From the following information you are required to prepare the Trading account, profit and loss account and Balance sheet as on 31st March, 2014.


Trial Balance as on 31st March, 2014

Particulars
Debit (Rs.)
Credit (Rs.)
Ronaldo Capital
Ricardo’s capital
Ronaldo’s Drawing
Ricardo’s Drawing
Stock on 1 –4 – 2013
Bills Receivable
Purchases
Sales
Bills Payable
Return In ward
Return Outward
Plant and Machinery
Loose Tools
Patents
Sundry Debtors
Sundry Creditors
Cash at Bank
Wages
Salaries
Rent and Taxes
Insurance
Printing and Stationery
Power and Fuel


4, 000
1, 000
2, 20, 000
5, 000
2, 95, 000


5, 000

1, 00, 000
24, 000
25, 000
1, 25, 000

77, 550
19, 000
17, 500
7, 950
3, 000
2, 000
3, 500
1, 00, 000
2, 30, 000





2, 00, 000
1, 60, 000

4, 500




2, 40, 000







9, 34, 500
9, 34, 500

1.      Stock on 31st March, 2014 is valued at Rs. 30,000 but is market value is Rs. 35,000.
2.      Depreciate plant and machinery @ 5% p.a. Patents by 20%.
3.      Insurance were prepaid for Rs. 200.
4.      Salaries outstanding amounted to Rs. 800.
5.      Maintain Reserve for Doubtful debts at 10% of Sundry debtors.
6.      Goods worth Rs. 5000 were destroyed by fire and the insurance company admitted a claim for Rs. 3000 only.
7.      Ronaldo has withdrawn goods worth Rs. 500 for his own use, but no entry is passed in the books.

Solution: In the books of Ronaldo & Ricardo

Trading A/c for the year ended 31.03.14

Particulars
Amount
Amount
Particulars
Amount
Amount
To Opening Stock

220000
By Sales
200000

To Purchases
295000

(-) Return
-5000
195000
(-) Return
-4500
290500
By Goods destroyed by fire

5000
To Wages

19000
By Goods withdrawn by Partner Ronaldo

500
To Power & Fuel

3500






By Closing Stock

30000



By Gross Loss C/d

302500


533000


533000


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

Particulars
Amount
Amount
Particulars
Amount
Amount
To Gross Loss b/d

302500



To Salaries
17500




(+) Outstanding
800
18300



To Rent & Taxes

7950



To Insurance
3000




(-) Prepaid
-200
2800



To Printing & Stationery

2000



To Bad debts
-




(+) F.B.D.
-         




(+) N.R.D.D.
12500




(-) O.R.D.D.
-
12500



To Depreciation





On Plant & Machinery
5000




On Patents
5000
10000



To Goods lost on fire

2000






By Net Loss c/d





Ronaldo
179025




Ricardo
179025
358050


358050


358050


Partners Capital A/c

Particulars
Ronaldo
Ricardo
Particulars
Ronaldo
Ricardo
To Drawings
4000
1000
By Balance b/d
100000
230000
To Drawings
[Goods]
500
-



To Net Loss b/d
179025
179025



To balance c/d
-
49975
By Balance c/d
83525
-

183525
230000

183525
230000

Balance Sheet as on 31.3.14


Liabilities
Amount
Amount
Assets
Amount
Amount
Capital A/c


Bills Receivable

5000
Ronaldo
-

Plant & Machinery
100000

Ricardo
49975
49975
(-) Depreciation
(5000)
95000
Bills Payable

160000
Loose Tools

24000
Sundry Creditors

240000
Patents
25000

Outstanding Salaries

800
(-) Depreciation
-5000
20000



Sundry Debtors
125000




(-) N.R.D.D.
-12500
112500



Cash at Bank

77550



Prepaid Insurance

200



Insurance Claim

3000



Closing Stock

30000



Ronaldo's Capital

83525


450775


450775