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Target Publications Pvt. Ltd. Chapter 02: Partnership Final Accounts

1

02 Partnership Final Accounts Solution to Practice Q.1.: In the Books of Firm

Trading Account for the year ended 31st Mar, 2012 Dr. Cr.

Particulars Amount `

Amount `


Amount `

To Opening Stock A/c 25,000 By Sales A/c 1,42,600To Purchases A/c 90,000 By Goods Taken Over A/c 3,000To Wages A/c 24,000 By Closing Stock A/c 18,500To Factory Expenses A/c 8,000 To Gross Profit c/d 17,100 1,64,100 1,64,100

Profit and Loss Account for the year ended 31st Mar, 2012

Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 17,100Doubtful Debts A/c

Old Bad Debts 700 Add: New Bad Debts 1,000 Add: New R.D.D. 2,200 Less: Old R.D.D. 1,000 2,900

To Carriage Outward A/c 1,700 To Advertisements A/c 3,500 To Insurance A/c 400

Less: Prepaid 100 300 To Depreciation A/c

Land and Building (10%) 3,000 Furniture (20%) 600 3,600

To Office Expenses A/c 2,300 To Net Profit c/d

Suresh 1,600 Ramesh 1,200 2,800

17,100 17,100

Partner’s Current Account

Dr. Cr.

Particulars Suresh `

Ramesh `

Particulars Suresh `

Ramesh `

To Drawings A/c 3,000 − By Balance b/d 20,000 25,000(Goods withdrawn) By Profit & Loss A/c 1,600 1,200 To Balance c/d 18,600 26,200

21,600 26,200 21,600 26,200

2

Target Publications Pvt. Ltd. Std. XII (Commerce): Book-Keeping & Accountancy

Balance Sheet as on 31st Mar, 2012 Liabilities Amount

` Amount

` Assets Amount

` Amount

`Capitals Land and Building 30,000

Suresh 18,600 Less: Depreciation (10%) 3,000 27,000Ramesh 26,200 44,800 Furniture 3,000

Sundry Creditors 49,000 Less: Depreciation (20%) 600 2,400Unpaid Wages 1,000 Debtors 45,000

Less: New Bad Debts 1,000 44,000 Less: New R.D.D. (5%) 2,200 41,800 Closing Stock 18,500 Prepaid Insurance 100 Cash at Bank 5,000 94,800 94,800

Solution to Practice Q.2.: In the books of Firm Trading Account for the year ended 31st Mar, 2007

Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 45,000 By Sales A/c 1,87,500To Purchase A/c 1,12,500 Less: Return Inward 3,600 1,83,900

Less: Return Outward 1,500 1,11,000 By Goods Distributed as To Productive Wages A/c 5,250 Free Sample A/c 1,250

Add: Outstanding 300 5,550 By Closing Stock A/c 28,000 To Gross Profit c/d 51,600 2,13,150 2,13,150

Profit and Loss Account for the year ended 31st Mar, 2007 Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 51,600Doubtful Debts A/c By Discount A/c 1,500

Old Bad Debts 600 Add: New Bad Debts – Add: New R.D.D. 3,825 Less: Old R.D.D. – 4,425

To Depreciation A/c Building (5%) 2,715 Machinery (10%) 2,250 4,965

To Salaries A/c 9,300 To Rent, Rates, Insurance A/c 5,100

Less: Prepaid 200 4,900 To Discount A/c 1,950 To Unproductive Wages A/c 900 To Advertisement A/c (Goods distributed as Free Samples) 1,250 To Net Profit c/d

Sona 15,246 Mona 10,164 25,410 53,100 53,100


3

Partner’s Capital Account Dr. Cr.

Particulars Sona `

Mona `

Particulars Sona `

Mona `

To Drawings A/c 16,500 15,000 By Balance b/d 52,500 67,500 By Profit & Loss A/c 15,246 10,164To Balance c/d 51,246 62,664

67,746 77,664 67,746 77,664


` Amount

` Assets Amount

` Amount

`Capital Machinery 22,500

Sona 51,246 Less: Depreciation (10%) 2,250 20,250Mona 62,664 1,13,910 Building 54,300

Sundry Creditors 45,000 Less: Depreciation (5%) 2,715 51,585Bank Overdraft 15,000 Sundry Debtor 76,500Outstanding Productive Wages 300 Less: New R.D.D. (5%) 3,825 72,675 Cash 1,500 Prepaid Rent, Rates, Insurance 200 Closing Stock 28,000 1,74,210 1,74,210

Solution to Practice Q.3.: In the Books of Firm



Amount `


Amount `

To Opening Stock A/c 90,000 By Sales A/c 3,75,000To Purchases A/c 2,25,000 Less: Return Inward 7,200 3,67,800

Less: Return Outward 3,000 2,22,000 By Goods distributed as Free To Productive Wages A/c 10,500 Samples A/c 2,500

Add: Outstanding 600 11,100 By Closing Stock A/c 50,000 To Gross Profit c/d 97,200 4,20,300 4,20,300


Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 97,200Doubtful Debts A/c By Discount Received A/c 3,000

Old Bad Debts 1,200 Add: New Bad Debts – Add: New R.D.D. 7,650 Less: Old R.D.D. – 8,850

To Unproductive Wages A/c 1,800 To Salaries A/c 18,600 To Rent, Rates & Insurance A/c 10,200

Less: Prepaid Insurance 400 9,800 To Discount Allowed A/c 3,900

4


To Advertisement A/c (goods distributed as Free Samples) 2,500 To Interest on Overdraft A/c 1,500 To Depreciation A/c

Building (5%) 5,430 Machinery (10%) 4,500 9,930

To Net Profit c/d

Premlal’s A/c 21,660 Sundarlal’s A/c 21,660 43,320

1,00,200 1,00,200

Partner’s Capital Account

Dr. Cr.

Particulars Premlal `

Sundarlal `

Particulars Premlal `

Sundarlal `

To Drawings A/c 33,000 30,000 By Balance b/d 1,05,000 1,35,000 By Profit & Loss A/c 21,660 21,660To Balance c/d 93,660 1,26,660

1,26,660 1,56,660 1,26,660 1,56,660


` Amount

` Assets Amount

` Amount

`Capital Machinery 45,000

Premlal 93,660 Less: Depreciation (10%) 4,500 40,500Sundarlal 1,26,660 2,20,320 Building 1,08,600

Sundry Creditors 90,000 Less: Depreciation (5%) 5,430 1,03,170Outstanding Productive Wages 600 Sundry Debtors 1,53,000Bank Overdraft 30,000 Less: Reserve for Bad Debts

Add: Outstanding Interest 1,500 31,500 (5%) 7,650 1,45,350 Cash 3,000

Prepaid Insurance 400 Closing Stock 50,000 3,42,420 3,42,420




Amount `


Amount `

To Opening Stock A/c 45,000 By Sales A/c 5,50,000To Purchases A/c 2,25,000 By Closing Stock A/c 35,000 Less: Purchase of Machinery 15,000 2,10,000To Manufacturing & Wages A/c 70,000To Carriage Inwards A/c 2,500 To Factory Rent A/c 7,500 Add: Outstanding 300 7,800To Coal Gas & Water A/c 1,000

To Gross Profit c/d 2,48,700 5,85,000 5,85,000


5



Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 2,48,700Doubtful Debts A/c

Old Bad Debts – Add: New Bad Debts 2,250 Add: New R.D.D. − Less: Old R.D.D. 200 2,050

To Trade Charges A/c 12,800 To Salaries A/c 18,000 To Carriage Outwards A/c 1,500 To Discount A/c 350 To Insurance A/c 700 To Office Rent A/c 30,000 To Printing & Stationery A/c 600

Add: Outstanding 600 1,200 To Advertising A/c 15,000

Less: Prepaid 10,000 5,000 To Interest on Loan A/c 2,850

To Net Profit c/d

Raju 87,125 Manju 87,125 1,74,250

2,48,700 2,48,700


Dr. Cr.

