Amitbhai and Narendrabhai are in Partnership sharing Profits and losses equally. from the following Trail balance and Adjustments given below, 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.

Trail Balance as on 31st march, 2019.
Debit Balance Amount ₹ Credit Balance  Amount ₹ 
Plant & Machinery 2,80,000 Capital A/c:  
     Amitbhai  3,50,000 
     Narendrabhai 3,00,000 
Factory Building 75,000 Sales 1,80,000 
Sundry Debtors 28,700 Bills Payable 8,500 
Purchases 85,500 Discount 1,200 
Bad Debts 500 Creditors 38,500 
Sales return 2,200 R.D.D. 2,700 
10% Govt. Bond 40,000 Bank Loan 15,000 
(Purchased on 1st Oct 2018) 
Import Duty 1,800 Purchases Return 2,000 
Legal Charges 2,000   
Motive Power 12,000   
Warehouse rent 1,800   
Cash in Hand  20,000   
Cash at Bank 70,000   
Advertisement 10,000   
(For 2-year, w.e.f 1st Jan 2019) 
Salaries 3,800   
Rent 1,500   
       Amitbhai 2,400 
       Narendrabhai 3,200 
Furniture 1,95,800   
Bills receivable 20,700   
Free hold Property 41,000   
 8,97,900  8,97,900 
1. Stock on hand on 31st March 2019 was valued at ₹43,000.
2. Uninsured goods worth ₹8,000 were stolen.
3. Create R.D.D. at 2% on Sundry Debtors.
4. Mr. Patil, Our Customer become insolvent and could not pay his debts of ₹500.
5. Outstanding Expenses - Rent ₹800 and Salaries ₹300.
6. Depreciation Factory Building by ₹2,500 and Furniture by ₹1,800.


Final Account

In the Books of Amitbhai and Narendrabhai

Dr.  Trading A/c And Profit & Loss A/c for the year ended 31st march, 2019   Cr. 
Particulars Amount  Amount  Particulars Amount  Amount  
To Purchase  85,500  By Sales 1,80,000  
(-) Purchase Return 2,000 83,500 (-) Sales Return 2,200 1,77,800 
To Import duty  1,800 By Goods were stolen  8,000 
To Motive Power   12,000    
   By Closing Stock  43,000 
To Gross Profit c/d  1,31,500    
  2,27,800   2,27,800 
To Bad Debt          (T) 500  By Gross Profit b/d  1,31,500 
(+) Bad Debt        (A) 500  
(+) R.D.D.              (A) 564  
(-) R.D.D.            (T) 2,700 -1,136 
To Legal Charges  2,000 By R.D.D.   1,136 
To Warehouse rent  1,800 By Interest receivable  2,000 
To Advertisement 10,000  By Discount  1,200 
(-) Prepaid Advertisement 8,750 1,250 
To Salaries 3,800     
(+) Outstanding Exp 300 4,100 
To Rent 1,500     
(+) Outstanding Exp 800 2,300 
To Depreciation:      
Factory Building 2,500  
Furniture 1,800 4,300 
To loss on goods were stolen  8,000    
To Net Profit      
Amitbhai 56,043     
Narendrabhai 56,043 1,12,086    
  1,35,836   1,35,836 
Liabilities Amount  Amount  Assets Amount  Amount  
Capital A/c:   Plant & Machinery  2,80,000 
Amitbhai       3,50,000   
3,00,000(-) Drawings:   
Amitbhai            2,400   
Narendrabhai    3,200 5,600  
(+) Net Profit     1,12,086 5,32,314 
   Factory Building 75,000  
(-) Depreciation  2,500 72,500 
   10% Govt. Bond   
(Purchased on 1st Oct 2018)   
(+) Interest Receivable  40,000  
2,000 42,000 
Bills Payable  8,500 Cash in Hand  20,000 
Creditors  38,500 Cash at bank  70,000 
Bank Loan  15,000 Furniture 1,95,800  
(-) Depreciation 1,800 1,94,000 
Outstanding:   Bills Receivable  20,700 
Rent 800  
Salaries 300 1,100 
   Free hold Property  41,000 
   Debtors 28,700  
(-) Bad Debt        (A) 500  
(-) R.D.D. @2%   (A)  564 27,636 
   Prepaid Advertisement  8,750 
   Closing Stock  43,000 
  8,19,586   8,19,586 
Explanation Of Adjustments:
Amitbhai and Narendrabhai are in Partnership

1. Stock on hand on 31st March 2019 was valued at ₹43,000.
Stock on 31st march 2019 is the end month of the year therefore stock is closing at valued ₹43,000. 1st Effect in Balance sheet Assets side And 2nd Effect in Trading A/c credit side.

2. Uninsured goods worth ₹8,000 were stolen.
Goods stolen which were uninsured, No entry for insurance claim. Stolen means a loss for the business of Amitbhai and Narendrabhai are in Partnership. 
The Loss entry in the Profit/Loss A/c Debit side And Show to the credit side of Trading A/c.

3. Create R.D.D. at 2% on Sundry Debtors.
Reserve for Doubtful debts, new R.D.D. (Provision for Doubtful Debts) Show to the debit side of Profit/Loss A/c And Deduct from Sundry Debtors Balance Sheet Asset Side.

4. Mr. Patil, Our Customer become insolvent and could not pay his debts of ₹500.
Mr. Patil Customer of Amitbhai and Narendrabhai Partnership  Business Became insolvent(unable to pay) Add to the Bad Debts of Profit/loss A/c And Deduct from the Sundry Debtors from Assets side.

5. Outstanding Expenses - Rent ₹800 and Salaries ₹300.
Outstanding Expenses are Add to the specified expense on the debit side of profit/loss A/c And Balance Sheet Liability side.

6. Depreciation Factory Building by ₹2,500 and Furniture by ₹1,800.
Depreciation of Factory Building and Furniture or any Asset effect will be same to all Assets. 1st effect show to the debit side of the Profit/Koss A/c And Less from the the Asset in Balance Sheet Asset Side.


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