Kamesh and Mani are partners sharing profits and losses in equal ratio. From the following Trial Balance you are required to prepare Trading and profit and Loss Account for the year ended 31st December, 2005 and Balance sheet as on that date after taking into consideration the additional information.

Debit Balance	Amount	Credit Balance	Amount
Land and Building	44500	Capital : Kamesh	60000
Plant	9750	Mani	40000
Drawings: Kamesh	3000	Sales	57000
Mani	2000	Sundry Creditors	9500
Opening Stock	26000	Reserve for Doubtful Debts	500
Wages	5000	Outstanding Expenses	500
Purchases	34500
Carriage inwards	700
Office expenses	2270
Rent, Rates and Taxes	1750
Insurance	480
Motor Van (addition on 1st July Rs. 10,000)	20,000
Salaries	1750
Bad debts	950
Debtors	14600
Cash at Bank	250
	167500		167500

Additional Information:

1.      Closing stock on 31^st December, 2005 was at cost Rs, 40, 000/- and Market price Rs. 50,000/-

2.      Depreciate Plant at 10% p.a. and Land and Building @ 20% p.a. Depreciate Motor van by 10% p.a.

3.      The goods for Rs. 5, 600 purchases and received on 25^th December, 2002 were not recorded in the purchase book.

4.      Insurance is paid for the year ended 31st March 2005.

Solution:

In the books of M/s Kamesh and Mani

Trading Account for the year ended 31.12.2005

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Opening Stock		26000	By Sales		57000
To Purchases	34500
(+) Unrecorded	5600	40100
To Wages		5000
To Carriage Inward		700
To Gross Profit C/d		25200	By Closing Stock		40000
		97000			97000

Profit and Loss Account for the year ended 31.12.2005

Particulars	Amt.	Amt.	Particulars	Amt.	Amt.
To Office Expenss		2270	By Gross Profit b/d		25200
To Rent, Rates and Taxes		1750
To Insurance	480
(+) Outstanding for 9 months	360	840
To Salaries		1750
To Bad debts	950
(+) F.D.D.	-
(+) N.R.D.D.	-
(-) O.R.D.D.	-500	450
To Depreciation
Plant	975
Land & Building	8900
Motor Van	1500	11375
To Net Profit C/d
Kamesh	3383
Mani	3382	6765
		25200			25200

Partners Current  Account

Particulars	Kamesh	Mani	Particulars	Kamesh	Mani
To Drawings	3000	2000	By Balance b/d	60000	40000
To Balance c/d	60383	41382	By Net Profit b/d	3383	3382
	63383	43382		63383	43382

Balance Sheet as on 31.12.1997

Liability	Amt.	Amt.	Assets	Amt.	Amt.
Capital A/c			Land & Building	44500
Kamesh	60383		(-) Depreciation	-8900	3600
Mani	41382	101765	Plant	9750
Sundry Creditors	9500		(-) Depreciation	-975	8775
(+) Unrecorded	5600	15100	Motor Van	20000
Outstanding Expenses		500	(-) Depreciation	-1500	18500
Outstanding Insurance		360	Debtors		14680
			Cash at Bank		250
			Closing Stock		40000
		117725			117725