Jitesh and Lailesh are in partnership sharing profits and losses in the ratio of 2:1. From the following Trial Balance and adjustments given below, you are required to prepare Trading and Profit and Loss A/c for the year ended 31st March 2013 and the Balance Sheet as on that date:
| Trial Balance as on 31st March 2013 | ||
| Particulars | Debit Amount (Rs) | Credit Amount (Rs) |
| Prepaid Insurance | 800 | |
| Insurance | 2,000 | |
| R.B.D.D. | 1,000 | |
| Discount | 800 | |
| Postage and telephone | 3,200 | |
| Salaries | 56,000 | |
| Debtors and Creditors | 66,000 | 68,000 |
| Wages | 24,000 | |
| Opening Stock | 48,000 | |
| Carriage | 1,000 | |
| Purchases and Sales | 1,93,200 | 3,01,600 |
| Return inwards and outwards | 5,600 | 9,200 |
| Bank overdraft | 1,20,800 | |
| Plant & Machinery | 24,000 | |
| Land & Building | 1,76,000 | |
| Capital | ||
| Jitesh | 52,000 | |
| Lailesh | 48,000 | |
| Total | 6,00,600 | 6,00,600 |
2. Goods worth Rs. 4,000 were distributed as free samples.
3. Closing stock on 31.03.2013 was valued at the cost Rs. 56,000 while its market price was Rs. 60,000.
4. Salaries were outstanding Rs. 2,000.
5. Depreciate:
Plant & Machinery @ 10% p.a.
Solution
|
Financial Statements of Jitesh and Lailesh Trading Account |
|||
| Dr. | Cr. | ||
| Particulars | Amount (Rs) | Particulars | Amount (Rs) |
| Opening Stock | 48,000 | Sales 3,01,600 | |
| Purchases 1,93,200 | Less: Return Inwards 5,600 | 2,96,000 | |
| Less: Return Outwards 9,200 | Closing Stock | 56,000 | |
| Less: Free Samples 4,000 | 1,80,000 | ||
| Carriage | 1,000 | ||
| Wages | 24,000 | ||
| Gross Profit (Balancing Figure) | 99,000 | ||
| 3,52,000 | 3,52,000 | ||
| Profit and Loss Account for the year ended March 31, 2013 | |||
| Dr. | Cr. | ||
| Particulars | Amount (Rs) | Particulars | Amount (Rs) |
| Discount | 800 | Gross Profit | 99000 |
| Free Samples | 4,000 | ||
| Salary 56,000 | |||
| Add: Outstanding 2,000 | 58,000 | ||
| Depreciation on Land & Building | 8,800 | ||
| Depreciation on Plant & Machinery | 2,400 | ||
| Insurance | 2,000 | ||
| Old Bad Debts | |||
| Add: Further Bad Debts 2,000 | |||
| Add: New Provision 3,200 | |||
| Less: Old Provision 1,000 | 4,200 | ||
| Postage & Telephone | 3,200 | ||
| Net Profit (Balancing Figure) | |||
| Jitesh 10400 | |||
| Lailesh 5200 | 15,600 | ||
| 99,000 | 99,000 | ||
| Balance Sheet as on March 31, 2013 | |||
| Liabilities | Amount (Rs) | Assets | Amount (Rs) |
| Capital | Fixed Assets | ||
| Jitesh 52000 | Land & Building 176000 | ||
| Add: Profit 10400 | 62400 | Less: Depreciation 8800 | 167200 |
| Lailesh 48000 | Plant & Machinery 24000 | ||
| Add: Profit 5200 | 53,200 | Less: Depreciation 2400 | 21600 |
| Current Liabilities | Current Assets | ||
| Creditors | 68000 | Closing Stock | 56000 |
| Outstanding Salary | 2000 | Debtors 66000 | |
| Bank Overdraft | 120800 | Less: Further B. Debts 2000 | |
| Less: New Provision 3200 | 60800 | ||
| Prepaid Insurance | 800 | ||
| 3,06,400 | 3,06,400 | ||
Working Notes:
WN1 Calculation of Depreciation
Depreciation on Land and Building=1,76,000×5100=Rs 8,800
Depreciation on Plant and Machinery = 24,000×10100=Rs 2,400
WN2 Calculation of Provision for Doubtful Debts
Provisionfor Doubtful Debts=(66,000−2,000)×5100 = Rs 3,200
WN3 Calculation of Share in Profit
Jitesh's Share in Profit=15,600 × 2/3=Rs 10,400
Lailesh's Share in Profit=15,600 × 1/3=Rs 5,200
