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Surekha and Sangita Decided to Undertake a Venture Jointly. They Agreed to Share Profits and Losses in the Ratio of 3 : 2. Surekha Supplied from Her Own Stock Goods Worth Rs. 4,00,000

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Question

Surekha and Sangita decided to undertake a venture jointly. They agreed to share profits and losses in the ratio of 3 : 2. Surekha supplied from her own stock goods worth Rs. 4,00,000 and paid Rs. 9,900 for freight and Rs. 2,400 for insurance. Sangita purchased goods of Rs. 3,90,000 for the venture and paid Rs 14,000 for selling expenses. Sangita accepted a bill for 3 months of Rs. 1,90,000 drawn by Surekha as an advance. The bill was discounted immediately by Surekha for Rs. 1,84,000 and the amount of discount was charged to Joint Venture Account. Sangita sold all the goods for Rs. 10,00,000. At end of the venture, the accounts were settled. Give journal entries in the books of Surekha.

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Solution

In the books of Surekha

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

Joint Venture A/c

Dr.

 

4,00,000

 

 

To Purchases A/c

 

 

 

4,00,000

 

(Goods supplied for Joint Venture)

 

 

 

 

 

 

 

 

 

 

 

Joint Venture A/c

 

 

12,300

 

 

To Bank A/c (9,900 + 2,400)

 

 

 

12,300

 

(Expenses paid for Joint Venture)

 

 

 

 

 

 

 

 

 

 

 

Joint Venture A/c

Dr.

 

3,90,000

 

 

To Sangita’s A/c

 

 

 

3,90,000

 

(Goods purchased by Sangita for Joint Venture)

 

 

 

 

 

 

 

 

 

 

 

Joint Venture A/c

Dr.

 

14,000

 

 

To Sangita’s A/c

 

 

 

14,000

 

(Selling expenses paid by Sangita)

 

 

 

 

 

 

 

 

 

 

 

Bills Receivable A/c

Dr.

 

1,90,000

 

 

To Sangita’s A/c

 

 

 

1,90,000

 

(Acceptance received)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,84,000

 

 

Discount A/c

Dr.

 

6,000

 

 

To Bills Receivable A/c

 

 

 

1,90,000

 

(Sangita’s acceptance discounted with bank)

 

 

 

 

 

 

 

 

 

 

 

Joint Venture A/c

Dr.

 

6,000

 

 

    To Discount A/c

 

 

 

6,000

 

(Discount on bill treated as Joint Venture expenditure)

 

 

 

 

 

 

 

 

 

 

 

Sangita’s A/c

Dr.

 

10,00,000

 

 

To Joint Venture A/c

 

 

 

10,00,000

 

(Goods sold)

 

 

 

 

 

 

 

 

 

 

 

Joint Venture A/c

Dr.

 

1,77,700

 

 

To Profit & Loss A/c

 

 

 

1,06,620

 

To Sangita’s A/c

 

 

 

71,080

 

(Profit made on Joint Venture)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,34,920

 

 

To Sangita’s A/c

 

 

 

3,34,920

 

(Final payment received)

 

 

 

 

 

In the Books of Sangita

Joint Venture Account

Dr.

 

Cr.

Date

Particulars

Amount

(Rs)

Date

Particulars

Amount

(Rs)

 

Surekha

4,00,000

 

Bank

10,00,000

 

Surekha:

 

 

 

 

 

Freight

9,900

 

 

 

 

 

Insurance

2,400

12,300

 

 

 

 

Bank:

 

 

 

 

 

Purchases

3,90,000

 

 

 

 

 

Selling Expenses

14,000

4,04,000

 

 

 

 

Surekha (Bill discounted)

6,000

 

 

 

 

Profit transferred to:

 

 

 

 

 

Profit & Loss A/c (2/5th)

71,080

 

 

 

 

 

Surekha (3/5th)

1,06,620

1,77,700

 

 

 

 

 

 

 

 

 

 

 

10,00,000

 

 

10,00,000

 

Surekha’s Account

Dr.

 

Cr.

