# 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%.

#### Solution:

 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
 Dr                                                                                                                           Partners Capital A/c                                                                                                                         Cr Particular Archana Prerana Particular Archana Prerana To Drawing 1,200 900 By Balance b/d 40,000 20,000 By Interest on Capital 1,200 600 To Balance c/d 40,550 19,975 By Net Profit 550 275 41,750 20,875 41,750 20,875
 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