Satish and Pradeep are partners in a partnership firm, sharing profit and losses equally. From the following Trial Balance and Adjustment given below, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2013 and Balance sheet as on that date.
Balance Sheet as on 31st March 2013
Debit Balance Amount (₹) Credit Balance Amount (₹)
Purchases
220000
Partners' Capital
Sundry Debtors
45000
Satish
120000
Discount
4000
Pradeep
90000
Opening stock
25000
Sales
430000
Wages and salaries
23000
Sundry Creditors
85000
Manufacturing expenses
25500
Discount
3500
Factory Building
175000
Plant and Machinery
75000
Advertisement (for 2 yrs w.e.f. 1.1.13)
10000
Salary and wages
45000
Cash in hand
15000
10 % Govt. Bonds (purchased on 01.07.2012)
60000
Warehouse Rent
6000
728500
728500
Adjustments :
(1) The closing stock was valued at the market price at ₹ 92000, which is 15 % above its cost price.
(2) Depreciation machinery at 10 % p.a.
(3) Outstanding wages were ₹ 2500
(4) Maintain R.D.D. at 5 % on sundry debtors.
Show Solution In the books of M/s Satish and Pradeep
Tradind A/c for the year ended 31.3.2013
Dr. Cr.
Particulars
Amount
Amount
Particulars
Amount
Amount
To Opening stock
25000
By Sales
430000
To Purchases
220000
To Wages and Salaries
23000
25500
By Closing Stock
80000
Add: Outstanding
2500
To Manufacturing expenses
25500
To Gross Profit C/d
214000
510000
510000
Dr. Cr.
Particulars
Amount
Amount
Particulars
Amount
Amount
To Discount
4000
By Gross Profit C/d
214000
To Advertisement
10000
1250
By Discount
3500
Less: Prepaid
8750
By Interst on Govt. Bond
4500
To Salaries and Wages
45000
To Warehouse Rent
6000
To Depreciation on Machinery
7500
To R.D.D.
2250
To Net Profit Transferred to Partners Capital A/c
Satish Capital A/c
78000
Pradeep Capital A/c
78000
156000
222000
222000
Dr. Cr.
Particulars
Satish
Pradeep
Particulars
Satish
Pradeep
By Balance b/d
120000
90000
By Profit and Loss A/c
78000
78000
To Balance C/d
198000
168000
198000
168000
198000
168000
M/s Satish and Pradeep
Balance Sheet as on 31.3.13
Liabilities
Amount
Amount
Assets
Amount
Amount
Capital :
Sundry Debtors
45000
Satish
198000
Less: New R.D.D.
2250
42750
Pradeep
168000
366000
Factory Building
175000
Sundry Creditors
85000
Plant and Machinery
75000
Outstanding Wages
2500
Less: Depreciation
7500
67500
Cash in Hand
15000
10% Govt. Bond
60000
Add: Interest on Bonds
4500
64500
Prepaid Advertisements
8750
Closing Stock
80000
453500
453500
Working Notes:
1) Closing Stock:
Since market price is 15% above cost price, we value stock at cost price which is calculated as
cost = `"Market price"/115 xx 100 = "Rs." 80000`
2) Depreciation = Rs. 70000 x 10% = Rs. 7000
3) RDD = 5% x Debtors = Rs. 45000 = Rs. 2250
4) Interest accrued on Government Bond
`= 10% xx "Rs". 60000 xx 9/12 = "Rs". 4500`
5) Deferred Advertisement:
Since the advertisement has been paid for 2 years but only 1 quarter is in the current year, expenditure of 7 quarters is deferred Deferred expenditure = Rs. `10000 xx 7/8` = Rs. 8750
6) Distribution of Profit:
Mohini = Rs. `155000 xx 1/2` = Rs. 77500
Rohini = Rs. `155000 xx 1/2` = Rs. 77500
shaalaa.com
From the following Trial Balance of M/s Sanjay and Keshav, you are required to prepare Trading and Profit and Loss account, for the year ended 31st March 2013 and Balance Sheet as on that date after taking into account the following additional information:
Trial Balance as on 31st March, 2013
Debit Balances
Amount (Rs.)
Credit Balances
Amount (Rs.)
