FINAL ACCOUNT WITH ANSWER

From the following Trial Balance of Kamlesh and Maharajan and given adjustments, prepare a Trading Account, Profit and Loss account for the year ended 31^st March, 2007 and a Balance Sheet as on that date.                                                 (20)

Dr.                        Trial Balance as on 31^st March 2007                                    Cr.

Particulars	Amt. (`.)	Particulars	Amt. (`.)
Opening Stock	45,000	Capital A/c
Purchases	2,25,000	Kamlesh	25,000
Plant and Machinery	75,000	Mahajan	20,000
Carriage	16,800	Sales	4,50,000
Factory Rent	1,500	Discount Received	750
Insurance	1,050	Sundry Creditors	15,000
Sundry Debtors	60,000	Bad debts Reserve	200
Office Rent	3,000	Bills Payable	2,000
Printing & Stationery	600
Advertisement	15,000
Bills Receivable	3,000
Drawings:  Kamlesh	3,500
Mahajan	2,500
Salaries	18,000
Wages	20,000
Furniture	7,500
Royalty	1,000
Cash at Bank	14,500
	5,12,950		5,12,950

The following adjustment are required:

(1)          Closing stock was valued at Cost price `. 35,000 and Market Price 40,000.

(2)          Plant– Machinery & Furniture are to be depreciated at 6% & 10% p.a respectively.

(3)          Maintain Reserve for Doubtful Debts @ 2 ½ % on Sundry Debtors.

(4)          Outstanding Expenses:  Factory Rent `. 300; Office Rent `. 600.

(5)          Interest on capital to be allowed at 6% p.a.

(6)          Prepaid insurance was `. 100.

Trading Account for the year ended 31-3-2007

Particulars	`.	`.	Particulars	`.	`.
To Opening Stock To Purchases To Carriage To Factory Rent Add: Outstanding To Wages To Royalty To Gross Profit c/d	1,500      300	45,000 2,25,000 16,800 1,800 20,000 1,000 1,75,400	By Sales By Closing Stock		4,50,000 35,000
		4,85,000			4,85,000

Profit and Loss A/c for the year ended 31-3-2007

Particulars	`.	`.	Particulars	`.	`.
To Insurance Less: Prepaid To Office Rent Add: Outstanding To Printing & Stationery To Advertisement To Salaries To Bad Debts Add: New Bad Debts Add: New R.D.D. Less: Old R.D.D. To Depreciation Plant & Machinery Furniture To Interest on Capital Kamlesh Mahajan To Net Profit Kamlesh Mahajan	1,050     100 3,000     600 -           - -    1,500 1,500      200 4,500     750 1,500    1,200 64,375 64,375	950 3,600 600 15,000 18,000 1,300 5,250 2,700 1,28,750	By Gross Profit b/d By Discount Received		1,75,400 750
		1,76,150			1,76,150

Balance Sheet as on 31-3-2007

Liabilities	`.	`.	Assets	`.	`.
Capital Kamlesh Mahajan Sundry Creditors Bills Payable Outstanding Expenses Factory Rent Office Rent	87,375   83,075 300     600	1,70,450 15,000 2,000 900	Plant & Machinery Less: Depreciation Sundry Debtors Less: New R.D.D. Bills Receivable Furniture Less: Depreciation Cash at Bank Closing Stock Prepaid Insurance	75,000    4,500 60,000   1,500 7,500    750	70,500 58,500 3,000 6,750 14,500 35,000 100
		1,88,350			1,88,350

Partner’s Capital A/c

Particulars	Kamlesh	Mahajan	Particulars	Kamlesh	Mahajan
To Drawings To Balance c/d	3,500 87,375	2,500 83,075	By Balance b/d By Interest on Capital By Net Profit b/d	25,000 1,500 64,375	20,000 1,200 64,375
	90,875	85,575		90,875	85,575