Question

Kshipra and Manisha are partners sharing Profit and Losses in their Capital ratio. You are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 and a Balance Sheet as of that date.

Trial Balance as of 31st March 2019

Adjustments:

1. Stock on 31st March 2019 was at ₹ 37,000. 

2. Sales include the sale of machinery of ₹ 2,000, which is sold on 1st April 2018. 

3. Depreciation on fixed assets @ 5%

Answer 1

In the books of Kshipra and Manisha

Balance Sheet as of 31st March 2019

1. Depreciation on fixed assets means depreciation on Furniture, Plant & Machinery, and Building.

2. Sales includes the sale of Machinery of ₹ 2,000 is subtracted from sales and from Plant & Machinery.

On balance amount of Plant & Machinery ₹ 58,000, calculate 5 % depreciation i.e. 60,000 – 2,000 = ₹ 58,000 × 5% = ₹ 2,900

3. Here on gross profit calculate 1% commission for partners and record it to Profit and Loss A/c and in Current A/cs. Commission payable to each partner = \(\frac{1}{100}\) × Gross profit

= \(\frac{1}{100}\) × 81,700

= ₹ 817.