Agarkar and Dravid are in partnership sharing profit and losses in the ratio of 2: 1 from the following information of Trial balance and adjustments you are required to prepare profit and loss account, trading account and Balance sheet as on 31st march 2003.


Trial Balance as on 31st March, 2003
Particulars
Debit (Rs.)
Credit (Rs.)
Prepaid Insurance
Insurance
R.B.D.D
Discount
Postage and Telephones
Salaries
Debtors
Creditors
Wages
Opening Stock
Carriage
Return Inward
Return Outward
Purchase and sales
Bank Overdraft
Plant and Machinery
Land and Building
Drawings:-
Agarkar
Dravid
Capitals:-
Agarkar
Dravid
400
1, 000

400
1, 600
28, 000
33, 000

12, 000
24, 000
500
2,800

96, 600

12, 000
88, 000

4,000
2,000


500




34, 000




4, 600
1, 50, 800
60, 400






30, 000
26, 000
3, 06, 300
3, 06, 300
Adjustments:
1.   Write off Rs. 1,000 for bad debts and provide for R.B.D.D @ 5% on debtors.
2.   Goods worth Rs. 2,000 were distributed as free samples.
3.   Closing Stock 31 – 12- 2003 was valued at cost Rs. 28, 000 while its market value is Rs. 30,000/-.
4.   Salaries were outstanding Rs. 1,000.
5.   Depreciate Land and Building @ 5% p.a. and Plant and Machinery @ 10% p.a.
6.   Goods worth Rs. 3,000 were destroyed by fire, but insurance company admitted the claim for Rs. 400 only.
7.   Dravid had taken goods worth Rs. 1000 for his own use, but no entry is made in the books.

ANSWER

GROSS PROFIT 53500

NET PROFIT 9200

BALANCE SHEET TOTAL 

153600




Solution:
In the books of M/s Agarkar and Dravid
Trading Account for the year ended 31.03.2014

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

24000
By Sales
150800

To Purchases
96600

(-) Return
(2800)
148000
(-) Return
(4600)
92000
By Goods distributed as free samples

2000
To Wages

12000
By Goods destroyed by fire

3000
To Carriage

500
By Goods taken over by partner Dravid

1000



By Closing Stock

28000
To Gross Profit C/d

53500





182000


182000

Profit and Loss Account for the year ended 31.03.2014
Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To Insurance

1000
By Gross Profit b/d

53500
To Discount

400



To Postage and Telephone

1600



To Bad debts
-




(+) F.B.D.
1000




(+) N.R.D.D.
1600




(-) O.R.D.D.
(500)
2100



To Salaries
28000




(+) Outstanding
1000
29000



To Advertisement

2000



To Depreciation





Plant and Machinery
1200




Land and Building
4400
5600



To Goods lost by fire
[3000 – 400]

2600



To New Profit C/d





Agarkar
6133




Dravid
3067
9200





53500


53500

Partners Capital Account
Particulars
Agarkar
Dravid
Particulars
Agarkar
Dravid
To Drawings
4000
2000
By balance b/d
30000
26000
To Drawings
[Goods]

1000
By Net Profit b/d
6133
3067
To Balance c/d
32133
26067




36133
29067

36133
29067

Balance Sheet as on 31.03.2014

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


Prepaid Insurance

400
Agarkar
32133

Debtors
33000

Dravid
26067
58200
(-) F.B.D.
(1000)

Bank Over draft

60400

32000

Creditors

34000
(-) N.R.D.D.
(1600)
30400
Outstanding Salaries

1000
Plant and Machinery
12000




(-) Depreciation @10%
1200
10800



Land and Building
88000




(-) Depreciation
(4400)
83600



Closing Stock

28000



Insurance Claim

400


153600


153600