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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Trial Balance as on 31^st March, 2010

Particulars	Debit Amount Rs.	Credit Amount Rs
Partner’s Capital A/c-
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Purchases and Sales	220000	430000
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Adjustments:

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Trial Balance as on 31^st March, 2013

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Postage and Telegram	1,750	Sundry Creditors	72700
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Adjustments:
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Balance sheet as on 31st March, 2016
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Capital A/c:		Land & building	2,00,000
Harsha	2,80,000	Furniture	76,000
Varsha	2,80,000	Sundry debtors	3,00,000
Sundry creditors	4,00,000	Stock	1,60,000
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She should bring Rs. 1,00,000 as her capital for 1/4th share in future profits.
land and building to be valued at Rs. 2,40,000 and furniture be reduced by 10%.
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The stock is to be taken at a value of Rs. 2,00,000.
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Trial Balance as on 31st March 2016
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Prepaid insurance	3,200
Insurance	8,000
R.D.D.		4,000
Discount	3,200
Postage and telephone	12,800
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Wages	96,000
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Bank Overdraft		4,83,200
Plant and Machinery	96,000
Land and Building	7,04,000
Partner's Capital accounts:
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Sangmesh		1,92,000
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Closing stock on 31st March 2016 was valued at the cost of Rs. 2,24,000 while its market price was Rs. 2,40,000.
The salaries were outstanding at Rs. 8,000.
Depreciation: Land and Building @ 5% p.a. and Plant and Machinery @ 10 % p.a.

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