Kshipra and Manisha Practise Problem | Q: 10 | Page no. 61 Chapter 1: Introduction to Partnership and Partnership Final Accounts

Chapter 1: Introduction to Partnership and Partnership Final Accounts

Practise Problem | Q: 10 | Page no. 61

 

Kshipra and Manisha are Partners sharing Profit and Loss in their Capital Ratio. You are required to prepare Trading Account 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 ₹

Sundry Debtors

28,000

Sales

1,20,000

Purchases

55,000

Rent

1,800

Furniture

38,500

Sundry Creditors

38,500

Plant & Machinery

60,000

Purchase Return

1,000

Wages

800

Discount

500

Salaries

3,500

Bills Payable

9,000

Discount

800

Capital A/c :


Bills Receivable

14,400

Kshipra

90,000

Carriage Outward

1,000

Manisha

30,000

Postage

500

Current A/c :


Sales Return

500

Kshipra

5,000

Cash in Hand

4,000

Manisha

3,000

Cash at Bank

47,000



Insurance

2,000



Opening Stock

17,800



Trade Expenses

1,500



Warehouse Rent

2,500



Advertisement

1,000



Building

20,000




2,98,800


2,98,800

Adjustments :

1) Stock on 31st March 2019 was at 37,000.

2) Sales include the sale of machinery of  2,000, which is sold on 1st April 2018.

3) Depreciation on fixed assets @ 5%.

4) Each Partners is entitled to get Commission at 1% of Gross Profit and Interest on Capital 5% p.a.

5) Outstanding Expenses Wages  200 & Salaries  500.

6) Create provision for doubtful debts @ 3% on Sundry Debtors. 

Solution

In the books of Kshipra and Manisha Trading and Profit and Loss Account for the year ended on 31st March 2019.

 

Particulars

Amount 

Amount 

Particulars

Amount 

Amount 

To Opening Stock


17,800

By Sales

1,20,000


To Purchase

55,000


Less: Machinery Sold



Less: Purchase Return

1,000

54,000

Wrongly Recorded as Sales

2,000


To Wages

800


Less: Sales Return

500

1,17,500

Add: O/s Wages

200

1,000

By Closing Stock


37,000

To Gross Profit c/d


81,700






1,54,500



1,54,500

To Salaries

3,500


By Gross Profit b/d


81,700

Add: O/s Salaries

500

4,000

By Rent


1,800

To Discount


800

By Discount


500

To Carriage Outward


1,000




To Postage


500




To Insurance


2,000




To Trade Expenses


1,500




To Warehouse Rent


2,500




To Advertisement


1,000




To Provision for Doubtful Debts (New)


840




To Depreciation






Furniture

1,925





Plant & Machinery

2,900





Building

1,000

5,825




To Interest on Capital






Kshipra

4,500





Manisha

1,500

6,000




To Commission






Kshipra

817





Manisha

817

1,634




To Net Profit (Transferred to Capital A/c)






Kshipra

42,301





Manisha

14,100

56,401












84,000



84,000

 

Partners’ Current Accounts

Particulars

Kshipra 

Manisha 

Particulars

Kshipra 

Manisha 

To Balance c/d

52,618

19,417

By Balance b/d

5,000

3,000




By Profit and Loss A/c (Commission)

817

817




By Profit and Loss A/c (Interest on Capital)

4,500

1,500




By Profit and Loss A/c (Share in Profit)

42,301

14,100








52,618

19,417


52,618

19,417




To Balance b/d

52,618

19,417

 

Balance Sheet as on 31st March 2019

Liabilities

Amount 

Amount 

Assets

Amount 

Amount 

Capital Accounts :



Furniture

38,500


Kshipra

90,000


Less: Depreciation

1,925

36,575

Manisha

30,000

1,20,000

Plant & Machinery

60,000


Current A/cs



Less: Sold on 1/4/18

2,000


Kshipra

52,618



58,000


Manisha

19,417

72,035

Less: Depreciation

2,900

55,100

Sundry Creditors


38,500

Building

20,000


Bills Payable


9,000

Less: Depreciation

1,000

19,000

Outstanding expenses



Closing Stock


37,000

Wages

200


Sundry Debtors

28,000


Salaries

500

700

Less: Provision for Doubtful Debts

840

27,160




Bills Receivable


14,400




Cash in Hand


4,000




Cash at Bank


47,000



2,40,235



2,40,235

 

Working Notes :

(1) Depreciation on fixed assets means depreciation on Furniture, Plant & Machinery and Building.

(2) Sales include the sale of Machinery of  2,000 is subtracted from sales and from Plant & Machinery.

On balance amount of Plant & Machinery  58,000, calculate 5 % depreciation i.e. 60,000  -  2,000 =  58,000 x 5% =  2,900

(3) Here on gross profit calculate 1 % commission for partners and record it to Profit and Loss A/c and in Current A/cs.

Commission payable to each partner = 1% of Gross Profit = (1/100) x 81700 =  817.


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: 10 | Page no. 61 Click Here for Solution


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