Prepare Trading and Profit & Loss account for the year ended 31st March, 2014 and Balance sheet as on that date from the following Trial Balance of Kaveri and Narmada.


Debit Balance
Rs.
Credit Balance
Rs.
Kaveri’s Drawings
Narmada’s Drawings
Land & Building
Plant & Machinery
Stock(1.4.2013)
Purchases
Wages
Carriage Outward
Carriage Inward
Coal
Salary
Rent, Rates & Taxes
Discount Allowed
Cash & Bank Balance
Sundry Debtors
Printing & Stationery
Bad Debts
Advertisement
Sales Return
Furniture
Bills Receivable
4,000
4,000
21,000
12,600
8,000
12,000
5,000
500
400
1,260
7,500
560
300
5,080
9,000
460
240
1,750
400
1,240
1,600
Kaveri’s Capital
Narmada’s Capital
Bills Payable
Creditors
Purchase Returns
Sales
12,000
20,000
6,790
14,600
500
43,000
96,890
96,890

Adjustments:
1.      Closing Stock is valued at Rs. 10,000/- at cost whose market value was Rs. 15,000/-
2.      Provision for doubtful debts should be maintained at 5% on sundry debtors.
3.      Kaveri has withdrawn goods for his personal use Rs. 500 for which no entry is passed.
4.      Fire occurred in the Godown and goods worth Rs. 5, 000 were destroyed, but Insurance Company admitted Claim for Rs. 3, 500.
5.      Rates prepaid Rs. 60.


Solution:
In the books of M/s KAVERI & NARMADA       
Trading Account for the year ended 31.03.2014

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

8000
By Sales
43000

To Purchases
12000

(-) Return
400
42600
(-) Return
500
11500
By Goods taken over by Partners


To Wages

5000
Kaveri

500
To Carriage inward

400
By Goods destroyed on fire

5000
To Coal

1260






By Closing Stock

19000
To Gross profit c/d

31940





58100


58100

Profit and Loss Account for the year ended 31.03.2014
Particulars
Amt.
Amt.
Particulars
Amt.
Amt.
To carriage outward

500
By Gross Profit b/d

31940
To Salary

7500



To Rent, Rates & Taxes
560




(-) Prepaid
60
500



To Discount Allowed

300



To Printing & Stationery

460



To Bad debts
240




(+) FBD
-




(+) NRDD
450




(-) ORDD
-
690



To Advertisement

1750



To Goods lost on fire
[5000 – 3500]

1500









To Net Profit c/d





Kaveri
9370




Narmada
9370
18740





31940


31940







Partners Capital Account
Particulars
Kaveri
Narmada
Particulars
Kaveri
Narmada
To Drawings
4000
4000
By balance b/d
12000
20000
To Drawings
[Goods]
500

By Net Profit b/d
9370
9370
To Balance c/d
16870
25370




21370
29370

21370
29370

Balance Sheet as on 31.03.2014

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


Land & Building

21000
Kaveri
16870

Plant & Machinery

12600
Narmada
25370
42240
Cash & Bank

5080
Bills Payable

6790
Sundry Debtors
9000

Creditors

14600
(-) NRDD
450
8550



Furniture

1240



Bills Receivable

1600



Closing Stock

10000



Insurance Claim

3500



Prepaid Rates

60








63630


63630

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