12th commerce BK Introduction to Partnership and Partnership Final Accounts-Practical Problem Q.1 solutions

Practise Problem | Q 1 | Page 54

Q.1) Amitbhai and Narendrabhai are in Partnership Sharing Profits and Losses equally. From the following Trial Balance and Adjustments given below, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March 2019 and BalanceSheet as on that date.

 

Trial Balance as on 31st March 2019
Debit Balance	Amount f	Credit Balance	Amount f
Plant & Machinery	2,80,000	Capital A/c :
Factory Building	75,000	Amitbhai	3,50,000
Sundry Debtors	28,700	Narendrabhai	3,00,000
Purchases	85,500	Sales	1,80,000
Bad Debts	500	Bills Payable	8,500
Sales Return	2,200	Discount	1,200
10% Govt. Bond	40,000	Creditors	38,500
(Purchased on 1st Oct 2018)
Import Duty	1,800	R.D	2,700
Legal Charges	2,000	Bank Loan	15,000
Motive Power	12,000	Purchases Return	2,000
Warehouse Rent	1,800
Cash in Hand	20,000
Cash at Bank	70,000
Advertisement (for 2 years, w.e.f	10,000
1st Jan 2019)
Salaries	3,800
Rent	1,500
Drawings :
Amitbhai	2,400
Narendrabhai	3,200
Furniture	1,95,800
Bills Receivable	20,700
Freehold Property	41,000
	8,97,900		8,97,900

Adjustments :
1) Stock on hand on 31 st March 2019 was valued at ₹ 43,000.
2) Uninsured goods worth ₹ 8,000 were stolen.
3) Create R.D.D at 2% on Sundry debtors.
4) Mr. Patil, our customer becomes insolvent and could not pay his debts of ₹ 500.
5) Outstanding Expenses - Rent ₹ 800 and Salaries ₹ 300.
6) Depreciate Factory Building by ₹ 2,500 and Furniture by ₹ 1,800.

Q.1)   Solution:

Dr.	In the books of Amitbhai and Narendrabhai Trading and Profit and Loss Account  for the year ended on 31st March 2019				Cr.
Particulars	Amount	Amount	Particulars	Amount	Amount
	Rs.	Rs.		Rs.	Rs.
To Purchases	85,500		By Sales	1,80,000
Less: Purchase	2,000	83,500	Less: Sales Return	2,200	1,77,800
Return
To Import Duty		1,800	By Closing Stock		43,000
To Motive Power		12,000	By Goods Stolen Away		8,000
To Depreciation -		2,500
Factory Building
To Gross Profit		1,29,000
c/d
		2,28,800			2,28,800
To Warehouse		1,800	By Gross Profit b/d		1,29,000
Rent
To R.B.D.D. A/C			By Discount		1,200
Bad debts	500		By O/s Interest on Govt.		2,000
			Bonds
Add: New Bad	500		By R.B.D.D. A/c (Excess		1,136
debts			Reserve)
			(2,700 - 1,564)
Add: New	564
Reserve
	1564
Less: Old	2700
Reserve
To Legal		2,000
Charges
To Advertisement	10,000
Expenses
less: Prepaid	8,750	1250
Adv. Exp.
To Salaries	3,800
Add: O/s Salaries	300	4100
To Rent	1500
Add: O/s Rent	800	2,300
To Depreciation		1,800
on Furniture
To Loss due to		8,000
Theft
To Net Profit
Transferred to
Capital A/c
Amitbhai	56,043
Narendrabhai	56,043	1,12,086
		1,33,336			1,33,336

 

Balance Sheet as on 31st March 2019
Liabilities	Amount	Amount	Assets	Amount	Amount
	Rs.	Rs.		Rs.	Rs.
Capital Account:			Plant &		2,80,000
Amitbhai			Machinery
Opening Balance	3,50,000		Factory Building	75,000
Add: Net Profit	56,043		Less:	2,500	72,500
			Depreciation
Less: Drawings	2,400	4,03,643	Closing Stock		43,000
			Sundry Debtors	28,700
Capital Account:			Less: B.D. (New)	500
Narendrabhai
Opening Balance	3,00,000			28,200
Add: Net Profit	56,043		Less: R.D.D.	564	27,636
			(New)
Less: Drawings	3,200	3,52,843	10 % Govt. Bond		40,000
Bills Payable		8,500	O/s Interest on		2,000
			Govt. Bond
Creditors		38,500	Cash in Hand		20,000
Bank Loan		15,000	Cash at Bank		70,000
Outstanding expenses			Prepaid		8,750
			Advertisement
			Expense
Rent	800		Furniture	1,95,800
Salaries	300	1,100	Less:	1,800	1,94,000
			Depreciation
			Bills Receivable		20,700
			Freehold		41,000
			property
		8,19,586			8,19,586

 

Notes :

(1) Import duty, Motive power, and Depreciation on Factory building are recorded in the  Trading A/c.

(2) 10 % govt. bond is an investment. It was purchased on 1 - 10 - 2018. Interest is calculated for six months.
Interest in Govt. Bond = 4000*10/100*6/12  = Rs. 2,000


(3) Adv. exp. paid for 2 years from 01 - 01 - 2019. Up to 31 - 3 - 2019, 3 months adv. exp. is written off to Profit and Loss A/c. It is calculated as below :

10,000 x 3/24= Rs.1,250