Question

Asha and Nirasha are partners sharing profits and losses in the ratio of 1 : 1. From the following Trial Balance and additional information, prepare Trading and Profit and Loss account for the year ended 31st March, 2023 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2023
Debit Balance	Amount (₹)	Credit Balance	Amount (₹)
Stock (1/4/2022)	1,30,000	General Reserve	29,000
Bills Receivable	56,000	Capital:
Wages and Salaries	18,000	Asha	3,20,000
Sundry Debtors	2,65,000	Nirasha	2,40,000
Bad Debts	2,000	Creditors	1,96,000
Purchases	2,96,000	R.D.D.	3,600
Motor Car	1,36,000	Sales	5,71,000
Machinery	2,29,600	Outstanding Wages	1,400
Audit Fees	2,400	Purchases Returns	8,000
Sales Return	4,000	Discount	3,600
Discount	4,600
Building	1,50,000
Cash at Bank	24,000
10% Investment	40,000
Advertisement (Paid for 9 months)	9,000
Royalties	6,000
	13,72,600		13,72,60

Adjustment and Additional Information:

(1) Closing Stock ₹ 80,000.

(2) Depreciation Building and Machinery @ 5% and 3% respectively.

(3) Bills Receivable included dishonoured bill of ₹ 6,000.

(4) Goods worth ₹ 2,000 taken by Asha for personal use was not entered in the books of accounts.

(5) Write off ₹ 3,600 as Bad debts and maintain R.D.D. at 5% on Sundry Debtors.

(6) Goods of ₹ 12,000 were sold but no entry was made in the books of accounts.

Answer 1

Dr.	In the books of Asha and Nirasha Trading, Profit and Loss Account for the year ended on 31st March, 2023				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Opening Stock		1,30,000	By Sales	5,71,000	5,79,000
To Purchases	2,96,000	2,88,000	Add: Unrecorded Sales	12,000
Less: Purchases Return	8,000			5,83,000
To Royalties		6,000	Less: Sales Return	4,000
To Wages and Salaries		18,000	By Goods take over by Asha for Personal Use		2,000
To Gross Profit c/d		2,19,000	By Closing Stock		80,000
		6,61,000			6,61,000
To Advertisement	9,000	12,000	By Gross Profit b/d		2,19,000
Add: O/s for 3 months	3,000		By Interest Accrued on Investment		4,000
To Audit fees		2,400	By Discount		3,600
To Depreciation on :
Building	7,500	14,388
Machinery	6,888
To Bad debts (old)	2,000	15,970
Add: New Bad Debts	3,600
Add: New R.D.D.	13,970
	19,570
Less: R.D.D. (old)	3,600
To Discount		4,600
To Net Profit (Transferred to Partners’ Capital A/c’s)
Asha	88,621	1,77,242
Nirasha	88,621
		2,26,600			2,26,600

 

Balance Sheet as on 31st March, 2023
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital : Asha	3,20,000	4,06,621	Building	1,50,000	1,42,500
Add : Net Profit	88,621		Less : Depreciation 5%	7,500
Less : (Goods taken over by Asha for personal use)	2,000		Machinery	2,29,600	2,22,712
Capital Nirasha	2,40,000	3,28,621	Less : Depreciation 3%	6,888
Add : Net Profit	88,620		Bills Receivable	56,000	50,000
General Reserve		29,000	Less: Bills Receivable dishonoured	6,000
O/s Advertisement Exp. (3 months)		3,000	Motor car		1,36,000
Creditors		1,96,000	Cash at Bank		24,000
Outstanding Wages		1,400	Closing stock		80,000
			Sundry Debtors	2,65,000	2,65,430
			Add : Bills Receivable dishonoured	6,000
				2,71,000
			Add : Unrecorded Sales	12,000
				2,83,000
			Less : Bad debts (New)	3,600
				2,79,400
			Less : R.D.D. 5% (New)	13,970
			10% Investment	40,000	44,000
			Add : Interest Accrued	4,000
	9,64,642				9,64,642