Following is the Trial Balance of Mano and Prakash as on 31st March, 2014 who share Profits and Loses to the ratio of 3:2. Interest on capital was allowed at 5% p.a. Prepare Trading A/c and Profit & Loss A/c for the year ending 31st March, 2014 and a balance sheet as on that date.

Trial Balance as on 31^st March, 2014

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 : Mano Prakash	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. Mano Prakash 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.

Solution: In the books of Mano  & Prakash

Trading A/c for the year ended 31.03.14

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

Profit and Loss A/c for the year ended 31 – 3 – 14

Particulars	Amount	Amount	Particulars	Amount	Amount
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	-
(+) F.B.D.	100
(+) N.R.D.D.	700
(-) O.R.D.D.	-200	600
To Depreciation
On Plant and Machinery	1500
On Land & Building	1000	2500
To Interest on Loan		90
To Interest on Capital
Mano	1750
Prakash	500	2250
To Net Profit c/d
Mano	5928
Prakash	3952	9880
		20000			20000

Partners Current A/c

Particulars	Ravi	Magesh	Particulars	Ravi	Magesh
To Balance b/d	2100	600	By Interest on Capital	1750	500
To Balance c/d	5578	3852	By Net Profit b/d	5928	3952
	7678	4452		7678	4452

Balance Sheet as on 31.3.14

Liabilities	Amount	Amount	Assets	Amount	Amount
Capial a/c			Sundry Debtors	14100
Mano	35000		(-) F.B.D.	100
Prakash	10000	45000		14000
Current A/c			(-) N.R.D.D.	-700	13300
Mano	5578		Plant and Machinery	15000
Prakash	3852	9430	(-) Depreciation	-1500	13500
Sundry Creditors		15800	Land & Building	20000
Loan @ 9%	2000		(-) Depreciation	1000	19000
(+) Interest	90	2090	Cash at Bank		7327
Outstanding Expenses			Closing Stock		20500
Wages	750		Prepaid Rent, Rates & Taxes		100
Salary	657	1407
		73727			73727