Question

Practical Problem

Given below is the Trial Balance of M/s Roma and Mona partnership firm. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2012 and Balance Sheet as on that date

Trial Balance as on 31st March, 2012
Debit Balance	Amount Rs	Credit Balance		Amount Rs
Stock on 1st April, 2011	52,000	Provident fund		50,000
Sundry Debtors	84,000	Interest on P.F. Investment		2,800
Bad debts	3,000	Sundry Creditors		84,000
Premises	78,000	Rent received		9,600
Salaries	28,000	Reserve for Doubtful Debts		2,000
Motor Vehicle	50,000	Discount received		3,600
Purchases	1,76,000	Sales		3,20,000
Provident Fund Investment	50,000	Capital A/c-	Roma	50,000
Provident Fund contribution	5,500		Mona	50,000
Wages	22,000
Rent (for 10 months)	16,000
Office Expenses	5,000
Discount allowed	2,500
	5,72,000			5,72,000

Adjustments:

1) Stock on 31st March, 2012 was valued at Rs 80,000.

2) Goods of Rs 6,000 were sold and despatched on 27th March, 2012, but no entry was made in the books of accounts.

3) Write off Bad debts of Rs 4,000 and provide for R.D.D. at 5% on sundry debtors.

4) Provide reserve for discount on debtors at 2% and on creditors at 3%.

5) Outstanding wages Rs 4,000 and outstanding salaries Rs 3,066.

6) Depreciate Motor Vehicle at 5% p.a.

Answer 1

Trading Account for the year ended Mar.31,2012
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Opening Stock			52,000	Sales	3,20,000
Purchases			1,76,000	Add: Additional Sales	6,000	3,26,000
Wages		22,000		Closing Stock		80,000
Add: Outstanding Wages		4,000	26,000
Gross Profit (Balancing Figure)			1,52,000
			4,06,000			4,06,000

Profit and Loss Account for the year ended March 31, 2012
Dr.						Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Bad-Debts		3,000		Gross Profit	1,52,000
Add: Further Bad-Debts		4,000		Rent Received	9,600
Add: New Reserve for Doubtful Debts		4,300		Discount Received	3,600
Less: Old Reserve for Doubtful Debts		(2,000)	9,300	Reserve for Discount on Creditors	2,520
Reserve for Discount on Debtors			1,634
Salaries		28,000
Add: Outstanding Salaries		3,066	31,066
Depreciation on Motor Vehicle			2,500
Rent		16,000
Add: Outstanding Rent $\left(16,000\times \frac{2}{10}=\mathrm{Rs}3,200\right)$		3,200	19,200
Office Expenses			5,000
Discount Allowed			2,500
Provident Fund Contribution			5,500
Net Profit (Balancing Figure)
Roma		45,510
Mona		45,510	91,020
			1,67,720		1,67,720

Balance Sheet as on March 31, 2012
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital of Roma	50,000		Fixed Assets
Add: Net Profit	45,510	95,510	Motor Vehicle	50,000
Capital of Mona	50,000		Less: 5% Depreciation	(2,500)	47,500
Add: Net Profit	45,510	95,510	Premises		78,000
Current Liabilities			Machinery
Creditors	84,000		Current Assets
Less: Reserve for Discount on Creditors	(2,520)	81,480	Closing Stock		80,000
Outstanding Salaries		3,066	Debtors	84,000
Outstanding Wages		4,000	Add: Additional	6,000
Outstanding Rent		3,200	Less: Further Bad-Debts	(4,000)
Interest on Provident Fund Investment		2,800	Less: Reserve for Doubtful Debts	(4,300)
Provident Fund		50,000	Less: Reserve for Discount on Debtors	(1,634)	80,066
			Provident Fund Investment		50,000
		3,35,566			3,35,566