Chapter 1: Introduction to Partnership and Partnership Final Accounts
Practise Problem | Q: 5 | Page no. 58
Sucheta & Gayatri are Partners sharing Profit and Loss in the ratio 3:2. From the following Trial Balance and additional information, 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
Particulars | Debit ₹ | Credit ₹ |
---|---|---|
Purchases & Sales | 65,000 | 1,85,500 |
Works Manager's Salary | 2,300 | |
Capital - Sucheta | 75,000 | |
Gayatri | 40,000 | |
Opening Stock | 18,700 | |
Debtors & Creditors | 47,500 | 35,000 |
Wages & Salaries | 4,000 | |
Bills Receivable | 22,000 | |
Bills Payable | 27,300 | |
Discount | 400 | |
Motive Power | 1,350 | |
Custom duty | 1,500 | |
Interest | 1,300 | |
Unproductive Wages | 3,000 | |
Audit fees | 2,500 | |
Rent | 1,800 | |
Conveyance | 2,000 | |
Goodwill | 25,000 | |
Copyrights | 20,000 | |
Building | 88,000 | |
Partner (Sucheta's) Loan | 6,150 | |
Investments | 40,000 | |
Cash at Bank | 26,000 | |
Total | 3,70,650 | 3,70,650 |
Adjustments:
- Stock on 31st March 2019 was valued at ₹19,700.
- Goods costing ₹3,000 distributed as a free sample.
- Motive Power includes ₹500 paid for the deposit of Power Meter.
- Depreciate Building @ 5%.
- Write off ₹2,000 for Bad debts and maintain R.D.D at 3% on Debtors.
- Bills Receivable included dishonored of Bill of ₹4,000.
Solution:
In the books of Sucheta and Gayatri
Trading and Profit and Loss Account for the year ended on 31st March 2019
Dr. Particulars | Amount ₹ | Amount ₹ | Cr. Particulars | Amount ₹ | Amount ₹ | ||
---|---|---|---|---|---|---|---|
To Opening Stock | 18,700 | By Sales | 1,85,500 | ||||
To Purchases | 65,000 | By Goods Distributed as Free sample | 3,000 | ||||
To Works Manager’s Salary | 2,300 | By Closing Stock | 19,700 | ||||
To Wages & Salaries | 4,000 | ||||||
To Motive Power | 1,350 | ||||||
Less: Deposit for Power Meter | 500 | 850 | |||||
To Custom Duty | 1,500 | ||||||
To Gross Profit c/d | 1,15,850 | ||||||
2,08,200 | 2,08,200 | ||||||
To Unproductive Wages | 3,000 | By Gross Profit b/d | 1,15,850 | ||||
To Audit Fees | 2,500 | By Discount | 400 | ||||
To Rent | 1,800 | By Interest | 1,300 | ||||
To Conveyance | 2,000 | ||||||
To O/s Interest on Sucheta’s Loan | 369 | ||||||
To Advertisement Expenses (Goods distributed as samples) | 3,000 | ||||||
To Depreciation on Building | 4,400 | ||||||
To R.B.D.D A/c | |||||||
Bad debts (New) | 2,000 | ||||||
Add: New Reserve | 1,485 | 3,485 | |||||
To Net Profit (Transferred to Capital A/cs) | |||||||
Sucheta (3/5) | 58,197.60 | ||||||
Gayatri (2/5) | 38,798.40 | 96,996 | |||||
1,17,550 | 1,17,550 |
Balance Sheet as on 31st March 2019
Liabilities | Amount ₹ | Amount ₹ | Assets | Amount ₹ | Amount ₹ |
---|---|---|---|---|---|
Capital Account: Sucheta | Deposit Power Meter | 500 | |||
Opening Balance | 75,000 | Building | 88,000 | ||
Add: Net Profit | 58,197.60 | 1,33,197.60 | Less: Depreciation @ 5% | 4,400 | 83,600 |
Capital Account: Gayatri | Debtors | 47,500 | |||
Opening Balance | 40,000 | Add: Dishonoured Bill | 4,000 | ||
Add: Net Profit | 38,798.40 | 78,798.40 | 51,500 | ||
Sucheta’s Loan | 6,150 | Less: Bad Debts (New) | 2,000 | ||
Add: O/s Int. on Loan | 369 | 6,519 | 49,500 | ||
Creditors | 35,000 | Less : R.D.D. (New) @ 3% on 49,500 | 1,485 | 48,015 | |
Bills Payable | 27,300 | Bills Receivable | 22,000 | ||
Less: Dishonoured Bill | 4,000 | 18,000 | |||
Goodwill | 25,000 | ||||
Copyrights | 20,000 | ||||
Investments | 40,000 | ||||
Closing Stock | 19,700 | ||||
Cash at Bank | 26,000 | ||||
Total | 2,80,815 | Total | 2,80,815 |
Working Notes:
- The rate of interest on the partner’s loan is not mentioned, therefore interest on the loan is calculated at 6% p.a.
Interest on Sucheta’s Loan = 6150 x 6% = ₹369 - Add dishonored bill amount (₹4,000) to debtors amount (New Debtors = 47,500 + 4,000 = 51,500). Then calculate Bad Debts and R.D.D.
Bad Debts (New) = ₹2,000
Remaining Debtors = 51,500 - 2,000 = 49,500
R.D.D. @ 3% on ₹49,500 = ₹1,485 - Subtract dishonored bill amount (₹4,000) from bills receivable amount (New Bills Receivable = 22,000 - 4,000 = ₹18,000).
