Maharashtra State BoardHSC Arts 12th Board Exam

Satish and Pradeep Are Partners in a Partnership Firm Firm , Sharing Profit and Losses Equally - Book Keeping and Accountancy

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Satish and Pradeep are partners in a partnership firm, sharing profit and losses equally. From the following Trial Balance and Adjustment given below, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2013 and Balance sheet as on that date.

Balance Sheet as on 31st March 2013

Debit Balance Amount (₹) Credit Balance Amount (₹)
Purchases 220000 Partners' Capital  
Sundry Debtors 45000 Satish 120000
Discount 4000 Pradeep 90000
Opening stock 25000 Sales 430000
Wages and salaries 23000 Sundry Creditors 85000
Manufacturing expenses 25500 Discount 3500
Factory Building 175000    
Plant and Machinery 75000
Advertisement (for 2 yrs w.e.f. 1.1.13) 10000
Salary and wages 45000
Cash in hand 15000
10 % Govt. Bonds (purchased on 01.07.2012) 60000
Warehouse Rent 6000
  728500   728500

Adjustments :

(1) The closing stock was valued at the market price at ₹ 92000, which is 15 % above its cost price.

(2) Depreciation machinery at 10 % p.a.

(3) Outstanding wages were ₹ 2500

(4) Maintain R.D.D. at 5 % on sundry debtors.

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Solution

In the books of M/s Satish and Pradeep
Tradind A/c for the year ended 31.3.2013
Dr.                                                                                             Cr.
Particulars
Amount
Amount
Particulars
Amount
Amount
To Opening stock
 
25000
By Sales
 
430000
To Purchases
 
220000
     
To Wages and Salaries
23000
25500
By Closing Stock   80000
Add: Outstanding
2500
 
 
 
To Manufacturing expenses
 
25500
To Gross Profit C/d   214000
 
510000
 
510000


Profit and Loss A/c
for the year ended 31.3.2013

Dr.                                                                                           Cr.

Particulars
Amount
Amount
Particulars
Amount
Amount
To Discount
 
4000
By Gross Profit C/d
 
214000
To Advertisement
10000
1250
By Discount
 
3500
Less: Prepaid
8750
By Interst on Govt. Bond
 
4500
To Salaries and Wages
 
45000
     
To Warehouse Rent
 
6000
To Depreciation on Machinery
 
7500
To R.D.D.
 
2250
To Net Profit Transferred to Partners Capital A/c
   
Satish Capital A/c
78000
 
Pradeep Capital A/c
78000
156000
   
222000
   
222000


Partners’ Capital A/c

Dr.                                                                                           Cr.

Particulars
Satish
Pradeep
Particulars
Satish
Pradeep
     
By Balance b/d
120000
90000
     
By Profit and Loss A/c
78000
78000
To Balance C/d
198000
168000
     
 
198000
168000
 
198000
168000
 
M/s Satish and Pradeep
Balance Sheet as on 31.3.13

Liabilities
Amount
Amount
Assets
Amount
Amount
Capital :
   
Sundry Debtors
45000
 
Satish
198000
 
Less: New R.D.D.
2250
42750
Pradeep
168000
366000
Factory Building
 
175000
Sundry Creditors
 
85000
Plant and Machinery
75000
 
Outstanding Wages
 
2500
Less: Depreciation
7500
67500
     
Cash in Hand
 
15000
10% Govt. Bond
60000
 
Add: Interest on Bonds
4500
64500
Prepaid Advertisements
 
8750
Closing Stock
 
80000
   
453500
   
453500

Working Notes:

1) Closing Stock:

Since market price is 15% above cost price, we value stock at cost price which is calculated as

cost = `"Market price"/115 xx 100 = "Rs." 80000`

2) Depreciation = Rs. 70000 x 10% = Rs. 7000

3) RDD = 5% x Debtors = Rs. 45000 = Rs. 2250

4) Interest accrued on Government Bond

`= 10% xx "Rs". 60000 xx 9/12 = "Rs". 4500`

5) Deferred Advertisement:

Since the advertisement has been paid for 2 years but only 1 quarter is in the current year, expenditure of 7 quarters is deferred Deferred expenditure = Rs. `10000 xx 7/8` = Rs. 8750

6) Distribution of Profit:

Mohini = Rs. `155000 xx 1/2` = Rs. 77500

Rohini  = Rs. `155000 xx 1/2` = Rs. 77500

Concept: Preparation of Final Accounts
  Is there an error in this question or solution?

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