Date

Particulars

Amount

(Rs)

Date

Particulars

Amount

(Rs)

 

Bills Payable

1,90,000

 

Joint Venture (Goods)

4,00,000

 

Bank (Final Payment)

3,34,920

 

Joint Venture (Freight & Sundry Expenses)

12,300

 

 

 

 

Joint Venture (Discount on bill)

6,000

 

 

 

 

Joint Venture (Profit)

1,06,620

 

 

 

 

 

 

 

 

5,24,920

 

 

5,24,920

 

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Amount
Rs
Credit
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Rs
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            Trial Balance as on 31st 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  
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5,000

 
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Plant and Machinery

75,000

 
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45,000

 
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  728500 728500

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  9,60,000   9,60,000

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  3. land and building to be valued at Rs. 2,40,000 and furniture be reduced by 10%.
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Amount
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Assets
Amount
(₹)
Capital Accounts
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10,000
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10,000
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10,000
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5,000
Creditors
10,900
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6,600
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4,000
Cash
6,600
 
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Amit bhai and Narendra bhai are in Partnership 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 2019 and Balance Sheet as on that date.

Trial Balance as on 31st March 2019

Debit Balance Amount ₹ Credit Balance Amount ₹
Plant & Machinery 2,80,000 Capital A/c:  
Factory Building 75,000 Amitbhai 3,50,000
Sundry Debtors 28,700 Narendrabhai 3,00,000
Purchases 85,500 Sales 1,80,000
Bad Debts 500 Bills Payable 8,500
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(Purchased on 1st Oct 2018)

40,000 Creditors 38,500
Import Duty 1,800 R.D.D. 2,700
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Motive Power 12,000 Purchases Return 2,000
Warehouse Rent 1,800    
Cash in Hand 20,000    
Cash at Bank 70,000    
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10,000    
Salaries 3,800    
Rent 1,500    
Drawings :      
Amitbhai 2,400    
Narendrabhai 3,200    
Furniture 1,95,800    
Bills Receivable 20,700    
Freehold Property 41,000    
  8,97,900   8,97,900

Adjustments:

1) Stock on hand on 31st March 2019 was valued at  ₹ 43,000.

2) Uninsured goods worth ₹ 8,000 were stolen.

3) Create R.D.D at 2% on Sundry debtors.

4) Mr. Patil, our customer becomes insolvent and could not pay his debts of ₹ 500.

5) Outstanding Expenses - Rent ₹ 800 and Salaries ₹ 300

6) Depreciate Factory Building by ₹ 2,500 and Furniture by ₹ 1,800


From the following Trial Balance of M/S Mitesh and Mangesh, 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 as on (1/4/2018) 25,000 Sundry Creditors 38,000
Building 48,500 Sales 1,75,000
Carriage 1,780 Capital:  
Factory Insurance 2,700 Mitesh 1,50,000
Postage 1,600 Mangesh 50,000
Bills Receivable 13,700 Outstanding Salaries 2,000
Sundry Debtors 52,200 Bills Payable 18,000
Return Inward 1,600 Return outword 1,800
Purchases 68,900    
Audit fees 1,800 Current A/c:  
Loose tools 32,000 Mitesh 3,000
Manufacturing Expenses 1,820 Mangesh 2,000
Electricity Charges 2,600    
General Expenses 3,400    
Export duty 1,000    
Cash in hand 75,000    
Bank Balance 29,000    
Conveyance 4,100    
Furniture 64,000    
Salaries 2,000    
Rent, Rate & Taxes 3,700    
Drawings:      
Mitesh 1,200    
Mangesh 2,200    
  4,39,800   4,39,800

Adjustments :

1) Mitesh and Mangesh are sharing Profit and losses in the ratio 3: 1.
2) Partners are entitled to get Commission @ 1% each on Gross Profit.
3) The closing stock is valued at ₹ 23,700.
4) Outstanding Expenses - Audit fees ₹ 400; carriage ₹ 600.
5) The building is valued at ₹ 46,500.
6) Furniture is depreciated by 5%.
7) Provide Interest on Partner's capital at 2.5% pa.
8) Goods of ₹ 900 were taken by Mangesh for his personal use.
9) Write off ₹ 1,000 as Bad Debts and maintain R.D.D at 3% on Sundry Debtors.


