Miss Meena and Miss Reena are in partnership sharing profits and losses in the ratio of 3: 2.
From the following trial balance and adjustments, you are required to prepare Trading Account, Profit and Loss Account for the year ended 31st March 2013 and Balance Sheet as on that date.
Trial Balance as on 31.03.2013
|Trial Balance as on 31.03.2013|
|Particulars||Debit Amount (Rs)||Particulars||Credit Amount (Rs)|
|Plant and Machinery||1,20,000||Meena 3,00,000|
|Opening Stock||90,000||Sundry Creditors||1,80,000|
|Postage and Telegram||4,000|
1. Stock on hand on 31st March 2013 was valued at Rs. 1,10,000.
2. Depreciate plant and machinery at 10% p.a.
3. Create reserve for doubtful debts at 5% on sundry debtors.
4. Salaries include Rs. 2,500 as advance to workers.
5. Partners are allowed interest at 5% p.a. on their capitals.
Financial Statements of Meena and Reena
for the year ended March 31, 2013
|Gross Profit (Balancing Figure)||1,42,000|
|Profit and Loss Account for the year ended March 31, 2013|
|Particulars||Amount (Rs)||Particulars||Amount (Rs)|
|Old Bad Debts 3000||Gross Profit||1,42,000|
Add: New Provision for
Doubtful Debt 7,500
|Less: Prepaid Salaries 2,500||25,500|
|Depreciation on Plant and Machinery||12,000|
|To Interest on Capital:|
|Postage & Telegrams||4,000|
|Net Profit t/f to Partner’s Capital A/c (Balancing Figure)|
as on March 31, 2013
|Liabilities||Amount (Rs)||Assets||Amount (Rs)|
|Meena 3,00,000||Plant & Machinery 1,20,000|
|Add: Interest on Capital 15,000||Less: Depreciation 12,000||1,08,000|
|Add: Net Profit 31,800||Building||4,00,000|
|Less: Drawings 10,000||3,36,800||Current Assets|
|Reena 2,00,000||Closing Stock||1,10,000|
|Add: Interest on Capital 10,000||Debtors 1,50,000|
|Add: Net Profit 21,200||
Less: Reserve for
Doubtful Debt 7,500
|Less: Drawings 5,000||2,26,200||Prepaid Salaries||2,500|
1. Calculation of Depreciation
Depreciation on Plant & Machinery = 1,20,000 × 10/100 = Rs 12,000
2. Calculation of Interest on Capital
Meena =3,00,000 × 5/100 = Rs 15000
Reena = 200000 x 5/100 = Rs 10000
3. Calculation of Distribution of Profit
Meena = 53,000 × 3/5 = Rs 31,800
Reena = 53,000 × 2/5 = Rs 21,200
Video Tutorials For All Subjects
- Reconstitution of Partnership