Dalal & Raja are partners sharing profit and losses equally. From the following Trial Balance of the firm, prepare Trading a/c Profit and Loss A/c and Balance sheet for the year ending 31.12.1997.

Trial Balance as on 31.12.1997

Debit
Rs.
Credit
Rs.
Stock
Purchases
Sales Return
Debtors
Wages
Royalties
Furniture
Machinery
Advertisement for 4 years
Salary
Provident fund contribution
Provident fund investment
Insurance
Cash
Drawings :Dalal
Raja

20,000
1,30,200
500
20,000
6,000
1,000
5,000
30,000
4,000
3,000
500
2,000
500
3,000
3,500
1,500
Capital Accounts: Dalal
Raja
Current Accounts: Dalal
Raja
Sales
Purchase Return
Commission
Provident Fund
Interest on Provident fund investments.
Reserve for Doubtful debts
Creditors

15,000
15,000
2,000
2,000
1,70,500
3,200
300
2,000
200
500
20,000


2,30,700
2,30,700

1.      Closing stock: Cost price Rs. 25,000. Market Price Rs. 30,000/-
2.      Dalal has taken goods worth Rs. 500 for his personal use.
3.      Goods amounting Rs. 3,000 were sold and dispatched on 27.12.1997 but no entry was made in the sales book.
4.      Prepaid insurance Rs. 100.
5.      Depreciation Furniture by 15%, Machinery by 20%
6.      Write off bad debts Rs. 400/- and provide for reserve for doubtful debts at 3% on debtors.

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

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

20000
By Sales
170500

To Purchases
130200

(-) Return
500

(-) Return
-3200
127000

170000

To Wages

6000
(+) Unrecorded
3000
173000
To Royalties

1000
By Goods withdrawn by Partner Dalal

300
To Gross Profit C/d

44500
By Closing Stock

25000


198500


198500

Profit and Loss Account for the year ended 31.12.1997
Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To Advertisement
4000

By Gross Profit b/d

44500
(-) Prepaid
-3000
1000
By Commission

300
To Salary

3000



To Provident Fund Contribution

500



To Insurance
500




(-) Prepaid
-100
400



To Bad Debts
-




(+) F.B.D.
400




(+) N.R.D.D.
678




(-) O.R.D.D.
-500
578



To Depreciation





Furniture
750




Machinery
6000
6750



To Net Profit





Dalal
16286




Raja
16286
32572





44800


44800

Partners Current Account
Particulars
Kale
Gore
Particulars
Kale
Gore
To Drawings
3500
1500
By Balance b/d
2000
2000
To Drawings
[Goods]
500
-
To Net Profit b/d
16286
16286
To Balance c/d
14286
16786




18286
18286

18286
18286

Balance Sheet as on 31.03.2014

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


Debtors
20000

Dalal
15000

(+) Unrecorded Sales
3000

Raja
15000
30000

23000

Current A/c


(-) F.B.D.
-400

Dalal
14286


22600

Raja
16786
34072
(-) N.R.D.D.
-678
21922
Provident Fund
2000

Furniture
5000

(+) Interest on Provident Fund Investments
200
2200
(-) Depreciation
-750
4250
Creditors

20000
Machinery
30000




(-) Depreciation
-6000
24000



Provident Fund Investments

2000



Cash

3000



Closing Stock

25000



Prepaid Insurance

100



Prepaid Advertisement

3000


83272


83272