Chapter 1: Introduction to Partnership and Partnership Final Accounts
Practise Problem | Q: 9 | Page no. 61
Sun and Moon are Partners in Partnership Firm sharing Profits and Losses equally. You are required to give the effects of Adjustments with the help of the following information.
Trial Balance as on 31st March 2019
Debit Balance | Amount ₹ | Credit Balance | Amount ₹ |
Land & Building | 40,000 | Capital A/C | |
Furniture | 18,000 | Sun | 33,500 |
Machinery | 40,000 | Moon | 33,500 |
(Purchased on 1/7/18) | Current A/c: Sun | 6,000 | |
Goodwill | 2,000 | Sundry Creditors | 25,000 |
Wages | 2,000 | Bank Overdraft | 10,000 |
Current A/c: Moon | 4,000 | Reserve Fund | 5,000 |
8% Debentures | 8,000 | Provident Fund | 5,000 |
(Purchased on 1/10/18) | |||
Provident Fund Investment | 3,500 | ||
Stock of Postal stamps | 500 | ||
1,18,000 | 1,18,000 |
Adjustments:
1) Partners are entitled to get a salary ₹ 6,000 p.a. in addition to their profit & loss sharing.
2) Depreciation on Land & Building, Furniture & Machinery @10%, 5% and 3% respectively.
3) Interest on Capital 5% p.a.
4) Closing Stock ₹ 60,743.
5) Wages included ₹ 1,000 as advance is given to workers.
6) Interest due but not paid ₹ 800.
7) Total Net Profit amounted to ₹ 38,113.
Solution:
In the books of Sun and Moon
Partner’s Current Account
Particulars | Sun | Moon | Particulars | Sun | Moon | ||
To Balance b/d | 4,000 | By Balance b/d | 6,000 | - | |||
By Profit and Loss A/c (Share in Net Profit) | 19,056 | 19,057 (Amount rounded to nearest rupee) | |||||
By Profit and Loss A/c (Partners Salary) | 6,000 | 6,000 | |||||
By Profit and Loss A/c (Interest on Capital) | 1,675 | 1,675 | |||||
To Balance c/d | 32,731 | 22,732 | |||||
32,731 | 26,732 | 32,731 | 26,732 | ||||
Balance Sheet as on 31st March 2019
Liabilities | Amount ₹ | Amount ₹ | Assets | Amount ₹ | Amount ₹ |
Capital Accounts: | Land & Building | 40,000 | |||
Sun | 33,500 | Less: Depreciation | 4,000 | 36,000 | |
Moon | 33,500 | 67,000 | Furniture | 18,000 | |
Current A/cs: | Less: Depreciation | 900 | 17,100 | ||
Sun | 32,731 | Machinery | 40,000 | ||
Moon | 22,732 | 55,463 | Less: Depreciation | 900 | 39,100 |
Sundry Creditors | 25,000 | Goodwill | 2000 | ||
Bank Overdraft | 10,000 | 8 % Debentures | 8,000 | ||
Reserve Fund | 5,000 | Add: O/s Interest | 320 | 8,320 | |
Provident Fund | 5,000 | Provident Fund Investments | 3,500 | ||
O/s Interest | 800 | Stock & Postal Stamps | 500 | ||
1,68,263 | Closing Stock | 60,743 | |||
Advance to Workers | 1,000 | ||||
1,68,263 | 1,68,263 |
Working Notes:
(1) Depreciation on machinery is calculated for 9 months. (i.e. from 1/7/18 to 31/3/19)
Depreciation = 40000 x (3%) x 9 Months (9/12) = ₹ 900.
(2) Interest on 8 % debentures, calculated for 6 months. (i.e. from 1/10/18 to 31/3/19)
Interest = (PNR/100) = 8000 x (8/100) x 6 Months (6/12) = ₹ 320
(3) Advance given to workers (by firm) ₹ 1,000 is an asset for the firm, so, it is shown on Assets side.
(4) Interest due but not paid is a liability for firm, so, it is shown on the Liabilities side.
Balbharati Solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board.
Chapter 1: Introduction to Partnership and Partnership Final Accounts
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
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DISSOLUTION OF PARTNERSHIP FIRM : View | PDF Download
VALUATION OF GOODWILL WITH SOLUTION: View | PDF Download
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DISSOLUTION OF PARTNERSHIP FIRM
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