From the following Trial Balance of M/S Mitesh and Mangesh, 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. Trial Balance as on 31st March 2019 Debit Balance Amount (₹) Credit Balance Amount (₹) Stock as on (1/4/2018) 25,000 Sundry Creditors 38,000 Building 48,500 Sales 1,75,000 Carriage 1,780 Capital: Factory Insurance 2,700 Mitesh 1,50,000 Postage 1,600 Mangesh 50,000 Bills Receivable 13,700 Outstanding Salaries 2,000 Sundry Debtors 52,200 Bills Payable 18,000 Return Inward 1,600 Return outword 1,800 Purchases 68,900 Audit fees 1,800 Current A/c: Loose tools 32,000 Mitesh 3,000 Manufacturing Expenses 1,820 Mangesh 2,000 Electricity Charges 2,600 General Expenses 3,400 Export duty 1,000 Cash in hand 75,000 Bank Balance 29,000 Conveyance 4,100 Furniture 64,000 Salaries 2,000 Rent, Rate & Taxes 3,700 Drawings: Mitesh 1,200 Mangesh 2,200 4,39,800 4,39,800 Adjustments : 1) Mitesh and Mangesh are sharing Profit and losses in the ratio 3: 1.2) Partners are entitled to get Commission @ 1% each on Gross Profit.3) The closing stock is valued at ₹ 23,700.4) Outstanding Expenses - Audit fees ₹ 400; carriage ₹ 600.5) The building is valued at ₹ 46,500.6) Furniture is depreciated by 5%.7) Provide Interest on Partner's capital at 2.5% pa.8) Goods of ₹ 900 were taken by Mangesh for his personal use.9) Write off ₹ 1,000 as Bad Debts and maintain R.D.D at 3% on Sundry Debtors.

Dr. In the books of M/s. Mitesh and Mangesh Trading and Profit and Loss Account for the year ended on 31st March 2019 Cr. Particulars Amt ₹ Amt ₹ Particulars Amt ₹ Amt ₹ To Opening Stock 25,000 By Sales 1,75,000 To Purchase 68,900 Less: Sales Return 1,600 1,73,400 (-) Purchase Return 1,800 67,100 By Closing Stock 23,700 To Factory Insurance 2,700 By Goods Withdrawn for personal use Mangesh 900 To Manufacturing Expenses 1,820 To Carriage 1,780 Add : O/s Carriage 600 2,380 To Gross Profit c/d 99,000 1,98,000 1,98,000 To Postage 1,600 By Gross Profit b/d 99,000 To Audit Fees 1,800 Add: O/s Audit Fees 400 2,200 To Electricity Charges 2,600 To General Expenses 3,400 To Export Duty 1,000 To Conveyance 4,100 To Salaries 2,000 To Rent, Rate & Taxes 3,700 To Depreciation on: Building 2,000 Furniture 3,200 5,200 To R.B.D.D. A/c New Bad debts 1,000 Add: New Reserve 1,536 2,536 To Interest on Capital A/cs: Mitesh 3,750 Mangesh 1,250 5,000 To Commission to Partners A/c: Mitesh 990 Mangesh 990 1,980 To Net Profit (Transferred to Partners’ Current A/cs) Mitesh 47,763 Mangesh 15,921 63,684 99,000 99,000 Dr. Partners’ Current Accounts Cr. Particulars Mitesh Mangesh Particulars Mitesh Mangesh To Drawings 1,200 2,200 By Balance b/d 3,000 2,000 To Additional Drawings (Goods) 900 By Profit and Loss A/c (Commission) 990 990 To Balance c/d 54,303 17,061 By Profit and Loss A/c (Interest on Capital) 3,750 1,250 By Profit and Loss A/c 47,763 15,921 55,503 20,161 55,503 20,161 By Balance b/d 54,303 17,061 Balance Sheet as on 31st March 2019 Liabilities Amount ₹ Amount ₹ Asset Amount ₹ Amount ₹ Capital Accounts: Building 48,500 Mitesh 1,50,000 (-) Depreciation 2,000 46,500 Mangesh 50,000 2,00,000 Bills Receivable 13,700 Current Accounts: Sundry Debtors 52,200 Mitesh 54,303 (-) B.D. (New) 1,000 Mangesh 17,061 71,364 51,200 Sundry Creditors 38,000 (-) R.D.D. (New) 1,536 49,664 Bills Payable 18,000 Loose Tools 32,000 Outstanding expenses Cash in Hand 75,000 Salaries 2,000 Bank Balance 29,000 Audit fees 400 Furniture 64,000 Carriage 600 3,000 (-) Depreciation 3,200 60,800 Closing Stock 23,700 3,30,364 3,30,364 Working Notes: (1) In this problem, Current Account balances are given. So, the total amount of fixed capital is directly shown on the Liabilities side of the Balance Sheet. Effects of adjustments related to the commission to partners, interest on capital, goods are withdrawn by Mangesh are given in the Current Account. Closing balances of Current Account are shown separately on the Liability side of the Balance Sheet. (2) Building is valued at ₹ 46,500 whereas the opening balance of the Building given is ₹ 48,500. Therefore, the difference of the amount of ₹2,000 (48,500 - 46,500) is nothing but Depreciation charged on Building. (3) Return Inward ⇒ Sales ReturnReturn Outward ⇒ Purchase Return (4) Commission payable to partners: Mitesh = `1% "on Gross Profit" = 1/100 × 99000/1` = ₹ 990. Mangesh = `1% " on Gross Profit" = 1/100 × 99,000` = ₹ 990.

