Question

Mama and Kaka are partners in partnership firm sharing profits and losses equally. You are required to prepare Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as on that date:

Trial Balance as on 31st March, 2019
Debit Balances	Amount (₹)	Cebit Balances	Amount (₹)
Insurance	30,000	Capital Accounts:
Land and Building ((Addition of ₹ 40,000 wef. 1st July, 2018))	1,00,000	Mama	1,00,000
Salaries	10,000	Kaka	1,00,000
Export duty	5,000	10% Bank Loan (taken on1st Oct. 2018)	60,000
Interest	2,000	Interest	3,000
Furniture	80,000	Bills payable	16,000
Debtors	52,000		-
	2,79,000		2,79,000

Adjustment:

1. Gross profit amounted to ₹ 69,000.
2. Prepaid insurance ₹ 7,500.
3. Depreciate Land and Building at 10% p.a. and Furniture 5% p.a.
4. Write ₹ 2,000 for bad debts and maintain R.D.D. at 5% on sundry debtors.
5. Closing stock is valued at ₹ 69,000.

Answer 1

	In the books of Mama and Kaka
Dr.	Profit and Loss Account for the year ended on 31st March 2019				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Insurance	30,000	22,500	By Gross Profit b/d		69,000
(-) prepaid	7,500		By Interest received		3,000
To Depreciation on		13,000
Land and Building	9,000
Furniture	4,000
To Bad debts (new)	2,000	4500
(+) R.D.D (New)	2,500
To salaries		10,000
To export duty		5,000
To interest on bank loan		3,000
To interest		2,000
To Partners' Capital A/c: (New Profit)
Mama	6,000	12,000
Kaka	6,000
		72,000			72,000

 

Balance Sheet as on 31st March, 2019
Assets	Amount (₹)	Amount (₹)	Liabilities	Amount (₹)	Amount (₹)
Capital Accounts:			Land And Building	1,00,000	91,000
Mama	1,00,000	1,06,000	(-) Depreciation 10%	9,000
(+) Net Profit	6000		Furniture	80,000	76,000
Kaka	1,00,000	1,06,000	(-) Depreciation 5%	4,000
(+) Net Profit	6,000		Debtors	52,000
10% Bank loan	60,000	63,000	(-) Bad debts	2,000
(+) Interest due but not paid	3,000			50,000
Bills Payable		16,000	(-) R.D.D.	2,500	47,500
			Prepaid Insurance		7,500
			Closing Stock		69,000
		2,91,000			2,91,000