Sun and Moon are Partners in Partnership Firm sharing Profits and Losses equally. You are required to give the effects of Adjustments with the help of the following information. Trial Balance as on 31st March 2019 Debit Balance Amount ₹ Credit Balance Amount ₹ Land & Building 40,000 Capital A/C Furniture 18,000 Sun 33,500 Machinery 40,000 Moon 33,500 (Purchased on 1/7/18) Current A/c: Sun 6,000 Goodwill 2,000 Sundry Creditors 25,000 Wages 2,000 Bank Overdraft 10,000 Current A/c: Moon 4,000 Reserve Fund 5,000 8% Debentures 8,000 Providend Fund 5,000 (Purchased on 1/10/18) Providend Fund Investment 3,500 Stock of Postal stamps 500 1,18,000 1,18,000 Adjustments: 1) Partners are entitled to get salary ₹ 6,000 p.a. in addition to their profit & loss sharing. 2) Depreciation on Land & Building, Furniture & Machinery @10%, 5% and 3% respectively. 3) Interest on Capital 5% p.a. 4) Closing Stock ₹ 60,743. 5) Wages included ₹ 1,000 as advance is given to workers. 6) Interest due but not paid ₹ 800. 7) Total Net Profit amounted to ₹ 38,113.

Dr. In the books of Sun and Moon Partner’s Current Account Cr. Particulars Sun Moon Particulars Sun Moon To Balance b/d 4,000 By Balance b/d 6,000 - By Profit and Loss A/c (Share in Net Profit) 19,056 19,056 By Profit and Loss A/c (Partners Salary) 6,000 6,000 By Profit and Loss A/c (Interest on Capital) 1,675 1,675 To Balance c/d 32,731 22,732 32,731 26,732 32,731 26,732 By Balance b/d 32,731 22,732 Balance Sheet as on 31st March 2019 Liabilities Amt ₹ Amt ₹ Assets Amt ₹ Amt ₹ Capital Accounts: Land & Building 40,000 Sun 33,500 Less: Depreciation 4,000 36,000 Moon 33,500 67,000 Furniture 18,000 Current A/cs: Less: Depreciation 900 17,100 Sun 32,731 Machinery 40,000 Moon 22,732 55,463 Less: Depreciation 900 39,100 Sundry Creditors 25,000 Goodwill 2000 Bank Overdraft 10,000 8 % Debentures 8,000 Reserve Fund 5,000 Add: O/s Interest 320 8,320 Provident Fund 5,000 Provident Fund Investments 3,500 O/s Interest 800 Stock & Postal Stamps 500 1,68,263 Closing Stock 60,743 Advance to Workers 1,000 1,68,263 1,68,263 Working Notes: (1) Depreciation on machinery is calculated for 9 months. (i.e. from 1/7/18 to 31/3/19) Depreciation = `40,000xx 3/100 xx9/12` = ₹ 900 (2) Interest on 8 % debentures, calculated for 6 months. (i.e. from 1/10/18 to 31/3/19) I = `"PRN"/100= 8,000 xx 8/ 100 xx 6 /12` = ₹ 320 (3) Advance given to workers (by firm) ₹ 1,000 is an asset for the firm, so, it is shown on Assets side. (4) Interest due but not paid is a liability for firm, so, it is shown on the Liabilities side

Sun and Moon are Partners in Partnership Firm sharing Profits and Losses equally. You are required to give the effects of Adjustments with the help of the following information.

Question

Sun and Moon are Partners in Partnership Firm sharing Profits and Losses equally. You are required to give the effects of Adjustments with the help of the following information.

Trial Balance as on 31st March 2019

Debit Balance	Amount ₹	Credit Balance	Amount ₹
Land & Building	40,000	Capital A/C
Furniture	18,000	Sun	33,500
Machinery	40,000	Moon	33,500
(Purchased on 1/7/18)		Current A/c: Sun	6,000
Goodwill	2,000	Sundry Creditors	25,000
Wages	2,000	Bank Overdraft	10,000
Current A/c: Moon	4,000	Reserve Fund	5,000
8% Debentures	8,000	Providend Fund	5,000
(Purchased on 1/10/18)
Providend Fund Investment	3,500
Stock of Postal stamps	500
	1,18,000		1,18,000

Adjustments:

1) Partners are entitled to get salary ₹ 6,000 p.a. in addition to their profit & loss sharing.

