Snehal and Deepali are partners sharing profit and losses in their capital ratio. Following is the Trial Balance as on 31st March 2021:Trial Balance as on 31st March 2021ParticularsDebit Amount (₹)ParticularsCredit Amount (₹)Plant and Machinery27,600…

Question

Q.7 Snehal and Deepali are partners sharing profit and losses in their capital ratio. Following is the Trial Balance as on 31st March 2021: Trial Balance as on 31st March 2021 ParticularsDebit Amount (₹)ParticularsCredit Amount (₹) Plant and Machinery27,600Capital Accounts: Carriage Outward2,600Snehal1,60,000 Wages and Salary15,200Deepali80,000 Sundry Debtors1,24,000Sundry Creditors68,000 General Expenses5,000Sales2,96,000 Stock (1st April 2020)1,79,000R.D.D.2,400 Motor Van80,000Purchase Return12,000 Office Rent10,000 Freehold Property46,000 Sales Return16,000 Advertisement (For 2 Years)8,000 Salaries9,000 Purchases96,000 6,18,4006,18,400 Adjustments: Closing stock is valued at ₹ 1,76,000. Outstanding wages ₹ 1,600. Reserve for doubtful debts on Debtors at 5% is to be created. Depreciate motor van by 5% and plant and machinery by 10% p.a. Prepare: (i) Trading Account (ii) Profit and Loss Account (iii) Balance Sheet as on 31st March 2021.

Doubtly AI · Accepted Answer

Answer: Gross Profit ₹ 1,76,200; Net Profit ₹ 1,35,040 (Snehal ₹ 90,026.67, Deepali ₹ 45,013.33); Balance Sheet total ₹ 4,44,640. Working notes Capital ratio = 1,60,000 : 80,000 = 2 : 1. Advertisement ₹ 8,000 is for 2 years, so ₹ 4,000 is this year's expense and ₹ 4,000 is prepaid (shown as an asset). New R.D.D. = 5% of 1,24,000 = ₹ 6,200. Less old R.D.D. ₹ 2,400, so ₹ 3,800 is charged to Profit and Loss Account. Depreciation: Motor Van 5% of 80,000 = ₹ 4,000; Plant and Machinery 10% of 27,600 = ₹ 2,760. (i) Trading Account for the year ended 31st March 2021 Dr. ParticularsAmount (₹)Cr. ParticularsAmount (₹) To Opening Stock1,79,000By Sales 2,96,000 Less: Sales Return 16,0002,80,000 To Purchases 96,000 Less: Purchase Return 12,00084,000By Closing Stock1,76,000 To Wages and Salary 15,200 Add: Outstanding 1,60016,800 To Gross Profit c/d1,76,200 4,56,0004,56,000 (ii) Profit and Loss Account for the year ended 31st March 2021 Dr. ParticularsAmount (₹)Cr. ParticularsAmount (₹) To Carriage Outward2,600By Gross Profit b/d1,76,200 To General Expenses5,000 To Office Rent10,000 To Salaries9,000 To Advertisement 8,000 Less: Prepaid 4,0004,000 To New R.D.D. 6,200 Less: Old R.D.D. 2,4003,800 To Depreciation: Motor Van 4,000 Plant and Machinery 2,7606,760 To Net Profit transferred to: Snehal's Capital A/c (2/3) 90,026.67 Deepali's Capital A/c (1/3) 45,013.331,35,040 1,76,2001,76,200 (iii) Balance Sheet as on 31st March 2021 LiabilitiesAmount (₹)AssetsAmount (₹) Capital Accounts: Snehal 1,60,000 Add: Net Profit 90,026.672,50,026.67Freehold Property46,000 Deepali 80,000 Add: Net Profit 45,013.331,25,013.33Plant and Machinery 27,600 Less: Depreciation 2,76024,840 Sundry Creditors68,000Motor Van 80,000 Less: Depreciation 4,00076,000 Outstanding Wages1,600Sundry Debtors 1,24,000 Less: R.D.D. 6,2001,17,800 Closing Stock1,76,000 Prepaid Advertisement4,000 4,44,6404,44,640 Note: if the whole advertisement of ₹ 8,000 is charged to this year, net profit becomes ₹ 1,31,040 (Snehal ₹ 87,360,...

Snehal and Deepali are partners sharing profit and losses in their capital ratio. Following is the Trial Balance as on 31st March 2021:Trial Balance as on 31st March 2021ParticularsDebit Amount (₹)ParticularsCredit Amount (₹)Plant and Machinery27,600…

1 answer

Your answer

Particulars	Debit Amount (₹)	Particulars	Credit Amount (₹)
Plant and Machinery	27,600	Capital Accounts:
Carriage Outward	2,600	Snehal	1,60,000
Wages and Salary	15,200	Deepali	80,000
Sundry Debtors	1,24,000	Sundry Creditors	68,000
General Expenses	5,000	Sales	2,96,000
Stock (1st April 2020)	1,79,000	R.D.D.	2,400
Motor Van	80,000	Purchase Return	12,000
Office Rent	10,000
Freehold Property	46,000
Sales Return	16,000
Advertisement (For 2 Years)	8,000
Salaries	9,000
Purchases	96,000
	6,18,400		6,18,400

Dr. Particulars	Amount (₹)	Cr. Particulars	Amount (₹)
To Opening Stock	1,79,000	By Sales 2,96,000 Less: Sales Return 16,000	2,80,000
To Purchases 96,000 Less: Purchase Return 12,000	84,000	By Closing Stock	1,76,000
To Wages and Salary 15,200 Add: Outstanding 1,600	16,800
To Gross Profit c/d	1,76,200
	4,56,000		4,56,000

Dr. Particulars	Amount (₹)	Cr. Particulars	Amount (₹)
To Carriage Outward	2,600	By Gross Profit b/d	1,76,200
To General Expenses	5,000
To Office Rent	10,000
To Salaries	9,000
To Advertisement 8,000 Less: Prepaid 4,000	4,000
To New R.D.D. 6,200 Less: Old R.D.D. 2,400	3,800
To Depreciation: Motor Van 4,000 Plant and Machinery 2,760	6,760
To Net Profit transferred to: Snehal's Capital A/c (2/3) 90,026.67 Deepali's Capital A/c (1/3) 45,013.33	1,35,040
	1,76,200		1,76,200

Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Accounts: Snehal 1,60,000 Add: Net Profit 90,026.67	2,50,026.67	Freehold Property	46,000
Deepali 80,000 Add: Net Profit 45,013.33	1,25,013.33	Plant and Machinery 27,600 Less: Depreciation 2,760	24,840
Sundry Creditors	68,000	Motor Van 80,000 Less: Depreciation 4,000	76,000
Outstanding Wages	1,600	Sundry Debtors 1,24,000 Less: R.D.D. 6,200	1,17,800
		Closing Stock	1,76,000
		Prepaid Advertisement	4,000
	4,44,640		4,44,640