Question

From the following Trial Balance of Rasika and Diksha, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2022 and Balance Sheet as on that date:

Trial Balance as on 31st March, 2022
Debit Balance	Amount (₹)	Credit Balance	Amount (₹)
Stock (01.04.2021)	30,800	Capital Accounts:
Purchases	80,000	Rasika	80,000
Salaries	6,800	Diksha	80,000
Wages	10,500	Sundry Creditors	30,500
Royalties	3,200	Interest Received on Fixed Deposits	1,000
Printing and Stationery	4,500	Sales	1,20,000
Sundry Debtors	43,000
Furniture	20,200
Investments	40,000
Advertisement (For 3 year)	30,000
Bad debts	500
Cash in hand	27,000
Fixed Deposit	15,000
	3,11,500		3,11,500

Adjustments:

1. Interest on fixed deposits ₹ 1,200 is still receivable.
2. Furniture to be depreciated by 5% p.a.
3. 2.5% reserve for doubtful debts on Sundry Debtors to be provided.
4. Closing Stock was valued at cost price ₹ 40,000 and Market price ₹ 35,000.

Answer 1

Dr.	In the books of Rasika and Diksha Trading and Profit and Loss Account for the year ended 31st March, 2022.				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Opening Stock		30,800	By Sales		1,20,000
To Purchases		80,000	By Closing Stock		35,000
To Wages		10,500
To Royalties		3,200
To Gross profit c/d		30,500
		1,55,000			1,55,000
To Salaries		6,800	By Gross profit b/d		30,500
To Printing and stationery		4,500	By Interest on fixed deposit	1,000	2,200
To Advertisement (For 3 years)	30,000	10,000	Add: Accrued interest	1,200
Less: Prepaid Advertisement (For 2 years)	20,000
To Bad debts (Old)	500	1,575
Add: R.D.D. (New)	1,075
To Depreciation on Furniture		1,010
To Net profit (Transferred to partners’ capital A/cs		8,815
Rasika	4,408
Diksha	4,407
		32,700			32,700

 

Balance Sheet as on 31st March, 2022
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Account:			Sundry Debtors	43,000	41,925
Rasika Opening balance	80,000	84,408	Less: R.D.D.	1,075
Add: Net profit	4,408		Furniture	20,200	19,190
Diksha Opening balance	80,000	84,407	Less: Depreciation	1,010
Add: Net profit	4,407		Investment		40,000
Sundry creditors		30,500	Prepaid Advertisement		20,000
			Fixed deposit	15,000	16,200
			Add: Accrued interest	1,200
			Closing stock		35,000
			Cash in hand		27,000
		1,99,315			1,99,315