From the following information you are required to prepare the Trading account, profit and loss account and Balance sheet as on 31st March, 2014.

Trial Balance as on 31^st March, 2014

Particulars	Debit (Rs.)	Credit (Rs.)
Ronaldo Capital Ricardo’s capital Ronaldo’s Drawing Ricardo’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	4, 000 1, 000 2, 20, 000 5, 000 2, 95, 000 5, 000 1, 00, 000 24, 000 25, 000 1, 25, 000 77, 550 19, 000 17, 500 7, 950 3, 000 2, 000 3, 500	1, 00, 000 2, 30, 000 2, 00, 000 1, 60, 000 4, 500 2, 40, 000
	9, 34, 500	9, 34, 500

1.      Stock on 31^st March, 2014 is valued at Rs. 30,000 but is market value is Rs. 35,000.

2.      Depreciate plant and machinery @ 5% p.a. Patents by 20%.

3.      Insurance were prepaid for Rs. 200.

4.      Salaries outstanding amounted to Rs. 800.

5.      Maintain Reserve for Doubtful debts at 10% of Sundry debtors.

6.      Goods worth Rs. 5000 were destroyed by fire and the insurance company admitted a claim for Rs. 3000 only.

7.      Ronaldo has withdrawn goods worth Rs. 500 for his own use, but no entry is passed in the books.

Solution: In the books of Ronaldo & Ricardo

Trading A/c for the year ended 31.03.14

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		220000	By Sales	200000
To Purchases	295000		(-) Return	-5000	195000
(-) Return	-4500	290500	By Goods destroyed by fire		5000
To Wages		19000	By Goods withdrawn by Partner Ronaldo		500
To Power & Fuel		3500
			By Closing Stock		30000
			By Gross Loss C/d		302500
		533000			533000

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

Particulars	Amount	Amount	Particulars	Amount	Amount
To Gross Loss b/d		302500
To Salaries	17500
(+) Outstanding	800	18300
To Rent & Taxes		7950
To Insurance	3000
(-) Prepaid	-200	2800
To Printing & Stationery		2000
To Bad debts	-
(+) F.B.D.	-
(+) N.R.D.D.	12500
(-) O.R.D.D.	-	12500
To Depreciation
On Plant & Machinery	5000
On Patents	5000	10000
To Goods lost on fire		2000
			By Net Loss c/d
			Ronaldo	179025
			Ricardo	179025	358050
		358050			358050

Partners Capital A/c

Particulars	Ronaldo	Ricardo	Particulars	Ronaldo	Ricardo
To Drawings	4000	1000	By Balance b/d	100000	230000
To Drawings [Goods]	500	-
To Net Loss b/d	179025	179025
To balance c/d	-	49975	By Balance c/d	83525	-
	183525	230000		183525	230000

Balance Sheet as on 31.3.14

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c			Bills Receivable		5000
Ronaldo	-		Plant & Machinery	100000
Ricardo	49975	49975	(-) Depreciation	(5000)	95000
Bills Payable		160000	Loose Tools		24000
Sundry Creditors		240000	Patents	25000
Outstanding Salaries		800	(-) Depreciation	-5000	20000
			Sundry Debtors	125000
			(-) N.R.D.D.	-12500	112500
			Cash at Bank		77550
			Prepaid Insurance		200
			Insurance Claim		3000
			Closing Stock		30000
			Ronaldo's Capital		83525
		450775			450775