lecount - Introduction 30,000 Lessdepreciation 3,000 | 27,000 is given the Trial Balance of Messers. Pran and Ali as at 31* December, are required to prepare a Trading and Profit and Loss account for the ded 31" December, 2009 and the Balance Sheet as at that date. Particulars Dr. Amount Cr.Amount Capital Accounts: ee eran’ 25,000 Ali 20,000 Opening Stock 45,000 ; Purchases _ 2,25,000 Plant and Machinery 75,000 Trade Charges 12,800 Sales 4,50,000 Carriage inwards 2,500 oul Carriage outwards 1,500 a Factory Rent 1,500 ‘50d Discount 350 750 500 Insurance 5 700, 000 Sundry Debtors 60,000 Sundry Creditors 15,000 Office Rent 3,000 Bad Debts Reserve 200 unt | Printing and Stationary 600 000 | Advertising 15,000 100 Bills Receivable 3,000 Drawings: Pran 3,500 =. Ali . 2,500 200 Bills Payable 2,000 SalariesManufacturing Wages Furniture and Fixtures Coal, Gas and Water Cash in Hand Cash at Bank The following adjustments are required: (i) The closing stock amounted to = 35,000. (ii) Plant and Machinery » Furniture and Fixtures are to be depreciated at 6% and 5% respectively, (iil) fi Debts Reserve to be raised to 2.5% on Debtors. (iv) Provide for Outstani| i Liabilities: Factory Rent % 300; Office Rent = 600. (v) Interest on capital 4a drawings to be charged at 6% and 5% respectively per annum. (vi) insur includes € 100 in respect of 2010. Solution Advanced Financial Act 20,000 7,500 1,000 2,000 12,500 5,12,950__5,12,950 Pran and Ali Trading and Profit and Loss Account Dr. Sor the year ended 31 December, 2009 Particulars Amount Particulars To Opening Stock 45,000 | By Sales ” Purchases 2,25,000} ” Closing Stock ” Manufacturing Wages 20,000 ” Coal. Gas. Water 1,000 Carriage Inwards 2,500 ” Factory Rent 1,500, Add, Outstanding 300} 1,800 ” Gross Profite/d. cE 89.700 4, 85,000 To Salaries ” Office Rent Add, Outstanding ” Trade charges (Le., office exp.) ” Insurance Less. Prepaid * Carriage outwards » Advertising » Discount (Dr.) Printing & Stationary 3,000) 600; 700 100} 18,000 3,600 12,800 600 1,500 15,000 350 600 By Gross Profits b/d. ” Discount (Cr.) “Interest on drawings: Pran Ali 175] 125] lccount - Introduction 1,500 200| 1,300 Machinery 4,500 andFixwre 375 | 4,875 (von Capital: 1,500 2,700 64,712.50 , 29.42: a : 90,750 1,90750] Balance Sheet as at 31" December, 2009 Amount || Assets eat 3 2,000.00 |) Cash in hand 2.000 15,000.00 || Cash at Bank 2,300 Bills Receivable , Sundry Debtors 60,000 300 Less. New Reserve oe 4 900.00 | for Bad Debts 1,500 d a al Closing Stock pie 35,000 Furniture & Fixtures 25,000.00 Less, Depreciation 375] 7,125 " Plant & Machinery 75,000 Ak 1,500.00 Less. Depreciation 4,500] 70,500 64,712.50 PrepaidInsurance 91,212.50 Drawings 3500.00 e 175.00| 87537.50 70,000.00 1,200.00 64,712.50 85.912.50 Drawings 2,500.00 287.50 eo 1 a: 00, 1.88.725,00Del2, . Advanced Financial Accounting | Partnership Account - Introduction 2.13! FINAL ACCOUNTS Fianl Accounts of a partnership concern include the following: Rent and Rates 1,000 Insurance 700 General expenses 200 Trading and Profit and Loss Account Wages 26,000 2. Profit and Loss Appropriation Account Sundry Debtors 20,000 s Machinery 30,000 3. Balance’sheet. j Castaneane 14,000 The final accounts of a partnership concern are prepared in the same manne Cash in band 4,100 as in the case of a sole proprietorship concern. However, there are ce 2,58,000 differences between the two. They are: The Partnership Agreeement provides that: 1. Ina sole proprietorship concern, it is not necessary to prepare a Profit am ‘ . Loss Appropriatiionb Account. But, ina Partnership concern, a Profit BAGO hoe ey emi sc 8e) Loss Appropriation Account is prepared immediately after the prepara of Trading and Profit and Loss Account. In this account adjustments relat to items such as interest on partner’s capil salaries and commission to partners, division of profit/loss among partn Salaries for the month of December, 2009 still unpaid & 800. etc, are to be done. ] | Pre-paid insurance £200 Each partner is to receive 5% interest on capital. Partners share profits and losses equally. . Other information: 2. Balance Sheet of a sole proprietorship shows only one capital account. Depreciate Machinery at 10% per annum is so because there is only one owner. But in a aes conce Closing stock @ 15,800 : Provide 5% of Sundry debtors for bad and doubtful debts. of the firm. dlution 5 Illustration 3 Trading and Profit and Loss Account From the following information, prepare the final accounts of the h forthe year ending 31* December, 2009 __ Ce firm for the year ending 31st December, 2009. ‘Particulars Amount Particulars ‘Amount ; Opening stock 12,000}) By Sales 1,76,00% Trial Balance as on 31st December, 2009 f relies 140,000] ° Closing stock fe Particulars Dr. Cre Wayes 26,000 40,000 Siro profit o/d 13,800 Tarun’s capital A/c Varun’s Capital Account 12,000 1,91.800 Sales i 1,76,000 5,000 By Gross profit b/d 13,800 Sundry creditors 12,000 q 800 5,800, Drawings: i \ 1,000 “Tarun 2,000 a Varin : 3,000 Peet prepaid 200 500) Purchases 1,40,000 i Wlexpenses "| 200 Stock on Ist January, 2009 12,000 4 or bad and Salaries 5,000 gtul debts 1,000