Opening stock
180000
Sales
525000
Bills receivable
80000
Rent
22000
Purchase
240000
Bills payable
78000
Bad debts
20000
Sundry creditors
100000
Salary and wages
24000
Capital account
Sanjay
Keshav
500000
300000
Discount
9000
Carriage inward
12000
Travelling expenses
13000
Cash in hand
38000
Furniture
280000
Insurance
12000
Land and building
400000
Postage and telegram
7000
Sundry debtors
210000
1525000
1525000
Additional information:
Insurance paid in advance Rs. 3,000.
Depreciation provided on furniture at 10%.
Salary and wages outstanding Rs. 6,000.
Rent received in advance Rs. 5,000.
Closing stock as on 31.03.2013 Rs. 2,00,000.
From the following Trial Balance of M/s Sanjay and Keshav, you are required to prepare Trading and Profit and Loss account, for the year ended 31st March 2013 and Balance Sheet as on that date after taking into account the following additional information:
Trial Balance as on 31st March 2013
Debit Balances Amount (Rs.) Credit Balances Amount (Rs.)
Opening stock
1,80,000
Sales
5,25,000
Bills receivable
80,000
Rent
22,000
Purchase
2,40,000
Bills payable
78,000
Bad debts
20,000
Sundry creditors
1,00,000
Salary and wages
24,000
Capital account:
Discount
9,000
Sanjay
5,00,000
Carriage inward
12,000
Keshav
3,00,000
Travelling expenses
13,000
Cash in hand
38,000
Furniture
2,80,000
Insurance
12,000
Land and building
4,00,000
Postage and telegram
7,000
Sundry debtors
2,10,000
15,25,000
15,25,000
Additional information:
Insurance paid in advance Rs. 3,000.
Depreciation provided on furniture at 10%.
Salary and wages outstanding Rs. 6,000.
Rent received in advance Rs. 5,000.
Closing stock as on 31.03.2013 Rs. 2,00,000.
A new partner is admitted in the firm for getting additional capital and skill.
Jaya and Maya are partners in a firm sharing profits and losses in the ratio of 2 : 3 respectively. With the help of the trial balance and adjustments given below, you are required to prepare their Trading, Profit and Loss Account for the year ended 31st March, 2013 and the Balance Sheet as on that date :
Trial Balance as on 31st March, 2013
Debit Balances Amount Credit Balances Amount
Purchases
1,09,000
Sundry creditors
45,600
Insurance
3,700
Sales
1,94,000
Rent, rates and taxes
14,600
R.D.D.
2,000
Office expenses
7,300
Commission
5,500
Land and buildings
3,00,000
Capital A/c’s:
Plant and machinery
60,000
Jaya
2,00,000
Furniture
15,000
Maya
2,50,000
Carriage inwards
3,700
Current A/c’s:
Sundry debtors
88,000
Jaya
3,400
Stock (as on 01.04.2012)
32,800
Maya
9,100
Wages and salaries
28,600
Cash in hand
4,700
Cash at bank
40,200
Drawings A/c’s:
Jaya
500
Maya
1,500
7,09,600
7,09,600
Adjustments :
From the following Trial Balance of M/s Sanjay and Vijay, you are require to prepare Trading and Profit and Loss A/c for the year ended on 31st March, 2010 and Balance Sheet as on that date after taking into consideration the additional information given below :
Trial Balance as on 31st March, 2010
Particulars
Debit Amount (Rs)
Credit Amount (Rs)
Sundry Debtors and Creditors
Bills Receivable and Bills Payable
Purchases and Sales
Return Inward
Salaries and Wages
Carriage outward
Insurance Premium
Postage and Telegram
Plant and Machinery
Advertisement
Import Duty
Bad Debts
Printing and Stationery
Cash in Hand
Leasehold Premises
Opening Stock
Dividend Received
Outstanding Audit fees
10% Bank Loan (Taken on 1.10.2009)
Capital Accounts : Sanjay
Vijay
45,800
28,200
98,500
2,000
26,000
1,800
2,200
1,750
70,000
3,000
2,100
1,000
2,400
1,850
80,000
12,000
72,700
40,000
1,10,000
1,500
60,000
45,000
45,000
Total
3,78,600
3,78,600
Additional Information:
(1) Closing Stock was valued at Rs 25,000.
(2) Unused Postage Stamps of Rs 250.
