Mani and Sonu are the partners sharing profits and losses equally. You are required to prepare the Trading and profit and loss account for the year ended 31st March, 2014 and a Balance sheet as at that date after making the necessary adjustments.

Trial Balance as on 31st March, 2014.

Debit Balance
Amount
Credit Balance
Amount
Buildings
Plant and Machinery
Furniture
Sundry Debtors
Return Inwards
Discount
Printing and Stationery
Insurance Charges
Bad debts
Salaries
Purchases
Cash at Bank
Stock ( on 1.4.2013)
Carriage Inwards
Legal Charges
Mani’s Drawings
Sonu’s Drawings
70000
60000
16000
28800
6000
2600
1500
1600
1400
19300
98000
25800
20000
2500
500
8000
6000
Mani’s Capital
Sonu’s Capital
Discount Received
Loan From Vijay
Sales
Sundry Creditors
Reserve for Bad Debts
Return Outward
80000
100000
1800
30500
120000
30000
2000
3700
3,68,000
3,68,000
Adjustments:
1.      The stock on 31.03.14 was of the value of Rs. 44,000 which is less than its market value by 2,000.
2.      Goods worth Rs. 4,000 were received on 31st December, 1997 and were included in the closing stock, but purchase invoice was omitted to be entered in the books.
3.      Make reserve for discount at 5% on debtors and creditors.

Solution: In the books of Mani & Sonu

Trading A/c for the year ended 31.03.14

Particulars
Amount
Amount
Particulars
Amount
Amount
To Opening Stock

20000
By Sales
120000

To Purchases
98000

(-) Returns
-6000
114000
(-) Returns
-3700





94300




(+) Unrecorded
4000
98300



To Carriage inward

2500



To Gross Profit C/d

37200
By Closing Stock

44000


158000


158000

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

Particulars
Amount
Amount
Particulars
Amount
Amount
To Discount

2600
By Gross Profit b/d

37200
To Printing & Stationery

1500
By O.R.D.D.
2000

To Insurance Charges

1600
(-) N.R.D.D.
-

To Salaries

19300
(-) F.B.D.
-

To Legal Charges

500
(-) Bad debts
1400
600
To Discount on Debtors

1440
By Discount on Creditors

1700
To Net Profit C/d


Discount received

1800
Mani
7180




Sonu
7180
14360





41300


41300



Partners Current A/c

Particulars
Mani
Sonu
Particulars
Mani
Sonu
To Drawings
8000
6000
By Balance b/d
80000
100000
To Balance b/d
79180
101180
By Net Profit b/d
7180
7180







87180
107180

87180
107180


Balance Sheet as on 31.3.14


Liabilities
Amount
Amount
Assets
Amount
Amount
Capital A/c


Buildings

70000
Mani
101180

Plant & Machinery

60000
Sonu
79180
180360
Furniture

16000
Loan from Vijay

30500
Sundry Debtors
28800

Sundry Creditors
30000

(-) Discount
-1440
27360
(+) Unrecorded Sales
4000

Cash at Bank

25800

34000

Closing Stock

44000
(-) Discount
-1700
32300





243160


243160