Q.7. Ashok and Tanaji are Partners sharing Profit and Losses in the ratio 2:3 respectively. Their Trial Balance as on 31stMarch, 2007 is given below. You are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2007 and Balance Sheet as on that date after taking into account the given adjustments.
Trial Balance as on 31stMarch, 2007
Particulars | Amt. (Rs.) | Particulars | Amt. (Rs.) |
Purchases Patents Right Building | 98,000 4,000 1,00,000 | Capital: Ashok Tanaji | 30,000 40,000 |
Stock (1.04.2006) | 15,000 | Provident Fund | 7,000 |
Printing and Stationery | 1,750 | Creditors | 45,000 |
Sundry Debtors Wages and Salaries | 35,000 11,000 | 10% Bank Loan taken on 1st April 2006 | 12,000 |
Audit Fees | 700 | Sales | 1,58,000 |
Sundry Expenses | 3,500 | Reserve for Doubtful Debts | 250 |
Furniture | 8,000 | Purchase Returns | 3,500 |
Investment | 10,000 | ||
Cash | 4,000 | ||
Provident Fund Contribution | 800 | ||
Carriage Inwards | 1,300 | ||
Travelling Expenses | 2,700 | ||
2,95,750 | 2,95,750 |
Adjustments:
(1) Closing stock is valued at the cost of Rs. 15,000 while its market price is Rs.18,000.
(2) On 31st March, 2007 the stock of stationery was Rs. 500.
(3) Provide reserve for bad and doubtful debts at 5% on debtors.
(4) Depreciate building at 5% and patent rights at 10%.
(5) Interest on capitals is to be provided at 5% p.a. (20)
Trading Account for the year ended 31stMarch 2007
Particulars | Rs. | Rs. | Particulars | Rs. | Rs. |
To Opening Stock | 15,000 | By Sales | 1,58,000 | ||
To Purchases Less: Returns | 98,000 3,500 | 94,500 | |||
To Wages & Salaries | 11,000 | ||||
To Carriage Inwards | 1,300 | ||||
To Gross Profit c/d | 51,200 | By Closing Stock | 15,000 | ||
1,73,000 | 1,73,000 |
Profit & Loss A/c for the year ended 31stMarch 2007
Particulars | Rs. | Rs. | Particulars | Rs. | Rs. |
To Printing & Stationery | 1,750 | To Gross Profit b/d | 51,200 | ||
Less: Stock | 500 | 1,250 | |||
To Audit Fees | 700 | ||||
To Sundry Expenses | 3,500 | ||||
To Provident Fund Contribution | 800 | ||||
To Travelling Expenses | 2,700 | ||||
To Bad Debts | - | ||||
Add: New Bad debts | - | ||||
Add: New R.D.D. | 1,750 | ||||
Less: Old R.D.D. | 1,750 250 | 1,500 | |||
To Depreciation on Patent Right Building | 400 5,000 | 5,400 | |||
To Interest on Capital Ashok Tanaji | 1,500 2,000 | 3,500 | |||
To Interest on loan | 1,200 | ||||
To Net Profit Ashok (2/5) Tanaji (3/5) | 12260 18390 | 30650 | |||
51,200 | 51,200 |
Partner’s Capital A/c
Particulars | Ashok | Tanaji | Particulars | Ashok | Tanaji |
By Balance b/d | 30,000 | 40,000 | |||
By Interest on Capital | 1,500 | 2,000 | |||
To Balance c/d | 43,760 | 60,390 | By Net Profit | 12,260 | 18,390 |
43,760 | 60,390 | 43,760 | 60,390 |
Balance Sheet as on 31-3-2007
Liabilities | Rs. | Rs. | Assets | Rs. | Rs. |
Partners Capital Ashok Tanaji | 43,760 60,390 | 1,04,150 | Patents Right (-) 10% Depreciation | 4,000 400 | 3,600 |
Building Less: 5% Depreciation | 1,00,000 5,000 | 95,000 | |||
Provident Fund Creditors | 7,000 45,000 | Sundry Debtors Less: New R.D.D. | 35,000 1,750 | 33,250 | |
Bank Loan (10%) Add: Interest | 12,000 1,200 | 13,200 | Furniture Investment | 8,000 10,000 | |
Cash | 4,000 | ||||
Closing Stock | 15,000 | ||||
Stock of Stationery | 500 | ||||
1,69,350 | 1,69,350 |