Archana and Prerana are partners, sharing Profits and Losses in the ratio 2: 1 with the help of following Trial Balance and Adjustments given below. You are required to prepare Trading and 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 Balance Amount ₹ Credit Balance Amount ₹ Stock (1/4/2018) 8,560 Capital: Patents 2,000 Archana 40,000 Sundry Debtors 18,500 Prerana 20,000 Stock of Stationary 3,000 Other Loans 3,000 Trade Mark 2,000 Reserve fund 1,000 Bills Receivable 6,300 Sundry Creditors 17,500 Electricity charges 1,450 Bills Payable 5,000 Wages 950 Purchase Return 1,000 Heating & Lighting 1,000 R.D.D 500 Trade Expenses 850 Sales 30,200 Sales Return 400 Interest 310 Land & Building 22,000 Furniture 13,000 Cash at Bank 5,000 Investments 7,500 Drawings : Archana 1,200 Prerana 900 Bad debts 200 Purchases 23,700 1,18,510 1,18,510 Adjustments: 1) Stock on 31st March 2019 is valued at Cost Price ₹ 12,000 and Market Price ₹ 17,000. 2) Our customer Mr. Shekhar failed to pay his dues of ₹ 800. 3) 1/8th of Patents are to be written off. 4) A part of Furniture ₹ 5,000 is purchased on 1st Oct 2018. 5) Depreciation on Land & Building 10% and on Furniture 5%. 6) Outstanding Expenses Wages ₹ 300 and Electricity Charges ₹ 200. 7) Allow Interest on Capital 3%.

Dr. In the books of Archana and Prerna Trading and Profit and Loss Account for the year ended on 31st March 2019 Cr. Particulars Amount (Rs.) Amount (Rs.) Particulars Amount (Rs.) Amount (Rs.) To Opening Stock 8,560 By Sales 30,200 To Purchases 23,700 Less: Sales Return 400 29,800 Less: Purchase Return 1,000 22,700 By Closing Stock 12,000 To Wages 950 Add: O/s Wages 300 1,250 To Heating & Lighting 1,000 To Gross Profit c/d 8,290 41,800 41800 To Electricity Charges 1,450 By Gross Profit b/d 8,290 Add: O/s Electricity Charges 200 1,650 By Interest 310 To Trade Expenses 850 To R.B.D.D A/c Bad debts 200 Add: New Bad debts 800 Less: Old Reserve 1,000 500 To Written off Patents 500 250 To Depreciation Furniture 525 Land and Building 2,200 2,725 To Interest on Capital Archana 1,200 Prerna 600 1,800 To Net Profit (Transferred to Capital A/c) Archana 550 Prerna 275 825 8600 8,600 Balance Sheet as on 31st March 2019 Liabilities Amount ₹ Amount ₹ Assets Amount ₹ Amount ₹ Capital Account: Archana Patents 2,000 Opening Balance 40,000 Less: Written off 250 1,750 Add: Int. on Capital 1,200 Furniture 13,000 Add: Net Profit 550 Less: Depreciation (400 + 125) 525 12,475 41,750 Land and Building 22,000 Less: Drawings 1,200 40,550 Less: Depreciation 2,200 19,800 Capital Accounts: Prerna Stock of Stationery 3,000 Opening Balance 20,000 Closing Stock 12,000 Add: Int. on Capital 600 Sundry Debtors 18,500 Add: Net Profit 275 Less: Bad Debts (New) 800 17,700 20,875 Trade Mark 2,000 Less: Drawings 900 19,975 Bills Receivable 6,300 Other Loans 3,000 Cash at Bank 5,000 Reserve Fund 1,000 Investments 7,500 Sundry Creditors 17,500 Bills Payable 5,000 Outstanding Expenses Wages 300 Electricity Charges 200 500 87,525 87,525 Working Notes: (1) Stationery stock is an asset. (2) Depreciation on furniture: 13,000 8,000 (Opening Balance) `= 8,000 xx 5/100` (Depr. for full year) = Rs. 400. 5,000 (Pur. on 01/10/18) `= 5,000 xx 6/12 xx 5/100`(Depr. for six months) = Rs. 125. Total depreciation. = 400 + 125 + ₹ 525 (3) `1/8 "patents to be written off" = 2,000 × 1/8` = ₹ 250. (4) As no other expenses are given, Trade Expense is recorded in the Profit and Loss Account.

