Ravi and Magesh are in a Partnership firm. The trial Balance of the firm on 31st March, 2014 was as follows. Prepare Trading and Profit & Loss account for the year ended 31st March, 2014 and a Balance sheet as on that date.

 Trial Balance as on 31^st March, 2014.

Particulars	Debit (Rs.)	Credit (Rs.)
Capitals:
Ravi		15000
Magesh		10000
Drawings:
Ravi	500
Magesh	200
Buildings	20000
Plant and Machinery	6000
Cash at Bank	600
Purchases and Sales	47500	75500
Returns	1500	1000
Carriage	350
Opening Stock	11000
Wages	6000
Debtors and Creditors	17600	12600
Salaries	2500
Rent and Insurance	400
Postage and Telegrams	200
Bad Debts	250
Discount	100	50
Reserve for Bad Debts		750
Outstanding Salaries		100
Trade Expenses	300
	115000	115000

1.      Partners share Profits and Losses  in the ratio of their capitals.

2.      Write off Rs. 450 for Bad debts & Reserve for Bad and Doubtful  Debts is to be maintained  at 5% on the Debtors.

3.      Goods worth Rs. 1, 000 were  destroyed by fire and the insurance  company admitted a claim for Rs. 800.

4.      Stock as on 31st December,  2004 was valued at Rs. 8, 000.

5.      Goods worth Rs. 1000 were  distributed as free samples.

6. Wages outstanding Rs. 1000

Solution: In the books of Ravi & Magesh

Trading A/c for the year ended 31.03.14

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		11000	By Sales	75500
To Purchases	47500		(-) Returns	-1500	74000
(-) Returns	-1000	46500	By Goods Lost by Fire		1000
To Carriage		350	By Goods distributed as free sample		1000
To Wages	6000
(+) Outstanding	1000	7000
To Gross Profit c/d		19150	By Closing Stock		8000
		84000			84000

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

Particulars	Amount	Amount	Particulars	Amount	Amount
To Salaries		2500	By Gross Profit b/d		19150
To Rent & Insurance		400	By Discount		50
To Postage and Telegrams		200
To Bad debts	250
(+) F.B.D.	450
(+) N.R.D.D.	858
(-) O.R.D.D.	(750)	808
To Discount		100
To Trade Expenses		300
To Goods lost by fire		200
To Advertisements		1000
To Net Profit
Ravi	8215
Magesh	5477	13692
		19200			19200

Partners Capital A/c

Particulars	Ravi	Magesh	Particulars	Ravi	Magesh
To Drawings	500	200	By Balance b/d	15000	10000
To Balance c/d	22715	15477	By Net Profit b/d	8215	5477
	23215	15477		23215	15477

Balance Sheet as on 31.3.14

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c			Buildings		20000
Ravi	22715		Plant and Machinery		6000
Magesh	15277	37992	Cash at Bank		600
Creditors		12600	Debtors	17600
Outstanding Salaries		100	(-) F.B.D.	(450)
Outstanding Wages		1000		17150
			(-) N.R.D.D.	(858)	16292
			Insurance Claim		800
			Closing Stock		8000
		51692			51692