Chapter 1: Introduction to Partnership and Partnership Final Accounts
Practise Problem | Q: 6 | Page no. 59
Archana and Prerana are partners, sharing Profits and Losses in the ratio 2:1 with the help of following Trial 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.
Trial Balance as on 31st March 2019
Debit Balance | Amount ₹ | Credit Balance | Amount ₹ |
---|---|---|---|
Stock (1/4/2018) | 8,560 | Capital : | |
Patents | 2,000 | Archana | 40,000 |
Sundry Debtors | 18,500 | Prerana | 20,000 |
Stock of Stationary | 3,000 | Other Loans | 3,000 |
Trade Mark | 2,000 | Reserve fund | 1,000 |
Bills Receivable | 6,300 | Sundry Creditors | 17,500 |
Electricity charges | 1,450 | Bills Payable | 5,000 |
Wages | 950 | Purchase Return | 1,000 |
Heating & Lighting | 1,000 | R.D.D | 500 |
Trade Expenses | 850 | Sales | 30,200 |
Sales Return | 400 | Interest | 310 |
Land & Building | 22,000 | ||
Furniture | 13,000 | ||
Cash at Bank | 5,000 | ||
Investments | 7,500 | ||
Drawings : | |||
Archana | 1,200 | ||
Prerana | 900 | ||
Bad debts | 200 | ||
Purchases | 23,700 | ||
Total | 1,18,510 | Total | 1,18,510 |
Adjustments:
1) Stock on 31st March 2019 is valued at Cost Price ₹12,000 and Market Price ₹17,000.
2) Our customer Mr. Shekhar failed to pay his dues of ₹800.
3) 1/8th of Patents are to be written off.
4) A part of Furniture ₹5,000 is purchased on 1st Oct 2018.
5) Depreciation on Land & Building 10% and on Furniture 5%.
6) Outstanding Expenses Wages ₹300 and Electricity Charges ₹200.
7) Allow Interest on Capital 3%.
Solution:
In the books of Archana and Prerna Trading and Profit and Loss Account for the year ended on 31st March 2019
Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) | |
---|---|---|---|---|---|---|
To Opening Stock | 8,560 | By Sales | 30,200 | |||
To Purchases | 23,700 | Less: Sales Return | 400 | 29,800 | ||
Less: Purchase Return | 1,000 | 22,700 | By Closing Stock | 12,000 | ||
To Wages | 950 | |||||
Add: O/s Wages | 300 | 1,250 | ||||
To Heating & Lighting | 1,000 | |||||
To Gross Profit c/d | 8,290 | |||||
41,800 | 41,800 | |||||
To Electricity Charges | 1,450 | By Gross Profit b/d | 8,290 | |||
Add O/s Ele. Ch. | 200 | 1,650 | By Interest | 310 | ||
To Trade Expenses | 850 | |||||
To R.B.D.D A/c | ||||||
Bad debts | 200 | |||||
Add: New Bad debts | 800 | |||||
Less: Old Reserve (R.D.D) | 500 | 500 | ||||
To Written off Patents | 250 | |||||
To Depreciation | ||||||
Furniture | 525 | |||||
Land and Building | 2,200 | 2,725 | ||||
To Interest on Capital | ||||||
Archana | 1,200 | |||||
Prerna | 600 | 1,800 | ||||
To Net Profit (Transferred to Capital A/c) | ||||||
Archana | 550 | |||||
Prerna | 275 | 825 | ||||
8,600 | 8,600 |
Balance Sheet as on 31st March 2019
Liabilities | Amount ₹ | Amount ₹ | Assets | Amount ₹ | Amount ₹ |
---|---|---|---|---|---|
Capital Account: Archana | Patents | 2,000 | |||
Opening Balance | 40,000 | Less: Written off | 250 | 1,750 | |
Add: Int. on Capital | 1,200 | Furniture | 13,000 | ||
Add: Net Profit | 550 | Less: Depreciation (400 + 125) | 525 | 12,475 | |
41,750 | Land and Building | 22,000 | |||
Less: Drawings | 1,200 | 40,550 | Less: Depreciation | 2,200 | 19,800 |
Capital Accounts: Prerna | Stock of Stationery | 3,000 | |||
Opening Balance | 20,000 | Closing Stock | 12,000 | ||
Add: Int. on Capital | 600 | Sundry Debtors | 18,500 | ||
Add: Net Profit | 275 | Less: Bad Debts (New) | 800 | 17,700 | |
20,875 | Trade Mark | 2,000 | |||
Less: Drawings | 900 | 19,975 | Bills Receivable | 6,300 | |
Other Loans | 3,000 | Cash at Bank | 5,000 | ||
Reserve Fund | 1,000 | Investments | 7,500 | ||
Sundry Creditors | 17,500 | ||||
Bills Payable | 5,000 | ||||
Outstanding Expenses | |||||
Wages | 300 | ||||
Electricity Charges | 200 | 500 | |||
Total | 87,525 | Total | 87,525 |
Working Notes:
(1) Stationery stock is an asset.
