Mani and Sonu are the partners sharing profits and losses equally. You are required to prepare the Trading and profit and loss account for the year ended 31st March, 2014 and a Balance sheet as at that date after making the necessary adjustments.

Trial Balance as on 31st March, 2014.

Debit Balance	Amount	Credit Balance	Amount
Buildings Plant and Machinery Furniture Sundry Debtors Return Inwards Discount Printing and Stationery Insurance Charges Bad debts Salaries Purchases Cash at Bank Stock ( on 1.4.2013) Carriage Inwards Legal Charges Mani’s Drawings Sonu’s Drawings	70000 60000 16000 28800 6000 2600 1500 1600 1400 19300 98000 25800 20000 2500 500 8000 6000	Mani’s Capital Sonu’s Capital Discount Received Loan From Vijay Sales Sundry Creditors Reserve for Bad Debts Return Outward	80000 100000 1800 30500 120000 30000 2000 3700
	3,68,000		3,68,000

Adjustments:

1.      The stock on 31.03.14 was of the value of Rs. 44,000 which is less than its market value by 2,000.

2.      Goods worth Rs. 4,000 were received on 31^st December, 1997 and were included in the closing stock, but purchase invoice was omitted to be entered in the books.

3.      Make reserve for discount at 5% on debtors and creditors.

Solution: In the books of Mani & Sonu

Trading A/c for the year ended 31.03.14

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		20000	By Sales	120000
To Purchases	98000		(-) Returns	-6000	114000
(-) Returns	-3700
	94300
(+) Unrecorded	4000	98300
To Carriage inward		2500
To Gross Profit C/d		37200	By Closing Stock		44000
		158000			158000

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

Particulars	Amount	Amount	Particulars	Amount	Amount
To Discount		2600	By Gross Profit b/d		37200
To Printing & Stationery		1500	By O.R.D.D.	2000
To Insurance Charges		1600	(-) N.R.D.D.	-
To Salaries		19300	(-) F.B.D.	-
To Legal Charges		500	(-) Bad debts	1400	600
To Discount on Debtors		1440	By Discount on Creditors		1700
To Net Profit C/d			Discount received		1800
Mani	7180
Sonu	7180	14360
		41300			41300

Partners Current A/c

Particulars	Mani	Sonu	Particulars	Mani	Sonu
To Drawings	8000	6000	By Balance b/d	80000	100000
To Balance b/d	79180	101180	By Net Profit b/d	7180	7180
	87180	107180		87180	107180

Balance Sheet as on 31.3.14

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c			Buildings		70000
Mani	101180		Plant & Machinery		60000
Sonu	79180	180360	Furniture		16000
Loan from Vijay		30500	Sundry Debtors	28800
Sundry Creditors	30000		(-) Discount	-1440	27360
(+) Unrecorded Sales	4000		Cash at Bank		25800
	34000		Closing Stock		44000
(-) Discount	-1700	32300
		243160			243160