Following is the Trial Balance of Vinod and Vikas sharing profits and losses equally. Prepare a Trading and Profit & Loss account for the year ending 31st March, 1996 and a Balance Sheet as on that date after considering the adjustment given below.


Trial Balance as on 31st March, 1996

Particulars
(Debit)
Rs.
Particulars
(Credit)
Rs.
Stock (1-4-1995)
Purchases
Returns Inwards
Carriage
Motive Power
Wages
Trade Expenses
Sundry Debtors
Salaries
Insurance
Postage
Commission
Plant & Machinery
Furniture
Advertising
Office Rent (10 months)
Drawings
Vinod
Vikas
Building
Cash in Hand
44000
170000
10000
4000
6000
56000
4000
72000
38000
2400
3600
5000
60000
16000
8000
10000

14000
6000
24000
3000
Capital A/c
Vinod
Vikas
Sales
Creditors
Commission
Bank Loan

80000
80000
320000
40000
4000
32000













556000
556000

Adjustments

1.     Stock on 31.3.1996 was valued at cost price Rs. 80,000 and market price Rs. 72,000.

2.     Insurance has been paid for one year ending 31.6.1996.

3.     Goods withdrawn by Vinod amounting to Rs. 10,000 during the year were not recorded in the books.

4.     Bad debts were Rs. 2000 and an R.D.D. is to be created at 5% on debtors.

5.     Goods of Rs. 6000 were purchased on 30.3.1996 and also included in the closing stock, but the purchase was not recorded in the books of account


Solution:
In the books of M/s Vinod and Vikas
Trading Account for the year ended 31.03.1996

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

44000
By Sales
320000

To Purchases
170000

(-) Return
-10000
310000
(+) Unrecorded
6000
176000
By Goods withdrawn by Partner Vinod

10000
To Carriage

4000



To Motive Power

6000



To Wages

56000



To Gross Profit C/d

106000
By Closing Stock

72000


392000


392000


Profit and Loss Account for the year ended 31.03.2004

Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To Trade Expenses

4000
By Gross Profit b/d

106000
To Salaries

38000
By Commission

4000
To Insurance
2400




(-) Prepaid
-600
1800



To Postage

3600



To Commission

5000



To Advertising

8000



To Office Rent
10000




(+) Outstanding
2000
12000



To Bad Debts
-




(+) F.B.D.
2000




(+) N.R.D.D.
3500




(-) O.R.D.D.
-
5500



To Net Profit C/d





Vinod
16050




Vikas
16050
32100





110000


110000


Partners Capital  Account

Particulars
Vinod
Vikas
Particulars
Vinod
Vikas
To Drawings
14000
6000
By Balance B/d
80000
80000
To Drawings
[Goods]
10000
-
By Net Profit b/d
16050
16050
To Balance C/d
72050
90050
















96050
96050

96050
96050



Balance Sheet as on 31.03.2004

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


Sundry Debtors
72000

Vinod
72050

(-) F.B.D.
-2000

Vikas
90050
162100

70000

Creditors
40000

(-) N.R.D.D.
-3500
66500
(+) Unrecorded Purchases
6000
46000
Plant & Machinery

60000
Bank Loan

32000
Furniture

16000
Outstanding Office Rent

2000
Building

24000



Cash in Hand

3000



Closing Stock

72000



Prepaid Insurance

600














242100


242100