From the following Trial Balance of Rajini and Kamal, You are required to prepare a Trading and Profit and Loss account for the year ended 31st March, 2014 and Balance sheet as on that date after taking into consideration the additional information. They share profits and losses in their capital ratio.

Trial Balance as on 31^st March,  2014

Particulars	Amounts	Particulars	Amounts
Drawings		Capital Account
Rajini	2000	Rajini	40000
Kamal	1000	Kamal	1000
Opening Stock	12000	Creditors	30000
Purchases	80000	Sales	140000
Office Salaries	6000	Return Outwards	2400
Royalties	2000	Return Outwards	2400
Trade Expenses	1400	Bills Payable	6000
Advertisement	5200	Reserve Fund	4000
Wages & Salaries	10400
Cash in Hand	8000
Debtors	50000
Bad debts	400
Investments	16000
Motor Van	30000
Furniture	10000
Office Rent	3400
Plant & Machinery	24000
Freehold Property	16000
Bills Receivable	4000
Discount	1600
	2, 83, 400		2, 83, 400

Adjustments:

1.      Closing stock was valued at Rs. 17, 600

2.      Audit Fee for the year was outstanding Rs. 2, 400

3.      Create R.D.D at 5% on Debtors.

4.      The goods for Rs. 5, 600 purchased and received on 25^th March, 2014 were not recorded in the purchase book.

5.      Depreciate freehold property at 10% and Motor Van at 25%

Solution: In the books of Rajini and Kamal

Trading A/c for the year ended 31.3.14

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		12000	By Sales		140000
To Purchases	80000
(-) Return	-2400
	77600
(+) Unrecorded	5600	83200
To Royalties		2000
To Wages & Salaries		10400	By Closing Stock		17600
To Gross Profit C/d		50000
		157600			157600

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

Particulars	Amount	Amount	Particulars	Amount	Amount
To Office Salaries		6000	By Gross Profit b/d		58000
To Trade Expenses		1400
To Advertisement		5200
To Bad debts	400
(+) F.B.D.	-
(+) N.R.D.D.	2500
(-) O.R.D.D.	-1000	1900
To Office Rent		3400
To Discount		1600
To Outstanding Audit Fees		2400
To Net Profit C/d
Rajini	11240
Kamal	16860	28100
		50000			50000

Partners Capital A/c

Particulars	Rajini	Kamal	Particulars	Rajini	Kamal
To Drawings	2000	1000	By Balance b/d	40000	60000
To balance c/d	49240	75860	By Net Profit b/d	11240	16860
	51240	76860		51240	76860

Balance Sheet as on 31.3.14

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c			Cash in hand		8000
Rajini	49240		Debtors	50000
Kamal	75860	125100	(-) N.R.D.D.	-2500	47500
Creditors	30000		Investments		16000
(+) Unrecorded Purchases	5600	35600	Motor Van		30000
Bills Payable		6000	Furniture		10000
Reserve Fund		4000	Plant & Machinery		24000
Outstanding Audit Fees		2400	Freehold Property		16000
			Bills Receivable		4000
			Closing Stock		17600
		173100			173100