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.

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