OMTEX CLASSES: A and B are in Partnership. Their capitals on 1st April 2010 were Rs. 30,000 each.

A and B are in Partnership. Their capitals on 1st April 2010 were Rs. 30,000 each.

TEXTUAL PROBLEM NO. 8
SINGLE ENTRY ACCOUNTING SYSTEM

8. A and B are in Partnership. Their Capitals on 1st April 2010 were Rs. 30,000 each. The assets and liabilities as on 31st March 2011 were as follows: Cash in Hand Rs. 2,400, Cash at Bank Rs. 16,000, Bills Receivable Rs. 4,000, Debtors Rs. 28,600. Stock Rs. 26,000. Machinery Rs. 14,000, Furniture Rs. 8,000, Bills Payable Rs. 3,000, Sundry creditors Rs. 6,000, Outstanding salary Rs. 800.

Additional Information:

(1) Provide Rs. 600 as Bad Debts and 5% R.D.D.
(2) Depreciate furniture @ 5% p.a. and Machinery @ 10% p.a.
(3) Stock is undervalued by Rs. 2,000.
(4) Sundry creditors are overvalued by Rs. 1,000.
(5) Prepaid insurance Rs. 2,000.
(6) Additional capital introduced by partners Rs. 4,000 each.

(7) Drawings of ‘A’ Rs. 3,000 and ‘B’ Rs. 2,000, calculate the profit for the year ended 31st March 2011.