Particulars Raju

`

Manju `

Particulars Raju

`

Manju `

To Drawings A/c 4,500 3,500 By Balance b/d 35,000 30,000By Profit & Loss A/c 87,125 87,125

To Balance c/d 1,17,625 1,13,625

1,22,125 1,17,125 1,22,125 1,17,125


` Amount

` Assets Amount

` Amount

`Capitals Plant & Machinery 95,000

Raju 1,17,625 Add: Additions wrongly Manju 1,13,625 2,31,250 included in Purchases 15,000 1,10,000

Sundry Creditors 12,750 Furniture & Fixtures 17,500Loan from Raju 38,000 Debtors 90,000

Add: Interest Payable 2,850 40,850 Less: New R.D.D. (2.5%) 2,250 87,750Outstanding Expenses Bills Receivable 3,000

Factory Rent 300 Closing Stock 35,000Printing & Stationery 600 900 Prepaid Advertising 10,000 Cash in Hand 10,000

Cash at Bank 12,500 2,85,750 2,85,750

6


Solution to Practice Q.5.: In the Books of Firm Trading Account for the year ended 31st Mar, 2007

Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 45,000 By Sales A/c 4,50,000To Purchases A/c 2,25,000 By Closing Stock A/c 35,000To Carriage A/c 16,800 To Factory Rent A/c 1,500

Add: Outstanding 300 1,800 To Wages A/c 20,000 To Royalty A/c 1,000 To Gross Profit c/d 1,75,400 4,85,000 4,85,000


Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 1,75,400Doubtful Debts A/c By Discount Received A/c 750

Old Bad Debts − Add: New Bad Debts − Add: New R.D.D. 1,500 Less: Old R.D.D. 200 1,300

To Insurance A/c 1,050 Less: Prepaid 100 950

To Office Rent A/c 3,000 Add: Outstanding 600 3,600

To Printing and Stationery A/c 600 To Advertising A/c 15,000 To Salaries A/c 18,000 To Depreciation A/c

Plant and Machinery (6%) 4,500 Furniture (10%) 750 5,250

To Interest on Capital A/c Kamlesh 1,500 Mahajan 1,200 2,700

To Net Profit c/d

Kamlesh 64,375 Mahajan 64,375 1,28,750

1,76,150 1,76,150


Dr. Cr.

Particulars Kamlesh `

Mahajan `

Particulars Kamlesh `

Mahajan `

To Drawings A/c 3,500 2,500 By Balance b/d 25,000 20,000 By Interest on Capital A/c 1,500 1,200To Balance c/d 87,375 83,075 By Profit & Loss A/c 64,375 64,375

90,875 85,575 90,875 85,575


7


` Amount

` Assets Amount

` Amount

`Capital Plant & Machinery 75,000

Kamlesh 87,375 Less: Depreciation (6%) 4,500 70,500Mahajan 83,075 1,70,450 Sundry Debtors 60,000

Sundry Creditors 15,000 Less: New R.D.D. (2.5%) 1,500 58,500Bills Payable 2,000 Bills Receivable 3,000Outstanding Expenses Furniture 7,500

Factory Rent 300 Less: Depreciation (10%) 750 6,750Office Rent 600 900 Cash at Bank 14,500

Closing Stock 35,000 Prepaid Insurance 100 1,88,350 1,88,350




Amount `


Amount `

To Opening Stock A/c 35,000 By Sales A/c 3,30,000To Purchases A/c 2,25,200 By Goods destroyed by Fire To Wages A/c 12,000 A/c 12,000To Factory Expenses A/c 8,000 By Goods withdrawn by

Kumbhar A/c 1,200To Gross Profit c/d 1,03,000 By Closing Stock A/c 40,000 3,83,200 3,83,200


Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 1,03,000Doubtful Debts A/c By Discount A/c 4,000

Old Bad Debts 3,000 By Interest on Investments Add: New Bad Debts 450 A/c 8,000Add: New R.D.D. − Less: Old R.D.D. – 3,450

To Salary and Wages A/c 4,200 Add: Outstanding 800 5,000

To Sundry Expenses A/c 13,600 To Travelling Expenses A/c 2,000 To Commission A/c 4,000 To Depreciation on Building A/c (7.5%) 3,750 To Loss by Fire A/c 12,000 To Rent (outstanding) A/c 1,200 To Net Profit c/d

Kumbhar’s A/c 42,000 Maroti’s A/c 28,000 70,000

1,15,000 1,15,000

8



Particulars Kumbhar `

Maroti `

Particulars Kumbhar `

Maroti `

To Drawings A/c 1,200 − By Balance b/d 60,000 40,000 By Profit & Loss A/c 42,000 28,000To Balance c/d 1,00,800 68,000

1,02,000 68,000 1,02,000 68,000


` Amount

` Assets Amount

` Amount

`Capital Goodwill 21,000

Kumbhar 1,00,800 Building 50,000Maroti 68,000 1,68,800 Less: Depreciation (7.5%) 3,750 46,250

Sundry Creditors 20,000 Tools and Equipment 6,000Bank Overdraft 10,000 Furniture 12,000Outstanding Expenses: Investments 20,000

Salary and Wages 800 Closing Stock 40,000Rent 1,200 2,000 Debtors 40,000

Less: Bad Debts 450 39,550 Bills Receivable 6,000 Cash in Hand 10,000 2,00,800 2,00,800




Amount `


Amount `


By Closing Stock A/c 90,000To Gross Profit c/d 2,54,000 5,45,000 5,45,000


Dr. Cr. Particulars Amount

` Amount

` Particulars Amount

` Amount

`To Office Rent (outstanding) 12,000 By Gross Profit b/d 2,54,000A/c By Royalties Received A/c 3,000To Printing and Stationery Less: Received in Advance 1,000 2,000 (outstanding) A/c 1,200 To Interest on Overdraft A/c 500 To Provident Fund Contribution A/c 15,000 To Salaries and Wages A/c 37,000 To Sundry Expenses A/c 3,000 To Audit Fees A/c 10,000 To Salary to Dubbu A/c 6,000


9

To Commission to Guddu A/c 2,540 (2,54,000 × 1%) To Net Profit c/d

Dubbu 98,443 Guddu 70,317 1,68,760

2,56,000 2,56,000


Dr. Cr.

Particulars Dubbu `

Guddu `

Particulars Dubbu `

Guddu `

To Drawings A/c 10,000 7,000 By Balance b/d 10,000 6,000 By Salary A/c 6,000 – By Commission A/c – 2,540To Balance c/d 1,04,443 71,857 By Profit and Loss A/c 98,443 70,317

1,14,443 78,857 1,14,443 78,857


` Amount

` Assets Amount

` Amount

`Partners Capital Goodwill 15,000

Dubbu 70,000 Patent & Trade Mark 15,000Guddu 50,000 1,20,000 Premises 1,60,000

Partner’s Current Furniture 20,000Dubbu 1,04,443 Provident Fund Investment 71,000Guddu 71,857 1,76,300 Closing Stock 90,000

Provident Fund 65,000 Debtors 33,000Add: Interest P.F. Investment 6,000 71,000 Cash in Hand 2,000

Bank Overdraft 12,000 Add: Interest 500 12,500

Outstanding Expenses Office Rent 12,000 Printing & Stationary 1,200 13,200

Royalties Received in Advance 1,000 Creditors 12,000 4,06,000 4,06,000




Amount `


Amount `

To Opening Stock A/c 20,800 By Sales A/c 1,50,400To Purchases A/c 59,000 Add: Unrecorded Sales 6,000 1,56,400To Wages A/c 28,000 By Closing Stock A/c 24,000

Add: Outstanding Wages 2,000 30,000 To Carriage A/c 8,600 To Trade Expenses A/c 600 To Gross Profit c/d 61,400 1,80,400 1,80,400

10




Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 61,400Doubtful Debts A/c By Commission A/c 800

Old Bad Debt – Add: New Bad Debt – Add: New R.D.D. 1,500 Less: Old R.D.D. – 1,500

To Depreciation on Plant & Machinery A/c (10%) 8,000 To General Expenses A/c 1,400 To Electricity & Lighting A/c 6,000

Less: Deposit 1,500 4,500 To Advertisement A/c 3,000 To Interest on Bank Loan A/c 4,000

Add: Interest Payable 2,750 6,750 To Printing & Stationery A/c 4,200 To Discount A/c 800 To Net Profit c/d

Ram 19,230 Shyam 12,820 32,050

62,200 62,200


Dr. Cr.

