OMTEX CLASSES: Agarkar and Dravid are in partnership sharing profit and losses in the ratio of 2: 1 from the following information of Trial balance and adjustments you are required to prepare profit and loss account, trading account and Balance sheet as on 31st march 2003.

Trial Balance as on 31^st March, 2003

Particulars	Debit (Rs.)	Credit (Rs.)
Prepaid Insurance Insurance R.B.D.D Discount Postage and Telephones Salaries Debtors Creditors Wages Opening Stock Carriage Return Inward Return Outward Purchase and sales Bank Overdraft Plant and Machinery Land and Building Drawings:- Agarkar Dravid Capitals:- Agarkar Dravid	400 1, 000 400 1, 600 28, 000 33, 000 12, 000 24, 000 500 2,800 96, 600 12, 000 88, 000 4,000 2,000	500 34, 000 4, 600 1, 50, 800 60, 400 30, 000 26, 000
	3, 06, 300	3, 06, 300

Adjustments:

1. Write off Rs. 1,000 for bad debts and provide for R.B.D.D @ 5% on debtors.

2. Goods worth Rs. 2,000 were distributed as free samples.

3. Closing Stock 31 – 12- 2003 was valued at cost Rs. 28, 000 while its market value is Rs. 30,000/-.

4. Salaries were outstanding Rs. 1,000.

5. Depreciate Land and Building @ 5% p.a. and Plant and Machinery @ 10% p.a.

6. Goods worth Rs. 3,000 were destroyed by fire, but insurance company admitted the claim for Rs. 400 only.

7. Dravid had taken goods worth Rs. 1000 for his own use, but no entry is made in the books.

ANSWER

GROSS PROFIT 53500

Solution:

In the books of M/s Agarkar and Dravid

Trading Account for the year ended 31.03.2014

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Opening Stock		24000	By Sales	150800
To Purchases	96600		(-) Return	(2800)	148000
(-) Return	(4600)	92000	By Goods distributed as free samples		2000
To Wages		12000	By Goods destroyed by fire		3000
To Carriage		500	By Goods taken over by partner Dravid		1000
			By Closing Stock		28000
To Gross Profit C/d		53500
		182000			182000

Profit and Loss Account for the year ended 31.03.2014

Partners Capital Account

Balance Sheet as on 31.03.2014