Archana and Prerana are partners, sharing Profits and Losses in the ratio 2:1 with the help of following Trial Balance . You are required to prepare Trading and Profit and Loss Account

Question

Archana and Prerana are partners, sharing Profits and Losses in the ratio 2: 1 with the help of following Trial Balance and Adjustments given below. You are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as on that date.

Trial Balance as on 31^s^t March 2019

Debit Balance	Amount ₹	Credit Balance	Amount ₹
Stock (1/4/2018)	8,560	Capital:
Patents	2,000	Archana	40,000
Sundry Debtors	18,500	Prerana	20,000
Stock of Stationary	3,000	Other Loans	3,000
Trade Mark	2,000	Reserve fund	1,000
Bills Receivable	6,300	Sundry Creditors	17,500
Electricity charges	1,450	Bills Payable	5,000
Wages	950	Purchase Return	1,000
Heating & Lighting	1,000	R.D.D	500
Trade Expenses	850	Sales	30,200
Sales Return	400	Interest	310
Land & Building	22,000
Furniture	13,000
Cash at Bank	5,000
Investments	7,500
Drawings :
Archana	1,200
Prerana	900
Bad debts	200
Purchases	23,700
	1,18,510		1,18,510

Adjustments:

1) Stock on 31^st March 2019 is valued at Cost Price ₹ 12,000 and Market Price ₹ 17,000.

2) Our customer Mr. Shekhar failed to pay his dues of ₹ 800.

3) 1/8^th of Patents are to be written off.

4) A part of Furniture ₹ 5,000 is purchased on 1^st Oct 2018.

5) Depreciation on Land & Building 10% and on Furniture 5%.

6) Outstanding Expenses Wages ₹ 300 and Electricity Charges ₹ 200.

7) Allow Interest on Capital 3%.

Ledger

Solution

Dr.	In the books of Archana and Prerna Trading and Profit and Loss Account for the year ended on 31st March 2019					Cr.
Particulars		Amount (Rs.)	Amount (Rs.)	Particulars	Amount (Rs.)	Amount (Rs.)
To Opening Stock			8,560	By Sales	30,200
To Purchases		23,700		Less: Sales Return	400	29,800
Less: Purchase Return		1,000	22,700	By Closing Stock		12,000
To Wages		950
Add: O/s Wages		300	1,250
To Heating & Lighting			1,000
To Gross Profit c/d			8,290
			41,800			41800
To Electricity Charges		1,450		By Gross Profit b/d		8,290
Add: O/s Electricity Charges		200	1,650	By Interest		310
To Trade Expenses			850
To R.B.D.D A/c
Bad debts		200
Add: New Bad debts		800
Less: Old Reserve		1,000	500
To Written off Patents		500	250
To Depreciation
Furniture		525
Land and Building		2,200	2,725
To Interest on Capital
Archana		1,200
Prerna		600	1,800
To Net Profit (Transferred to Capital A/c)
Archana		550
Prerna		275	825
			8600			8,600

Balance Sheet as on 31st March 2019
Liabilities	Amount ₹	Amount ₹	Assets	Amount ₹	Amount ₹
Capital Account: Archana			Patents	2,000
Opening Balance	40,000		Less: Written off	250	1,750
Add: Int. on Capital	1,200		Furniture	13,000
Add: Net Profit	550		Less: Depreciation (400 + 125)	525	12,475
	41,750		Land and Building	22,000
Less: Drawings	1,200	40,550	Less: Depreciation	2,200	19,800
Capital Accounts: Prerna			Stock of Stationery		3,000
Opening Balance	20,000		Closing Stock		12,000
Add: Int. on Capital	600		Sundry Debtors	18,500
Add: Net Profit	275		Less: Bad Debts (New)	800	17,700
	20,875		Trade Mark		2,000
Less: Drawings	900	19,975	Bills Receivable		6,300
Other Loans		3,000	Cash at Bank		5,000
Reserve Fund		1,000	Investments		7,500
Sundry Creditors		17,500
Bills Payable		5,000
Outstanding Expenses
Wages	300
Electricity Charges	200	500
		87,525			87,525

Working Notes:

(1) Stationery stock is an asset.

