Amitbhai and Narendrabhai are in Partnership Sharing Profits and Losses equally

Explanation:

                      Trial Balance of 31 March 2019

Debit balance                        Amount      Credit Balance          Amount

                                                 (INR ₹)                                           (INR ₹)

Plant & machinery                2,80,000        Capital A/c:

Factory & Building                   75,000         Amitbhai                3,50,000

Sundry Debtors                        28,700         Narendrabhai       3,00,000

Purchases                                 85,500           Sales                    1,80,000

Bad Debts                                      500           BILLS Payable            8,500

Sales Return                                  2,200         Discount                   1,200

10% Govt Bond                            40,000         Creditors                 38,500

Import Duty                                     1,800          RDD                          2,700

Legal Charges                                2,000         Bank Loan               15,000

Motive Power                                 12,000        Purchases Return     2,000

Warehouse Rent 1,800

Cash in Hand                                 20,000

Cash at Bank                                  70,000

Advertisement                                 10,000

(for 2 years, w.e.f 1st JAN)  

Drawings:

Amitbhai                                              2,400

Narendrabhai                                       3,200

Salaries                                                 3,800

Rent                                                       1,500

Furniture                                            1,95,800

Bills Receivable                                     20,700

Freehold Property                                 41,000

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                                                            8,97,900                                    8,97,900

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Adjustments

• Stock on hand on 31 March 2019 valued at ₹ 43,000.
• Uninsured goods worth ₹ 8,000 were stolen.
• Mr. Patil, customer becomes insolvent & could not PAY his debts of ₹ 500.
• Create R.D.D at 2% on Sundry debtors.
• Depreciate Furniture by ₹ 1,800  & Factory Building by ₹ 2,500
• Outstanding Expenses - Salaries ₹ 300 & Rent ₹ 800

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In the books of Amitbhai and Narendrabhai Trading and Profit and Loss Account for the year ended on 31st March 2019

Dr                                                                                                                    Cr

Particulars              Amt.          Amt.       Particulars         Amt         Amt

To Purchases         85,500                      By Sales           1,80,000

Less:                                                           Less:

Purchase Return       2,000      83,500    Sales Return         2,200    1,77,800

To Import Duty                             1,800     By Closing Stock                  43,000

To Motive Power                        12,000     By Goods Stolen                    8,000

To Depreciation:

Factory Building                            2,500

To Gross Profit c/d                      1,29,000

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                                                    2,28,800                           2,28,800

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To Bad debts         500                 o/s Int.on GB                           2,000

Add:

To New Bad debts    500          By R.B.D.D. A/c                            1,136

                                                               (Excess Reserve)

                                                                  (2,700 – 1,564)  

Add: New Reserve    564  

                            1,564  

Less:  Old Reserve    2,700  

To Legal Charges                   2,000

To Ad Expenses           10,000  

less: Prepaid Adv Exp.   8,750     1,250

To Salaries                    3,800  

Add: O/s Salaries              300     4,100

To Rent                            1,500  

Add: O/s Rent              800     2,300

To Dep on Furniture               1,800

To Loss due to Theft              8,000

To Net Profit Transferred

to Capital A/c :  

Amitbhai                         56,043  

Narendrabhai           56,043   1,12,086

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                                        1,33,336                                                         1,33,336

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For Balance Sheet Please REFER attachment

Notes  for Balance Sheet:

• Import duty, Motive power, and Depreciation on Factory building are recorded in the Trading A/c.
• 10 % govt. bond is an investment. It was purchased on 1 – 10 – 2018. INTEREST is calculated for six months.  Interest on Govt. Bond = 40000 × 6/12 × 0.10 = ₹ 2,000
• Adv. exp. paid for 2 years from 01 – 01 – 2019. Up to 31 – 3 – 2019, 3 months adv. exp. is written off to Profit and Loss A/c. It is calculated as below :  10, 000 × 3 = ₹ 1,250
• Prepaid adv. exp. 10,000 – 1,250 = ₹ 8,750