Preparation of final accounts of partners

Basics of Accounting for Partnership

1. Preparation of final accounts of partners Prepared By PRASANTH.S.R

2. Debit Balance Amount Credit Balance Amount Opening stock 36000 Sales 940000 Purchases 620000 Returns outwards 4000 Return inwards 12000 Sundry Creditors 43000 Sundry Debtors 125000 Interest 1000 Computer 50000 Arti’s Capital 300000 Rent (for 11 months) 22000 Bharti’s Capital 150000 Salary of staff 120000     Land and building 352000     Wages 16000     General charges 30000     Cash at bank 25000     Arti’s drawings 20000     Bharti.s rawings 10000       1438000   1438000 Arti & Bharati are partners in a firm sharing profits in the ratio of 3:2. The following trial balance was extracted from their books as at 31st march 2014 . Trial Balance As at 31 st march 2014

3. You are required to prepare Trading and profit and loss account and profit and loss appropriation account for the year ended 31 st march 2014 and a balance sheet as on that date , taking into account the following adjustments. Stock on 31 st march was valued at Rs . 60000. Rent for the month of march has not been paid. Depreciate computer by 20% Barti is to be allowed a salary of Rs.5000 per month and partners are entitled to interest on capital @6% per annum.

4. Particulars Amount Particulars Amount To Opening Stock To Purchases 620000 Less: Returns Outwards 4000 To wages To Gross profit c/d     To Rent 22000 Add: Outstanding 2000   To Salary of staff To General charges To Depreciation on Computer To net profit transferred to Profit & Loss Appro . A/c 36000     616000 16000 320000 By Sales 940000 Less: Sales Inwards 12000 By Closing Stock         By Gross profit b/d By interest     928000 60000     988000 988000     24000   120000 30000   10000   137000   320000 1000             321000   321000 Trading & Profit and Loss Account Dr for the year ended 31 st march 2014 Cr.

5. Particulars Amount Particulars Amount To Bharti’s Salary To Interest on capital Arti 18000 Bharti 9000 To Profit transferred to Capital accounts Arti 30000 Bharti 20000 60000     27000       50000 By Net profit as per Profit and loss a/c             137000           137000   137000 Profit and Loss Appropriation Account Dr for the year ended 31 st march 2014 Cr.

6. Liabilities Amount Assets Amount Sundry Creditors Outstanding Rent Arti’s Capital 300000 Less : Drawings 20000 280000 Add: Interest on Capital 18000 Net Profit 30000 Bharti’s Capital 150000 Less : Drawings 10000 140000 Add: Interest on Capital 9000 Net Profit 20000 Salary 60000 43000 2000           328000               229000 Cash at bank Sundry Debtors Closing Stock Computer 50000 Less; Depreciation 10000 Land & Building 25000 125S000 60000   40000 352000       602000   602000 Balance Sheet of the Firm As at 31 st March 2014