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.

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 Profit and Loss A/c for the year ended 31.3.2013 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 Partners’ Capital A/c 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

Satish and Pradeep Are Partners in a Partnership Firm Firm , Sharing Profit and Losses Equally - Book Keeping and Accountancy

Question

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.

Ledger

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	25500
To Manufacturing expenses		25500
To Gross Profit C/d		214000
		510000			510000

Profit and Loss A/c
for the year ended 31.3.2013

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	1250	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

Partners’ Capital A/c

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

Preparation of Final Accounts

Is there an error in this question or solution?

APPEARS IN

2014-2015 (October) (with solutions)

Q 7 | 15 marks

RELATED QUESTIONS

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 31^st 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.

From the following Trial Balance and adjustments of M/s Apeksha and Pratiksha; 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:

Trial Balance as on 31.03.2013

Particulars	Debit Amount (Rs.)	Credit Amount (Rs.)
Capital Accounts
Apeksha		60000
Pratiksha		35000
Purchases and Sales	46700	85000
Sundry Debtors and Creditors	28000	25000
Bills Receivable and Bills Payable.	9600	7800
Opening Stock	18000
Wages	9900
Investment	13500
Postage and Telegrams	3600
Insurance	1200
Plant and machinery	40700
Furniture	18000
Cash in hand	2500
Carriage	3200
Bad debts	400
Prepaid rent	7000
Salaries	10500
	212800	212800

Adjustments:

(1) The closing stock is valued at Rs. 31,000

(2) Outstanding wages Rs. 1,400.

(3) Depreciate furniture at 10% p.a.

(4) Insurance Rs. 500 is paid in advance.

(5) Provide for further bad debts of Rs. 1,500.

(6) Goods worth Rs. 2,000 withdrawn by Apeksha for her domestic use but not recorded in the books of account.

Given below is the Trial Balance of M/s. Shailesh and Nilesh as on 31st March, 2016. 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
Opening stock	88,000	Capital accounts :
Purchase	1,76,000	Shailesh	1,20,000
Wages	23,500	Nilesh	1,20,000
Salaries (10 months)	18,000	Sundry creditors	1,03,000
Office expenses	8,000	Bank overdraft	60,000
Bank charges	2,600	Sales	3,08,000
Machinery	90,000	Current accounts :
Land and building	1,30,000	Shailesh	5,000
Bad debts	4,000	Nilesh	4,000
Sundry debtors	82,000
Electricity charges	9,900
Furniture	43,000
8% Debentures (1.10.2015)	40,000
Drawings :
Shailesh	3,000
Nilesh	2,000
	7,20,000		7,20,000

Adjustments :
1. Stock on 31^st March, 2016 was valued at market price of Rs 84,000, which was 20% above its cost price.
2. Depreciate machinery at 10% p.a.
3. Create reserve for bad and doubtful debts at 5% on sundry debtors.
4. Provide interest on capital at 8% p.a.
5. Machinery includes purchase of machinery for Rs 40,000 on 1^st January, 2016.

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 :
(1) Closing stock was valued at Rs. 22,600.
(2) Purchases include purchase of furniture of Rs .10,000 made on 1st October, 2012.
(3) Depreciate land and buildings at 10% p.a.; plant and machinery at 10% p.a. and furniture at 20% p.a.
(4) Create R.D.D. at 5% on sundry debtors.

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 31^st 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 4,400 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.
In the absence of partnership deed, what is profit sharing ratio of the partners?

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.

Profit and loss account is a nominal account.

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

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.

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

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.

A prepayment of insurance premium will appear in ______.

Closing stock is valued at ______.

If there is no existing provision for doubtful debts, provision created for doubtful debts is ______.

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.

Satish and Pradeep Are Partners in a Partnership Firm Firm , Sharing Profit and Losses Equally - Book Keeping and Accountancy

Advertisements

Advertisements

Question

SolutionShow Solution

APPEARS IN

RELATED QUESTIONS

Select a course

Solution