Following is the Trial Balance of Kalavati and Lilavati as on 31st March, 2005 who share Profits and Loses to the ratio of 3:2. Interest on capital was allowed at 5% p.a.

Trial Balance as on 31^st March, 2005

Debit Balance	Rs.	Credit Balance	Rs.
Opening Stock Sundry Debtors Purchases Wages Salaries Office expenses Discount Rent, Rates & Taxes Plant & Machinery Return Inward Land & Building Cash at Bank Current A/c : Kalavati Lilavati	10000 14100 20000 4250 1350 1223 650 900 15000 1750 20000 7327 2100 600	Return Outward Sundry Creditors Sales R.B.D.D. A/c. Capital A/c. Kalavati Lilavati Loan at 9% (Taken on 1.10.2004)	1250 15800 35000 200 35000 10000 2000
	99250		99250

Additional Information

1.   Closing stock was valued at Rs. 20,500.

2.   Unpaid wages Rs. 750.

3.   Outstanding salary Rs. 657.

4.   Provide depreciation on Plant & Machinery at 10% p.a. and on land & building at 5% p.a.

5.   Write of Rs. 100 as bad debts and provide R.B.D.D. at 5% on debtors.

6.   Rent, Rates and Taxes prepaid Rs. 100.

7.   Prepare Trading A/c and Profit & Loss A/c for the year ending 31^st March, 2005 and a balance sheet as on that date.

ANSWER:

GROSS PROFIT 20000

NET PROFIT 9880

BALANCE SHEET TOTAL

73727

Solution:

In the books of M/s Kalavati and Lilavati

Trading Account for the year ended 31.03.2005

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Opening Stock		10000	By Sales	35000
To Purchases	20000		(-) Return	(1750)	33250
(-) Return	(1250)	18750
To Wages	4250
(+) Unpaid	750	5000
			By Closing Stock		20500
To Gross Profit C/d		20000

Profit and Loss Account for the year ended 31.03.2005

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Salaries	1350		By Gross Profit b/d		20000
(+) Outstanding	657	2007
To Office Expenses		1223
To Discount`		650
To Rent, Rates & Taxes	900
(-) Prepaid	(100)	800
To Bad debts	-
(+) FBD	100
(+) NRDD	700
(-) ORDD	(200)	600
To Depreciation
Plant and Machinery	1500
Land & Building	1000	2500
To Interest on Capital
Kalavati	1750
Lilavati	500	2250
To Interest on loan		90
To Net Profit C/d
Kalavati	5928
Lilavati	3952	9880
		20000			20000

Partners Current  Account

Particulars	Kalavarti	Lilavati	Particulars	Kalavati	Lilavati
To Balance b/d	2100	600	By Interest on Capital	1750	500
			By Net Profit b/d	5928	3952
To Balance C/d	5578	3852
	7678	4452		7678	4452

Balance Sheet as on 31.03.2005

Liability	Amt.	Amt.	Assets	Amt.	Amt.
Capital A/c			Sundry Debtors	14100
Kalavati	35000		(-) FBD	(100)
Lilavati	10000	45000		14000
Current A/c			(-) NRDD	(700)	13300
Kalavati	5578		Cash at bank		7327
Lilavati	3852	9430	Plant & Machinery	15000
Sundry Creditors		15800	(-) Depreciation	(1500)	13500
Loan at 9%	2000		Land & Building	20000
(+) Interest	90	2090	(-) Depreciation	(1000)	19000
Unpaid Wages		750	Closing Stock		20500
Outstanding Salaries		657	Prepaid Rent, Rates & Taxes		100
		73727			73727