Balbharati solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board
Chapter 1 Introduction to Partnership and Partnership Final Accounts Practise Problem [Pages 54 - 61]
Practise Problem | Q 2 | Page 55
2. From the following Trial Balance of M/S Mitesh and Mangesh, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019, and Balance Sheet as on that date.
Trial Balance as on 31st March 2019
Debit Balance | Amount ₹ | Credit Balance | Amount ₹ |
---|---|---|---|
Stock as on (1/4/2018) | 25,000 | Sundry Creditors | 38,000 |
Building | 48,500 | Sales | 1,75,000 |
Carriage | 1,780 | Capital : | |
Factory Insurance | 2,700 | Mitesh | 1,50,000 |
Postage | 1,600 | Mangesh | 50,000 |
Bills Receivable | 13,700 | Outstanding Salaries | 2,000 |
Sundry Debtors | 52,200 | Bills Payable | 18,000 |
Return Inward | 1,600 | Return outword | 1,800 |
Purchases | 68,900 | ||
Audit fees | 1,800 | Current A/c : | |
Loose tools | 32,000 | Mitesh | 3,000 |
Manufacturing Expenses | 1,820 | Mangesh | 2,000 |
Electricity Charges | 2,600 | ||
General Expenses | 3,400 | ||
Export duty | 1,000 | ||
Cash in hand | 75,000 | ||
Bank Balance | 29,000 | ||
Conveyance | 4,100 | ||
Furniture | 64,000 | ||
Salaries | 2,000 | ||
Rent, Rate & Taxes | 3,700 | ||
Drawings : | |||
Mitesh | 1,200 | ||
Mangesh | 2,200 | ||
Total | 4,39,800 | Total | 4,39,800 |
Adjustments :
1) Mitesh and Mangesh are sharing Profit and losses in the ratio 3:1.
2) Partners are entitled to get Commission @ 1% each on Gross Profit.
3) The closing stock is valued at ₹23,700.
4) Outstanding Expenses - Audit fees ₹400; carriage ₹600.
5) The building is valued at ₹46,500.
6) Furniture is depreciated by 5%.
7) Provide Interest on Partner's capital at 2.5% pa.
8) Goods of ₹900 were taken by Mangesh for his personal use.
9) Write off ₹1,000 as Bad Debts and maintain R.D.D at 3% on Sundry Debtors.
SOLUTION
In the books of M/s. Mitesh and Mangesh
Trading and Profit and Loss Account for the year ended on 31st March 2019
Dr. | Amount ₹ | Amount ₹ | Cr. | Amount ₹ | Amount ₹ | ||
---|---|---|---|---|---|---|---|
Particulars | Inner ₹ | Outer ₹ | Particulars | Inner ₹ | Outer ₹ | ||
To Opening Stock | 25,000 | By Sales | 1,75,000 | ||||
To Purchases | 68,900 | Less: Sales Return (Return Inward) | 1,600 | 1,73,400 | |||
Less: Purchase Return (Return Outward) | 1,800 | 67,100 | By Closing Stock | 23,700 | |||
To Carriage | 1,780 | By Goods Withdrawn for personal use (Mangesh) | 900 | ||||
Add: Outstanding Carriage | 600 | 2,380 | |||||
To Factory Insurance | 2,700 | ||||||
To Manufacturing Expenses | 1,820 | ||||||
To Gross Profit c/d | 99,000 | ||||||
Total | 1,98,000 | Total | 1,98,000 | ||||
To Salaries | 2,000 | By Gross Profit b/d | 99,000 | ||||
To Rent, Rate & Taxes | 3,700 | ||||||
To Postage | 1,600 | ||||||
To Audit Fees | 1,800 | ||||||
Add: Outstanding Audit Fees | 400 | 2,200 | |||||
To Electricity Charges | 2,600 | ||||||
