Ajith, Vijay and Surya were partners sharing profits and losses equally. Following is their Trial Balance for the year ended 31st March, 2006. Trial Balance as on 31 st March, 2006

Particulars	Debit Rs.	Credit Rs.
Purchase and Sales	100000	200000
Salaries	11300
Stock (1.4.2005)	28000
Debtors and Creditors	28200	36000
Bills receivable and Bills Payable	60400	18100
Land and Building	48300
Returns	6300
Wages	25100
Cash at Bank	30000
Insurance	4500
Advertisement	9300
Furniture	20700
Rent & Taxes	4700
Interest		2700
Capital : Ajith		60000
Vijay		40000
Surya		20000
	376800	376800

1.   Closing stock is valued at Rs. 37,500.

2.   Depreciate Furniture @10% p.a. and Land and Building @5% p.a.

3.   Goods of Rs. 3,000 are purchased on 31.3.2006 are included in the closing stock but the entry is not passed in the books.

4.   Insurance is prepaid to the extent of Rs. 1,500.

5.   Salaries of Rs. 3,400 and wages of Rs. 4,700 are outstanding.

6.   Write off Rs. 1200 as bad debts from Debtors and provide 5% for Reserve for Doubtful Debts.

Prepare: Trading A/c and Profit and Loss A/c for the year ended 31^st March, 2006 and Balance Sheet as on that date.

Solution: In the books of Ajith, Vijay & Surya

Trading A/c for the year ended 31.03.06

Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		28000	By Sales	200000
To Purchases	100000		(-) Return	-6300	193700
(+) Unrecorded	3000	103000
To Wages	25100
(+) Outstanding	4700	29800	By Closing Stock		37500
To Gross Profit C/d		70400
		231200			231200

Profit and Loss A/c for the year ended 31 – 3 – 06

Particulars	Amount	Amount	Particulars	Amount	Amount
To Salaries	11300		By Gross Profit b/d		70400
(+) Outstanding	3400	14700	By Interest		2700
To Insurance	4500
(-) Prepaid	-1500	3000
To Advertisement		9300
To Rent & Taxes		4700
To Bad debts	-
To F.B.D.	1200
To N.R.D.D.	1350
To O.R.D.D.	-	2550
To Depreciation
On Furniture	2070
On Land & Building	2415	4485
To Net Profit c/d
Ajith	11455
Vijay	11455
Surya	11455	34365
		73100			73100

              

Partners Current A/c

Particulars	Ajith	Vijay	Surya	Particulars	Ajith	Vijay	Surya
To Balance c/d	71455	51455	31455	By balance b/d	60000	40000	20000
				By Net Profit b/d	11455	11455	11455
	71455	51455	31455		71455	51455	31455

Balance Sheet as on 31.3.10

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c			Sundry Debtors	28200
Ajith	71455		(-) F.B.D.	-1200
Vijay	51455			27000
Surya	31455	154365	(-) N.R. D.D.	-1350	25650
Bills Payable		18100	Bills Receivable		60400
Sundry Creditors	36000		Land & Building	48300
(+) Unrecorded Purchase	3000	39000	(-) Depreciation	2415	45885
Outstanding Expenses			Cash at bank		30000
Wages	4700		Furniture	20700
Salaries	3400	8100	(-) Depreciation	-2070	18630
			Closing Stock		37500
			Prepaid Insurance		1500
		219565			219565