Balbharati solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board
Chapter 1 Introduction to Partnership and Partnership Final Accounts Practise Problem [Pages 54 - 61]
Practise Problem | Q 1 | Page 54
1. Amitbhai and Narendrabhai are in Partnership Sharing Profits and Losses equally. From the following Trial Balance and Adjustments given below, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as on that date.
Trial Balance as on 31st March 2019
Debit Balance | Amount ₹ | Credit Balance | Amount ₹ |
Plant & Machinery | 2,80,000 | Capital A/c : | |
Factory Building | 75,000 | Amitbhai | 3,50,000 |
Sundry Debtors | 28,700 | Narendrabhai | 3,00,000 |
Purchases | 85,500 | Sales | 1,80,000 |
Bad Debts | 500 | Bills Payable | 8,500 |
Sales Return | 2,200 | Discount | 1,200 |
10% Govt. Bond (Purchased on 1st Oct 2018) | 40,000 | Creditors | 38,500 |
Import Duty | 1,800 | R.D | 2,700 |
Legal Charges | 2,000 | Bank Loan | 15,000 |
Motive Power | 12,000 | Purchases Return | 2,000 |
Warehouse Rent | 1,800 | ||
Cash in Hand | 20,000 | ||
Cash at Bank | 70,000 | ||
Advertisement (for 2 years, w.e.f 1st Jan 2019) | 10,000 | ||
Salaries | 3,800 | ||
Rent | 1,500 | ||
Drawings : | |||
Amitbhai | 2,400 | ||
Narendrabhai | 3,200 | ||
Furniture | 1,95,800 | ||
Bills Receivable | 20,700 | ||
Freehold Property | 41,000 | ||
8,97,900 | 8,97,900 |
Adjustments :
1) Stock on hand on 31st March 2019 was valued at ₹ 43,000.
2) Uninsured goods worth ₹ 8,000 were stolen.
3) Create R.D.D at 2% on Sundry debtors.
4) Mr. Patil, our customer became insolvent and could not pay his debts of ₹ 500.
5) Outstanding Expenses - Rent ₹ 800 and Salaries ₹ 300
6) Depreciate Factory Building by ₹ 2,500 and Furniture by ₹ 1,800
SOLUTION:
In the books of Amitbhai and Narendrabhai Trading and Profit and Loss Account for the year ended on 31st March 2019
Dr. | Cr. | ||||||
Particulars | Amount ₹ | Amount ₹ | Particulars | Amount ₹ | Amount ₹ | ||
To Purchases | 85,500 | By Sales | 1,80,000 | ||||
Less: Purchase Return | 2,000 | 83,500 | Less: Sales Return | 2,200 | 1,77,800 | ||
To Import Duty | 1,800 | By Closing Stock | 43,000 | ||||
To Motive Power | 12,000 | By Goods Stolen Away | 8,000 | ||||
To Depreciation - Factory Building | 2,500 | ||||||
To Gross Profit c/d | 1,29,000 | ||||||
2,28,800 | 2,28,800 | ||||||
To Warehouse Rent | 1,800 | By Gross Profit b/d | 1,29,000 | ||||
To R.B.D.D. A/C | By Discount | 1,200 | |||||
Bad debts | 500 | By O/s Interest on Govt. Bonds | 2,000 | ||||
Add: New Bad debts | 500 | By R.B.D.D. A/c (Excess Reserve) (2,700 – 1,564) | 1,136 | ||||
Add: New Reserve | 564 | ||||||
1564 | |||||||
Less: Old Reserve | 2700 | ||||||
To Legal Charges | 2,000 | ||||||
To Advertisement Expenses | 10,000 | ||||||
less: Prepaid Adv. Exp. | 8,750 | 1250 | |||||
To Salaries | 3,800 | ||||||
Add: O/s Salaries | 300 | 4100 | |||||
To Rent | 1500 | ||||||
Add: O/s Rent | 800 | 2,300 | |||||
To Depreciation on Furniture | 1,800 | ||||||
To Loss due to Theft | 8,000 | ||||||
To Net Profit Transferred to Capital A/c | |||||||
Amitbhai | 56,043 | ||||||
Narendrabhai | 56,043 | 1,12,086 | |||||
1,33,336 | 1,33,336 | ||||||
Balance Sheet as on 31st March 2019
Liabilities | Amount ₹ | Amount ₹ | Assets | Amount ₹ | Amount ₹ |
Capital Account: Amitbhai | Plant & Machinery | 2,80,000 | |||
Opening Balance | 3,50,000 | Factory Building | 75,000 | ||
Add: Net Profit | 56,043 | Less: Depreciation | 2,500 | 72,500 | |
Less: Drawings | 2,400 | 4,03,643 | Closing Stock | 43,000 | |
Sundry Debtors | 28,700 | ||||
Capital Account: Narendrabhai | Less: B.D. (New) | 500 | |||
Opening Balance | 3,00,000 | 28,200 | |||
Add: Net Profit | 56,043 | Less: R.D.D. (New) | 564 | 27,636 | |
Less: Drawings | 3,200 | 3,52,843 | 10 % Govt. Bond | 40,000 | |
Bills Payable | 8,500 | O/s Interest on Govt. Bond | 2,000 | ||
Creditors | 38,500 | Cash in Hand | 20,000 | ||
Bank Loan | 15,000 | Cash at Bank | 70,000 | ||
Outstanding expenses | Prepaid Advertisement Expense | 8,750 | |||
Rent | 800 | Furniture | 1,95,800 | ||
Salaries | 300 | 1,100 | Less: Depreciation | 1,800 | 1,94,000 |
Bills Receivable | 20,700 | ||||
Freehold property | 41,000 | ||||
8,19,586 | 8,19,586 |
Notes :
(1) Import duty, Motive power, and Depreciation on Factory building are recorded in the Trading A/c.
(2) 10 % govt. bond is an investment. It was purchased on 1 – 10 – 2018.
Interest is calculated for six months.
Interest on Govt. Bond = ₹ 40,000 X (6/12) X 10% =₹ 2,000
(3) Adv. exp. paid for 2 years from 01 – 01 – 2019. Up to 31 – 3 – 2019, 3 months adv. exp. is written off to Profit and Loss A/c. It is calculated as below : 10000 X (3/24) = ₹1250
Prepaid adv. exp. 10,000 – 1,250 = ₹ 8,750
Balbharati Solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board.
Chapter 1: Introduction to Partnership and Partnership Final Accounts