Practical Problems: From the following Trial Balance of M/S Mitesh and Mangesh, you are required to prepare Trading and Profit and Loss Account for the year - Book Keeping and Accountancy

Question

From the following Trial Balance of M/S Mitesh and Mangesh, 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.

Trial Balance as on 31st March 2019

Debit Balance	Amount (₹)	Credit Balance	Amount (₹)
Stock as on (1/4/2018)	25,000	Sundry Creditors	38,000
Building	48,500	Sales	1,75,000
Carriage	1,780	Capital:
Factory Insurance	2,700	Mitesh	1,50,000
Postage	1,600	Mangesh	50,000
Bills Receivable	13,700	Outstanding Salaries	2,000
Sundry Debtors	52,200	Bills Payable	18,000
Return Inward	1,600	Return outword	1,800
Purchases	68,900
Audit fees	1,800	Current A/c:
Loose tools	32,000	Mitesh	3,000
Manufacturing Expenses	1,820	Mangesh	2,000
Electricity Charges	2,600
General Expenses	3,400
Export duty	1,000
Cash in hand	75,000
Bank Balance	29,000
Conveyance	4,100
Furniture	64,000
Salaries	2,000
Rent, Rate & Taxes	3,700
Drawings:
Mitesh	1,200
Mangesh	2,200
	4,39,800		4,39,800

Adjustments :

1) Mitesh and Mangesh are sharing Profit and losses in the ratio 3: 1.
2) Partners are entitled to get Commission @ 1% each on Gross Profit.
3) The closing stock is valued at ₹ 23,700.
4) Outstanding Expenses - Audit fees ₹ 400; carriage ₹ 600.
5) The building is valued at ₹ 46,500.
6) Furniture is depreciated by 5%.
7) Provide Interest on Partner's capital at 2.5% pa.
8) Goods of ₹ 900 were taken by Mangesh for his personal use.
9) Write off ₹ 1,000 as Bad Debts and maintain R.D.D at 3% on Sundry Debtors.

Ledger

Solution

Dr.	In the books of M/s. Mitesh and Mangesh Trading and Profit and Loss Account for the year ended on 31st March 2019						Cr.
Particulars		Amt ₹	Amt ₹	Particulars	Amt ₹	Amt ₹
To Opening Stock			25,000	By Sales	1,75,000
To Purchase		68,900		Less: Sales Return	1,600	1,73,400
(-) Purchase Return		1,800	67,100	By Closing Stock		23,700
To Factory Insurance			2,700	By Goods Withdrawn for personal use Mangesh		900
To Manufacturing Expenses			1,820
To Carriage		1,780
Add : O/s Carriage		600	2,380
To Gross Profit c/d			99,000
			1,98,000			1,98,000
To Postage			1,600	By Gross Profit b/d		99,000
To Audit Fees		1,800
Add: O/s Audit Fees		400	2,200
To Electricity Charges			2,600
To General Expenses			3,400
To Export Duty			1,000
To Conveyance			4,100
To Salaries			2,000
To Rent, Rate & Taxes			3,700
To Depreciation on:
Building		2,000
Furniture		3,200	5,200
To R.B.D.D. A/c
New Bad debts		1,000
Add: New Reserve		1,536	2,536
To Interest on Capital A/cs:
Mitesh		3,750
Mangesh		1,250	5,000
To Commission to Partners A/c:
Mitesh		990
Mangesh		990	1,980
To Net Profit (Transferred to Partners’ Current A/cs)
Mitesh		47,763
Mangesh		15,921	63,684
			99,000			99,000

