Practical Problem 06

Practical Problem | Q 6 | Page 59

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.
31st March 2019 and Balance Sheet as on that date.
Trial Balance
Debit Balance	₹	Credit Balance	₹
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. ( Information)

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%.

In the books of Archana and Prerana
Dr Trading and Profit and loss accounts for the year ended 31st March,2019 . Cr
Particular	₹	₹	Particular	₹	₹
To Opening Stock		8,560	By Sales	30,200
To Purchase	23,700		Less: Sales return	-400	29,800
Less: Purchase Return	-1,000	22,700
To wages	950		By Closing Stock		12,000
Add: Outstanding	300	1250
To Heating & Lighting		1,000
To Gross Profit c/d		8,290
		41,800			41,800
To Electric Charges	1,450		By Gross Profit b/d		8,290
Add: Outstanding	200	1,650	By Interest		310
To Trade Expenses		850
To Bad Debts (old)	200
Add: New Bad Debts	800
	1000
Less: Old R.D.D	-500	500
To Patent Written off		250
To Depreciation
Land & Building	2,200
Furniture	525	2,725
To Interest on Capital
Archana	1,200
Prerana	600	1,800
To Net Profit
Archana	550
Prerana	275	825
		8,600			8,600

Balance Sheet as on 31st March,2019 .
Liabilities	₹	₹	Asset	₹	₹
Capital A/c			Land & Building	22,000
Archana	40,550		Less: Depreciation @ 10%	-2,200	19,800
Prerana	19,975	60,525	Furniture	13,000
			Less: Depreciation @ 5%	-525	12,475
Other Loans		3,000	Patent	2,000
Reserve Fund		1,000	Less: Written off (1/8)th	-250	1,750
Creditor		17,500	Trade Mark		2,000
Bills Payable		5,000	Investment		7,500
Outstanding wages		300	Sundry Debtor	18,500
Outstanding Electric Charges		200	Less: New Bad Debts	-800	17,700
			Stock of stationary		3,000
			Bill Receivable		6,300
			Cash at Bank		5,000
			Closing Stock		12,000
		87,525			87,525