From the following Trial Balance of Meena and Reena being equal partners, you are required to prepare Trading and Profit & Loss A/c for the year ended 31st March, 2014 and Balance Sheet as on that date after taking into consideration the additional information.

 Trial Balance as on 31st March, 2014
Particulars
(Debit)
Rs.
Particulars
(Credit)
Rs.
Opening Stock
Drawings:
Meena
Reena
Insurance
Salaries and Wages
Carriage
Purchase
Bills Receivable
Rent
Debtors
Returns
Machinery
Travelling Expenses
Cash at Bank
Building
Office Expenses
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 (for 3 years)
60000

1000
1500
600
4500
2500
65000
600
3500
18000
1000
12000
3000
1000
30000
2700
3000
Capital A/c
Meena
Reena
Reserve Fund
Sales
Bills Payable
Creditors
Returns
Reserve for Bad &
Doubtful Debts

22000
18000
21600
130000
1000
16000
500
800

209900
209900

Adjustments:
1.      Closing stock: cost Rs. 25,000 and market price Rs. 30,000.
2.      Allow interest on capital at 10% p.a.
3.      Prepaid insurance Rs. 50.
4.      Provide for R.B.D.D. at 5% on debtors.
5.      Uninsured goods costing Rs. 3000 were destroyed by fire.
6.      Outstanding expenses: Salaries Rs. 1000; Rent Rs. 500.
7.      Provide depreciation on Machinery at 20%; Building 2 ½ %.

Solution: In the books of Meena & Reena

Trading A/c for the year ended 31.03.14

Particulars
Amount
Amount
Particulars
Amount
Amount
To Opening Stock

60000
By Sales
130000

To Purchases
65000

(-) Return
-1000
129000
(-) Return
-500
64500
By Goods lost by fire

3000
To Carriage

2500









To Gross Profit C/d

30000
By Closing Stock

25000








157000


157000

Profit and Loss A/c for the year ended 31 – 3 – 14

Particulars
Amount
Amount
Particulars
Amount
Amount
To Insurance
600

By Gross Profit c/d

30000
(-) Prepaid
-50
550



To Salaries & Wages
4500




(+) Outstanding
1000
5500



To Rent
3500




(+) Outstanding
500
4000



To Travelling Expenses

3000



To Office Expenses

2700



To Advertisement
3000




(-) Prepaid
-2000
1000



To Bad debts
-




(+) F.B.D,
-




(-) N.R.D.D.
900




(-) O.R.D.D.
-800
100



To Goods lost by fire

3000



To Depreciation





On Machinery
2400




On Building
750
3150



To Interest on Capital





Meena
2200




Reena
1800
4000



To Net Profit C/d





Meena
1500




Reena
1500
3000





30000


30000


Partners Capital A/c

Particulars
Meena
Reena
Particulars
Meena
Reena
To Drawings
1000
1500
By Balance b/d
22000
18000
To Balance c/d
24700
19800
By Interest on Capital
2200
1800



By Net Profit b/d
1500
1500

25700
21300

25700
21300

Balance Sheet as on 31.3.14


Liabilities
Amount
Amount
Assets
Amount
Amount
Capital A/c


Bills Receivable

600
Meena
24700

Debtors
18000

Reena
19800
44500
(-)N.R.D.D.
-900
17100
Reserve Fund

21600
Machinery
12000

Bills Payable

1000
(-) Depreciation
-2400
9600
Creditors

16000
Cash at bank

1000
Outstanding Expenses


Building
30000

Salaries
1000

(-) Depreciation
750
29250
Rent
500
1500
Closing Stock

25000



Prepaid Insurance

50



Prepaid Advertisement

2000








84600


84600

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