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From the following Trial Balance of M/s Sanjay and Keshav, you are required to prepare Trading and Profit and Loss account, FINAL ACCOUNT MARCH 2015 BOARD SOLUTION

HSC Board Accountancy March 2015 Paper Solution

FINAL ACCOUNT MARCH 2015 BOARD SOLUTION

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Question 7

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 (₹) Credit Balances Amount (₹)
Opening stock 1,80,000 Sales 5,25,000
Bills receivable 80,000 Rent 22,000
Purchases 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
Total 15,25,000 Total 15,25,000

Additional information:

  • (1) Insurance paid in advance ₹ 3,000.
  • (2) Depreciation provided on furniture at 10%.
  • (3) Salary and wages outstanding ₹ 6,000.
  • (4) Rent received in advance ₹ 5,000.
  • (5) Closing stock as on 31.03.2013 ₹ 2,00,000.

Solution

In the books of M/s Sanjay and Keshav

Trading and Profit & Loss Account for the year ended 31st March, 2013

Dr. Particulars Amount (₹) Amount (₹) Particulars Amount (₹) Cr. Amount (₹)
To Opening Stock 1,80,000 By Sales 5,25,000
To Purchases 2,40,000 By Closing Stock 2,00,000
To Carriage Inward 12,000
To Gross Profit c/d 2,93,000
Total 7,25,000 Total 7,25,000
To Bad Debts 20,000 By Gross Profit b/d 2,93,000
To Salary and Wages 24,000 By Rent 22,000
(+) Outstanding 6,000 30,000 (-) Received in Advance 5,000 17,000
To Discount 9,000
To Travelling Expenses 13,000
To Insurance 12,000
(-) Prepaid 3,000 9,000
To Postage and Telegram 7,000
To Depreciation on Furniture 28,000
To Net Profit (Transferred to Capital A/c)
    Sanjay (1/2) 97,000
    Keshav (1/2) 97,000 1,94,000
Total 3,10,000 Total 3,10,000

Balance Sheet as on 31st March, 2013

Liabilities Amount (₹) Amount (₹) Assets Amount (₹) Amount (₹)
Capital Accounts: Land and Building 4,00,000
Sanjay 5,00,000 Furniture 2,80,000
(+) Net Profit 97,000 5,97,000 (-) Depreciation (10%) 28,000 2,52,000
Keshav 3,00,000 Sundry Debtors 2,10,000
(+) Net Profit 97,000 3,97,000 Bills Receivable 80,000
Sundry Creditors 1,00,000 Closing Stock 2,00,000
Bills Payable 78,000 Cash in Hand 38,000
Outstanding Salary & Wages 6,000 Prepaid Insurance 3,000
Rent Received in Advance 5,000
Total 11,83,000 Total 11,83,000

Working Notes:

1. Depreciation on Furniture:

$$ \text{Depreciation} = 2,80,000 \times \frac{10}{100} = 28,000 $$

2. Net Profit Distribution:

Since the profit-sharing ratio is not mentioned in the problem, it is assumed to be equal (1:1).

$$ \text{Total Net Profit} = 1,94,000 $$ $$ \text{Sanjay's Share} = 1,94,000 \times \frac{1}{2} = 97,000 $$ $$ \text{Keshav's Share} = 1,94,000 \times \frac{1}{2} = 97,000 $$

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