To General Expenses | 3,400 | ||||||
To Export Duty | 1,000 | ||||||
To Conveyance | 4,100 | ||||||
To Depreciation on: | |||||||
Building | 2,000 | ||||||
Furniture | 3,200 | 5,200 | |||||
To Bad Debts & R.D.D.: | |||||||
Bad Debts (New) | 1,000 | ||||||
Add: New R.D.D. | 1,536 | 2,536 | |||||
To Interest on Capital: | |||||||
Mitesh | 3,750 | ||||||
Mangesh | 1,250 | 5,000 | |||||
To Commission to Partners: | |||||||
Mitesh | 990 | ||||||
Mangesh | 990 | 1,980 | |||||
To Net Profit (Transferred to Partners’ Current A/cs) | |||||||
Mitesh (3/4) | 47,763 | ||||||
Mangesh (1/4) | 15,921 | 63,684 | |||||
Total | 99,000 | Total | 99,000 |
Partners’ Current Accounts
Particulars (Dr.) | Mitesh ₹ | Mangesh ₹ | Particulars (Cr.) | Mitesh ₹ | Mangesh ₹ |
---|---|---|---|---|---|
To Drawings | 1,200 | 2,200 | By Balance b/d | 3,000 | 2,000 |
To Goods Withdrawn (Drawings) | - | 900 | By Commission (from P&L A/c) | 990 | 990 |
To Balance c/d | 54,303 | 17,061 | By Interest on Capital (from P&L A/c) | 3,750 | 1,250 |
By Net Profit (from P&L A/c) | 47,763 | 15,921 | |||
Total | 55,503 | 20,161 | Total | 55,503 | 20,161 |
By Balance b/d | 54,303 | 17,061 |
Balance Sheet as on 31st March 2019
Liabilities | Inner ₹ | Outer ₹ | Assets | Inner ₹ | Outer ₹ |
---|---|---|---|---|---|
Capital Accounts: | Building | 48,500 | |||
Mitesh | 1,50,000 | Less: Revaluation Loss (Depreciation) | 2,000 | 46,500 | |
Mangesh | 50,000 | 2,00,000 | Furniture | 64,000 | |
Current Accounts: | Less: Depreciation (5%) | 3,200 | 60,800 | ||
Mitesh | 54,303 | Sundry Debtors | 52,200 | ||
Mangesh | 17,061 | 71,364 | Less: Bad Debts (New) | 1,000 | |
Sundry Creditors | 38,000 | 51,200 | |||
Bills Payable | 18,000 | Less: R.D.D. (New @3%) | 1,536 | 49,664 | |
Outstanding Expenses: | Loose Tools | 32,000 | |||
Outstanding Salaries | 2,000 | Bills Receivable | 13,700 | ||
Outstanding Audit fees | 400 | Cash in Hand | 75,000 | ||
Outstanding Carriage | 600 | 3,000 | Bank Balance | 29,000 | |
Closing Stock | 23,700 | ||||
Total | 3,30,364 | Total | 3,30,364 |
Working Notes:
(1) Current Account Balances: In this problem, Current Account balances are given. So, the total amount of fixed capital is directly shown on the Liabilities side of the Balance Sheet. Effects of adjustments related to the commission to partners, interest on capital, goods withdrawn by Mangesh are given in the Current Account. Closing balances of Current Account are shown separately on the Liability side of the Balance Sheet.
(2) Building Valuation: Building is valued at ₹46,500 whereas the opening balance of the Building given is ₹48,500. Therefore, the difference of the amount of ₹2,000 (48,500 - 46,500) is treated as Depreciation (or loss on revaluation) charged on Building.
(3) Returns:
Return Inward ⇒ Sales Return (deducted from Sales).
Return Outward ⇒ Purchase Return (deducted from Purchases).
