Answered

IDNLearn.com makes it easy to find answers and share knowledge with others. Receive prompt and accurate responses to your questions from our community of knowledgeable professionals ready to assist you at any time.

Q. 7. Asha and Nisha are partners sharing profit and loss equally. From the following Trial Balance and adjustments, you are required to prepare Final Accounts:

Trial Balance as on [tex]$31^{\text {st }}$[/tex] March, 2019

\begin{tabular}{|l|r|l|r|}
\hline \multicolumn{1}{|c|}{Debit Balance} & \begin{tabular}{c}Amount\\₹\end{tabular} & Credit Balance & \begin{tabular}{c}Amount\\₹\end{tabular} \\
\hline Purchases & 48,000 & Capital accounts: & \\
Salaries & 7,500 & Asha & 80,000 \\
Wages & 2,800 & Nisha & 40,000 \\
Advertisement & 4,000 & Bank Overdraft & 34,000 \\
(2 years) & & Sales & 1,48,000 \\
Sales Return & 8,000 & R. D. D. & 1,200 \\
Motor Van & 63,000 & Purchase Return & 6,000 \\
Stock (1.4.2018) & 94,500 & & \\
\hline
Sundry Debtors & 62,800 & & \\
Coal, Gas and Fuel & 1,000 & & \\
Plant and Machinery & 17,600 & & \\
\hline Total & 3,09,200 & Total & 3,09,200 \\
\hline
\end{tabular}

Adjustments:
1. Closing stock is valued at cost price ₹ 88,000 and market price ₹ 90,000.
2. Asha and Nisha withdrew goods from the business ₹ 3,000 and ₹ 2,000 respectively for their personal use.
3. Depreciate Motor Van by [tex]$5\%$[/tex] and Plant and Machinery by [tex]$7\%$[/tex].
4. Reserve for Doubtful Debts on Debtors at [tex]$5\%$[/tex] is to be created.
5. Outstanding Wages ₹ 800.

Sagot :

GinnyAnsweridn
Certainly! Let's work through the detailed solution process for the given problem step-by-step:

### Trial Balance as on 31st March 2019

| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| ----------------------- | ---------- | ------------------ | ---------- |
| Purchases | 48,000 | Capital: Asha | 80,000 |
| Salaries | 7,500 | Capital: Nisha | 40,000 |
| Wages | 2,800 | Bank Overdraft | 34,000 |
| Advertisement | 4,000 | Sales | 1,48,000 |
| Sales Return | 8,000 | R.D.D. | 1,200 |
| Motor Van | 63,000 | Purchase Return | 6,000 |
| Stock (1.4.2018) | 94,500 | | |
| Sundry Debtors | 62,800 | | |
| Coal, Gas, and Fuel | 1,000 | | |
| Plant and Machinery | 17,600 | | |
| | | | |
| Total Debit | 3,09,200 | Total Credit | 3,09,200 |

### Adjustments
1. Closing Stock: Valued at ₹ 88,000 (cost) and ₹ 90,000 (market).
2. Withdrawals: Asha - ₹ 3,000; Nisha - ₹ 2,000
3. Depreciation:
- Motor Van by 5%
- Plant and Machinery by 7%
4. Reserve for Doubtful Debts: 5% on Sundry Debtors.
5. Outstanding Wages: ₹ 800

### Calculations

#### 1. Depreciation
- Motor Van: [tex]\(₹ 63,000 \times 5\% = ₹ 3,150\)[/tex]
- Plant & Machinery: [tex]\(₹ 17,600 \times 7\% = ₹ 1,232\)[/tex]

#### 2. Reserve for Doubtful Debts
- Sundry Debtors: ₹ 62,800
- Reserve Needed: [tex]\(₹ 62,800 \times 5\% = ₹ 3,140\)[/tex]

#### 3. Gross Profit
- Sales: ₹ 1,48,000
- Sales Return: ₹ 8,000
- Net Sales: [tex]\(₹ 1,48,000 - ₹ 8,000 = ₹ 1,40,000\)[/tex]
- Purchases: ₹ 48,000
- Purchase Return: ₹ 6,000
- Net Purchases: [tex]\(₹ 48,000 - ₹ 6,000 = ₹ 42,000\)[/tex]
- Opening Stock: ₹ 94,500
- Closing Stock: ₹ 88,000

- Gross Profit Calculation:
[tex]\[ \text{Gross Profit} = \text{Net Sales} - \text{Net Purchases} + \text{Closing Stock} - \text{Opening Stock} \][/tex]
[tex]\[ \text{Gross Profit} = ₹ 1,40,000 - ₹ 42,000 + ₹ 88,000 - ₹ 94,500 = ₹ 91,500 \][/tex]

#### 4. Total Expenses
- Salaries: ₹ 7,500
- Wages: ₹ 2,800
- Advertisement: ₹ 4,000
- Outstanding Wages: ₹ 800
- Depreciation on Motor Van: ₹ 3,150
- Depreciation on Plant & Machinery: ₹ 1,232
- RDD (existing): ₹ 1,200

[tex]\[ \text{Total Expenses} = ₹ 7,500 + ₹ 2,800 + ₹ 4,000 + ₹ 800 + ₹ 3,150 + ₹ 1,232 + ₹ 1,200 = ₹ 20,682 \][/tex]

#### 5. Net Profit
- Gross Profit: ₹ 91,500
- Total Expenses: ₹ 20,682

[tex]\[ \text{Net Profit} = \text{Gross Profit} - \text{Total Expenses} \][/tex]
[tex]\[ \text{Net Profit} = ₹ 91,500 - ₹ 20,682 = ₹ 70,818 \][/tex]

### Final Result

- Depreciation on Motor Van: ₹ 3,150
- Depreciation on Plant & Machinery: ₹ 1,232
- New RDD: ₹ 3,140
- Gross Profit: ₹ 91,500
- Total Expenses: ₹ 20,682
- Net Profit: ₹ 70,818
Thank you for being part of this discussion. Keep exploring, asking questions, and sharing your insights with the community. Together, we can find the best solutions. Thank you for choosing IDNLearn.com for your queries. We’re committed to providing accurate answers, so visit us again soon.