Chapter: Introduction to Partnership and Partnership Final Accounts· Book-Keeping & Accountancy
Mama and Kaka are partners in partnership firm sharing profits and losses equally. You are required to prepare Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as on that date:Trial Balance as on 31st March, 2019Debit Bal…
Q.7 Mama and Kaka are partners in partnership firm sharing profits and losses equally. You are required to prepare 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 Balances | Amount (₹) | Credit Balances | Amount (₹) |
|---|---|---|---|
| Insurance | 30,000 | Capital Accounts: | |
| Land and Building (Addition of ₹ 40,000 w.e.f. 1st July, 2018) | 1,00,000 | Mama | 1,00,000 |
| Salaries | 10,000 | Kaka | 1,00,000 |
| Export duty | 5,000 | 10% Bank loan (taken on 1st Oct., 2018) | 60,000 |
| Interest | 2,000 | Interest | 3,000 |
| Furniture | 80,000 | Bills payable | 16,000 |
| Debtors | 52,000 | ||
| 2,79,000 | 2,79,000 |
Adjustments:
- Gross profit amounted to ₹ 69,000.
- Prepaid insurance ₹ 7,500.
- Depreciate Land and Building at 10% p.a. and Furniture at 5% p.a.
- Write off ₹ 2,000 for bad debts and maintain R.D.D. at 5% on sundry debtors.
- Closing stock is valued at ₹ 69,000.