Following is the Trial Balance of Kalavati and Lilavati as on 31st March, 2005 who share profits and losses in the ration of 3:2. Interest on capital was allowed @5% p.a.

Trial balance as on 31^st March, 2005

Particulars	Amount	Particulars	Amount
Opening Stock	10000	Return Outwards	1250
Sundry debtors	14100	Sundry Creditors	15800
Purchases	20000	Sales	35000
Wages	4250	R.D.D.	200
Salaries	1350	Capital Account
Office Expenses	1223	Kalavati	35000
Discount	350	Lilavati	10000
Rent, Rates and Taxes	900	Loan @ 9% p.a. (Taken on 1-10-2004)	2000
Plant & machinery	15000	Bills Payable	12000
Return inwards	1750
Land and Buildings	32000
Cash at bank	4327
Current Account
Kalavati	2100
Lilavati	600
Government bonds	3000
	111250		111250

 Additional information:

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

2.      Unpaid wages Rs. 750; outstanding salary Rs. 657.

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

4.      Provide depreciation and plant and machinery at 10% p.a. and on Land and building at 5% p.a.

5.      Rent, Rates & Taxes were prepaid Rs. 100.

6.      Bills payable included a dishonoured bill of Rs. 3000.

Prepare Trading account and profit and loss account for the year ending 31^st March, 2005 and a balance sheet as on that date.  (October 2006 board exam questions.)

In the books of Kalavati & Lilavati

Trading account for the year ended 31^st March, 2005.

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		10000	By Sales	35000
To Purchases	20000		(-) Return	(1750)	33250
(-) Return	(1250)	18750	By Closing Stock		20500
To Wages	4250
(+) Outstanding	750	5000
To Gross Profit C/d		20000
		53750			53750

Profit and loss account for the year ended 31^st March, 2005

Particulars	Amount	Amount	Particulars	Amount	Amount
To Salaries	1350		By Gross Profit b/d		30000
(+) Outstanding	657	2007
To office Expenses		1223
To Discount		650
To Rent, Rates & Taxes	900
(-) Prepaid	(100)	800
To Bad debts	-
(+) F. B.D.	100
(+) NRDD	700
(-) ORDD	(200)	600
To Depreciation
Plant & Machinery	1500
Land & Buildings	1600	3100
To Interest on Loan		90
To Interest on Capital
Kalavati	1750
Lilavati	500	2250
To Net Profit Transferred to Current A/c
Kalavati	5568
Lilavati	3712	9280
		20000			20000

Partners’ current accounts

Particulars	Kalavati	Lilavati	Particulars	Kalavati	Lilavati
To Balance b/d	2100	600	By Interest on Capital	1750	500
To Balance c/d	5218	3612	By Net Profit b/d	5568	3712
	7318	4212		7318	4212

Balance sheet as on 31^st March, 2005

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital Account			Land & Building	32000
Kalavati	35000		(-) Depreciation  @ 5%	(1600)	30400
Lilavati	10000	45000	Plant & Machinery	15000
Current Account			(-) Depreciation @ 10%	(1500)	13500
Kalavati	5218		Sundry Debtors	14100
Lilavati	3612	8830	(-) F.B.D.	(100)
Sundry Creditors	15800			14000
(+) Bills Payable Dishonoured	3000	18800	(-) N.R.D.D.	(700)	13300
Bills Payable	12000		Closing Stock		20500
(-) Bills Payable Dishonoured	(3000)	9000	Prepaid Rent, Rates & Tax		100
Outstanding			Cash at Bank		4327
Salaries	657		Government bonds		3000
Wages	750	1407
Loan @9%	2000
(+) Interest	90	2090
		85127			85127