(2) Depreciation on furniture:
Total Value of Furniture = ₹13,000.
₹8,000 (Opening Balance) | ₹5,000 (Purchased on 01/10/18) |
---|---|
₹8,000 x 5% (Depreciation for full Year) = ₹400 | ₹5,000 x 5% x 6/12 (Depreciation for 6 months) = ₹125 |
Total Depreciation = ₹400 + ₹125 = ₹525
(3) ⅛th of Patents to be written off = ₹2,000 x (⅛) = ₹250.
(4) As no other expenses are given, Trade Expenses is recorded in Profit and Loss Account.
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. |
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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 |
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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 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
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
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 and Their Meanings:
- Partnership: A business structure where two or more individuals manage and operate a business in accordance with an agreement.
- Final Accounts: Financial statements (Trading A/c, P&L A/c, Balance Sheet) prepared at year-end to show a business's financial performance and position.
- Trial Balance: A list of all account balances (debit and credit) from the ledger, used to check arithmetic accuracy before preparing final accounts.
- Adjustments: Entries made at the end of an accounting period to record unrecognized income or expenses, ensuring accuracy of financial statements.
- Trading Account: Calculates Gross Profit or Gross Loss by comparing sales revenue with the cost of goods sold.
- Profit and Loss Account (P&L A/c): Determines the Net Profit or Net Loss by summarizing all revenues and expenses for a period.
- Balance Sheet: A snapshot of a company's assets, liabilities, and equity at a specific point in time.
- Patents: Exclusive legal rights granted for an invention, treated as an intangible asset.
- Sundry Debtors: Customers who owe money to the business for goods/services bought on credit.
- Trade Mark: A symbol, logo, or name legally registered to represent a company or product; an intangible asset.
- Bills Receivable: Formal IOUs from customers promising to pay a specific amount at a future date (an asset).
- Wages: Payments to employees, usually for manual labor, often considered a direct expense.
- Drawings: Withdrawals of cash or goods by partners from the business for personal use.
- Bad Debts: Amounts owed by debtors that are deemed uncollectible.
- Capital: Funds invested by the partners into the business.
- Reserve Fund: Profits set aside for future needs or to strengthen financial stability.
- Sundry Creditors: Suppliers to whom the business owes money for credit purchases.
- Bills Payable: Formal IOUs issued by the business to suppliers, promising payment at a future date (a liability).
- R.D.D. (Reserve for Doubtful Debts): A provision made for potential bad debts from sundry debtors.
- Depreciation: The decrease in the value of fixed assets over time due to wear and tear or obsolescence.
- Outstanding Expenses: Expenses incurred during the accounting period but not yet paid.
- Gross Profit: Profit before deducting operating expenses (Sales - Cost of Goods Sold).
- Net Profit: The final profit after all expenses (including taxes and interest) are deducted from revenues.
- Liabilities: Financial obligations or debts owed by the business to external parties.
- Assets: Resources owned by the business that have economic value (e.g., cash, buildings, machinery).
- Written off: Reducing the book value of an asset (like patents) or recognizing an expense (like bad debts).