From the following Trial Balance and adjustments given below of Reena and Aarti, 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 ₹
Purchases 35,500 Sales 58,200
Sundry Debtors 40,000 Sundry Creditors 25,700
Sales Returns 1,000 Purchases Returns 500
Opening Stock 18,100 R.D.D 800
Bad debts 500 Discount 50
Land and Building 25,000 Commission 250
Furniture 20,000 Capital:  
Discount 1,000 Reena 50,000
Royalties 700 Aarti 30,000
Rent 1,900    
Salaries 3,000    
Wages 800    
Insurance 1,500    
Drawings:      
Reena 2,000    
Aarti 1,000    
Cash at Bank 11,500    
Cash in Hand 2,000    
  1,65,500   1,65,500

Adjustments :

  1. Closing Stock valued at ₹ 22,000.
  2. Write off  ₹ 900 for Bad and doubtful debts and create a provision for Reserve for doubtful debts ₹ 1,000.
  3. Create a provision for Discount on Debtors @ 3% and creditors @ 5%.
  4. Outstanding Expenses - Wages ₹ 700 and Salaries ₹ 800.
  5. Insurance is paid for 15 months, w.e.f. 1st April 2018 
  6. Depreciate Land and Building @ 5%
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Sucheta and Gayatri are Partners sharing Profit and Loss in the ratio 3:2. From the following Trial Balance and additional information, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.

Trial Balance as on 31st March 2019

Particulars Debit ₹ Credit ₹
Purchases and Sales 65,000 1,85,500
Works Manager's Salary 2,300  
Capital:    
- Sucheta   75,000
- Gayatri   40,000
Opening Stock 18,700  
Debtors and Creditors 47,500 35,000
Wages and Salaries 4,000  
Bills Receivable 22,000  
Bills Payable   27,300
Discount   400
Motive Power 1,350  
Custom duty 1,500  
Interest   1,300
Unproductive Wages 3,000  
Audit fees 2,500  
Rent 1,800  
Conveyance 2,000  
Goodwill 25,000  
Copyrights 20,000  
Building 88,000  
Partner (Sucheta's) Loan   6,150
Investments 40,000  
Cash at Bank 26,000  
  3,70,650 3,70,650

Adjustments:

  1. Stock on 31st March 2019 was valued at ₹ 19,700.
  2. Goods costing ₹ 3,000 distributed as a free sample.
  3. Motive Power includes ₹ 500 paid for the deposit of the Power Meter.
  4. Depreciate Building @ 5%.
  5. Write of ₹ 2,000 for Bad debts and maintain R.D.D at 3% on Debtors.
  6. Bills Receivable included dishonored of Bill of  ₹ 4,000.

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%. 


Nana and Nani are Partners in Partnership Firm sharing Profits and Losses equally. You are required to give effects of Adjustments in Profit & Loss A/c and Balance Sheet with the help of the following information.

Trial Balance as on 31st March 2019

Debit Balance Amount ₹ Credit Balance Amount ₹
Insurance 15,000 Capital A/c  
Land and building 50,000 Nana 50,000
(Addition of 20,000 w.e.f 1st July 2018)   Nani 50,000
Salaries 5,000 10% Bank loan taken on 1st Oct. 2018 30,000
Export Duty 2,500 Interest 1,500
Interest 1,000 Bills Payable 8,000
Furniture 40,000    
Debtors 26,000    
  1,39,500   1,39,500

Adjustments :

1) Gross profit amounted to ₹ 34,500.

2) Insurance Paid for 15 months w.e.f. 1. 4. 2018.

3) Depreciate Land and Building at 10% p.a. and Furniture at 5% p.a.

4) Write off ₹ 1,000 for Bad Debts and maintain R.D.D at 5% on Sundry Debtors.

5) Closing Stock is valued at ₹ 34,500.


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.


The insurance premium is paid for the year ending 1st September 2019 amounted to ₹ 1,500. Calculate prepaid insurance assuming that the year ending is 31st March 2019.