Particulars Ram `

Shyam `

Particulars Ram `

Shyam `

By Balance b/d 80,000 60,000To Balance c/d 99,230 72,820 By Profit & Loss A/c 19,230 12,820

99,230 72,820 99,230 72,820


` Amount

` Assets Amount

` Amount

`Capital A/c Goodwill 20,000

Ram 99,230 Plant & Machinery 80,000Shyam 72,820 1,72,050 Less: Depreciation (10%) 8,000 72,000

Bank Loan 60,000 Patents 10,000Add: Interest Payable 2,750 62,750 Furniture 14,200

Creditors 41,000 Land & Building 1,06,600Outstanding Wages 2,000 Debtors 24,000 Add: Unrecorded Sales 6,000 30,000

Less: R.D.D. @ 5% 1,500 28,500 Cash in Hand 1,000 Deposit with Electricity Board 1,500 Closing Stock 24,000

2,77,800 2,77,800


11

Solution to Practice Q.9.: In the Books of Firm Trading Account for the year ended 31st Mar 2013

Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 90,000 By Sales A/c 8,14,000To Purchases A/c 6,50,000 By Closing Stock A/c 1,10,000To Wages A/c 35,000 To Carriage Inward A/c 7,000 To Gross Profit c/d 1,42,000 9,24,000 9,24,000


Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 1,42,000Doubtful Debt A/c

Old Bad Debt 3,000 Add: New Bad Debt − Add: New R.D.D. 7,500 Less: Old R.D.D. − 10,500

To Salaries A/c 28,000 Less: Advance to Workers 2,500 25,500

To Postage and Telegram A/c 4,000 To Insurance A/c 5,000 To Rent A/c 4,000 To Discount A/c 3,000 To Depreciation on Plant & Machinery A/c (10%) 12,000 To Interest on Partners Capital A/c

Meena 15,000 Reena 10,000 25,000

To Net Profit c/d

Meena 31,800 Reena 21,200 53,000

1,42,000 1,42,000


Dr. Cr.

Particulars Meena `

Reena `

Particulars Meena `

Reena `

To Drawings A/c 10,000 5,000 By Balance b/d 3,00,000 2,00,000 By Interest on Capital A/c 15,000 10,000To Balance c/d 3,36,800 2,26,200 By Profit & Loss A/c 31,800 21,200

3,46,800 2,31,200 3,46,800 2,31,200

12



` Amount

` Assets Amount

` Amount

`Capital Building 4,00,000

Meena 3,36,800 Plant & Machinery 1,20,000Reena 2,26,200 5,63,000 Less: Depreciation (10%) 12,000 1,08,000

Sundry Creditors 1,80,000 Debtors 1,50,000Bank Overdraft 20,000 Less: R.D.D. (5%) 7,500 1,42,500 Closing Stock 1,10,000 Advance to Workers 2,500 7,63,000 7,63,000


Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 44,000 By Sales A/c 1,69,000To Purchases A/c 1,22,500 By Closing Stock A/c 34,000To Wages A/c 13,500 To Carriage A/c 2,100 To Gross Profit c/d 20,900 2,03,000 2,03,000



Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 20,900Doubtful Debts A/c By Sundry Income A/c 4,000

Old Bad Debt 3,200 Add: New Bad Debt – Add: New R.D.D. 3,460 Less: Old R.D.D. 2,000 4,660

To Depreciation on Plant A/c (10%) 7,500 To Rent, Rates and Insurance A/c 4,500

Less: Prepaid Insurance 600 3,900 To Salaries A/c 7,600 To Office Expenses A/c 5,400 By Net Loss c/d

Less: Drawings of Sujeet 800 4,600 Abhijeet 2,976To Interest on Bank Loan A/c 1,600 Sujeet 1,984 4,960

29,860 29,860 Partner’s Capital Account

Dr. Cr.

Particulars Abhijeet `

Sujeet `

Particulars Abhijeet `

Sujeet `

To Drawings A/c 6,000 4,000 By Balance b/d 1,32,000 88,000To Drawings A/c – 800 To Profit and Loss A/c 2,976 1,984 To Balance c/d 1,23,024 81,216

1,32,000 88,000 1,32,000 88,000


13


` Amount

` Assets Amount

` Amount

`Capital Land & Building 1,70,000

Abhijeet 1,23,024 Plant 90,000Sujeet 81,216 2,04,240 Less: Depreciation (10%) 7,500 82,500

Sundry Creditors 81,900 Cash at Bank 6,500Bank Overdraft 80,000 Sundry Debtor 69,200Outstanding Expenses 4,600 Less: R.D.D. (5%) 3,460 65,740Pre-Received Rent 5,000 Furniture 50,00010% Bank Loan 32,000 Closing Stock 34,000

Add: Interest Payable 1,600 33,600 Prepaid Insurance 600 4,09,340 4,09,340

Solution to Practice Q.11.: In the books of firm



Amount `


Amount `

To Opening Stock A/c 15,000 By Sales A/c 79,800To Purchases A/c 45,700 By Goods destroyed by Fire A/c 4,000To Wages A/c 9,900 By Closing Stock A/c 40,200

Add: Outstanding 2,100 12,000 To Carriage Inwards A/c 4,500

Less: Carriage paid for Machinery

1,000 3,500 To Gross Profit c/d 47,800 1,24,000 1,24,000


Dr. Cr.


Amount `


Amount `

To Carriage Outwards A/c 4,600 By Gross Profit b/d 47,800To Printing and Stationery A/c 3,400 To Insurance A/c 750

Less: Prepaid 200 550 To Salaries A/c 10,000 To Postage and Telegram A/c 700 To Advertisement A/c 1,000 To Bad Debts A/c 250 To Loss by Fire A/c 800 To Depreciation A/c

Machinery (10%) 2,780 Furniture (15%) 960 3,740

To Net Profit c/d

Ajay A/c 11,380 Vijay A/c 11,380 22,760

47,800 47,800

14



Particulars Ajay `

Vijay `

Particulars Ajay `

Vijay `

By Balance b/d 40,000 25,000To Balance c/d 51,380 36,380 By Profit & Loss A/c 11,380 11,380

51,380 36,380 51,380 36,380 Balance Sheet as on 31st Mar, 2007

Liabilities Amount `

Amount `

Assets Amount `

Amount `

Capital : Investment 3,500Ajay 51,380 Machinery 26,800

Vijay 36,380 87,760 Add: Carriage paid for Machinery 1,000

Bills Payable 6,000 27,800Creditors 12,000 Less: Depreciation (10%) 2,780 25,020Bank Overdraft 3,000 Furniture 6,400Outstanding Salaries 1,700 Less: Depreciation (15%) 960 5,440Outstanding Wages 2,100 Debtors 25,000 Prepaid Insurance 200 Bills Receivable 4,000 Cash at Bank 6,000 Closing Stock 40,200 Insurance Claim 3,200 1,12,560 1,12,560


Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 15,000 By Sales A/c 1,58,000To Purchases A/c 98,000 By Closing Stock A/c 15,000

Less: Return Inward 3,500 94,500 By Goods destroyed by Fire To Carriage A/c 1,300 A/c 10,000To Wages and Salaries A/c 11,000 To Gross Profit c/d 61,200 1,83,000 1,83,000



Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 61,200Doubtful Debts A/c By Interest on Investments

Old Bad Debts − A/c 500Add: New Bad Debts − Add: New R.D.D. 1,750 Less: Old R.D.D. 250 1,500

To Printing and Stationery A/c 1,750 Less: Unused 500 1,250

To Audit Fees A/c 700


15

To Sundry Expenses A/c 3,500 To Provident Fund Contribution A/c 800 To Travelling Expenses A/c 2,700 To Depreciation A/c

Building (5%) 5,000 Patents Right (10%) 400 5400

To Loss by Fire A/c 2,000 To Interest on Capital A/c

Ashok 1,500 Tanaji 2,000 3,500

To Net Profit c/d

Ashok 16,140 Tanaji 24,210 40,350

61,700 61,700


Dr. Cr.

Particulars Ashok `

Tanaji `

Particulars Ashok `

Tanaji `

By Balance b/d 30,000 40,000 By Interest on Capital A/c 1,500 2,000To Balance c/d 47,640 66,210 By Profit & Loss A/c 16,140 24,210

47,640 66,210 47,640 66,210


` Amount

` Assets Amount

` Amount

`Capital Building 1,00,000

Ashok 47,640 Less: Depreciation (5%) 5,000 95,000Tanaji 66,210 1,13,850 Patents Right 4,000

Creditors 45,000 Less: Depreciation (10%) 400 3,600Bank Loan 12,000 Furniture 8,000Provident Fund 7,000 Sundry Debtors 35,000 Less: New R.D.D. (5%) 1,750 33,250 10% Investment 10,000 Add: Interest Receivable 500 10,500 Cash 4,000

Closing Stock 15,000 Insurance Claim Receivable 8,000

Unused Stationery 500 1,77,850 1,77,850




Amount `


Amount `


Less: Return Outward 4,000 1,90,000 By Goods withdrawn by To Wages A/c 28,400 Jitesh A/c 3,000

16


To Dock Charges A/c 4,200 By Goods destroyed by Fire A/c 8,000 To Gross Profit c/d 1,53,400 By Closing Stock A/c 75,000 4,46,000 4,46,000


Dr. Cr.


