Partnership Final Accounts (T-Account Format)
A Double-Entry Solution for Jitesh & Pritesh | Year ended 31st March, 2010
The Problem
Trial Balance as on 31st March, 2010
| Particulars | Debit Balance (₹) | Credit Balance (₹) |
|---|---|---|
| Capital – Jitesh | 200,000 | |
| Capital – Pritesh | 120,000 | |
| Bills Receivable | 40,000 | |
| Bills Payable | 50,000 | |
| Opening Stock | 70,000 | |
| Purchases & Sales | 194,000 | 363,000 |
| Returns | 3,000 | 4,000 |
| Salaries | 15,600 | |
| Wages | 28,400 | |
| Conveyance | 2,200 | |
| Commission | 6,000 | |
| Miscellaneous Expenses | 3,200 | |
| Warehouse Rent | 9,000 | |
| Brokerage | 3,000 | |
| Dock charges | 4,200 | |
| Insurance | 4,800 | |
| Goodwill | 76,000 | |
| Land and Building | 180,000 | |
| Shares in Bajaj Ltd. | 50,000 | |
| Cash in hand | 3,600 | |
| Sundry Debtors & Creditors | 56,000 | 60,000 |
| Motor van | 60,000 | |
| Total | 803,000 | 803,000 |
Adjustments
- Closing stock was valued at ₹ 75,000.
- Depreciate land and building and motor van at 5% p.a.
- Insurance is paid for the year ended 31st May, 2010.
- Jitesh has taken goods of ₹ 3,000 for his personal use.
- Goods of ₹ 8,000 were destroyed by fire and the Insurance Company admitted a claim of ₹ 6,400 only.
- Commission due but not received (accrued) is ₹ 1,600.
Verified Solution (T-Account Format)
Trading and Profit & Loss Account for the year ended 31st March, 2010
| DEBIT (Dr.) | CREDIT (Cr.) | ||||
|---|---|---|---|---|---|
| Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
| To Opening Stock | 70,000 | By Sales | 363,000 | ||
| To Purchases | 194,000 | Less: Returns | (3,000) | 360,000 | |
| Less: Returns | (4,000) | 190,000 | By Goods taken by Jitesh | 3,000 | |
| To Wages | 28,400 | By Goods destroyed by fire | 8,000 | ||
| To Dock Charges | 4,200 | By Closing Stock | 75,000 | ||
| To Gross Profit c/d | 153,400 | ||||
| Total | 446,000 | Total | 446,000 | ||
| To Salaries | 15,600 | By Gross Profit b/d | 153,400 | ||
| To Miscellaneous Expenses | 3,200 | By Commission Received | 6,000 | ||
| To Warehouse Rent | 9,000 | Add: Accrued | 1,600 | 7,600 | |
| To Brokerage | 3,000 | ||||
| To Conveyance | 2,200 | ||||
| To Insurance (4,800 - 800) | 4,000 | ||||
| To Depreciation (9,000 + 3,000) | 12,000 | ||||
| To Loss by Fire (8,000 - 6,400) | 1,600 | ||||
| To Net Profit (Transfer to Capital) | 110,400 | ||||
| Total | 161,000 | Total | 161,000 | ||
Partners' Capital Account
| DEBIT (Dr.) | CREDIT (Cr.) | ||||
|---|---|---|---|---|---|
| Particulars | Jitesh (₹) | Pritesh (₹) | Particulars | Jitesh (₹) | Pritesh (₹) |
| To Drawings (Goods) | 3,000 | - | By Balance b/d | 200,000 | 120,000 |
| To Balance c/d | 252,200 | 175,200 | By P&L A/c (Profit) | 55,200 | 55,200 |
| Total | 255,200 | 175,200 | Total | 255,200 | 175,200 |
Balance Sheet as on 31st March, 2010
| LIABILITIES | ASSETS | ||||
|---|---|---|---|---|---|
| Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
| Capital Accounts: | Fixed Assets: | ||||
| Jitesh | 252,200 | Goodwill | 76,000 | ||
| Pritesh | 175,200 | 427,400 | Land & Building | 180,000 | |
| Current Liabilities: | Less: Depreciation (5%) | (9,000) | 171,000 | ||
| Bills Payable | 50,000 | Motor Van | 60,000 | ||
| Sundry Creditors | 60,000 | Less: Depreciation (5%) | (3,000) | 57,000 | |
| Investments: | |||||
| Shares in Bajaj Ltd. | 50,000 | ||||
| Current Assets: | |||||
| Closing Stock | 75,000 | ||||
| Sundry Debtors | 56,000 | ||||
| Bills Receivable | 40,000 | ||||
| Insurance Claim Receivable | 6,400 | ||||
| Accrued Commission | 1,600 | ||||
| Prepaid Insurance | 800 | ||||
| Cash in hand | 3,600 | ||||
| Total | 537,400 | Total | 537,400 | ||