Question

Rohan and Roshan are partners in ‘Shan Traders’ sharing profits and losses in the ratio of 2:1. From the following Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2011 and Balance Sheet as on that date

Trial Balance as on 31st March, 2011
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening stock	32,000	Sales	1,93,500
Purchases	64,000	Sundry Creditors	15,000
Plant and Machinery	30,000	Unpaid Wages	1,500
Furniture	18,500	Return outward	2,500
Carriage	1,500	Capital A/c:
Wages and Salaries	35,000	Rohan	90,000
Bills Receivable	5,000	Roshan	50,000
Sundry Debtors	32,000
Conveyance	4,000
Rent, Rates and Taxes	2,000
Return Inward	3,500
Cash in hand	14,750
Land and Building	83,500
Bad debts	1,750
Patents	25,000
	3,52,500		3,52,500

Adjustments:

1. Closing stock: Cost price Rs 25,000 and market price Rs 30,000.
2. An amount of Rs 3,500 spent for repairs to Building is debited to Building account.
3. Depreciate plant and Machinery and Building at 5% p.a.
4. Goods of Rs 750 taken by Roshan for this personal use.
5. Included in wages advances given to workers Rs 3,000.
6. Provide Rs 1,500 for bad and doubtful debts on Debtors.

Answer 1

Dr.		Trading Account for the year ended 31, March 2011			Cr.
Particulars		Amount (Rs)	Particulars		Amount (Rs)
To Opening Stock		32000	By Sales	193500	190000
To Purchases	64000	60750	Less: Return Inward	(3500)
Less: Drawings	(750)		By Closing Stock		25000
Less: Return Outward	(2500)
To Wages and Salaries	35000	32000
Less: Prepaid Wages	(3000)
To Carriage		1500
To Gross Profit (Balancing Figure)		88750
		215000			215000

       

Dr.		Profit and Loss Account for the year ended 31st March 2011		Cr.
Particulars		Amount (Rs)	Particulars	Amount (Rs)
Depreciation on:			By Gross Profit	88750
To Plant and Machinery	1500	5500
To Building	4000
To Repair of Building		3500
To Conveyance		4000
To Rent, Rates and Taxes		2000
To Bad-Debts	1750	3250
Add: Provision for Doubtful Debts	1500
To Net Profit (Balancing Figure)
Rohan	47000	70500
Roshan	23500
		88750		88750

 

Dr.		Balance sheet as on 31st March 2011			Cr.
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital of Rohan	90000	137000	Fixed Assets:
Add: Net Profit	47000		Land and building	83500	76000
Capital of Roshan	50000	72750	Less: Repairs	(3500)
Less: Drawings	(750)		Less: 5% Depreciation	(4000)
Add: Net Profit	23500		Plant and Machinery	30000	28500
Current Liabilities			Less: 5% Depreciation	(1500)
Creditors		15000	Furniture		18500
Unpaid Wages		1500	Patent		25000
			Current Assets
			Debtors	32000	30500
			Less: Provision for Doubtful-Debts	(1500)
			Bills Receivable		5000
			Cash in Hand		14750
			Closing Stock		25000
			Advance paid to workers		3000
		226250			226250