Final account question with solution


Q.7.   Ashok and Tanaji are Partners sharing Profit and Losses in the ratio 2:3 respectively. Their Trial Balance as on 31st March, 2007 is given below. You are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2007 and Balance Sheet as on that date after taking into account the given adjustments.   

Trial Balance as on 31st March, 2007
Particulars
Amt. (Rs.)
Particulars
Amt. (Rs.)
Purchases
Patents Right
Building
98,000
4,000
1,00,000
Capital:
     Ashok
     Tanaji

30,000
40,000
Stock (1.04.2006)
15,000
Provident Fund
7,000
Printing and Stationery
1,750
Creditors
45,000
Sundry Debtors
Wages and Salaries
35,000
11,000
10% Bank Loan taken on 1st April 2006
12,000
Audit Fees
700
Sales
1,58,000
Sundry Expenses
3,500
Reserve for Doubtful Debts
250
Furniture
8,000
Purchase Returns
3,500
Investment
10,000


Cash
4,000


Provident Fund Contribution
800


Carriage Inwards
1,300


Travelling Expenses
2,700



2,95,750

2,95,750

Adjustments:
(1)   Closing stock is valued at the cost of Rs. 15,000 while its market price is Rs.18,000.
(2)   On 31st March, 2007 the stock of stationery was Rs. 500.
(3)   Provide reserve for bad and doubtful debts at 5% on debtors.
(4)   Depreciate building at 5% and patent rights at 10%.
(5)   Interest on capitals is to be provided at 5% p.a.                                                     (20)

Trading Account for the year ended 31st March 2007
Particulars
Rs.
Rs.
Particulars
Rs.
Rs.
To Opening Stock

15,000
By Sales

1,58,000
To Purchases
Less: Returns
98,000
3,500

94,500



To Wages & Salaries

11,000



To Carriage Inwards

1,300



To Gross Profit c/d

51,200
By Closing Stock

15,000


1,73,000


1,73,000
Profit & Loss A/c for the year ended 31st March 2007
Particulars
Rs.
Rs.
Particulars
Rs.
Rs.
To Printing & Stationery
1,750

To Gross Profit b/d

51,200
Less: Stock
500
1,250



To Audit Fees

700



To Sundry Expenses

3,500



To Provident Fund Contribution


800



To Travelling Expenses

2,700



To Bad Debts
-




Add: New Bad debts
-




Add: New R.D.D.
1,750





Less: Old R.D.D.
1,750
250

1,500



To Depreciation on
Patent Right
Building

400
5,000


5,400



To Interest on Capital
Ashok
Tanaji

1,500
2,000


3,500



To Interest on loan

1,200



To Net Profit
Ashok (2/5)
Tanaji (3/5)

12260
18390


30650





51,200


51,200
Partner’s Capital A/c
Particulars
Ashok
Tanaji
Particulars
Ashok
Tanaji



By Balance b/d
30,000
40,000



By Interest on Capital
1,500
2,000
To Balance c/d
43,760
60,390
By Net Profit
12,260
18,390

43,760
60,390

43,760
60,390
Balance Sheet as on 31-3-2007
Liabilities
Rs.
Rs.
Assets
Rs.
Rs.
Partners Capital
Ashok
Tanaji

43,760
60,390


1,04,150

Patents Right
(-) 10% Depreciation

4,000
400


3,600



Building
Less: 5% Depreciation
1,00,000
5,000

95,000
Provident Fund
Creditors

7,000
45,000
Sundry Debtors
Less: New R.D.D.
35,000
1,750

33,250
Bank Loan (10%)
Add: Interest
12,000
1,200

13,200
Furniture
Investment

8,000
10,000



Cash

4,000



Closing Stock

15,000



Stock of Stationery

500


1,69,350


1,69,350

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