- Net Profit Distribution (Ratio 3:2 for Sucheta:Gayatri):
Total Net Profit = ₹96,996
Sucheta's Share = 96,996 * (3/5) = ₹58,197.60
Gayatri's Share = 96,996 * (2/5) = ₹38,798.40
(Note: The original solution had rounded figures for profit distribution. Using precise calculations leads to minor differences in final capital and balance sheet totals, which will still tally if consistent.)
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.
- Practise Problem | Q 1 | Page 54 Click here for solution
- Practise Problem | Q 2 | Page 55 Click here for solution
- Practise Problem | Q 3 | Page 56 Click here for solution
- Practise Problem | Q 4 | Page 57 Click here for solution
- Practise Problem | Q: 5 | Page no. 58 Click here for solution
- Practise Problem | Q: 6 | Page no. 59 Click here for solution
- Practise Problem | Q: 7 | Page no. 59 Click Here for Solution
- Practise Problem | Q: 8 | Page no. 60 Click Here for Solution
- Practise Problem | Q: 9 | Page no. 61 Click Here for Solution
- Practise Problem | Q: 10 | Page no. 61 Click Here for Solution
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
IMPORTANT STUDY MATERIAL
- 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
- BILL OF EXCHANGE: View | PDF Download
- FORMAT OF BILL: View | PDF Download
- ADMISSION OF A PARTNER: View | PDF Download
- RETIREMENT OF PARTNER: View | PDF Download
- DEATH OF PARTNER: View | PDF Download
- ACCOUNTING FOR SHARES: View | PDF Download
- DISSOLUTION OF PARTNERSHIP FIRM: View | PDF Download
- VALUATION OF GOODWILL WITH SOLUTION: View | PDF Download
- FORMAT OF FINAL ACCOUNT : View | PDF Download
- INTRODUCTION TO PARTNERSHIP: View | PDF Download
IMPORTANT PRACTICE PAPER FOR BOARD EXAM 2020
Difficult Words & Meanings
- Partnership: A business owned and managed by two or more individuals who share profits or losses.
- Final Accounts: Financial statements prepared at the end of an accounting period to show the financial performance (Trading and Profit & Loss Account) and financial position (Balance Sheet) of a business.
- Trading Account: An account prepared to find out the gross profit or gross loss of a business during a specific period.
- Profit and Loss Account (P&L Account): An account prepared to ascertain the net profit or net loss of a business after considering all operating and non-operating incomes and expenses.
- Balance Sheet: A statement showing the assets, liabilities, and capital of a business on a specific date, reflecting its financial position.
- Trial Balance: A list of all debit and credit balances extracted from ledger accounts to check the arithmetical accuracy of bookkeeping.
- Debit (Dr.): An entry on the left side of an account, typically representing an increase in assets or expenses, or a decrease in liabilities or income.
- Credit (Cr.): An entry on the right side of an account, typically representing an increase in liabilities or income, or a decrease in assets or expenses.
- Capital: The amount invested in the business by the owners (partners).
- Opening Stock: The value of goods available for sale at the beginning of an accounting period.
- Debtors (Sundry Debtors): Persons or entities who owe money to the business for goods or services sold on credit.
- Creditors (Sundry Creditors): Persons or entities to whom the business owes money for goods or services purchased on credit.
- Bills Receivable: A formal written promise from a debtor to pay a specific sum of money at a future date (an asset).
- Bills Payable: A formal written promise made by the business to pay a specific sum of money to a creditor at a future date (a liability).
- Motive Power: Expenses incurred on power (like electricity or fuel) used for running machinery in a factory.
- Custom Duty: A tax levied on goods imported into a country.
- Unproductive Wages: Wages paid to workers not directly involved in the production process (e.g., cleaning staff in the office); treated as an indirect expense.
- Audit Fees: Fees paid to an auditor for examining and verifying the accuracy of the business's financial records.
- Conveyance: Expenses related to transportation for business purposes.
- Goodwill: The intangible value of a business based on its reputation, customer base, and other factors that enable it to earn higher profits.
- Copyrights: Exclusive legal rights granted to the creator of original works (like literary, artistic, or musical works) to reproduce and distribute them.
- Partner's Loan: Money lent by a partner to the partnership firm, treated as a liability for the firm.
- Adjustments: Modifications made to account balances at the end of an accounting period to reflect items not yet recorded or to correct errors, ensuring accurate financial statements.
- Closing Stock: The value of unsold goods at the end of an accounting period.
- Depreciation: The systematic allocation of the cost of a tangible asset over its useful life, reflecting its wear and tear or obsolescence.
- Bad Debts: Amounts owed by debtors that are deemed irrecoverable (unlikely to be paid).
- R.D.D. (Reserve for Doubtful Debts / Provision for Doubtful Debts): An estimated amount set aside from profits to cover potential future bad debts.
- Dishonored Bill: A bill of exchange or promissory note that the drawee (payer) fails to pay on its due date.
- Gross Profit: The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services (Sales - Cost of Goods Sold).
- Net Profit: The actual profit of the business after all expenses (operating and non-operating) have been deducted from all revenues (Gross Profit - Indirect Expenses + Indirect Incomes).
- Liabilities: The financial obligations or debts of a business owed to external parties.
- Assets: Resources owned by a business that have economic value and are expected to provide future benefits.
- Outstanding (O/s) Interest: Interest that has become due but has not yet been paid.