Amount `


Amount `

To Salaries A/c 15,600 By Gross Profit b/d 1,53,400To Conveyance A/c 2,200 By Commission A/c 6,000To Miscellaneous Expenses A/c 3,200 Add: Commission Receivable 1,600 7,600To Warehouse Rent A/c 9,000 To Brokerage A/c 3,000 To Insurance A/c 4,800

Less: Prepaid Insurance 800 4,000 To Loss by fire A/c 1,600 To Depreciation A/c

Land and Building (5%) 9,000 Motor Van (5%) 3,000 12,000

To Net Profit c/d

Jitesh 55,200 Pritesh 55,200 1,10,400

1,61,000 1,61,000


Dr. Cr.

Particulars Jitesh `

Pritesh `

Particulars Jitesh `

Pritesh `

To Drawings A/c (goods) 3,000 − By Balance b/d 2,00,000 1,20,000 By Profit & Loss A/c 55,200 55,200To Balance c/d 2,52,200 1,75,200

2,55,200 1,75,200 2,55,200 1,75,200


` Amount

` Assets Amount

` Amount

`Capital Bills Receivable 40,000

Jitesh 2,52,200 Goodwill 76,000Pritesh 1,75,200 4,27,400 Land and Building 1,80,000

Bills Payable 50,000 Less: Depreciation (5%) 9,000 1,71,000Sundry Creditors 60,000 Motor Van 60,000 Less: Depreciation (5%) 3,000 57,000 Shares in Bajaj Ltd. 50,000

Cash in Hand 3,600 Sundry Debtors 56,000

Closing Stock 75,000 Prepaid Insurance 800 Insurance Claim 6,400 Commission Receivable 1,600 5,37,400 5,37,400


17


Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 35,000 By Sales A/c 1,80,000To Purchases A/c 85,000 By Goods withdrawn for Less: Purchase of Furniture 5,000 personal use A/c Less: Purchase Returns 4,500 75,500 Ram 3,000To Wages A/c 8,000 Lakhan 1,000 4,000To Trade Expenses A/c 200 By Closing Stock A/c 24,000 To Gross Profit c/d 89,300 2,08,000 2,08,000



Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 89,300Doubtful Debts A/c

Old Bad Debts − Add: New Bad Debts 1,000 Add: New R.D.D. 3,500 Less: Old R.D.D. − 4,500

To Tax & Insurance A/c 2,500 To Rent A/c 3,000

Less: Prepaid 200 2,800 To General Expenses A/c 500 To Warehouse Rent A/c 300 To Depreciatoon on Motor Lorry A/c (10%) 1,500 To Salary to Ram’s A/c 1,500 To Commission to Lakhan’s A/c (2% on Sales) 3,600 To Interest on Partners Capital A/c

Ram 2,500 Lakhan 2,500 5,000

To Net Profit c/d Ram 33,550 Lakhan 33,550 67,100 89,300 89,300

Partner’s Current Account Dr. Cr.

Particulars Ram `

Lakhan`

Particulars Ram `

Lakhan`

To Balance b/d – 2,000 By Balance b/d 5,000 –To Drawings A/c 3,000 1,000 By Salary A/c 1,500 –(Goods withdrawn for personal By Commission A/c use) (2% on Sales) – 3,600

By Interest on Partners Capital A/c 2,500 2,500To Balance c/d 39,550 36,650 By Profit & Loss A/c 33,550 33,550

42,550 39,650 42,550 39,650

18



` Amount

` Assets Amount

` Amount

`Capitals Furniture & Fixtures 20,000

Ram 25,000 Add: Wrongly included in Lakhan 25,000 50,000 Purchases 5,000 25,000

Current Motor Lorry 15,000Ram 39,550 Less: Depreciation (10%) 1,500 13,500Lakhan 36,650 76,200 Debtors 71,000

Sundry Creditors 20,100 Less: New Bad Debts 1,000Bills Payable 3,000 70,000

Less: R.D.D. (5%) 3,500 66,500 Bills Receivable 6,100

Closing Stock 24,000 Prepaid Rent 200 Bank 14,000

1,49,300 1,49,300




Amount `


Amount `

To Opening Stock A/c 28,788 By Sales A/c 2,05,000To Purchase A/c 1,25,225 Less: Sales Return 4,250 2,00,750

Less: Return 3,230 1,21,995 By Closing Stock A/c 15,000To Wages A/c 20,167 To Gross Profit c/d 44,800 2,15,750 2,15,750

Profit and Loss Account for the year 31st Mar, 2007

Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 44,800Doubtful Debts A/c By Commission A/c 245

Old Bad Debt 315 By Dividend on Investment Add: New Bad Debt 200 A/c 825Add: New R.D.D. 1,000 Less: Old R.D.D. 500 1,015

To Salaries A/c 13,677 To Advertisement A/c 3,000

Less: Prepaid 2,500 500 To Insurance A/c 320 To Depreciation A/c

Furniture (10%) 675 Machinery (5%) 375 1,050

To Interest on Capital A/c Keshav 1,350 Devidas 1,750 3,100


19

To Commission to Keshav A/c 448 To Salaries to Devidas A/c 2,000 To Net Profit c/d

Keshav 11,880 Devidas 11,880 23,760

45,870 45,870


Dr. Cr.

Particulars Keshav `

Devidas `

Particulars Keshav `

Devidas `

To Drawings A/c 3,000 1,500 By Balance b/d 27,000 35,000 By Salaries A/c – 2,000 By Commission A/c 448 – By Interest on Capital A/c 1,350 1,750To Balance c/d 37,678 49,130 By Profit & Loss A/c 11,880 11,880

40,678 50,630 40,678 50,630

Balance Sheet as on 31st Mar, 2007


Amount `

Assets Amount `

Amount `

Capital Debtors 50,200Keshav 37,678 Less: New Bad debts 200Devidas 49,130 86,808 50,000

Creditors 31,073 Less: New R.D.D. (2%) 1,000 49,000 Furniture 7,450 Less: Depreciation (10%) 675 6,775 Machinery 7,500 Less: Depreciation (5%) 375 7,125 Prepaid Advertisement 2,500 Investment 9,500 Cash and Bank 27,981 Closing Stock 15,000 1,17,881 1,17,881

Solution to Practice Q.16: In the Books of Firm



Amount `


Amount `

To Opening Stock A/c 20,000 By Sales A/c 2,40,000To Purchases A/c 1,20,000 By Closing Stock A/c 37,000To Wages A/c 14,000 To Carriage A/c 5,000 To Gross Profit c/d 1,18,000 2,77,000 2,77,000

20




Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 1,18,000Doubtful Debts A/c By Interest on Drawings A/c

Old Bad Debts 1,000 Jay 100Add: New Bad Debts – Vijay 200 300Add: New R.D.D. 1,950 By Excess R.D.D. A/c 50Less: Old R.D.D. 3,000 – By Commission A/c 1,000

To Interest on Capital A/c By Reserve for Discount on Jay 3,840 Creditors A/c Vijay 1,920 5,760 Old Discount on Creditor −

To Discount A/c 800 Add: New Discount on Add: New R.F.D.D. 741 1,541 Creditor –

To Printing & Stationery A/c 3,300 Add: New Reserve for Less: Stock of Stationery 500 2,800 Discount on Creditors 1,080

To Depreciation A/c Less: Old Reserve for Building (20%) 24,000 Discount on Creditor − 1,080Machinery (15%) 9,000 33,000

To Salaries & Wages A/c 10,000 To Interest on Bank Loan A/c 3,900

Add: Outstanding 2,100 6,000 To Net Profit c/d

Jay 40,886 Vijay 20,443 61,329

1,20,430 1,20,430


Dr. Cr.

