Kamesh and Mani are partners sharing profits and losses in equal ratio. From the following Trial Balance you are required to prepare Trading and profit and Loss Account for the year ended 31st December, 2005 and Balance sheet as on that date after taking into consideration the additional information.


Debit Balance
Amount
Credit Balance
Amount
Land and Building
44500
Capital : Kamesh
60000
Plant
9750
Mani
40000
Drawings: Kamesh
3000
Sales
57000
Mani
2000
Sundry Creditors
9500
Opening Stock
26000
Reserve for Doubtful Debts
500
Wages
5000
Outstanding Expenses
500
Purchases
34500


Carriage inwards
700


Office expenses
2270


Rent, Rates and Taxes
1750


Insurance
480


Motor Van (addition on 1st July Rs. 10,000)
20,000


Salaries
1750


Bad debts
950


Debtors
14600


Cash at Bank
250



167500

167500


Additional Information:
1.      Closing stock on 31st December, 2005 was at cost Rs, 40, 000/- and Market price Rs. 50,000/-
2.      Depreciate Plant at 10% p.a. and Land and Building @ 20% p.a. Depreciate Motor van by 10% p.a.
3.      The goods for Rs. 5, 600 purchases and received on 25th December, 2002 were not recorded in the purchase book.
4.      Insurance is paid for the year ended 31st March 2005.


Solution:
In the books of M/s Kamesh and Mani
Trading Account for the year ended 31.12.2005

Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To Opening Stock

26000
By Sales

57000
To Purchases
34500




(+) Unrecorded
5600
40100



To Wages

5000



To Carriage Inward

700



To Gross Profit C/d

25200
By Closing Stock

40000














97000


97000

Profit and Loss Account for the year ended 31.12.2005
Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To Office Expenss

2270
By Gross Profit b/d

25200
To Rent, Rates and Taxes

1750



To Insurance
480




(+) Outstanding for 9 months
360
840



To Salaries

1750



To Bad debts
950




(+) F.D.D.
-




(+) N.R.D.D.
-




(-) O.R.D.D.
-500
450



To Depreciation





Plant
975




Land & Building
8900




Motor Van
1500
11375



To Net Profit C/d





Kamesh
3383




Mani
3382
6765

















25200


25200

Partners Current  Account
Particulars
Kamesh
Mani
Particulars
Kamesh
Mani
To Drawings
3000
2000
By Balance b/d
60000
40000
To Balance c/d
60383
41382
By Net Profit b/d
3383
3382







63383
43382

63383
43382

Balance Sheet as on 31.12.1997

Liability
Amt.
Amt.
Assets
Amt.
Amt.
Capital A/c


Land & Building
44500

Kamesh
60383

(-) Depreciation
-8900
3600
Mani
41382
101765
Plant
9750

Sundry Creditors
9500

(-) Depreciation
-975
8775
(+) Unrecorded
5600
15100
Motor Van
20000

Outstanding Expenses

500
(-) Depreciation
-1500
18500
Outstanding Insurance

360
Debtors

14680



Cash at Bank

250



Closing Stock

40000


117725


117725