Practical Problem 08

Practical Problem | Q 8 | Page 60

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

In the books of Nana and Nani
Dr Trading and Profit and loss accounts for the year ended 31st March….. Cr
Particular	₹	₹	Particular	₹	₹



To Insurance	15,000		By Gross Profit b/d		34,500
Less: Prepaid Insurance	-3,000	12,000	By Interest		1,500
To New Bad Debts		1,000
To New R.D.D		1,250
To Salaries		5,000
To Export Duty		2,500
To Interest		1,000
To Depreciation:
Land & Building	4,500
Furniture	2,000	6,500
To Interest on Loan		1,500
To Net Profit C/d
Nana Capital A/c	2,625
Nani Capital A/c	2,625	5,250

		36,000			36,000