Particulars Jay `

Vijay `

Particulars Jay `

Vijay `

To Balance b/d – 4,000 By Balance b/d 3,000 –To Drawings A/c 2,000 4,000 By Interest on Capital A/c 3,840 1,920To Interest on Drawings A/c 100 200 By Profit & Loss A/c 40,886 20,443 To Balance c/d 45,626 14,163

47,726 22,363 47,726 22,363



Amount `

Assets Amount `

Amount `

Capitals Building 1,20,000Jay 64,000 Less: Depreciation (20%) 24,000 96,000Vijay 32,000 96,000 Machinery 60,000

Current A/c Less: Depreciation (15%) 9,000 51,000Jay 45,626 Motor Lorry 25,000Vijay 14,163 59,789 Closing Stock 37,000


21

Bank Loan @ (12%) 50,000 Debtors 40,000Add: Outstanding Interest 2,100 52,100 Less: New Bad Debts 1,000

Creditors 36,000 39,000Less: R.F.D.C.( 3%) 1,080 34,920 Less: R.D.D. (5%) 1,950

Bills Payable 3,000 37,050 Less: R.F.D.D. (2%) 741 36,309 Stock of Stationery 500 2,45,809 2,45,809

Solution to Practice Q.17.: In the books of firm Trading Account for the year ended 31st Mar, 2006

Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 28,000 By Sales A/c 1,95,300To Purchases A/c 1,04,000 Less: Sales Return 6,300 1,89,000

Add: Unrecorded Purchase 3,000 By Closing Stock A/c 37,500 1,07,000

Less: Purchase Return 2,600 1,04,400 To Wages A/c 25,100

Add: Outstanding 4,700 29,800 To Gross Profit c/d 64,300 2,26,500 2,26,500



Amount `


Amount `

To Salaries A/c 11,300 By Gorss Profit b/d 64,300Add: Outstanding 3,400 14,700 By Interest A/c 4,800

To Insurance A/c 4,500 Less: Prepaid 1,500 3,000

To Advertisement A/c 9,300 To Rent and Taxes A/c 4,700 To Bad Debts A/c 1,200

Add: Reserve for Bad Debts 1,150 2,350 To Depreciation A/c

Furniture (10%) 1,870 Land & Building (5%) 2,415 4,285

To Net Profit c/d Swati’s A/c 10,255 Swity’s A/c 10,255 Sweta’s A/c 10,255 30,765 69,100 69,100


Particulars Swati `

Swity `

Sweta `

Particulars Swati `

Swity `

Sweta `

By Balance b/d 60,000 40,000 20,000 By Profit & Loss A/c 10,255 10,255 10,255 To Balance c/d 70,255 50,255 30,255

70,255 50,255 30,255 70,255 50,255 30,255

22




Amount `

Assets Amount `

Amount `

Capital A/c: Debtors 24,200Swati 70,255 Less: Bad Debts 1,200Swity 50,255 23,000Sweta 30,255 1,50,765 Less: Reserve for Bad Debts

Bills Payable 18,100 (5%) 1,150 21,850Creditors 36,000 Bills Receivable 62,400

Add: Unrecorded Purchases 3,000 39,000 Land and Building 48,300Outstanding Expenses Less: Depreciation (5%) 2,415 45,885

Salaries 3,400 Cash at Bank 30,000Wages 4,700 8,100 Furniture 18,700 Less: Depreciation (10%) 1,870 16,830 Closing Stock 37,500 Prepaid Insurance 1,500

2,15,965 2,15,965




Amount `


Amount `

To Opening Stock A/c 17,000 By Sales A/c 75,500To Purchases 47,500 Less: Sales Returns 1,500 74,000 Add:Unrecorded Purchases 1,500 By Closing Stock A/c 10,000

49,000 Less: Purchase Returns 1,000 48,000

To Gross Profit c/d 19,000 84,000 84,000


Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 19,000Doubtful Debts A/c By Reserve for Discount on

Old Bad Debts Creditors A/c Add: New Bad Debts Old Discount on Creditor 600Add: New R.D.D. 880 Add: New Discount on Less: Old R.D.D. 400 480 Creditor –

To Stationery A/c 2,000 Add: New Reserve for Less: Unused Stationery 400 1,600 Discount on Creditors 420

To Advertisement A/c 2,700 Less: Old Reserve for Less: Prepaid 2,000 700 Discount on Creditor 200 820

To Rent, Rates & Insurance By Interest Receivable A/c 150A/c 1,400 To Shop Fittings written off A/c 3,200


23

To Reserve for Discount on Debtors A/c

Old Discount on Debtors 400 Add: New Discount on Debtors − Add: New Reserve for Discount on Debtors

335

Less: Old Reserve for Discount on Debtors

300 435

To Net Profit c/d

Ramakant 8103 Maruti Sheth 4052 12,155 19,970 19,970


Particulars Ramakant `

Maruti Sheth`

Particulars Ramakant `

Maruti Sheth`




Amount`

Assets Amount`

Amount`

Capitals Leasehold Property 30,000Ramakant 31,603 Shop Fittings 16,000Maruti Sheth 32,802 64,405 Less: Written Off 3,200 12,800

Sundry Creditors 12,500 Debtors 17,600Add: Unrecorded Purchases 1,500 Less: R.D.D. (5%) 880

14,000 16,720Less: Reserve for Discount (3%) 420 13,580 Less: Reserve for Discount (2%) 335 16,385 5% Government Bonds 6,000 Add: Interest Receivable 150 6,150

Stock of Stationery 400 Closing Stock 10,000

Prepaid Rent 250 Prepaid Advertisement 2,000 Bank

77,985 77,985 Solution to Practice Q.19.: In the books of firm



Amount `


Amount `

To Opening Stock A/c 80,000 By Sales A/c 3,80,000To Purchases A/c 1,30,000 Add: Unrecorded Sales 15,000

Less: Returns 4,000 1,26,000 3,95,000To Royalties A/c 14,000 Less: Returns 5,000 3,90,000 By Closing Stock A/c 90,000 To Gross Profit c/d 2,60,000 4,80,000 4,80,000

24




Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 2,60,000Doubtful Debts A/c By Reserve for Discount on

Old Bad Debts 7,500 Creditors A/c Add: New Bad Debts 2,000 Old Discount on Creditor −Add: New R.D.D. 4,400 Add: New Discount on Less: Old R.D.D. 2,000 11,900 Creditor –

To Reserve for Discount on Add: New Reserve for Debtors A/c Discount on Creditors 400

Old Discount on Debtors 5,000 Less: Old Reserve for Add: New Discount on Debtors − Discount on Creditor − 400Add: New Reserve for Discount on Debtors

1,672

Less: Old Reserve for Discount on Debtors

− 6,672

To Provident Fund Contribution A/c 5,000 To Salary & Wages A/c 25,000

Less: Drawings 2,000 23,000 To Commission to Kale A/c 10,000 To Depreciation A/c

Furniture (20%) 16,500 Premises (10%) 16,000 32,500

To Net Profit c/d

Gore 91,375 Kale 79,953 1,71,328

2,60,400 2,60,400


Dr. Cr.

Particulars Gore `

Kale `

Particulars Gore `

Kale `

To Balance b/d 6,000 − By Balance b/d − 10,000To Drawings A/c 5,000 10,000 By Commission A/c − 10,000To Drawings A/c − 2,000 By Profit & Loss A/c 91,375 79,953 To Balance c/d 80,375 87,953

91,375 99,953 91,375 99,953


` Amount

` Assets Amount

` Amount

`Capital A/c Debtors 75,000

Gore 80,000 Add: Unrecorded Sales 15,000Kale 70,000 1,50,000 90,000

Current A/c Less: Bad debts 2,000Gore 80,375 88,000Kale 87,953 1,68,328 Less: R.D.D. (5%) 4,400

Sundry Creditors 20,000 83,600Less: Reserve for discount Less: Reserve for discount on Creditors (2%) 400 19,600 on Debtors (2%) 1,672 81,928


25

Provident Fund 65,000 Furniture 82,500Interest on Provident Fund Less: Depreciation (20%) 16,500 66,000Investment 3,000 Premises 1,60,000Outstanding Salary & Wages 9,000 Less: Depreciation (10%) 16,000 1,44,000General Reserves 66,000 Provident fund Investment 71,000 Cash in hand 28,000 Closing Stock 90,000 4,80,928 4,80,928




Amount `


Amount `

To Opening Stock A/c 80,000 By Sales A/c 7,68,000To Purchases A/c 4,00,000 Less: Return Inward 30,000 7,38,000To Carriage A/c 7,500 By Goods withdrawn by To Power & Fuel A/c 40,000 Ganga A/c 10,000To Wages A/c 35,000 By Closing Stock A/c 1,00,000 To Gross Profit c/d 2,85,500 8,48,000 8,48,000


Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 2,85,500Doubtful Debts A/c By Commission A/c 12,000

Old Bad Debts − Add: New Bad Debts 10,000 Add: New R.D.D. 3,500 Less: Old R.D.D. – 13,500

To Trade Expenses A/c 8,000 To Salaries A/c 72,000 To Insurance A/c 6,000

Less: Prepaid 1,500 4,500 To Postage A/c 3,000 To Commission A/c 8,000 To Advertisement A/c 15,000 To Interest on Loan A/c 9,000 To Depreciation A/c

Plant & Machinery (20%) 40,000 Building (10%) 40,000 80,000

To Net Profit c/d

Ganga’s A/c 42,250 Godawari’s A/c 42,250 84,500

2,97,500 2,97,500

26



Particulars Ganga `

Godawari `

Particulars Ganga `

Godawari `

To Drawings A/c 8,000 10,000 By Balance b/d 2,50,000 2,50,000To Drawings A/c (goods) 10,000 − By Profit & Loss A/c 42,250 42,250 To Balance c/d 2,74,250 2,82,250

2,92,250 2,92,250 2,92,250 2,92,250


` Amount

` Assets Amount

` Amount

`Capital Plant & Machinery 2,00,000

Ganga 2,74,250 Less: Depreciation (20%) 40,000 1,60,000Godawari 2,82,250 5,56,500 Furniture 80,000

Creditors 60,000 Building 4,00,00012% Bank Loan 1,50,000 Less: Depreciation (10%) 40,000 3,60,000

Add: Interest Payable 9,000 1,59,000 Debtors 80,000 Less: Bad Debts 10,000 70,000

Less: R.D.D. (5%) 3,500 66,500 Cash in Hand 7,500 Closing Stock 1,00,000 Prepaid Insurance 1,500

7,75,500 7,75,500




Amount `


Amount `

To Opening Stock A/c 22,000 By Sales A/c 2,87,500To Purchases A/c 1,62,350 By Goods Taken by Sachin A/c 3,000To Wages A/c 4,500 By Closing Stock A/c 37,500To Gross Profit c/d 1,39,150 3,28,000 3,28,000


Dr. Cr.