Dr.	Partners’ Current Accounts				Cr.
Particulars	Mitesh	Mangesh	Particulars	Mitesh	Mangesh
To Drawings	1,200	2,200	By Balance b/d	3,000	2,000
To Additional Drawings (Goods)		900	By Profit and Loss A/c (Commission)	990	990
To Balance c/d	54,303	17,061	By Profit and Loss A/c (Interest on Capital)	3,750	1,250
			By Profit and Loss A/c	47,763	15,921

	55,503	20,161		55,503	20,161
			By Balance b/d	54,303	17,061

Balance Sheet as on 31st March 2019

Liabilities	Amount ₹	Amount ₹	Asset	Amount ₹	Amount ₹
Capital Accounts:			Building	48,500
Mitesh	1,50,000		(-) Depreciation	2,000	46,500
Mangesh	50,000	2,00,000	Bills Receivable		13,700
Current Accounts:			Sundry Debtors	52,200
Mitesh	54,303		(-) B.D. (New)	1,000
Mangesh	17,061	71,364		51,200
Sundry Creditors		38,000	(-) R.D.D. (New)	1,536	49,664
Bills Payable		18,000	Loose Tools		32,000
Outstanding expenses			Cash in Hand		75,000
Salaries	2,000		Bank Balance		29,000
Audit fees	400		Furniture	64,000
Carriage	600	3,000	(-) Depreciation	3,200	60,800
			Closing Stock		23,700
		3,30,364			3,30,364

Working Notes:

(1) In this problem, Current Account balances are given. So, the total amount of fixed capital is directly shown on the Liabilities side of the Balance Sheet. Effects of adjustments related to the commission to partners, interest on capital, goods are withdrawn by Mangesh are given in the Current Account. Closing balances of Current Account are shown separately on the Liability side of the Balance Sheet.

(2) Building is valued at ₹ 46,500 whereas the opening balance of the Building given is ₹ 48,500. Therefore, the difference of the amount of ₹2,000 (48,500 - 46,500) is nothing but Depreciation charged on Building.

(3) Return Inward ⇒ Sales Return
Return Outward ⇒ Purchase Return

(4) Commission payable to partners:

Mitesh = `1% "on Gross Profit" = 1/100 × 99000/1` = ₹ 990.

Mangesh = `1% " on Gross Profit" = 1/100 × 99,000` = ₹ 990.

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Partnership Final Accounts

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Q 2.Q 1.Q 3.

Chapter 1: Introduction to Partnership and Partnership Final Accounts - Exercise 1.2 (Practical Problems) [Page 55]

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Balbharati Book Keeping and Accountancy [English] 12 Standard HSC Maharashtra State Board

Chapter 1 Introduction to Partnership and Partnership Final Accounts
Exercise 1.2 (Practical Problems) | Q 2. | Page 55

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Opening stock	20,000	Capital A/c's
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Trial Balance as on 31st March, 2011
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening stock	32,000	Sales	1,93,500
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Trial Balance as on 31^st March, 2010

Debit Balance	Amount (Rs)	Credit Balance	Amount (Rs)
Current A/c-		Capital A/c-
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Purchases	1,76,000	Current A/c- Seeta	5000
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5) Create Reserve for Bad and doubtful debts at 5% on Sundry Debtors.

6) Legal charges paid in advance Rs 1,200.

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Trial Balance as on 31^st March, 2013

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Opening Stock	23,500	Bills Payable	40000
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Bad debts	1000	Sanjay	45000
Purchases	98500	Vijay	45000
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Bills Receivable	16700
Carriage outward	1800
Wages and stationery (Note 2)	14000
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Cash in hand	1850
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Balance Sheet as on 31^st March, 2011

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Keshav	250000	Building		138000
Madhav	260000	Investment		45000
Creditors	8500	Loose Tools		38000
		Debtors	90000	72000
		(-)R.D.D	18000	72000
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	518500			518500

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