Asha and Nisha are the partners sharing profits and losses equally. You are required to prepare the Trading and profit and loss account for the year ended 31st December, 1997 and a Balance sheet as at that date after making the necessary adjustments.


Trial Balance as on 31st December, 1997
Debit Balance
Amount
Credit Balance
Amount
Buildings
Plant and Machinery
Furniture
Sundry Debtors
Return Inwards
Discount
Printing and Stationery
Insurance Charges
Bad debts
Salaries
Purchases
Cash at Bank
Stock ( on 1.1.97)
Carriage Inwards
Legal Charges
Asha’s Drawings
Nisha’s Drawings
70000
60000
16000
28800
6000
2600
1500
1600
1400
19300
98000
25800
20000
2500
500
8000
6000
Asha’s Capital
Nisha’s Capital
Discount Received
Loan From Vijay
Sales
Sundry Creditors
Reserve for Bad Debts
Return Outward
80000
100000
1800
30500
120000
30000
2000
3700
3,68,000
3,68,000

Adjustments:

1.   The stock on 31.12.97 was of the value of Rs. 44,000 which is less than its market value by 2,000.
2.   On 24th December, 1997 stock of the value of Rs. 6,000 was stolen Insurance company admitted the claim for Rs. 4,000 only and paid the amount on 7th Jan 1998.
3.   Goods worth Rs. 4,000 were received on 31st December, 1997 and were included in the closing stock, but purchase invoice was omitted to be entered in the books.
4.   Make reserve for discount at 5% on debtors and creditors.

43200
18360
81180-103180
247160
GROSS PROFIT
NET PROFIT
PARTNERS CAPITAL ACCOUNT BALANCE
BALANCE SHEET TOTAL


Solution:
In the books of M/s Asha and Nisha
Trading Account for the year ended 31.12.1997

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

20000
By Sales
120000

To Purchases
98000

(-) Return
(6000)
114000
(-) Return
(3700)

By Goods was Stolen

6000

94300




(+) Unrecorded
4000
98300



To Carriage inward

2500
By Closing Stock

44000






To Gross Profit C/d

43200





164000


164000

Profit and Loss Account for the year ended 31.12.1997
Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To Salaries

19300
By Gross Profit b/d

43200
To Discount

2600
By Discount received

1800
To Printing & Stationery

1500
By Discount on Creditors

1700
To Insurance Charges

1600
By O.R.D.D.
2000

To Legal Charges

500
(-) Old Bad debts
(1400)

To Loss on Goods Stolen

2000
(-) F.B.D.
-

To Discount on Debtors

1440
(-) N.R.D.D.
-
600
To Net Profit C/d





Asha
9180




Nisha
9180
18360





47300


47300

Partners Current  Account
Particulars
Asha
Nisha
Particulars
Asha
Nisha
To Drawings
8000
6000
By Balance b/d
80000
100000
To Balance c/d
81180
103180
By Net Profit b/d
9180
9180







89180
109180

89180
109180

Balance Sheet as on 31.12.1997
Liability
Amt.
Amt.
Assets
Amt.
Amt.
Capital A/c


Buildings

70000
Asha
81180

Plant and Machinery

60000
Nisha
103180
184360
Furniture

16000
Loan from Vijay

30500
Sundry debtors
28800

Sundry Creditors
30000

(-) Discount
(1440)
27360
(+) Unrecorded
4000

Cash at bank

25800

34000

Closing Stock

44000
(-) Discount
(1700)
32300
Insurance Claim

4000








247160


247160