46,000

 

Balance Sheet as on 31st March, 2010
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital of Sanjay:	40,000		Fixed Assets
Less: Drawings	(2,000)		Land and building	30,000
Add: Interest on capital	2,000		(−) 5% Depreciation	1,500	28,500
Add: Net Profit	6,000	46,000	Plant and machinery	25,000
Capital of Sudhir:	30,000		(−) 10% Depreciation	2,500	22,500
Less: Drawings	(3,000)		Furniture		16,000
Add: Interest on capital	1,500		Current Assets
Add: Net Profit	4,000	32,500	Prepaid Advertisement		3,000
Current Liabilities			Bills Receivable		8,000
Creditors	21,000		Closing Stock		35,000
Add: New Creditors (purchase on credit)	4,000	25,000	Cash in Hand		5,500
Bills Payable		20,000	Debtors	12,000
Outstanding Expenses:			Less: Bad Debts	(2,000)
Wages	2,000			10,000
Salaries	1,000		Less: R.D.D	(500)	9,500
Rent	1,500	4,500
		128,000			128,000