(4) Commission payable to partners:
Mitesh: 1% on Gross Profit = (1/100) x 99,000 = ₹990/-
Mangesh: 1% on Gross Profit = (1/100) x 99,000 = ₹990/-
Balbharati Solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board
Chapter 1: Introduction to Partnership and Partnership Final Accounts
Select the most appropriate alternative from the following & rewrite the sentence. |
Write the word/phrase/term, which can substitute the following sentence. |
State whether the following statement is True or False with reasons. |
Find an odd one. |
Complete the Sentence. |
Answer in one sentence only |
Do you agree/disagree with the following statement |
Practical Problems: |
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Practise Problem | Q 2 | Page 55 Click here for solution (Current Page) |
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Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board - Latest Syllabus
- Chapter 1: Introduction to Partnership and Partnership Final Accounts
- Chapter 2: Accounts of ‘Not for Profit’ Concerns
- Chapter 3: Reconstitution of Partnership (Admission of Partner)
- Chapter 4: Reconstitution of Partnership (Retirement of Partner)
- Chapter 5: Reconstitution of Partnership (Death of Partner)
- Chapter 6: Dissolution of Partnership Firm
- Chapter 7: Bills of Exchange
- Chapter 8: Company Accounts - Issue of Shares
- Chapter 9: Analysis of Financial Statements
- Chapter 10: Computer In Accounting
ACCOUNTS BOARD PAPERS
- HSC Accounts March 2020 Board Paper With Solution
- MARCH 2014 : View | PDF Download
- OCTOBER 2014 View | PDF Download
- MARCH 2015 View | PDF Download
- JULY 2015 View | PDF Download
- MARCH 2016 View | PDF Download
- JULY 2016 View | PDF Download
- JULY 2017 View | PDF Download
- MARCH 2017 View | PDF Download
- MARCH 2018 View | PDF Download
- JULY 2018 View | PDF Download
- MARCH 2019 View | PDF Download
- MARCH 2020 View | PDF Download
Other Important Resources & Proformas
- ACCOUNTANCY PAPER PATTERN: New 2020, Old View | PDF Download
- PROFORMA OF TRADING ACCOUNT: View | PDF Download
- PROFORMA OF PROFIT & LOSS ACCOUNT: View | PDF Download
- PROFORMA OF BALANCE SHEET: View | PDF Download
- FINAL ACCOUNT ADJUSTMENTS: View | PDF Download
- SINGLE ENTRY: View : PDF Download
- FINAL ACCOUNT: View | PDF Download
- NPO: View | PDF Download (Link placeholder for PDF if original was unlinked)
- BILL OF EXCHANGE: View | PDF Download (Link placeholder)
- FORMAT OF BILL: View | PDF Download (Link placeholder)
- ADMISSION OF A PARTNER: View | PDF Download (Link placeholder)
- RETIREMENT OF PARTNER: View | PDF Download (Link placeholder)
- DEATH OF PARTNER: View | PDF Download (Link placeholder)
- ACCOUNTING FOR SHARES: View | PDF Download (Link placeholder)
- DISSOLUTION OF PARTNERSHIP FIRM: View | PDF Download (Link placeholder)
- VALUATION OF GOODWILL WITH SOLUTION: View | PDF Download (Link placeholder)
- FORMAT OF FINAL ACCOUNT: View | PDF Download (Link placeholder)
- INTRODUCTION TO PARTNERSHIP: View | PDF Download (Link placeholder)
IMPORTANT PRACTICE PAPER FOR BOARD EXAM 2020
Difficult Words & Their Meanings:
- Partnership: A business structure where two or more individuals agree to share in the profits or losses of a business.
- Final Accounts: The set of financial statements prepared at the end of an accounting year to show a business's financial performance and position. It mainly includes the Trading Account, Profit and Loss Account, and Balance Sheet.
- Trial Balance: A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal. It's a check for arithmetical accuracy of ledger posting.
- Trading Account: A financial statement that shows the gross profit or gross loss of a business over a specific period. It focuses on the results of buying and selling goods or services.
- Profit and Loss Account (P&L A/c): A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, usually a fiscal year. It shows the net profit or net loss.
- Balance Sheet: A snapshot of a company's financial health at a particular point in time, showing what it owns (assets) and what it owes (liabilities), as well as the owners' stake (equity).
- Debit Balance: When the total of debit entries in an account is greater than the total of credit entries. Typically represents assets or expenses.
- Credit Balance: When the total of credit entries in an account is greater than the total of debit entries. Typically represents liabilities, income, or capital.
- Stock (as on 1/4/2018): This refers to the Opening Stock, which is the value of goods available for sale at the beginning of the accounting period.