Amount `


Amount `

To Salaries A/c 11,200 By Gross Profit c/d 1,39,150To Professional Charges A/c 7,300 By Commission A/c 4,200To Printing & Stationery A/c 1,850 Less: Loan Taken 2,000 2,200To Insurance A/c 3,400 By Interest on Drawings A/c To Interest A/c 6,300 Sachin 250To P.F. Contribution A/c 1,000 Shrimant 180 430To Interest on Capital A/c

Sachin 4,000 Shrimant 2,000 6,000

To Advertisement A/c 3,600 Less: Prepaid 3,150 450


27

To Net Profit c/d Sachin 78,210 Shrimant 26,070 1,04,280 1,41,780 1,41,780


Particulars Sachin `

Shrimant `

Particulars Sachin `

Shrimant `

To Drawings A/c 2,500 1,800 By Balance b/d 40,000 20,000To Drawings A/c [goods] 3,000 – By Interest on Capital A/c 4,000 2,000To Interest on Drawings A/c 250 180 By Profit & Loss A/c 78,210 26,070 To Balance c/d 1,16,460 46,090

1,22,210 48,070 1,22,210 48,070 Balance Sheet as on 31st Mar, 2007


Amount `

Assets Amount `

Amount `

Capital A/c Prepaid Insurance 400Sachin 1,16,460 Debtors 48,200Shrimant 46,090 1,62,550 Cash at Bank 1,01,300

Bills Payable 3,000 P.F. Investment 12,000Creditors 21,500 Prepaid Advertisement 3,150Outstanding Salaries 300 Closing Stock 37,500Provident Fund 12,000 Interest On P.F. Investment 1,200 Mr. Patil’s Loan 2,000 2,02,550 2,02,550


Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 2,00,000 By Sales A/c 3,54,000To Purchases A/c 1,37,500 By Goods Distributed as Free

Add: Unrecorded Purchase 2,500 Sample A/c 5,000 1,40,000 By Closing Stock A/c 55,000

Less: Return Outward 2,000 1,38,000 To Railway Freight A/c 7,000 To Gross Profit c/d 69,000 4,14,000 4,14,000



Amount `


Amount `

To Depreciation A/c By Gross Profit b/d 69,000Building (20%) 20,000 By Commission Received A/c 2,000Furniture (10%) 1,000 Plant & Machinery (15%) 3,000 24,000

To Salaries A/c 20,000 Add: Outstanding 1,000 21,000

28


To Advertisements A/c 5,000 (Free Samples) To Rent A/c 7,800

Less: Prepaid Rent 600 7,200 To Bad Debts A/c 400 To Net Profit c/d

A 8,040 B 5,360 13,400

71,000 71,000


Dr. Cr.

Particulars A `

B `

Particulars A `

B `


68,040 65,360 68,040 65,360



Amount `

Assets Amount `

Amount `

Capital Building 1,00,000A 65,740 Less: Depreciation (20%) 20,000 80,000B 62,360 1,28,100 Furniture 10,000

Creditors 32,000 Less: Depreciation (10%) 1,000 9,000Add: Unrecorded Purchase 2,500 34,500 Plant and Machinery 20,000

Outstanding Salaries 1,000 Less: Depreciation (15%) 3,000 17,000 Closing Stock 55,000 Bills Receivable 2,000

Prepaid Rent 600 1,63,600 1,63,600

Solution to Practice Q.23.: In the books Firm



Amount `


Amount `

To Opening Stock A/c 17,500 By Sales A/c 1,65,000To Purchase A/c 1,12,600 By Goods Withdrawn by Jagan To Productive Expense A/c 7,000 A/c 600To Work Manager Salary A/c 3,000 By Goods destroyed by Fire

A/c 5,000To Gross Profit c/d 50,500 By Closing Stock A/c 20,000 1,90,600 1,90,600


29



Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 50,500Doubtful Debts A/c By Commissions A/c 2,400

Old Bad Debts 500 By Interest on Investment A/c 3,600Add: New Bad Debts 225 Add: New R.D.D. – Less: Old R.D.D. – 725

To Depreciation A/c Land and Building (7.5%) 1,875

To Salaries and Wages A/c 4,600 Add: Outstanding 400 5,000

To Office Expenses A/c 4,300 To Legal Expenses A/c 1,500 To Commissions A/c 1,500 To Loss by Fire A/c 5,000 To Net Profit c/d

Jagan 21,960 Magan 14,640 36,600

56,500 56,500


Dr. Cr.

Particulars Jagan `

Magan `

Particulars Jagan `

Magan `

To Drawings A/c 600 – By Balance b/d 30,000 20,000 By Profit & Loss A/c 21,960 14,640To Balance c/d 51,360 34,640

51,960 34,640 51,960 34,640



Amount `

Assets Amount `

Amount `

Capital Cash in Hand 5,000Jagan 51,360 Bills Receivable 4,000Magan 34,640 86,000 Debtors 20,000

Creditors 10,000 Less: New Bad Debts 225 19,775Bank Overdraft 5,000 Patents 4,000Outstanding Salaries and Loose Tools 3,000Wages 400 Furniture 6,000

Goodwill 6,500 Land and Building 25,000

Less: Depreciation (7.5%) 1,875 23,125 Investment 10,000 Closing Stock 20,000 1,01,400 1,01,400

30



Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 42,000 By Sales A/c 2,20,000To Purchases A/c 1,02,000 By Goods stolen A/c 6,000To Wages A/c 4,000 By Closing Stock A/c 30,000

Less: Advance to worker 1,250 2,750 To Motive Power A/c 7,500

Less: Deposit for Power Meter 2,500 5,000 To Trade Expenses A/c 1,000

Less: Carriage Paid for new Machinery 500 500

To Gross Profit c/d 1,03,750 2,56,000 2,56,000



Amount `


Amount `

To Salaries A/c 7,000 By Gross Profit b/d 1,03,750To Audit Fees A/c 9,900 By Interest on Investments A/c 600To Stationery A/c 3,200 Add: Interest Receivable 150 750

Less: Unused Stationery 800 2,400 To Interest A/c 2,500 To General Expenses A/c 2,500 To Depreciation on Motor Van A/c (10%) 4,400 To Loss by theft A/c 6,000 To Net Profit c/d

Ramu 41,880 Shamu 27,920 69,800

1,04,500 1,04,500


Particulars Ramu `

Shamu `

Particulars Ramu `

Shamu `




Amount `

Assets Amount `

Amount `

Capital A/c 5% Investments 30,000Ramu 80,000 Add: Interest Receivable 150 30,150Shamu 55,000 1,35,000 Loose Tools 8,500

Current A/c Motor Van 44,000Ramu 43,880 Less: Depreciation (10%) 4,400 39,600Shamu 29,420 73,300 Building 75,000


31

Sundry Creditors 50,000 Debtors 48,000Loan from Ramu 30,000 Machinery 30,000 Add: Carriage paid for new machinery 500 30,500 Cash at Bank 22,000 Deposit for Power Meter 2,500 Stock of Stationery 800 Advance to workers 1,250 Closing Stock 30,000 2,88,300 2,88,300




Amount `


Amount `

To Opening Stock A/c 35,000 By Sales A/c 2,60,000To Purchases A/c 1,65,000 Less: Sale of Furniture 2,000 2,58,000

Less: Returns 3,000 1,62,000 By Goods distributed as free To Wages A/c 28,000 Samples A/c 400 By Goods destroyed by fire A/c 1,000To Gross Profit c/d 52,400 By Closing Stock A/c 9,000 2,77,400 2,77,400


Dr. Cr.


Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 52,400Doubtful Debts A/c By R.D.D. A/c 1,800

Old Bad Debts 1,000 By Interest on Investment A/c 700Add: New Bad Debts − Add: Interest Receivable 300 1,000Add: New R.D.D. – By Profit on Sale of Furniture Less: Old R.D.D. 2,800 − A/c 100

To Salaries A/c 18,000 To Insurance A/c 3,500 To Rent & Taxes A/c 2,000 To Advertisement A/c 400 To Loss by fire A/c 2,000 To Depreciation on Building A/c (10%) 4,400 To Commission to Manager A/c 5,000 To Net Profit c/d

Arun 10,000 Varun 6,000 Tarun 4,000 20,000

55,300 55,300

32



Particulars Arun `

Varun `

Tarun `

Particulars Arun `

Varun `

Tarun `

By Balance b/d 50,000 30,000 20,000To Balance c/d 60,000 36,000 24,000 By Profit & Loss A/c 10,000 6,000 4,000

60,000 36,000 24,000 60,000 36,000 24,000 Balance Sheet as on 31st Mar, 2012


Amount `

Assets Amount `

Amount `

Capital A/c Debtors 60,000Arun 60,000 Less: Bad debts 1,000 59,000Varun 36,000 Furniture 17,000Tarun 24,000 1,20,000 Less: Furniture sold 1,900 15,100

Creditors 35,000 Buildings 44,000Add: Bill Dishonoured 3,000 38,000 Less: Depreciation (10%) 4,400 39,600

Bills Payable 14,000 10% Investment 10,000Less: Bill Dishonoured 3,000 11,000 Add: Interest Receivable 300 10,300

Commission Payable to Cash in hand 17,000Manager 5,000 Bills Receivable 16,000 Closing Stock 9,000 Insurance Claim 8,000 1,74,000 1,74,000

[Note: The old reserve for doubtful debts (R.D.D.) as per Trial Balance = ` 2,800 is higher than the actual expense for the year. Therefore, the excess amount of R.D.D. will be shown on the credit side of the Profit & Loss Account.] Solution to Practice Q.26.: In the Books of Firm



Amount `


Amount `

To Opening Stock A/c 1,00,000 By Sales A/c 2,00,000To Purchases A/c 1,37,500 Less: Return Inwards 2,500

Less: Return Outward 2,250 1,35,250 1,97,500To Wages A/c 9,500 Less: Sale of Machinery 3,600 1,93,900

By Goods Lost by Theft A/c 5,000 By Closing Stock A/c 20,000 By Gross Loss A/c 25,850 2,44,750 2,44,750



Amount `


Amount `

To Gross Loss b/d 25,850 To Salaries A/c 6,000 To Printing and Stationery A/c 2,000 To Loss by Theft A/c 5,000 By Net Loss c/d To Loss on Sale of Machinery Dhrashti 19,625A/c 400 Srushti 19,625 39,250

39,250 39,250


33


Particulars Dhrashti `

Srushti `

Particulars Dhrashti `

Srushti `

To Drawings A/c 7,225 5,000 By Balance b/d 90,000 75,000To Profit & Loss A/c 19,625 19,625 To Balance c/d 63,150 50,375

90,000 75,000 90,000 75,000


` Amount

` Assets Amount

` Amount

`Capitals Loose Tools 12,500

Dhrashti 63,150 Patents 12,500Srushti 50,375 1,13,525 Machinery 50,000

Bills Payable 30,500 Less: Sale 4,000 46,000Less: Dishonoured 2,000 28,500 Bills Receivable 12,500

Sundry Creditors 58,250 Less: Dishonoured 3,000 9,500Add: Bills Payable Sundry Debtors 60,000Dishonoured 2,000 60,250 Add: Bills Receivable dishonoured 3,000 63,000

Cash in Hand and Bank 38,775 Closing Stock 20,000 2,02,275 2,02,275




Amount `


Amount `

To Opening Stock A/c 40,100 By Sales A/c 3,10,700To Purchases A/c 2,60,600 Less: Sales Return 1,000

Less: Purchase Return 6,400 2,54,200 3,09,700To Wages A/c 22,000 Add: Unrecorded Sales 20,000 3,29,700

Less: Installation Charges 2,000 20,000 By Closing Stock A/c 50,000To Royalties A/c 2,000 By Goods given as Charity A/c 5,000To Gross Profit c/d 68,400 3,84,700 3,84,700


Dr. Cr.


Amount `


Amount `

To Salaries A/c 2,000 By Gross Profit b/d 68,400Add: Outstanding 1,800 3,800 By Commission A/c 600

To Donations A/c 5,000 To Traveling Expenses A/c 2,000 To Telephone Expense A/c 600 To Professional Fees A/c 1,400 To Outstanding Expense A/c

Printing & Stationery 500 Electricity Expenses 1,700 2,200

34


To Net Profit c/d Motilal 27,000 Maniklal 27,000 54,000

69,000 69,000


Particulars Motilal `

Maniklal`

Particulars Motilal `

Maniklal`

By Balance b/d 24,000 14,000To Balance c/d 51,000 41,000 By Profit and Loss A/c 27,000 27,000

51,000 41,000 51,000 41,000


` Amount

` Assets Amount

` Amount

`To Capital Machinery 30,000

Motilal 51,000 Add: Installation Charges 2,000 32,000Maniklal 41,000 92,000 Debtors 40,000

Bills Payable 12,000 Add: Unrecorded Sales 20,000 60,000Creditors 40,000 Cash 6,000Outstanding Expenses Closing Stock 50,000

Salaries 1,800 Printing and Stationery 500 Electricity Expenses 1,700 4,000

1,48,000 1,48,000




Amount `


Amount `

To Opening Stock A/c 90,000 By Sales A/c 6,12,000To Purchases A/c 4,50,000 By Goods destroyed by Fire

Less: Machinery Wrongly A/c 15,000Included 30,000 4,20,000 By Closing Stock A/c 20,000

To Trade Charges A/c 12,000 To Carriage Inward A/c 5,000 To Coal, Gas and Water A/c 1,500 To Factory Rent A/c 2,000 To Gross Profit c/d 1,16,500 6,47,000 6,47,000


Dr. Cr.


Amount `


Amount `

To Loss by Fire A/c 5,000 By Gross Profit b/d 1,16,500To Interest on Capital A/c By Commission Receivable A/c 500

Raj 8,700 Ranbir 7,800 16,500

To Carriage Outward A/c 3,000


35

To General Expense A/c 5,500 To Unproductive Wages A/c 22,000 To Advertisement A/c 12,000

Less: Prepaid 8,000 4,000 To Discount A/c 3,000 To Outstanding Interest on Loan from Raj A/c 1,200 To Net Profit c/d

Raj 28,400 Ranbir 28,400 56,800

1,17,000 1,17,000


Particulars Raj `

Ranbir `

Particulars Raj `

Ranbir `

By Balance b/d 1,45,000 1,30,000 By Interest on Capital A/c 8,700 7,800To Balance c/d 1,82,100 1,66,200 By Profit and Loss A/c 28,400 28,400

1,82,100 1,66,200 1,82,100 1,66,200 Balance Sheet as on 31st Mar, 2012


Amount `

Assets Amount `

Amount `

Capital Goodwill 20,000Raj 1,82,100 Land & Building 77,000Ranbir 1,66,200 3,48,300 Plant & Machinary 1,50,000

Loan from Raj 20,000 Add: Wrongly Included in Add: Outstanding Interest 6% 1,200 21,200 Purchase 30,000 1,80,000

Closing Stock 20,000 Debtors 40,000

Commission Receivable 500 Insurance Claim 10,000 Cash in Hand 2,000

Cash at Bank 12,000 Prepaid Advertisement 8,000

3,69,500 3,69,500


Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 83,000 By Sales A/c 4,20,000To Purchases A/c 1,97,000 By Closing Stock A/c 76,000To Wages A/c 7,500

Less: Advance 2,500 5,000 To Motive Power A/c 15,000

Less: Deposit 7,000 8,000 To Carriage A/c 7,000 To Gross Profit c/d 1,96,000 4,96,000 4,96,000

36




Amount `


Amount `

To Salaries A/c 13,000 By Gross Profit b/d 1,96,000Add: Outstanding 3,000 16,000 By Interest on Drawings A/c

To Audit Fees A/c 8,500 Anand 180Add: Outstanding 3,500 12,000 Pramod 120 300

To Bad Debts A/c 6,400 To Interest A/c 4,000 To Interest on Capital A/c

Anand 8,100 Pramod 5,400 13,500

To Depreciation A/c Loose Tools (10%) 1,700 Motor Van (7.5%) 6,600 Machinery (12.5%) 7,500 15,800

To Net Profit c/d

Anand’s A/c 77,160 Pramod’s A/c 51,440 1,28,600

1,96,300 1,96,300


Dr. Cr.