(3) Uninsured goods worth Rs 8,000 were stolen from the godown.
(4) Leasehold property is to be run for 10 years w.e.f.1.10.2009.
(5) Depreciate Plant and Machinery at 10% p.a.
(6) Our customer Mr. Ajay became insolvent and could not pay his debts of Rs 2,000.
Answer in one sentence only.
Give the word / term or phrase which can substitute the following statement. The accounts which are prepared at the end of each financial year.
Select the most appropriate alternative from those given below and rewrite the statement.
The gross profit is transferred to _________________ account.
State whether the following statement is True or False.
Debit balance of Trading account shows gross profit.
Kajol and Sunny were partners sharing profits and losses in the ratio of 3:2. The following Balances were extracted from the books of account for the year ended March 31, 2015.
Account Name
Debit Amount Rs
Credit Amount Rs
Capital
Kajol
1,15,000
Sunny
91,000
Current accounts [on 1-04-2005*]
Kajol
4,500
Sunny
3,200
Drawings
Kajol
6,000
Sunny
3,000
Opening stock
22,700
Purchases and Sales
1,65,000
2,35,800
Freight inward
1,200
Returns
2,000
3,200
Printing and Stationery
900
Wages
5,500
Bills receivables and Bills payables
25,000
21,000
Discount
400
800
Salaries
6,000
Rent
7,200
Insurance premium
2,000
Traveling expenses
700
Sundry expenses
1,100
Commission
1,600
Debtors and Creditors
74,000
78,000
Building
85,000
Plant and Machinery
70,000
Motor car
60,000
Furniture and Fixtures
15,000
Bad debts
1,500
Provision for doubtful debts
2,200
Loan
25,000
Legal expenses
300
Audit fee
900
Cash in hand
7,500
Cash at bank
12,000
5,78,100
5,78,100
Prepare final accounts for the year ended March 31,2015, with following adjustments:
(a) Stock on March 31,2015 was Rs37,500.
(b) Bad debts Rs3,000; Provision for bad debts is to be made at 5% on debtors
(c) Rent Prepaid were Rs1,200.
(d) Wages outstanding were Rs 2,200.
(e) Interest on capital to be allowed on capital at 6% per annum and interest on drawings to be charged @ 5% per annum.
(f) Kajol is entitled to a Salary of Rs 1,500 per annum.
(g) Prepaid insurance was Rs 500.
(h) Depreciation was charged on Building, @ 4%; Plant and Machinery, @ 5%; Motor car, @ 10% and furniture and fixture, @ 5%.
(i) Goods worth Rs 7,000 were destroyed by fire on January 20,2015. The Insurance company agreed to pay Rs 5,000 in full settlement of the claim.
*As per the question, this year should be 01-04-2014
Dinker and Ravinder were partners sharing profits and losses in the ratio of 2:1. The following balances were extracted from the books of account, for the year ended December 31, 2017.
Account Name
Debit Amount Rs
Credit Amount Rs
Capital
Dinker
2,35,000
Ravinder
1,63,000
Drawings
Dinker
6,000
Ravinder
5,000
Opening Stock
35,100
Purchases and Sales
2,85,000
3,75,800
Carriage inward
2,200
Returns
3,000
2,200
Stationery
1,200
Wages
12,500
Bills receivables and Bills payables
45,000
32,000
Discount
900
400
Salaries
12,000
Rent and Taxes
18,000
Insurance premium
2,400
Postage
300
Sundry expenses
1,100
Commission
3,200
Debtors and creditors
95,000
40,000
Building
1,20,000
Plant and machinery
80,000
Investments
1,00,000
Furniture and Fixture
26,000
Bad Debts
2,000
Bad debts provision
4,600
Loan
35,000
Legal Expenses
200
Audit fee
1,800
Cash in Hand
13,500
Cash at Bank
23,000
8,91,200
8,91,200
Prepare final accounts for the year ended December 31,2017, with following adjustment:
(a) Stock on December 31,2017, was Rs 42,500.
(b) A Provision is to be made for bad debts at 5% on debtors
(c) Rent outstanding was Rs 1,600.
(d) Wages outstanding were Rs 1,200.
(e) Interest on capital to be allowed on capital @ 4% per annum and interest on drawings to be charged @ 6% per annum.
