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Final account question with solution


 Ashok and Tanaji are Partners sharing Profit and Losses in the ratio 2:3 respectively. Their Trial Balance as on 31st March, 2007 is given below. You are required to prepare Trading and Profit and Loss Account for the year ended 31stMarch, 2007 and Balance Sheet as on that date after taking into account the given adjustments.   

Trial Balance as on 31st March, 2007
Particulars
Amt. (Rs.)
Particulars
Amt. (Rs.)
Purchases
Patents Right
Building
98,000
4,000
1,00,000
Capital:
     Ashok
     Tanaji

30,000
40,000
Stock (1.04.2006)
15,000
Provident Fund
7,000
Printing and Stationery
1,750
Creditors
45,000
Sundry Debtors
Wages and Salaries
35,000
11,000
10% Bank Loan taken on 1st April 2006
12,000
Audit Fees
700
Sales
1,58,000
Sundry Expenses
3,500
Reserve for Doubtful Debts
250
Furniture
8,000
Purchase Returns
3,500
Investment
10,000
Cash
4,000
Provident Fund Contribution
800
Carriage Inwards
1,300
Travelling Expenses
2,700
2,95,750
2,95,750

Adjustments:
(1)   Closing stock is valued at the cost of Rs. 15,000 while its market price isRs.18,000.
(2)   On 31st March, 2007 the stock of stationery was Rs. 500.
(3)   Provide reserve for bad and doubtful debts at 5% on debtors.
(4)   Depreciate building at 5% and patent rights at 10%.
(5)   Interest on capitals is to be provided at 5% p.a.                                                     (20)

Trading Account for the year ended 31st March 2007
Particulars
Rs.
Rs.
Particulars
Rs.
Rs.
To Opening Stock
15,000
By Sales
1,58,000
To Purchases
Less: Returns
98,000
3,500

94,500
To Wages & Salaries
11,000
To Carriage Inwards
1,300
To Gross Profit c/d
51,200
By Closing Stock
15,000
1,73,000
1,73,000
Profit & Loss A/c for the year ended 31st March 2007
Particulars
Rs.
Rs.
Particulars
Rs.
Rs.
To Printing & Stationery
1,750
To Gross Profit b/d
51,200
Less: Stock
500
1,250
To Audit Fees
700
To Sundry Expenses
3,500
To Provident Fund Contribution

800
To Travelling Expenses
2,700
To Bad Debts
-
Add: New Bad debts
-
Add: New R.D.D.
1,750

Less: Old R.D.D.
1,750
250

1,500
To Depreciation on
Patent Right
Building

400
5,000


5,400
To Interest on Capital
Ashok
Tanaji

1,500
2,000


3,500
To Interest on loan
1,200
To Net Profit
Ashok (2/5)
Tanaji (3/5)

12260
18390


30650
51,200
51,200
Partner’s Capital A/c
Particulars
Ashok
Tanaji
Particulars
Ashok
Tanaji
By Balance b/d
30,000
40,000
By Interest on Capital
1,500
2,000
To Balance c/d
43,760
60,390
By Net Profit
12,260
18,390
43,760
60,390
43,760
60,390
Balance Sheet as on 31-3-2007

Liabilities
Rs.
Rs.
Assets
Rs.
Rs.
Partners Capital
Ashok
Tanaji

43,760
60,390


1,04,150

Patents Right
(-) 10% Depreciation

4,000
400


3,600
Building
Less: 5% Depreciation
1,00,000
5,000

95,000
Provident Fund
Creditors
7,000
45,000
Sundry Debtors
Less: New R.D.D.
35,000
1,750

33,250
Bank Loan (10%)
Add: Interest
12,000
1,200

13,200
Furniture
Investment
8,000
10,000
Cash
4,000
Closing Stock
15,000
Stock of Stationery
500
1,69,350
1,69,350