Karthik and Jones are partners sharing profits and losses in equal ratio. From the following Trial Balance you are required to prepare Trading and Profit & Loss account for the year ended 31st March, 2014 and Balance Sheet as on that date after taking into consideration the additional information.

Trial Balance as on 31st March, 2014

Particulars (Debit)	Amount	Particulars (Credit)	Amount
Land and Building Plant Drawings Karthik Jones Opening Stock Wages Purchases Carriage Office Expenses Rent, Rates & Taxes Insurance Motor van Salaries Bad debts Customers Account Cash at Bank	44500 9750 3000 2000 26000 5000 34500 700 2270 1750 480 20000 1750 950 14600 250	Capitals Karthik Jones Sales Suppliers Account Reserve for  Doubtful Debts Outstanding Expenses	60000 40000 57000 9500 500 500
	167500		167500

Additional Information:

1.      Closing stock on 31^st March, 1998 was at cost Rs. 60,000 and Market price Rs. 50,000.

2.      Provide 10% p.a. interest on Capital.

3.      Depreciate plant at 10% p.a.

4.      Jones’s withdrawal of goods worth Rs. 1,000 for personal use but not recorded in the books.

Solution: In the books of Karthik & Jones

Trading A/c for the year ended 31.03.14

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		26000	By Sales		57000
To Purchases		34500	By Goods withdrawn by Jones		1000
To Wages		5000
To Carriage		700
To Gross Profit C/d		41800	By Closing Stock		50000
		108000			108000

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

Particulars	Amount	Amount	Particulars	Amount	Amount
To Office Expenses		2270	By Gross Profit b/d		41800
To Rent, Rates & Taxes		1750
To Insurance		480
To Salaries		1750
To Bad debts	950
(+) F.B.D.	-
(+) N.R.D.D.	-
(-) O.R.D.D.	-500	450
To Depreciation on Plant		975
To Interest on Capital
Karthik	6000
Jones	4000	10000
To Net Profit C/d
Karthik	12063
Jones	12062	24125
		41800			41800

Partners Current A/c

Particulars	Karthik	Jones	Particulars	Karthik	Jones
To Drawings	3000	2000	By Balance b/d	60,000	40,000
To Drawing [Goods]	-	1000	By Interest on Capital	6000	4000
To Balance c/d	75063	53062	By Net Profit b/d	12063	12062
	78062	56062		78063	56062

Balance Sheet as on 31.3.14

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c			Land & Building		44500
Karthik	75063		Plant	9750
Jones	53062	128125	(-) Depreciation	-975	8775
Creditors		9500	Motor Van		20000
Outstanding Expenses		500	Debtors		14600
			Cash at bank		250
			Closing Stock		50000
		138125			138125