OMTEX CLASSES: Nivedha and Suganya are partners sharing profits and losses in the ratio of 2 : 1. From the following Trial Balance prepare Trading and Profit and loss account for the year ending 31st March, 2014.

Trial Balance as on 31.3.2014

Particulars	Debit (Rs.)	Credit (Rs.)
Stock Sundry Debtors Bills payable Purchases Wages Returns Outward Salaries Office Expenses Insurance Plant & Machinery Sundry Creditors Rent Sales Reserve for Doubtful Debts Travelling Expenses Returns Inward Land and Building Bills Receivable Bank Nivedha’s capital Suganya’s capital	20, 000 18, 000 40, 000 8, 500 2, 700 2, 400 1, 300 30, 000 1, 800 1, 500 3, 500 44, 800 3, 400 6, 600	10, 000 2, 500 21, 500 60, 000 500 60, 000 30, 000
	1, 84, 500	1, 84, 500

1. Closing stock was valued at Rs. 26,500.

2. Provide 10% Depreciation on Plant and Machinery.

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

4. Prepaid Insurance Rs. 300.

5. Maintain Reserve for Doubtful debts at 1% of Sundry debtors.

6. Outstanding rent for the current year Rs. 200.

7. Goods worth Rs. 100 were taken over by Nivedha for her personal use, but no entry is made in the books.

Solution: In the books of Nivedha and Suganya

Trading A/c for the year ended 31.03.14

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		20000	By Sales	60000
To Purchases	40000		(-) Returns	-3500	56500
(-) Returns	-2500	37500	By Goods distributed as free samples		1000
To wages		8500	By Goods withdrawn by Partner Nivedha		100
			By Closing stock		26500
To Gross Profit C/d		18100
		84100			84100

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

Particulars	Amount	Amount	Particulars	Amount	Amount
To Salaries		2700	By Gross Profit b/d		18100
To Office Expenses		2400	By O.R.D.D.	500
To Insurance	1300		(-) N.R.D.D.	180
(-) Prepaid	(300)	1000	(-) F.B.D.	-
To Rent	1800		(-) Bad debts	-	320
(+) Outstanding	200	2000
To Travelling Expenses		1500
To Depreciation on Plant and Machinery		3000
To Advertisement		1000
To Net Profit C/d
Nivedha	3213
Suganya	1607	4820
		18420			18420

Partners Capital A/c

Balance Sheet as on 31.3.14

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