2) Depreciation on Land & Building, Furniture & Machinery @10%, 5% and 3% respectively.

3) Interest on Capital 5% p.a.

4) Closing Stock ₹ 60,743.

5) Wages included ₹ 1,000 as advance is given to workers.

6) Interest due but not paid ₹ 800.

7) Total Net Profit amounted to ₹ 38,113.

Ledger

Solution

Dr.	In the books of Sun and Moon Partner’s Current Account						Cr.
Particulars		Sun	Moon	Particulars	Sun	Moon
To Balance b/d			4,000	By Balance b/d	6,000	-
				By Profit and Loss A/c (Share in Net Profit)	19,056	19,056
				By Profit and Loss A/c (Partners Salary)	6,000	6,000
				By Profit and Loss A/c (Interest on Capital)	1,675	1,675
To Balance c/d		32,731	22,732
		32,731	26,732		32,731	26,732
				By Balance b/d	32,731	22,732

Balance Sheet as on 31st March 2019
Liabilities	Amt ₹	Amt ₹	Assets	Amt ₹	Amt ₹
Capital Accounts:			Land & Building	40,000
Sun	33,500		Less: Depreciation	4,000	36,000
Moon	33,500	67,000	Furniture	18,000
Current A/cs:			Less: Depreciation	900	17,100
Sun	32,731		Machinery	40,000
Moon	22,732	55,463	Less: Depreciation	900	39,100
Sundry Creditors		25,000	Goodwill		2000
Bank Overdraft		10,000	8 % Debentures	8,000
Reserve Fund		5,000	Add: O/s Interest	320	8,320
Provident Fund		5,000	Provident Fund Investments		3,500
O/s Interest		800	Stock & Postal Stamps		500
		1,68,263	Closing Stock		60,743
			Advance to Workers		1,000
		1,68,263			1,68,263

Working Notes:

(1) Depreciation on machinery is calculated for 9 months. (i.e. from 1/7/18 to 31/3/19)

Depreciation = `40,000xx 3/100 xx9/12` = ₹ 900

(2) Interest on 8 % debentures, calculated for 6 months. (i.e. from 1/10/18 to 31/3/19)

I = `"PRN"/100= 8,000 xx 8/ 100 xx 6 /12` = ₹ 320

(3) Advance given to workers (by firm) ₹ 1,000 is an asset for the firm, so, it is shown on Assets side.

(4) Interest due but not paid is a liability for firm, so, it is shown on the Liabilities side

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Partnership Final Accounts

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Q 9.Q 8.Q 10.

Chapter 1: Introduction to Partnership and Partnership Final Accounts - Exercise 1.2 (Practical Problems) [Page 61]

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Balbharati Book-Keeping and Accountancy [English] Standard 12 Maharashtra State Board

Chapter 1 Introduction to Partnership and Partnership Final Accounts
Exercise 1.2 (Practical Problems) | Q 9. | Page 61

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Credit balance of Profit and Loss Account.

Sanjay and Sudhir are partners sharing profit and losses in the ratio 3: 2. The Trial Balance of the firm on 31st March, 2010 was follows:

Trial Balance as on 31st March, 2010
Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
Opening stock	20,000	Capital A/c's
Purchases	30,000	Sanjay	40,000
Debtors	12,000	Sudhir	30,000
Wages	5,000	Sales	70,000
Salaries	10,000	Sundry Creditors	21,000
Land and building	30,000	Bills Payable	20,000
Plant and machinery	25,000	Discount	5,000
Furniture	16,000	Outstanding Rent	1,500
Advertisement (for 2 years)	6,000
Bills Receivable	8,000
Insurance	2,000
Drawings:
Sanjay	2,000
Sudhir	3,000
Cash in hand	5,500
Rent	10,000
Power and Fuel	3,000
	1,87,500		1,87,500

Adjustments:

1) Stock on hand on 31st March, 2010 was at Rs. 35,000.

