From the following Trial Balance of M/s Kale and Gore your are required to prepare Trading and Profit and Loss account for the year ended 31st March, 2014 and the Balance sheet as on that date after taking into account the necessary adjustments. Trial Balance as on 31st March, 2014.

Particulars	Debit (Rs.)	Credit (Rs.)
Kale’s Capital Gore’s capital Kale’s Drawing Gore’s Drawing Stock on 1 – 4 – 2013 Bills Receivable Purchases Sales Bills Payable Return In ward Return Outward Plant and Machinery Loose Tools Patents Sundry Debtors Sundry Creditors Cash at Bank Wages Salaries Rent and Taxes Insurance Printing and Stationery Power and Fuel	14, 450 10, 000 2, 00,000 25, 000 2, 75, 000 5, 000 1, 00, 000 25, 000 25, 000 55, 000 47, 550 19, 000 17, 500 7, 500 3, 000 2, 000 3, 500	1, 80, 000 1, 50, 000 4, 00, 000 60, 000 4, 500 40, 000
	8, 34, 500	8, 34, 500

Adjustments:

1.   Depreciate Plant and Machinery by 5% and Patents by 15%.

2.   Provide for Bad and Doubtful debts @ 5% on Sundry debtors.

3.   Prepaid Insurance Rs. 750

4.   Outstanding expenses :      a. Salaries Rs. 2,500      b. Wages Rs. 1,000  c. Printing and Stationery Rs. 500.

5.   Stock as at 31^st March 2014 Rs. 1,30,000.

6.   Kale and Gore have taken goods worth Rs. 2,000 and Rs. 3,000 respectively for their personal use. No entry has been passed in the books.

36000	-7750	159675-133125	396800
GROSS PROFIT	NET PROFIT	PARTNERS CAPITAL ACCOUNT BALANCE	BALANCE SHEET TOTAL

Solution:

In the books of M/s Kale and Gore       

Trading Account for the year ended 31.03.2014

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Opening Stock		200000	By Sales	400000
To Purchases	275000		(-) Return	(5000)	395000
(-) Return	(4500)	270500	By Goods taken over by Partners
To Wages	19000		Kale	2000
(+) Outstanding	1000	20000	Gore	3000	5000
To Power and Fuel		3500	By Closing Stock		130000
To Gross Profit C/d		36000
		530000			530000

Profit and Loss Account for the year ended 31.03.2014

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Salaries	17500		By Gross Profit b/d		36000
(+) Outstanding	2500	20000
To rent and taxes		7500
To Insurance	3000
(-) Prepaid	(750)	2250
To Printing and Stationery	2000
(+) Outstanding	500	2500
To depreciation
Plant and Machinery	5000
Patent	3750	8750
To Bad debts	-
(+) FBD	-
(+) NRDD	2750
(-)ORDD	-	2750
			By Net loss C/d
			Kale	3875
			Gore	3875	7750
		43750			43750

Partners Capital Account

Particulars	Kale	Gore	Particulars	Kale	Gore
To Drawings	14450	10000	By balance b/d	180000	150000
To Drawings [Goods]	2000	3000
To Net Loss b/d	3875	3875
To Balance c/d	159675	133125
	180000	150000		180000	150000

Balance Sheet as on 31.03.2014

Liability	Amt.	Amt.	Assets	Amt.	Amt.
Capital			Bills Receivable		25000
Kale	159675		Plant & Machinery	100000
Gore	133125	292800	(-) Depreciation @5%	(5000)	95000
Bills Payable		60000	Loose Tools		25000
Sundry Creditor		40000	Patents	25000
Outstanding Expenses			(-) Depreciation @15%	(3750)	21250
Salaries	2500		Sundry debtors	55000
Wages	1000		(-) NRDD @ 5%	(2750)	52250
Printing and Stationery	500	4000	Cash at Bank		47550
			Prepaid Insurance		750
			Closing Stock		130000
		396800			396800