Ravi and Magesh are in a Partnership firm. The trial Balance of the firm on 31st March, 2014 was as follows. Prepare Trading and Profit & Loss account for the year ended 31st March, 2014 and a Balance sheet as on that date.

 Trial Balance as on 31st March, 2014.

Particulars
Debit (Rs.)
Credit (Rs.)

Capitals:


Ravi

15000
Magesh

10000
Drawings:


Ravi
500

Magesh
200

Buildings
20000

Plant and Machinery
6000

Cash at Bank
600

Purchases and Sales
47500
75500
Returns
1500
1000
Carriage
350

Opening Stock
11000

Wages
6000

Debtors and Creditors
17600
12600
Salaries
2500

Rent and Insurance
400

Postage and Telegrams
200

Bad Debts
250

Discount
100
50
Reserve for Bad Debts

750
Outstanding Salaries

100
Trade Expenses
300


115000
115000

1.      Partners share Profits and Losses  in the ratio of their capitals.
2.      Write off Rs. 450 for Bad debts & Reserve for Bad and Doubtful  Debts is to be maintained  at 5% on the Debtors.
3.      Goods worth Rs. 1, 000 were  destroyed by fire and the insurance  company admitted a claim for Rs. 800.
4.      Stock as on 31st December,  2004 was valued at Rs. 8, 000.
5.      Goods worth Rs. 1000 were  distributed as free samples.
6. Wages outstanding Rs. 1000

Solution: In the books of Ravi & Magesh

Trading A/c for the year ended 31.03.14

Particulars
Amount
Amount
Particulars
Amount
Amount
To Opening Stock

11000
By Sales
75500

To Purchases
47500

(-) Returns
-1500
74000
(-) Returns
-1000
46500
By Goods Lost by Fire

1000
To Carriage

350
By Goods distributed as free sample

1000
To Wages
6000




(+) Outstanding
1000
7000



To Gross Profit c/d

19150
By Closing Stock

8000


84000


84000

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

Particulars
Amount
Amount
Particulars
Amount
Amount
To Salaries

2500
By Gross Profit b/d

19150
To Rent & Insurance

400
By Discount

50
To Postage and Telegrams

200



To Bad debts
250




(+) F.B.D.
450




(+) N.R.D.D.
858




(-) O.R.D.D.
(750)
808



To Discount

100



To Trade Expenses

300



To Goods lost by fire

200



To Advertisements

1000



To Net Profit





Ravi
8215




Magesh
5477
13692





19200


19200


Partners Capital A/c

Particulars
Ravi
Magesh
Particulars
Ravi
Magesh
To Drawings
500
200
By Balance b/d
15000
10000
To Balance c/d
22715
15477
By Net Profit b/d
8215
5477







23215
15477

23215
15477

Balance Sheet as on 31.3.14


Liabilities
Amount
Amount
Assets
Amount
Amount
Capital A/c


Buildings

20000
Ravi
22715

Plant and Machinery

6000
Magesh
15277
37992
Cash at Bank

600
Creditors

12600
Debtors
17600

Outstanding Salaries

100
(-) F.B.D.
(450)

Outstanding Wages

1000

17150




(-) N.R.D.D.
(858)
16292



Insurance Claim

800



Closing Stock

8000








51692


51692