2) Write off Rs. 2,000, for further Bad debts and maintain R.D.D. at 5% on debtors.

3) Depreciate Land and Building at 5% and Machinery at 10%.

4) Outstanding expenses were wages Rs 2,000 and salary Rs 1,000.

5) Credit purchases amounted to Rs 4,000 were not recorded in the books of accounts.

6) Provide interest on Partners Capital at 5% p.a.

From the above Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that data.

Rohan and Roshan are partners in ‘Shan Traders’ sharing profits and losses in the ratio of 2:1. From the following Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2011 and Balance Sheet as on that date

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
Furniture	18,500	Return outward	2,500
Carriage	1,500	Capital A/c:
Wages and Salaries	35,000	Rohan	90,000
Bills Receivable	5,000	Roshan	50,000
Sundry Debtors	32,000
Conveyance	4,000
Rent, Rates and Taxes	2,000
Return Inward	3,500
Cash in hand	14,750
Land and Building	83,500
Bad debts	1,750
Patents	25,000
	3,52,500		3,52,500

Adjustments:

Closing stock: Cost price Rs 25,000 and market price Rs 30,000.
An amount of Rs 3,500 spent for repairs to Building is debited to Building account.
Depreciate plant and Machinery and Building at 5% p.a.
Goods of Rs 750 taken by Roshan for this personal use.
Included in wages advances given to workers Rs 3,000.
Provide Rs 1,500 for bad and doubtful debts on Debtors.

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.

4) Provide reserve for discount on debtors at 2% and on creditors at 3%.

5) Outstanding wages Rs 4,000 and outstanding salaries Rs 3,066.

6) Depreciate Motor Vehicle at 5% p.a.

Given below is the Trial Balance of M/s Seeta and Geeta as on 31^st March, 2010. You are required to prepare Trading and Profit and Loss Account for the year ended 31^st March, 2010 and Balance Sheet on that date.

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
Machinery	90000
Land and building	130000
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.

From the following Trial Balance of M/s Mahesh and Umesh, 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. Profit sharing ratio of Mahesh and Umesh was 3/5th and 2/5th respectively.

Trial Balance as on 31^st March, 2013
Debit Balance	Amount (₹)	Credit Balance	Amount (₹)
Investments	56,000	Capital A/c:
Carriage	7,000	Mahesh	1,62,000
Loose Tools	17,000	Umesh	1,08,000
Building	1,50,000	Current A/c:
Salary	13,000	Mahesh	16,200
Audit fees	8,500	Umesh	10,800
Opening stock	83,000	Sundry Creditors	99,000
Wages	7,500	Sales	4,20,000
Purchases	1,97,000	Bank Overdraft	56,400
Motive Power	15,000
Bad Debts	6,400
Printing and Stationery	4000
Debtors	96,000
Cash at Bank	52,000
Machinery	72,000
Motor Van	88,000
	8,72,400		8,72,400

Adjustments:

1) Stock on hand on 31st March, 2013 was valued at Rs 76,000.

2) Interest on partner’s capital at 5% p.a. was allowed.

3) Goods worth Rs 2,000 and Rs 1,500 withdrawn by Mahesh and Umesh respectively for their personal use.

4) Mahesh is entitled to get salary of Rs 6,500 and Umesh is to be given 20% commission on sales.

5) Rs. 2,500 due from customer is not recoverable.

6) Depreciate Motor Van at 8% p.a. and Building at 7% p.a.

Mohini and Rohini are in partnership firm sharing profits and losses equally. From the following Trial Balance and adjustments given below, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that date.

