Archana and Prerana are partners, sharing Profits and losses in the ratio 2:1 with the help of 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
Stock (01/04/2018)	8.560	Capital: Archana	40,000
		Prerana	20,000
Patents	2,000	Other loans	3,000
Sundry debtors	18,500	Reserve fund	1,000
Stock of Stationery	3,000	Sundry Creditors	17,500
Trade Mark	2,000	Bills Payable	5,000
Bills Receivable	6,300	Purchase Return	1,000
Electricity charges	1,450	R.D.D.	500
Wages	950	Sales	30,200
Heating & lighting	1,000	Interest	310
Trade Expenses	850
Sales Return	400
Land & Building	22,000
Furniture	13,000
Cash at bank	5,000
Investments	7,500
Drawings: Archana	1,200
Prerana	900
Bad debts	200
Purchases	23,700
	1,18510		1,18510

 Adjustments: 

 

1. Stock on 31st march 2019 is valued at Cost Price 12,000 and Market Price 17,000. 
2. Our customer Mr. Shekar failed to pay his due of 800 
3. 1/8th of Patent are to be written off. 
4. a part of Furniture 5,00. is purchased on 1st Oct 20198. 
5. Depreciation on land & Building 10% and on Furniture 5%. 
6. Outstanding Expenses Wages 300 and Electricity Charges 200. 
7. Allow Interest on capital 3%. 

 
 
Solution:  

Final Account 

In the Books of Archana and Prerana  

 
 

Trading A/c And Profit & Loss A/c for the year ended 31st March, 2019

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		8,560	By Sales	30,200
			(-) Sales Return	(400)	29,800
To wages	950
(+) Outstanding Wages	300	1,250
To Heating & Lighting		1,000	By Closing Stock		12,000
To Purchases	23,700
(-) Purchase Return	(1,000)	22,700
To Gross Profit		8,290
		41,800			41,800

 

 
 

To bad debts (T)	200		By Gross Profit		8,290
(-) R.D.D. (T)	(500)	-300
			By R.D.D.		300
To Electricity charges	1,450		By Interest		310
(+) Outstanding	200	1,650
To Trade expense		850
To Lose on Debtors		800
To Patents Write off		250
To Depreciation on
Land &Building
Furniture	2,200
	525	2,725
To Interest on Capital		1,800
To Net Profit
Archana	550
Prerana	275	825
		8,900			8,900

 
 

 
 

Partner`s Capital Account

Particulars	Archana	Prerana	Particulars	Archana	Prerana
To drawings	1,200	900	To Balance c/d	40,000	20,000
			To Interest on Capital	1,080	720
			To Net Profit	550	275
To Balance c/d	40,430	20,095
	41,630	20,995		41,630	20,995

 

 

 

Balance Sheet as on 31st March, 2019

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c:			Patents	2,000
			(-) Write off	(250)	1,750
Archana	40,430		Trade Mark		2,000
Prerana	20,095	60,525	Bills Receivable		6,300
			Land & Building	22,000
			(-) Depreciation	(2,200)	19,800
Other loans		3,000	Furniture	13,000
Reserve fund		1,000	(-) Depreciation	(525)	12,475
Creditors		17,500
Bills Payable		5,000	Cash at Bank		5,000
Outstanding			Debtors	18,500
Wages	300		(-) Bad Debt (A)	(800)	17,700
Electricity charges	200	500
			Investments		7,500
			Closing Stock		12,000
			Stock as Stationery		3,000
		87,252			87,252

Alternate: 

 
 

Balance Sheet as on 31st March, 2019

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital:       Archana	40,000		Patents	2,000
Prerana	20,000		(-) Write off	(250)	1,750
(+)Interest on Capital	1,800		Trade Mark		2,000
	61,800		Bills Receivable		6,300
(-) Drawings: Archana	1,200		Land & Building	22,000
Prerana	900	60,525	(-) Depreciation	(2,200)	19,800
Other loans		3,000	Furniture	13,000
Reserve fund		1,000	(-) Depreciation	(525)	12,475
Creditors		17,500
Bills Payable		5,000	Cash at Bank		5,000
Outstanding			Debtors	18,500
Wages	300		(-) Bad Debt     (A)	(800)	17,700
Electricity charges	200	500
			Investments		7,500
			Closing Stock		12,000
			Stock as Stationery		3,000
		87,252			87,252