Following is the Trial Balance of Devi and Sridevi sharing profits and losses equally. Prepare a Trading and Profit & Loss account for the year ending 31st March, 2014 and a Balance Sheet as on that date after considering the adjustment given below.

Trial Balance as on 31^st March, 2014

Particulars (Debit)	Rs.	Particulars (Credit)	Rs.
Stock (1-4-2013) Purchases Returns Inwards Carriage Motive Power Wages Trade Expenses Sundry Debtors Salaries Insurance Postage Commission Plant & Machinery Furniture Advertising Office Rent (10 months) Drawings Devi Sridevi Building Cash in Hand	44000 170000 10000 4000 6000 56000 4000 72000 38000 2400 3600 5000 60000 16000 8000 10000 14000 6000 24000 3000	Capital A/c Devi Sridevi Sales Creditors Commission Bank Loan	80000 80000 320000 40000 4000 32000
	556000		556000

Adjustments

1.     Stock on 31.3.2014 was valued at cost price Rs. 80,000 and market price Rs. 72,000.

2.     Insurance has been paid for one year ending 30.6.2014.

3.     Goods withdrawn by Devi amounting to Rs. 10,000 during the year were not recorded in the books.

4.     Bad debts were Rs. 2000 and an R.D.D. is to be created at 5% on debtors.

5.     Goods of Rs. 6000 were purchased on 30.3.2014 and also included in the closing stock, but the purchase was not recorded in the books of account

Solution: In the books of Devi & Sridevi

Trading A/c for the year ended 31.03.14

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		44000	By Sales	320000
To Purchases	170000		(-) Return	-10000	310000
(+) Unrecorded	6000	176000	By Goods withdrawn by partner Devi		10000
To Carriage		4000
To Motive Power		6000
To Wages		56000
To Gross Profit C/d		106000	By Closing Stock		72000
		392000			392000

Profit and Loss A/c for the year ended 31 – 3 – 14

Particulars	Amount	Amount	Particulars	Amount	Amount
To Trade Expenses		4000	By Gross Profit C/d		106000
To Salaries		38000	By Commission		4000
To Insurance	2400
(-) Prepaid	-600	1800
To Postage		3600
To Commission		5000
To Advertising		8000
To Office Rent	10000
(+) Outstanding	2000	12000
To Bad Debts	-
(+) F.B.D.	2000
(+) N.R.D.D.	3500
(-) O.R.D.D.	-	5500
To Net Profit C/d
Devi	16050
Sridevi	16050	32100
		110000			110000

Partners Current A/c

Particulars	Devi	Sridevi	Particulars	Devi	Sridevi
To Drawings	14000	6000	By Balance C/d	80000	80000
To Drawings [Goods]	10000	-	By Net Profit b/d	16050	16050
To Balance C/d	72050	90050
	96050	96050		96050	96050

Balance Sheet as on 31.3.14

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c			Sundry Debtors	72000
Devi	72050		(-) F.B.D.	-2000
Sridevi	90050	162100		70000
Creditors	40000		(-) N.R.D.D.	3500	66500
(+) Unrecorded Purchase	6000	46000	Plant & Machinery		60000
Bank Loan		32000	Furniture		16000
Outstanding Rent		2000	Building		24000
			Cash in Hand		3000
			Closing Stock		72000
			Prepaid Insurance		600
		242100			242100