Trial Balance as on 31^st March, 2010

Particulars	Debit Amount Rs.	Credit Amount Rs
Partner’s Capital A/c-
Mohini		120000
Rohini		90000
Purchases and Sales	220000	430000
Sundry Debtors and Creditors	45000	35000
Bills Receivable and Bills Payable	45000	50000
Discount	4000	3500
Opening stock	25000
Wages and Salaries	23000
Manufacturing Expenses	9,000
Factory Insurances	5,000
Factory Building	1,40,000
Plant and Machinery	75,000
Advertisement (for 2years w.e.f. 1^st Jan. 2010)	10,000
Salaries and Wages	45,000
Warehouse rent	6,000
Import duty	11,500
Cash in hand	5,000
10% Government Bond (Purchased on 1st July 2009)	60000
	728500	728500

Adjustments:

1) Closing stock was valued at market price Rs 92,000 which is 15% above its cost price.

2) Goods costing Rs 3,000 purchased and received on 31st March, 2010 were not recorded in purchase book.

3) Depreciate Machinery at 10% p.a.

4) Outstanding Wages were Rs 2,500.

5) Goods of Rs 2,000 were taken by Mohini for personal use but no entry was made in the books of account.

6) Maintain R.D.D at 5% on Sundry Debtors.

Keshav and Madhav were partners sharing the profits and losses in the ratio of 2:3. Their Balance Sheet is as follows:

Balance Sheet as on 31^st March, 2011

Liabilities	Amount (Rs)	Assets		Amount (Rs)
Capital Accounts :		Live stock		20000
Keshav	250000	Building		138000
Madhav	260000	Investment		45000
Creditors	8500	Loose Tools		38000
		Debtors	90000	72000
		(-)R.D.D	18000	72000
		Profit and Loss A/c		15000
		Closing Stock		104500
		Cash in Hand		86000
	518500			518500

On 1^st April, 2011 they admitted Uddhav on the following terms:

1) The new profit sharing ratio is equal.

2) Uddhav brings Rs 2,00,000 as his capital and Rs 80,000 as share of goodwill in cash.

3) Prepaid insurance of Rs 7,500 was not recorded in the books.

4) Loose tools were found undervalued by 5% and Building was found overvalued by 15% in the books.

5) All debtors are considered as good and out of creditors Rs 500 is no longer payable.

6) The market Value of Investment is 50% more than its book value.

Prepare, Profit and Loss Adjustment in A/c, Capital Accounts of partners and Balance Sheet of the new firm.

Ashok and Sangmesh are in partnership sharing profit 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 Account for the year ended on 31st March 2016 and Balance sheet as on that date:

Trial Balance as on 31st March 2016
Particulars	Debit Amount (₹)	Credit Amount (₹)
Prepaid insurance	3,200
Insurance	8,000
R.D.D.		4,000
Discount	3,200
Postage and telephone	12,800
Debtors and creditors	2,64,000	2,72,000
Salaries	2,24,000
Wages	96,000
Opening stock	1,92,000
Carriage	4,000
Purchased and sales	7,72,800	12,06,400
Return inward/Outward	22,400	36,800
Bank Overdraft		4,83,200
Plant and Machinery	96,000
Land and Building	7,04,000
Partner's Capital accounts:
Ashok		2,08,000
Sangmesh		1,92,000
	24,02,400	24,02,400

Adjustment:

Write off Rs. 8,000 for bad debts and provide R.D.D. @ 5% on debtors.
Goods worth Rs. 16,000 were distributed as free samples.
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.

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
		2,90,000			2,90,000

On 1st April, 2016 Ranjit is admitted in the partnership on the following terms.

(1) Ranjit should bring in cash Rs 48,000 as capital for 1/5th share in future profits.
(2) Goodwill was raised in the books of the firm for Rs 18,000
(3) Building is revalued st RS 1,12,000 and tghe value of stock to be reduced by Rs 6,000
(4) Reserve for doubtful debts be maintained at Rs 1,800.
(5) Pawans loand is to be repaid.

Prepare:
(1) Revaluation A/c
(2) Capital A/cs of partners and
(3) Balance sheet of the new firm

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The accounts that are prepared at the end of each accounting year.

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An asset which can be converted into cash easily.

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The account in which selling expenses of the business are recorded.