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 31^st 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 24^th 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 7^th Jan 1998.

3.   Goods worth Rs. 4,000 were received on 31^st 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