Mr. Kale and Mr. Gore were partners sharing profits and losses equally. The Trial Balance of their firm was as under: Prepare Trading and Profit and Loss Account for the year ended on 31st March, 2004 and Balance Sheet as on that date:


Trial Balance as on 31st March, 2004.
Debit Balance
Rs.
Credit Balance
Rs.
Opening Stock
Wages
Purchases
Investments
Postage
Printing & Stationery
Carriage Outwards
Insurance
Debtors
Furniture
Bad Debts
Carriage Inwards
Cash in Hand
Machinery (Purchased on 1.7.03)
Salaries (For 10 months)
Sundry Expenses
Bills receivable
30000
9500
52500
10000
1000
2500
1300
3200
35000
5500
1200
1800
5400
32000
15000
2100
8500

Capitals:
Mr. Kale
Mr. Gore
Current Accounts:
Mr. Kale
Mr. Gore
Bills Payable
10% Bank Loan(Taken on 1.10.2003)
Bank Overdraft
Creditors
Sales
R.D.D.
Returns Outward

30000
60000

2100
1400
7500
10000
6500
25000
70500
3000
500
216500
216500

Adjustment
1.   Closing stock was valued at Rs. 61,500.
2.   Printing and Stationery included Rs. 500 paid for purchase of postal stamps.
3.   Depreciate Furniture and Machinery at 10% p.a.
4.   5% interest is to be allowed on capital.
5.   Of the debtors Rs. 500 were bad and should be written off, and R.D.D. should be maintained at 5%.
6.   Goods of Rs. 7,500 were purchased on 30th March, 2004 and included in the closing stock but those purchases were not recorded in the books of accounts.

7.   Bills receivable include a dishonoured bill of Rs. 500. 

Answer:

GROSS PROFIT  31200

NET PROFIT  5300

BALANCE SHEET TOTAL 

152700



Solution:
In the books of M/s Kale and Gore
Trading Account for the year ended 31.03.2004

Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To opening stock

30000
By Sales

70500
To Purchases
52500




(-) Return
(500)





52000




(+) Unrecorded
7500
59500



To Wages

9500



To Carriage inward

1800
By Closing Stock

616500






To Gross Profit C/d

31200





132000


132000

Profit and Loss Account for the year ended 31.03.2004
Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To Postage
1000

By Gross Profit b/d

31200
(+) Postal Stamp
500
1500



To Printing & Stationery
2500




(-) Wrongly recorded
(500)
2000



To Carriage Outward

1300



To Insurance

3200



To Bad Debts
1200




(+) FBD
500




(+) NRDD
1750




(-) ORDD
(3000)
450



To Salaries
15000




(+) Outstanding
3000
18000



To Sundry Expenses

2100



To Depreciation





Machinery
2400




Furniture
550
2950



To Interest on Capital





Kale
1500




Gore
3000
4500



To Interest on Bank Loan

500






By Net loss c/d





Kale
2650




Gore
2650
5300








36500


36500

Partners Current  Account
Particulars
Kale
Gore
Particulars
Kale
Gore
To Net Loss b/d
2650
2650
By Balance b/d
2100
1400



By Interest on Capital
1500
3000






To Balance C/d
950
1750




3600
4400

3600
4400

Balance Sheet as on 31.03.2014
Liability
Amt.
Amt.
Assets
Amt.
Amt.
Capital A/c


Investments

10000
Kale
30000

Debtors
350000

Gore
60000
90000
(-) FBD
(500)

Current A/c



34500

Kale
950

(+) Bills receivable Dishonoured
500

Gore
1750
2700

35000

Bills Payable

7500
(-) NRDD
(1750)
33250
10% Bank Loan
10000

Furniture
5500

(+) Interest
500
10500
(-) Depreciation
(550)
4950
Bank Overdraft

6500
Cash in hand

5400
Creditors
25000

Machinery
32000

(+) Unrecorded Purchase
7500
32500
(-) Depreciation
(2400)
29600
Outstanding Salaries

3000
Bills receivable
8500




(-) Dishonoured
(500)
8000



Closing Stock

61500


152700


152700