Following is the Trial Balance of Vinod and Vikas sharing profits and losses equally. Prepare a Trading and Profit & Loss account for the year ending 31st March, 1996 and a Balance Sheet as on that date after considering the adjustment given below.

Trial Balance as on 31^st March, 1996

Particulars (Debit)	Rs.	Particulars (Credit)	Rs.
Stock (1-4-1995) Purchases Returns Inwards Carriage Motive Power Wages Trade Expenses Sundry Debtors Salaries Insurance Postage Commission Plant & Machinery Furniture Advertising Office Rent (10 months) Drawings Vinod Vikas Building Cash in Hand	44000 170000 10000 4000 6000 56000 4000 72000 38000 2400 3600 5000 60000 16000 8000 10000 14000 6000 24000 3000	Capital A/c Vinod Vikas Sales Creditors Commission Bank Loan	80000 80000 320000 40000 4000 32000
	556000		556000

Adjustments

1.     Stock on 31.3.1996 was valued at cost price Rs. 80,000 and market price Rs. 72,000.

2.     Insurance has been paid for one year ending 31.6.1996.

3.     Goods withdrawn by Vinod amounting to Rs. 10,000 during the year were not recorded in the books.

4.     Bad debts were Rs. 2000 and an R.D.D. is to be created at 5% on debtors.

5.     Goods of Rs. 6000 were purchased on 30.3.1996 and also included in the closing stock, but the purchase was not recorded in the books of account

Solution:

In the books of M/s Vinod and Vikas

Trading Account for the year ended 31.03.1996

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Opening Stock		44000	By Sales	320000
To Purchases	170000		(-) Return	-10000	310000
(+) Unrecorded	6000	176000	By Goods withdrawn by Partner Vinod		10000
To Carriage		4000
To Motive Power		6000
To Wages		56000
To Gross Profit C/d		106000	By Closing Stock		72000
		392000			392000

Profit and Loss Account for the year ended 31.03.2004

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Trade Expenses		4000	By Gross Profit b/d		106000
To Salaries		38000	By Commission		4000
To Insurance	2400
(-) Prepaid	-600	1800
To Postage		3600
To Commission		5000
To Advertising		8000
To Office Rent	10000
(+) Outstanding	2000	12000
To Bad Debts	-
(+) F.B.D.	2000
(+) N.R.D.D.	3500
(-) O.R.D.D.	-	5500
To Net Profit C/d
Vinod	16050
Vikas	16050	32100
		110000			110000

Partners Capital  Account

Particulars	Vinod	Vikas	Particulars	Vinod	Vikas
To Drawings	14000	6000	By Balance B/d	80000	80000
To Drawings [Goods]	10000	-	By Net Profit b/d	16050	16050
To Balance C/d	72050	90050
	96050	96050		96050	96050

Balance Sheet as on 31.03.2004

Liability	Amt.	Amt.	Assets	Amt.	Amt.
Capital A/c			Sundry Debtors	72000
Vinod	72050		(-) F.B.D.	-2000
Vikas	90050	162100		70000
Creditors	40000		(-) N.R.D.D.	-3500	66500
(+) Unrecorded Purchases	6000	46000	Plant & Machinery		60000
Bank Loan		32000	Furniture		16000
Outstanding Office Rent		2000	Building		24000
			Cash in Hand		3000
			Closing Stock		72000
			Prepaid Insurance		600
		242100			242100