Particulars Anand `

Pramod `

Particulars Anand `

Pramod `

To Drawings A/c 12,000 8,000 By Balance b/d 16,200 10,800To Interest of Drawings A/c 180 120 By Interest on Capital A/c 8,100 5,400 By Profit and Loss A/c 77,160 51,440To Balance c/d 89,280 59,520

1,01,460 67,640 1,01,460 67,640



Amount `

Assets Amount `

Amount `

Capital A/c: Investments 56,000Anand 1,62,000 Loose Tools 17,000Pramod 1,08,000 2,70,000 Less: Depreciation (10%) 1,700 15,300

Sundry Creditors 99,000 Motor Van 88,000Bank Overdraft 56,400 Less: Depreciation (7.5%) 6,600 81,400Outstanding Salaries 3,000 Building 1,50,000Outstanding Audit Fees 3,500 Debtors 96,000Current A/c: Cash at Bank 44,000

Anand 89,280 Machinery 60,000Pramod 59,520 1,48,800 Less: Depreciation (12.5%) 7,500 52,500

Closing Stock 76,000 Deposit for Meter 7,000 Advance Wages 2,500 5,80,700 5,80,700


37


Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 40,500 By Sales A/c 3,00,000To Purchase A/c 1,80,000 Add: Unrecorded Sales 3,000 3,03,000

Add: Unrecorded Purchases 5,000 1,85,000 By Closing Stock A/c 41,000To Wages & Salaries A/c 19,500

Less: Wages paid for making Furniture 5,000 14,500

To Works Manager’s salary A/c 3,600 To Gross Profit c/d 1,00,400 3,44,000 3,44,000


Dr. Cr.


Amount `


Amount `

To Sundry Expense A/c 3,800 By Gross Profit b/d 1,00,400To Rent A/c 22,000 By Commission A/c 12,500

Add: Outstanding 2,000 24,000 By Interest Receivable on To Printing & Stationery A/c 1,700 Debenture A/c 1,000To Insurance A/c 2,000 By Interest on Drawings A/c

Less: Prepaid 500 1,500 Samir 450To Provident Fund Karan 250 700Contribution A/c 1,250 To Advertisement A/c 4,800

Less: Prepaid 3,200 1,600 To Bad debts A/c 2,500 To Interest on Capital A/c

Samir 12,000 Karan 10,200 22,200

To Salary to Samir A/c 6,000 To Commission to Karan A/c 1,004 To Net Profit c/d

Samir 24,523 Karan 24,523 49,046

1,14,600 1,14,600


Dr. Cr.

Particulars Anand `

Pramod `

Particulars Anand `

Pramod `

To Drawings A/c 18,000 10,000 By Balance b/d 2,00,000 1,70,000To Interest of Drawings A/c 450 250 By Interest on Capital A/c 12,000 10,200 By Profit and Loss A/c 24,523 24,523 By Salary A/c 6,000 –To Balance c/d 2,24,073 1,95,477 By Commission A/c – 1,004

2,42,523 2,05,727 2,42,523 2,05,727

38




Amount `

Assets Amount `

Amount `

Capital A/c: Debtors 88,000Samir 2,24,073 Add: Unrecorded Sales 3,000 91,000Varun 1,95,477 4,19,550 Furniture 80,000

Creditors 87,000 Add: Wages paid for making Add: Unrecorded Purchases 5,000 92,000 new Furniture 5,000 85,000

Outstanding Rent 2,000 Land & Building 2,50,000Provident Fund 35,000 10% Debenture 40,000Interest on Provident Fund Add: Interest Receivable 1,000 41,000Investment 2,500 Prepaid Insurance 500 Prepaid Advertisement 3,200 Provident Fund Investment 38,000 Cash in hand 1,350 Closing Stock 41,000 5,51,050 5,51,050




Amount `


Amount `

To Opening Stock A/c 12,000 By Sales A/c 1,10,000To Purchases A/c 98,500 Less: Return Inwards 2,000 1,08,000To Import Duty A/c 2,100 By Goods stolen from Godown A/c 8,000To Gross Profit c/d 28,400 By Closing Stock A/c 25,000 1,41,000 1,41,000


Dr. Cr.


Amount `


Amount `

To Salaries and Wages A/c 26,000 By Gross Profit b/d 28,400To Carriage Outward A/c 1,800 By Dividend Received A/c 1,500To Insurance Premium A/c 2,200 To Postage and Telegram A/c 1,750

Less: Unused Postage Stamps 250 1,500 To Advertisements A/c 3,000 To Bad Debts A/c 1,000

Add: New Bad Debts 2,000 3,000 To Printing and Stationery A/c 2,400 To Interest on Bank Loan A/c 3,000 To Loss by theft A/c 8,000 To Depreciation A/c By Net Loss c/d

Leashold Premises 4,000 Sanjay 16,000Plant and Machinery (10%) 7,000 11,000 Vijay 16,000 32,000

61,900 61,900


39


Particulars Sanjay `

Vijay `

Particulars Sanjay `

Vijay `

To Profit and Loss A/c 16,000 16,000 By Balance b/d 45,000 45,000 To Balance c/d 29,000 29,000



Amount `

Assets Amount `

Amount `

Capital : Leashold Premises 80,000Sanjay 29,000 Less: Written off 4,000 76,000Vijay 29,000 58,000 Plant and Machinery 70,000

Sundry Creditors 72,700 Less: Depreciation (10%) 7,000 63,000Bills Payable 40,000 Sundry Debtors 45,800Outstanding Audit Fees 4,400 Less: New Bad Debts 2,000 43,80010% Bank Loan 60,000 Cash in Hand 1,850

Add: Outstanding Interest 3,000 63,000 Stock of Postage Stamps 250 Closing Stock 25,000 Bills Receivable 28,200 2,38,100 2,38,100


Dr. Cr.


Amount `


Amount `

To Opening Stock A/c 35,000 By Sales A/c To Purchases 2,20,000 Credit 4,00,000 Less: Purchase Returns 3,000 2,17,000 Cash 30,000To Wages A/c 28,000 4,30,000

Less: Sales Returns 2,500 4,27,500By Goods destroyed by Fire A/c 5,000By Goods withdrawn by a A/c 10,000By Goods distributed as Free Samples A/c 5,000

To Gross Profit c/d 2,47,500 By Closing Stock A/c 80,000 5,27,500 5,27,500



Amount `


Amount `

To Reserve for Bad & By Gross Profit b/d 2,47,500Doubtful Debts A/c By Discount A/c 3,500

Old Bad Debts 3,400 Add: New Bad Debts 5,000 Add: New R.D.D. 2,000 Less: Old R.D.D. – 10,400

40


To Sundry Expenses A/c 1,500 To Salaries A/c 46,000 To Travelling Expenses A/c 6,000 To Advertisement A/c 10,000

Less Prepaid 8,750 1,250

Add: Goods distributed as Free Samples 5,000 6,250

To Rates and Insurance A/c 13,800 To Discount A/c 4,000 To Interest on Bank Loan 3,300

Add: Outstanding 3,400 6,700 To Depreciation A/c

Buildings (10%) 18,000 Machinery (15%) 15,000 Furniture 20,000 53,000

To Interest on Loan from A A/c 2,500 To Loss by Fire A/c 5,000 To Net Profit c/d

A 54,771 B 41,079 95,850 2,51,000 2,51,000


Particulars A `

B `

Particulars A `

B `

To Drawings A/c 10,000 10,000 By Balance b/d 1,20,000 90,000By Goods withdrawn A/c 10,000 – By Profit & Loss A/c 54,771 41,079

To Balance c/d 1,54,771 1,21,079

1,74,771 1,31,079 1,74,771 1,31,079 Balance Sheet as on 31st Mar, 2012


Amount `

Assets Amount `

Amount `

Capitals Buildings 1,80,000A 1,54,771 Less: Depreciation (10%) 18,000 1,62,000B 1,21,079 2,75,850 Machinery 1,00,000

Sundry Creditors 35,000 Less: Depreciation (15%) 15,000 85,000Bills Payable 45,000 Furniture 60,00010% Loan from A 50,000 Less: Depreciation 20,000 40,000

Add: Interest Payable 2,500 52,500 Debtors 45,00010% Bank Loan 67,000 Less: Bad Debts 5,000

Add: Outstanding Interest 3,400 70,400 40,000

Less: R.D.D. (0.5% of Gross Credit Sales)

2,000

38,000

Bills Receivable 50,000 Closing Stock 80,000

Prepaid Rent Prepaid Advertisement 8,750 Cash in Hand 15,000

4,78,750 4,78,750

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