Practical Problem 01

Practical Problem | Q 1 | Page 54

Amitbhai and Narendrabhai 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
Debit	₹	Credit	₹
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
Sales Return	2,200	Discount	1,200
10% Govt. Bond	40,000	Creditors	38,500
(Purchased on 1st Oct, 2018)		R.D.D.	2,700
Import Duty	1,800	Bank Loan	15,000
Legal Charges	2,000	Purchases Return	2,000
Motive Power	12,000
Warehouse Rent	1,800
Cash in Hand	20,000
Cash at Bank	70,000
Advertisement	10,000
(for 2 years, w.e.f 1st Jan 2019)
Salaries	3,800
Rent	1,500
Drawings :
Amitbhai	2,400
Narendrabhai	3,200
Furniture	1,95,800
Bills Receivable	20,700
Free hold 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 became insolvent and could not pay his debts of ₹ 500.5) Outstanding Expenses – Rent ₹ 800 and Salaries ₹ 3006) Depreciate Factory Building by ₹ 2,500 and Furniture by ₹ 1,800

SOLUTION: (Highlighted Part are Adjustment)

In the books of Amitbhai and Narendrabhai
Dr Trading and Profit and loss accounts for the year ended 31st March, 2019. Cr
Particular	Rs	Rs	Particular	Rs	Rs
To Opening Stock		——	By Sales	1,80,000
To Purchases	85,500		Less: Sales Return	-2,200	1,77,800
Less Return	-2,000	83,500	By loss by theif		8,000
To Import Duty		1,800	By Cl. Stock		43,000
To Motive Power		12,000
To Gross Profit c/d		1,31,500
		2,28,800			2,28,800
			By Gross Profit b/d		1,31,500
To Legal Charges		2,000	By Discount		1,200
To Warehouse Rent		1,800
To Advertisement	10,000		By old RDD	2700
(for 2 years, w.e.f 1st Jan 2019)			Less Old Bad debts	-500
Less: Prepaid	-8,750	1250	Less New Bad Debts	-500
To Salaries	3800		Less New RDD	-564	1136
Add Outstanding	300	4,100
To Rent	1,500		By Interest Receivable		2,000
Add Outstanding	800	2,300
To Loss by theif		8,000
To Depreciation
Factory Building	2,500
Furniture	1,800	4,300

To Net Profit C/d
Amitbhai Capital A/c	56,043
Narendrabhai Capital A/c	56,043	1,12,086


		1,35,836			1,35,836

Dr Partners Capital Cr
Particular	Amitbhai	Narendrabhai	Particular	Amitbhai	Narendrabhai
To Drawings	2,400	3,200	By bal b/d	3,50,000	3,00,000
			By Net Profit b/d	56,043	56,043
To Bal c/d	4,03,643	3,52,843



	4,06,043	3,56,043		4,06,043	3,56,043

BalanceSheet as on 31st March, 2019.
Liabilities	Rs	Rs	Asset	Rs	Rs
Capital A/c			Plant & Machinery		2,80,000
Amitbhai	4,03,643		Factory Building	75,000
Narendrabhai	3,52,843	7,56,486	Less : Depreciation	-2,500	72,500
			Sundry Debtors	28,700
Bills Payable		8,500	Less : Bad Debts	-500
Creditors		38,500		28,200
Bank Loan		15,000	Less RDD @ 2%	-564	27,636
Outstanding Exp			10% Govt. Bond	40,000
Salaries	300		(Purchased on 1st Oct, 2018)
Rent	800	1,100	Add: interest receivable	2000	42,000
			Cash in Hand		20000
			Cash at Bank		70000
			Furniture	1,95,800
			Less Dep	-1,800	1,94,000
			Bills Receivable		20700
			Free hold Property		41,000
			Cl. Stock		43,000
			Prepaid Advertisement		8,750
		8,19,586			8,19,586

Practical Problem 01

Practical Problem | Q 1 | Page 54

SOLUTION: (Highlighted Part are Adjustment)

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