Practical Problem 01

Practical Problem | Q 1 | Page 54
  1. 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 & Machinery2,80,000 Capital A/c :
Factory Building75,000Amitbhai3,50,000
Sundry Debtors28,700 Narendrabhai3,00,000
Purchases85,500 Sales1,80,000
Bad Debts500 Bills Payable8,500
Sales Return2,200 Discount1,200
10% Govt. Bond40,000 Creditors38,500
(Purchased on 1st Oct, 2018) R.D.D.2,700
Import Duty1,800 Bank Loan15,000
Legal Charges2,000Purchases Return2,000
Motive Power12,000
Warehouse Rent1,800
Cash in Hand20,000
Cash at Bank70,000
(for 2 years, w.e.f 1st Jan 2019)
Drawings :
Narendrabhai 3,200
Bills Receivable20,700
Free hold Property41,000
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
To Opening Stock——By  Sales1,80,000
To Purchases85,500Less: Sales Return-2,2001,77,800
Less Return-2,00083,500By loss by theif8,000
To Import Duty1,800By Cl. Stock43,000
To Motive Power12,000
To Gross Profit c/d1,31,500
By Gross Profit b/d1,31,500
To Legal Charges2,000 By Discount1,200
To Warehouse Rent1,800
To Advertisement10,000By old RDD2700
(for 2 years, w.e.f 1st Jan 2019)Less Old Bad debts-500
Less: Prepaid-8,7501250Less New Bad Debts-500
To Salaries3800Less New RDD-5641136
Add Outstanding3004,100
To Rent1,500By Interest Receivable2,000
Add Outstanding8002,300
To Loss by theif8,000
To Depreciation
Factory Building2,500
To Net Profit C/d
Amitbhai Capital A/c56,043
 Narendrabhai Capital A/c56,0431,12,086
Dr                                                                            Partners Capital                                                                                Cr
ParticularAmitbhai NarendrabhaiParticularAmitbhai Narendrabhai
To Drawings2,400 3,200By bal b/d3,50,0003,00,000
By Net Profit b/d56,04356,043
To Bal c/d4,03,6433,52,843
                                                  BalanceSheet as on 31st March, 2019.
Capital A/cPlant & Machinery2,80,000
Amitbhai4,03,643Factory Building75,000
 Narendrabhai3,52,8437,56,486Less : Depreciation-2,50072,500
Sundry Debtors28,700
 Bills Payable8,500Less : Bad Debts-500
 Bank Loan15,000Less RDD @ 2%-56427,636
Outstanding Exp10% Govt. Bond40,000
Salaries300(Purchased on 1st Oct, 2018)
Rent8001,100Add: interest receivable200042,000
Cash in Hand20000
Cash at Bank70000
Less Dep-1,8001,94,000
Bills Receivable20700
Free hold Property41,000
Cl. Stock43,000
Prepaid Advertisement8,750