Pradeep and Prashant are partners sharing profits and losses in equal ratio. From the following Trial Balance you are required to prepare Trading and Profit & Loss account for the year ended 31st March, 1998 and Balance Sheet as on that date after taking into consideration the additional information.


Trial Balance as on 31st March, 1998

Particulars
(Debit)
Amount
Particulars
(Credit)
Amount
Land and Building
Plant(Addition on 1st
Jan.98,Rs.3,000)
Drawings
Pradeep
Prashant
Opening Stock
Freight
Purchases
Carriage
Office Expenses
Rent, Rates & Taxes
Insurance
Motor van
Salaries
Bad debts
Customers Account
Cash at Bank
44500
9750


3000
2000
26000
5000
34500
700
2270
1750
480
20000
1750
950
14600
250
Capitals
Pradeep
Prashant
Sales
Suppliers
Account
Reserve for
 Doubtful Debts
Outstanding
Expenses

60000
40000
57000
9500


500

500

167500

167500

Additional Information:
1.      Closing stock on 31st March, 1998 was at cost Rs. 40,000 and Market price Rs. 50,000.
2.      Provide 10% p.a. interest on Capital.
3.      Charge interest on drawings: Pradeep Rs. 100 and Prashant Rs. 150.
4.      Depreciate plant at 10% p.a.
5.      Prashant’s withdrawal of goods worth Rs. 1,000 for personal use but not recorded in the books.

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

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

26000
By Sales

57000
To Purchases

34500
By Goods Withdrawn by Partner Prashant

1000
To Freight

5000



To Carriage

700



To Gross Profit C/d

31800
By Closing Stock

40000


98000


98000



Profit and Loss Account for the year ended 31.03.1998

Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To Office Expenses

2270
By Gross Profit b/d

31800
To Rent, Rates & Taxes

1750
By Interest on Drawings


To Insurance

480
Pradeep
100

To Salaries

1750
Prashant
150
250
To Bad Debts
950




(+) F.B.D.
-




(+) N.R.D.D.
-




(-) O.R.D.D.
-500
450



To Depreciation on Plant

750



To Interest on Capital





Pradeep
6000




Prashant
4000
10000



To Net Profit C/d





Pradeep
7300




Prashant
7300
14600











32050


32050


Partners Capital  Account


Particulars
Pradeep
Prashant
Particulars
Pradeep
Prashant
To Drawings
3000
2000
By Balance B/d
60000
40000
To Drawings
[Goods]

1000
By Interest on Capital
6000
4000
To Interest on Drawings
100
150
By Net Profit b/d
7300
7300
To Balance c/d
70200
48150










73300
51300

73300
51300


Balance Sheet as on 31.03.2004



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


Land & Building

44500
Pradeep
70200

Plant
9750

Prashant
48150
118350
(-) Depreciation
750
9000
Creditors

9500
Motor Van

20000
Outstanding Expenses

500
Debtors

14600



Cash at Bank

250



Closing Stock

40000


128350


128350