# 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 Nani 50,000 Salaries 5,000 10% Bank loan taken on 1st Oct. 2018 30,000 Export Duty 2,500 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.

#### Solution :

 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
 Dr                                                                                                                               Partners Capital A/c                                                                                                                     Cr Particular NANA NANI Particular NANA NANI By Balance b/d 50,000 50,000 To Bal c/d 52,625 52,625 By Net Profit 2,625 2,625 52,625 52,625 52,625 52,625
 Balance Sheet as on 31st March,2019 Liabilities ₹ ₹ Asset ₹ ₹ Capital A/c Land & Building 50,000 Nana 52,625 Less: Depreciation @ 10% -4,500 45,500 Nani 52,625 1,05,250 Furniture 40,000 Less: Depreciation @ 5% -2,000 38,000 10% Bank Loan 30,000 Sundry Debtors 26,000 Add: O/s interest 1,500 31,500 Less: New Bad Debts -1,000 Bills Payable 8,000 25,000 Less: New R.D.D @ 5% -1,250 23,750 Prepaid Insurance 3,000 Closing Stock 34,500 1,44,750 1,44,750