(2) Depreciation on furniture:

13,000

8,000 (Opening Balance)

`= 8,000 xx 5/100` (Depr. for full year)
= Rs. 400.

5,000 (Pur. on 01/10/18)

`= 5,000 xx 6/12 xx 5/100`(Depr. for six months)
= Rs. 125.

Total depreciation. = 400 + 125 + ₹ 525

(3) `1/8 "patents to be written off" = 2,000 × 1/8` = ₹ 250.

(4) As no other expenses are given, Trade Expense is recorded in the Profit and Loss Account.

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Partnership Final Accounts

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Chapter 1: Introduction to Partnership and Partnership Final Accounts - Exercise 1.2 (Practical Problems) [Page 59]

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Chapter 1 Introduction to Partnership and Partnership Final Accounts
Exercise 1.2 (Practical Problems) | Q 6. | Page 59

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RELATED QUESTIONS

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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
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Adjustments:

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Given below is the Trial Balance of M/s Roma and Mona partnership firm. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2012 and Balance Sheet as on that date

Trial Balance as on 31^st March, 2012

Debit Balance	Amount Rs	Credit Balance	Amount Rs
Stock on 1^st April, 2011	52000	Provident fund	50000
Sundry Debtors	84000	Interest on P.F. Investment	2800
Bad debts	3000	Sundry Creditors	84000
Premises	78000	Rent received	9600
Salaries	28000	Reserve for Doubtful Debts	2000
Motor Vehicles	50000	Discount received	3600
Purchases	176000	Sales	320000
Provident Fund Investment	50,000	Capital A/c-
Provident Fund contribution	5500	Roma	50000
Wages	22000	Mona	50000
Rent (for 10 months)	16,000
Office Expenses	5,000
Discount allowed	2,500
	572000		572000

Adjustments:

1) Stock on 31st March, 2012 was valued at Rs 80,000.

2) Goods of Rs 6,000 were sold and despatched on 27th March, 2012, but no entry was made in the books of accounts.

3) Write off Bad debts of Rs 4,000 and provide for R.D.D. at 5% on sundry debtors.

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Trial Balance as on 31^st March, 2010

Debit Balance	Amount (Rs)	Credit Balance	Amount (Rs)
Current A/c-		Capital A/c-
Geeta	4000	Seeta	120000
Opening stock	88,000	Geeta	120000
Purchases	1,76,000	Current A/c- Seeta	5000
Wages	23,500	Sundry Creditors	103000
Salaries	15,000	Bank overdraft	60000
Office Expenses	8000	Sales	308000
Bank Charges	2600
Legal Charges	3000
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Interest	3600
Export Duty	3800
Bad -Debts	4000
Sundry Debtors	82000
Travelling Expenses	3200
Electricity charges	2300
Furniture	37000
8% Debentures (Purchased on 1.10.2009)	40000
	716000		716000

Adjustments:

1) Stock on hand on 31st March, 2010 was valued at Rs 80,000.

2) Goods costing Rs 16,000 destroyed by fire and Insurance Company admitted a claim of Rs 13,000.

3) Provide for outstanding expenses: Salaries Rs 3,000, Wages Rs 2,400.

4) Depreciate Machinery at 10% p.a. Land and Building at 5% p.a.

5) Create Reserve for Bad and doubtful debts at 5% on Sundry Debtors.

6) Legal charges paid in advance Rs 1,200.

7) Provide interest on capital at 8% p.a.

Darshan and Amar were partners sharing profit and losses in the proportion of 2: 1. Their balance sheet is as follows:

Balance sheet as on 31st March 2016

Liabilities	Amt(Rs)	Amt(Rs)	Assets	Amt(Rs)	Amt(Rs)
Capital A/cs:			Building		1,00,000
Darshan	96,000		Furniture		20,000
Amar	64,000	1,60,000	Equipments		10,000
General reserve		18,000	Debtors	63,000
Profit and Loss A/c		6,000	Less: R.D.D	3,000	60,000
Creditors		80,000	Stock		84,000
Pawans loan A/c		26,000	Cash		16,000
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(5) Pawans loand is to be repaid.

Prepare:
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