Find out Gross profit/Gross loss Purchases ₹ 30,000, Sales ₹ 15,000, Carriage Inward ₹ 2,400, Opening Stock ₹ 10,000, Purchase Returns ₹ 1,000, Closing Stock ₹ 36,000.


Borrowed loan from Bank of Maharashtra ₹ 2,00,000 on 1st October 2019 at a rate of 15% p.a. Calculate Interest on Bank Loan for the year 2019-20 assuming that the financial year ends on 31st March, every year.


Kavya and Bhavya are partners, sharing profits and losses in the ratio 3 : 2. From the following Trial Balance and adjustments, prepare: Trading and Profit and loss Account for the year ending and Balance Sheet as on that date.

Trial Balance as on 31st March, 2020
Particulars Debit Amount (₹) Credit Amount (₹)
Capital:    
   Kavya   7,50,000
   Bhavya   5,00,000
Sundry Debtors 2,25,000  
Sundry Creditors   1,50,000
Rent (10 Months) 5,000  
Opening Stock 2,67,750  
Building 4,25,000  
Salaries 25,000  
Commission 400 475
Vehicles 1,85,000  
Sales   4,20,250
Purchases 3,20,250  
Wages 5,000  
Office Expenses 10,000  
Bank Overdraft   75,000
Goods Returns 2,750 1,750
Provident Fund Investment 4,00,000  
Cash in Hand 20,000  
Provident Fund Contribution 50,000  
Provident Fund   1,40,000
Cash at Bank 1,00,000  
Interest on P.F. Investment   21,000
Drawing:    
   Kavya 10,000  
   Bhavya 7,500  
Bad-debts 1,675  
R.D.D.   1,850
Total 20,60,325 20,60,325

Adjustments :

  1. Closing Stock ₹ 1,80,000.
  2. Outstanding wages ₹ 1,500 and Salaries ₹ 1,000
  3. Depreciate Vehicles @ 5% p.a.
  4. Write off Bad debts of ₹ 2,500 and provide for R.D.D at 5% Sundry Debtors.
  5. Bhavya withdrew Goods of ₹ 3,000 for her personal use.

Sun and Moon are partners sharing profits and losses equally. From the following trial balance and additional information prepare trading and Profit and Loss Account for the year ended 31st march 2020 and balance sheet as on that date.

Trial Balance as on 31st March, 2020
Debit Balance Amount (₹) Credit Balance Amount (₹)
Stock (1/4/2019) 65,000 General Reserve 14,500
Bills Receivable 28,000 Capital:  
Wages and Salaries 9,000 Sun 1,60,000
 Sundry Debtors 1,32,500 Moon  1,20,000
Bad-debts  1,000 Creditors 98,000
Purchases   1,48,000 R.D.D. 1,800
Motor car  68,000 Sales  2,85,500
Machinery  1,14,800 Outstanding Wages 700
Audit Fees   1,200 Purchases Returns 4,000
Sales Return 2,000 Discount 1,800
Discount  2,300    
Building 75,000    
Cash at Bank  12,000    
10% Investment  20,000    
Advertisement (Paid for 9 months) 4,500    
Royalties 3,000    
  6,86,300   6,86,300

Adjustment and Additional Information:

  1. Closing Stock ₹ 40,000.
  2. Depreciate Building and Machinery @ 5% and 3% respectively.
  3. Bills Receivable included dishonoured bill of ₹ 3000.
  4. Goods worth ₹ 1000 taken by sun for personal use was not entered in the books of accounts.
  5. Write off ₹ 1800 as Bad debts and maintain R.D.D. at 5% on Sundry Debtors.
  6. Goods of ₹ 6000 were sold but no entry was made in the books of accounts.

From the following information, calculate Current Assets:

Debtors ₹ 60,000,  Creditors ₹ 30,000, Bills payable ₹ 20,000, Stock ₹ 30,000, Loose tools ₹ 10,000, Bank overdraft ₹ 10,000.


