Question

Practical Problem

Rohan and Roshan are partners in ‘Shan Traders’ sharing profits and losses in the ratio of 2:1. From the following Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2011 and Balance Sheet as on that date

Trial Balance as on 31st March, 2011
Particulars	Amount Rs	Particulars		Amount Rs
Opening stock	32,000	Sales		1,93,500
Purchases	64,000	Sundry Creditors		15,000
Plant and Machinery	30,000	Unpaid Wages		1,500
Furniture	18,500	Return outward		2,500
Carriage	1,500	Capital A/c-	Rohan	90,000
Wages and Salaries	35,000		Roshan	50,000
Bills Receivable	5,000
Sundry Debtors	32,000
Conveyance	4,000
Rent, Rates and Taxes	2,000
Return Inward	3,500
Cash in hand	14,750
Land and Building	83,500
Bad debts	1,750
Patents	25,000
	3,52,500			3,52,500

Adjustments:

1) Closing stock: Cost price Rs 25,000 and market price Rs 30,000.

2) An amount of Rs 3,500 spent for repairs to Building is debited to Building account.

3) Depreciate plant and Machinery and Building at 5% p.a.

4) Goods of Rs 750 taken by Roshan for this personal use.

5) Included in wages advances given to workers Rs 3,000.

6) Provide Rs 1,500 for bad and doubtful debts on Debtors.

Answer 1

Trading Account for the year ended March 31,2011
Dr.							Cr.
Particulars			Amount (Rs)	Particulars		Amount (Rs)
Opening Stock			32,000	Sales	1,93,500
Purchases		64,000		Less: Return Inward	(3,500)	1,90,000
Less: Drawings		(750)		Closing Stock
Less: Return Outward		(2,500)	60,750			25,000
Wages and Salaries		35,000
Less: Prepaid Wages		(3,000)	32,000
Carriage			1,500
Gross Profit (Balancing Figure)			88,750
			2,15,000			2,15,000

Profit and Loss Account for the year ended March 31, 2011
Dr.						Cr.
Particulars			Amount (Rs)	Particulars	Amount (Rs)
Depreciation on:				Gross Profit	88,750
Plant and Machinery		1,500
Building		4,000	5,500
Repair of Building			3,500
Conveyance			4,000
Rent, Rates and Taxes			2,000
Bad-Debts		1,750
Add: Provision for Doubtful Debts		1,500	3,250
Net Profit (Balancing Figure)
Rohan		47,000
Roshan		23,500	70,500
			88,750		88,750

Balance Sheet as on March 31, 2011
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Capital of Roshan	90,000		Fixed Assets
Add: Net Profit	47,000	1,37,000	Land and Building	83,500
Capital of Roshan	50,000		Less: Repairs	(3,500)
Less: Drawings	(750)		Less: 5% Depreciation	(4,000)	76,000
Add: Net Profit	23,500	72,750	Plant and Machinery	30,000
Current Liabilities			Less: 5% Depreciation	(1,500)	28,500
Creditors		15,000	Furniture		18,500
Unpaid Wages		1,500	Patents		25,000
			Current Assets
			Debtors	32,000
			Less: Provision for Doubtful-Debts	(1,500)	30,500
			Bills Receivable		5,000
			Cash in Hand		14,750
			Closing Stock		25,000
			Advance paid to Workers		3,000
		2,26,250			2,26,250