(f) Dinker and Ravinder are entitled to a Salary of Rs 2,000 per annum
(g) Ravinder is entitled to a commission Rs 1,500.
(h) Depreciation is to be charged on Building @ 4%, Plant and Machinery, 6%, and furniture and fixture, 5%.
(i) Outstanding interest on loan amounted to Rs 350.
Anubha and Kajal are partners of a firm sharing profits and losses in the ratio of 2:1. Their capital, were Rs 90,000 and Rs 60,000. The profit during the year were Rs 45,000. According to partnership deed, both partners are allowed salary, Rs 700 per month to Anubha and Rs 500 per month to Kajal. Interest allowed on capital @ 5% p.a. The drawings at the end of the period were Rs 8,500 for Anubha and Rs 6,500 for Kajal. Interest is to be charged @ 5% p.a. on drawings. Prepare partners capital accounts, assuming that the capital account are fluctuating.
From the following Trial Balance of M/s . Patil and Desai , you are required to prepare Trading and profit and loss Account for the year ended 31st March , 2016 and Balance Sheet as on that date :
Trial Balance as on 31.03.2016
Debit Balances Amount (₹) Credit Balances Amount (₹)
Machinery
140000
Capital accounts :
Furniture
80000
Patil
200000
Coal,gas and water
4300
Desai
150000
Land and Building
120000
Sales
330000
Purchases
232000
Sundry creditors
105000
Postage and telegram
2200
Bank loan
40000
Export duty
15500
Wages and Salaries
31000
Rent and taxes
7200
Cash in hand
58000
Freight
6200
Prepaid rent
3600
Sundry debtors
76000
Salaries
4200
Opening stock
39000
Discount
5800
825000
825000
Adjustments :
(1) Closing stock in hand was valued at ₹ 61000.
(2) Goods distributed as free samples were ₹ 3000.
(3) Outstanding salaries ₹ 900
(4) Provide reserve for doubtful debts at 5 % on sundry debtors.
(5) Depreciate machinery at 5 % p.a.
Select the most appropriate alternative from those given below and rewrite the statement. All indirect expenses are debited to ____________ account.
Select the most appropriate alternative from the given below and rewrite the statement. If any asset is taken over by a partner from the firm, his capital account will be ______
Umesh and Prakash were partners sharing profit and losses in the proportion of 3/5 and 2/5 respectively. They dissolved their partnership firm on 31st March, 2013, when their financial position was us under:
Balance sheet as on 31st March, 2012
Liabilities
Amount
Assets
Amount
Sundry Creditors
7500
Cash at Bank
1500
Umesh’s Wife’s Loan
15000
Debtors 33750
Capital Accounts:
Less: R.D.D. - 3750
30000
Umesh
69000
Stock
67500
Prakash
45000
Machinery
22500
Furniture
15000
136500
136500
(1) The assets realised as under.
Goodwill Rs. 7500; Stock Rs. 60000; Debtors Rs. 27000
(2) Machinery was taken over by Prakash at Rs. 20,000 and furniture by Umesh at book value.
(3) Umesh agreed to discharge his wife’s loan.
(4) The creditors were paid at a rebate of Rs. 1500.
(5) The expenses of dissolution amounted to Rs. 3000
A prepayment of insurance premium will appear in ______.
Closing stock is valued at ______.
What is the need for preparing final accounts?
Explain how closing stock is treated in final accounts?
Complete the following sentence.
"If, after the final accounts have been prepared, some omission or commissions are noticed say in respect of the interest on capital, interest on drawings, etc. necessary adjustments can be made in the partner's capital accounts through?
Which account is prepared when past adjustments are to be made?
Arvind and Anand are partners sharing profits and losses in the ratio 8 : 3 : 1 Balances in their capital accounts on April 01, 2019 were, Arvind- Rs. 4,40,000 and Anand Rs. 2,60,000. As per their agreement, partners were entitled to interest on capital @ 5% p.a., and interest on drawings was to be charged @ 6% p.a. Arvind was allowed an annual salary of Rs. 35,000/- for the additional responsibilities taken up by him. Partners drawings for the year were, I Arvind Rs. 40,000 and Anand Rs. 28,000. Profit and loss account of the firm for the year ending March 31, 2020 showed a Net Loss of Rs. 32,400. Prepare Profit and Loss Appropriation Account.
