Surya and Abhijeet are in a Partnership firm. The trial Balance of the firm on 31st March, 2014 was as follows. Prepare Trading and Profit & Loss account for the year ended 31st March, 2014 and a Balance sheet as on that date. Trial Balance as on 31st March, 2014.

Particulars	Debit (Rs.)	Credit (Rs.)
Capitals:
Surya		15000
Abhijeet		10000
Drawings:
Surya	500
Abhijeet	200
Buildings	20000
Plant and Machinery	6000
Cash at Bank	600
Purchases and Sales	47500	75500
Returns	1500	1000
Carriage	350
Opening Stock	11000
Wages	6000
Debtors and Creditors	17600	12600
Salaries	2500
Rent and Insurance	400
Postage and Telegrams	200
Bad Debts	250
Discount	100	50
Reserve for Bad Debts		750
Outstanding Salaries		100
Trade Expenses	300
	115000	115000

Adjustments

1. Partners share Profits and Losses in the ratio of their capitals.

2. Write off Rs. 450 for Bad debts & Reserve for Bad and Doubtful Debts is to be maintained at 5% on the Debtors.

3. Goods worth Rs. 1, 000 were destroyed by fire and the insurance company admitted a claim for Rs. 800.

4. Stock as on 31st December, 2004 was valued at Rs. 8, 000.

5. Goods worth Rs. 1000 were distributed as free samples.

6. Wages outstanding Rs. 1000.

Solution:

In the books of M/s Surya and Abhijeet

Trading Account for the year ended 31.03.2014

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Opening Stock		11000	By Sales	75500
To Purchases	47500		(-) Return	(1500)	74000
(-) Return	(1000)	46500	By Goods distributed as free samples		1000
To Carriage		350	By Goods destroyed by fire		1000
To Wages	6000		By Closing Stock		8000
(+) Out standing	1000	7000
To Gross Profit C/d		19150
		84000			84000

Profit and Loss Account for the year ended 31.03.2014

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Salaries		2500	By Gross Profit b/d		19150
To Rent and Insurance		400	By Discount		50
To Postage and Telegram		200
To Bad debts	250
(+) F.B.D.	450
(+) N.R.D.D.	858
(-) O.R.D.D.	(750)	808
To Discount		100
To Trade expenses		300
To Goods lost on fire [1000 – 800]		200
To Advertisement		1000
To Net Profit C/d
Surya	8215
Abhijeet	5477	13692
		19200			19200

Partners Capital Account

Particulars	Surya	Abhijeet	Particulars	Surya	Abhijeet
To Drawings	500	200	By balance b/d	15000	10000
			By Net Profit b/d	8215	5477
To Balance c/d	22715	15277
	23215	15477		23215	15477

Balance Sheet as on 31.03.2014

Liability	Amt.	Amt.	Assets	Amt.	Amt.
Capital A/c			Buildings		20000
Surya	22715		Plant and Machinery		6000
Abjijeet	15277	37992	Cash at bank		600
Creditors		12600	Debtors	17600
Outstanding Salaries		100	(-) F.B.D.	(450)
Outstanding Wages		1000		17150
			(-) N.R.D.D.	(858)	16292
			Insurance Claim		800
			Closing Stock		8000
		51692			51692