Varsha and Harsha are partners sharing profits and losses in their capital ratio. You are required to prepare Trading Account, Profit and Loss Account for the year ending 31st March, 2020 and Balance sheet as on that date:

 Trial Balance as on 31st March, 2020
Debit Balance  Amount ₹ Credit Balance  Amount ₹
sundry Debtors 56,000 Sales  2,40,000
Purchases 1,10,000 Sundry Creditors 99,600
Plant & machinery 1,60,000 Purchases Return 2,000
Furniture 1,05,800 Capital accounts  
Salaries 8,600 Varsha 1,80,000
Sales return 1,000 Harsh 60,000
Cash in hand 1,02,000 Current Accounts:  
Opening stock 35,600 Varsha 10,000
Rent, Rates & Taxes 9,000 Harsha 6,000
Advertisement 9,600    
  5,97,600   5,97,600

Adjustments:

  1. Stock on 31st March, 2020 was valued at ₹ 74,000.
  2. Depreciation on Plant and Machinery @ 5% p.a.
  3. Partners are entitled to get Interest on Capital at 5% p.a.
  4. Outstanding expenses: Salaries ₹ 700.
  5. Provide further Bad debts of ₹ 1,680 on Sundry debtors.

State whether the following statement is True or False with reason:

Profit and Loss Account is a Real Account.


A ______ is an Intangible Asset.


Find odd one.


Find odd one


Find odd one.


Complete the following Table:

Creditors Bills Payable Third-Party Liabilities
16,000 12,000 ?

Find the odd one:


Royalty paid on production is shown in the ______.


Credit balance of Profit and Loss Suspense Account is shown in the Balance Sheet on ______ side.


Find the odd one:


From the following Trial Balance of Hira and Manek, prepare Trading and Profit and Loss Account for the year ended 31st March, 2023 and Balance Sheet as on that date.

Trial Balance as on 31st March, 2023
Debit Balances Amount (₹) Credit Balances Amount (₹)
Stock (1 /4/2022) 50,000 Bank Overdraft 10,000
Debtors 1,61,000 Bills Payable 25,000
Bills Receivable 20,000 Creditors 1,36,000
Purchases 4,17,000 Sales 6,50,000
Sales Returns 2,000 Outstanding Rent 4,000
Carriage Inward 6,000  Unpaid Wages 3,000
Carriage Outward 9,000 Capital A/cs:  
Motor Vehicle 1,10,000 Hira 1,50,000
General Expenses 3,600 Manek 1,50,000
Export Duty 1,800 Purchase Returns 2,000
Advertisement (For 3 years from 1/10/2022) 9,600    
Printing and Stationery 2,400    
Drawings:      
Hira 7,000    
Manek 4,000    
Leasehold Premises 2,20,000    
Cash at Bank 90,000    
Furniture 16,600    
  11,30,000   11,30,000

Adjustments:

(1) Closing stock is valued at ₹ 64,000.

(2) Provide provision for doubtful debts ₹ 4,000.

(3) Create reserve for discount on debtors @ 3%

(4) Value of leasehold premises on 31st March, 2023 ₹ 2,00,000.

(5) Outstanding expenses: Printing and Stationery ₹ 1,000.


Mama and Kaka are partners in partnership firm sharing profits and losses equally. You are required to prepare 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 Balances Amount (₹) Cebit Balances Amount (₹)
Insurance 30,000 Capital Accounts:  
Land and Building ((Addition of ₹ 40,000 wef. 1st July, 2018)) 1,00,000 Mama 1,00,000
Salaries 10,000 Kaka 1,00,000
Export duty 5,000 10% Bank Loan (taken on1st Oct. 2018) 60,000
Interest 2,000 Interest 3,000
Furniture 80,000 Bills payable 16,000
Debtors 52,000   -
  2,79,000   2,79,000

Adjustment:

  1. Gross profit amounted to ₹ 69,000.
  2. Prepaid insurance ₹ 7,500.
  3. Depreciate Land and Building at 10% p.a. and Furniture 5% p.a.
  4. Write ₹ 2,000 for bad debts and maintain R.D.D. at 5% on sundry debtors.
  5. Closing stock is valued at ₹ 69,000.

Find odd one.


Find odd one.


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