Nivedha and Suganya are partners sharing profits and losses in the ratio of 2 : 1. From the following Trial Balance prepare Trading and Profit and loss account for the year ending 31st March, 2014.

Trial Balance as on 31.3.2014
Particulars
Debit (Rs.)
Credit (Rs.)
Stock
Sundry Debtors
Bills payable
Purchases
Wages
Returns Outward
Salaries
Office Expenses
Insurance
Plant & Machinery
Sundry Creditors
Rent
Sales
Reserve for Doubtful Debts
Travelling Expenses
Returns Inward
Land and Building
Bills Receivable
Bank
Nivedha’s capital
Suganya’s capital

20, 000
18, 000

40, 000
8, 500

2, 700
2, 400
1, 300
30, 000

1, 800


1, 500
3, 500
44, 800
3, 400
6, 600


10, 000


2, 500




21, 500

60, 000
500





60, 000
30, 000
1, 84, 500
1, 84, 500

1.      Closing stock was valued at Rs. 26,500.
2.      Provide 10% Depreciation  on Plant and Machinery.
3.      Goods worth Rs. 1000 were  distributed as free samples.
4.      Prepaid Insurance Rs. 300.
5.      Maintain Reserve for Doubtful  debts at 1% of Sundry debtors.
6.      Outstanding rent for the  current year Rs. 200.
7.      Goods worth Rs. 100 were  taken over by Nivedha for her  personal use, but no entry  is made in the books.

Solution: In the books of Nivedha and Suganya

Trading A/c for the year ended 31.03.14

Particulars
Amount
Amount
Particulars
Amount
Amount
To Opening Stock

20000
By Sales
60000

To Purchases
40000

(-) Returns
-3500
56500
(-) Returns
-2500
37500
By Goods distributed as free samples

1000
To wages

8500
By Goods withdrawn by Partner Nivedha

100



By Closing stock

26500
To Gross Profit C/d

18100





84100


84100


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

Particulars
Amount
Amount
Particulars
Amount
Amount
To Salaries

2700
By Gross Profit b/d

18100
To Office Expenses

2400
By O.R.D.D.
500

To Insurance
1300

(-) N.R.D.D.
180

(-) Prepaid
(300)
1000
(-) F.B.D.
-

To Rent
1800

(-) Bad debts
-
320
(+) Outstanding
200
2000



To Travelling Expenses

1500



To Depreciation on
Plant and Machinery

3000



To Advertisement

1000



To Net Profit C/d





Nivedha
3213




Suganya
1607
4820





18420


18420



Partners Capital A/c

Particulars
Nivedha
Suganya
Particulars
Nivedha
Suganya
To Drawings (Goods)
100
-
By Balance b/d
60000
30000
To Balance C/d
63113
31607
By Net Profit b/d
3123
1607







63213
31607

63213
31607



Balance Sheet as on 31.3.14


Liabilities
Amount
Amount
Assets
Amount
Amount
Capital A/c


Sundry Debtors
18000

Nivedha
63113

(-) N.R.D.D.
-180
17820
Suganya
31607
94720
Plant & Machinery
30000

Bills Payable

10000
(-) Depreciation
-3000
27000
Sundry Creditors

21500
Land & Building

44800
Outstanding rent

200
Bills Receivable

3400



Bank

6600



Closing Stock

26500



Prepaid Insurance

300


126420


126420