- Sundry Creditors: Individuals or businesses to whom your business owes money for goods or services supplied on credit.
- Carriage: Cost of transporting goods. "Carriage Inward" (usually in Trading A/c) is for goods purchased, "Carriage Outward" (usually in P&L A/c) is for goods sold.
- Factory Insurance: Insurance premium paid to cover risks related to the factory operations, building, or machinery. (Direct expense - Trading A/c)
- Postage: Expenses incurred for mail services, like stamps and courier charges. (Indirect expense - P&L A/c)
- Bills Receivable: A formal written promise (like a promissory note) from a customer to pay a specific amount of money on a future date; it's an asset for the business.
- Sundry Debtors: Individuals or businesses who owe money to your business for goods or services sold to them on credit. (Asset)
- Return Inward (Sales Return): Goods sold that are returned by customers to the business. (Deducted from Sales in Trading A/c)
- Purchases: The total amount of goods bought by the business for the purpose of resale or for use in manufacturing. (Trading A/c)
- Audit Fees: Payment made to an auditor for checking and verifying the accuracy of the business's financial records. (Indirect expense - P&L A/c)
- Loose tools: Small, inexpensive tools used in the business (e.g., hammers, screwdrivers) that are not considered major fixed assets. (Asset, sometimes revalued at year-end)
- Manufacturing Expenses: Costs directly incurred in the process of converting raw materials into finished goods in a factory. (Direct expense - Trading A/c)
- Electricity Charges: Cost incurred for the consumption of electricity. If specified for factory, it's direct; otherwise, it can be indirect (P&L A/c). In this problem, it's shown in P&L.
- General Expenses: Miscellaneous day-to-day operational expenses that don't fit into specific categories. (Indirect expense - P&L A/c)
- Export Duty: A tax imposed by the government on goods being shipped out of the country. (Indirect expense - P&L A/c)
- Conveyance: Expenses related to local travel for business purposes, like taxi fares or bus tickets. (Indirect expense - P&L A/c)
- Drawings: Withdrawal of cash or goods by the owner(s) or partner(s) from the business for their personal use. (Reduces capital or shown in Current A/c)
- Outstanding Expenses: Expenses that have been incurred (the benefit received) during the current accounting period but have not yet been paid for by the end of that period. (Added to respective expense and shown as a Liability)
- Depreciation: The systematic reduction in the recorded cost of a fixed asset until the value of the asset becomes zero or negligible, due to wear and tear, usage, or obsolescence. (Expense in P&L A/c, reduces asset value in Balance Sheet)
- Partner's Capital: The total amount of money or other assets invested into the partnership by each partner. (Liability for the firm)
- Bad Debts: Amounts owed to a business by its debtors that are considered uncollectible and are written off as an expense. (Expense in P&L A/c, deducted from Debtors)
- R.D.D. (Reserve for Doubtful Debts): An estimated amount set aside from profits to cover potential future bad debts. Also known as Provision for Doubtful Debts. (Charged to P&L A/c, deducted from Debtors in Balance Sheet)
- Gross Profit: The profit a company makes after deducting the direct costs associated with making and selling its products, or providing its services (Revenue - Cost of Goods Sold). Calculated in Trading Account.
- Net Profit: The profit remaining after all operating expenses, interest, and taxes have been deducted from the company's total revenues (Gross Profit - Indirect Expenses & Losses + Indirect Incomes & Gains). Calculated in P&L Account.
- Partner's Current Account: A separate account maintained for each partner to record transactions like interest on capital, drawings, salary, share of profit/loss, etc., keeping the capital account undisturbed (in case of Fixed Capital Method). (Balance can be debit or credit, shown in Balance Sheet accordingly)
- Liabilities: A company's legal financial debts or obligations that arise during the course of business operations. Shown on the left side of the Balance Sheet.
- Assets: Resources with economic value that an individual, corporation, or country owns or controls with the expectation that they will provide future benefit. Shown on the right side of the Balance Sheet.
- Closing Stock: The value of goods that a business has on hand at the end of an accounting period. (Shown on Credit side of Trading A/c and as an Asset in Balance Sheet)