And the balance sheet as on that date after taking

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and the Balance Sheet as on that date, after taking into the consideration the additional information: TrialBalanceason31 st March2010 Particulars Debit(Rs.) Credit(Rs.) Opening Stock 17,500 - Salaries and Wages 4,600 - Cash in hand 5,000 - Purchases and Sales 1,12,600 1,65,000 Office Expenses 4,300 - Productive Wages 7,000 - Bills Receivable 4,000 - Legal Expenses 1,500 - Bad Debts 500 - Works Manage r’s Salary 3,000 - Commission 1,500 2,400 Investments 10,000 - Debtors and Creditors 20,000 10,000 Bank Overdraft - 5,000
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56 Patents 4,000 - Loose Tools 3,000 - Furniture 6,000 - Goodwill 6,500 - Interest on Investment - 3,600 Land and Building 25,000 - Capital Accounts: Mr.X - 30,000 Mr.Y - 20,000 2,36,000 2,36,000 Adjustments: 1. Partners share Profits and Losses in their capital ratio. 2. The Closing Stock Cost Rs. 30,000/-Market Value Rs. 22,500/- 3. JaganhaswithdrawngoodsworthRs.600/-for his personal use. 4. Uninsured goods worth Rs. 5,000/-were destroyed by fire. 5. Rs.225/-written off as bad debts from Debtors. 6. OutstandingSalariesandWagesRs.400/-. 7. DepreciationonLandandBuildingat7½%. Solution: M/s.X & Y Trading, Profit & Loss Account for the year ended 31-03-2010 Particulars Rs. Particulars Rs. To Opening Stock 17,500 By Sales 1,65,000 To Purchases 1,12,600 By Goods with drawn(Jagan) 600 To Productive Wages 7,000 By Goods Lost by Fire 5,000 To Work Mana ger’s Salary 3,000 By Closing Stock 30,000 To Gross Profit c/d 60,500 2,00,600 2,00,600 To Salaries & Wags 4,600 5,000 By Gross Profit c/d 60,500 (+)Outstanding 400 By Commission 2,400 To Office Expense 500 225 4,300 By Interest on Investment 3,600 To Legal Expense 1,500 To Bad Debts 725 (+)Additional B.D. To Commission 1,500 To Loss by Fire 5,000 To Depreciation on 1,875 Land& Building To Net Profit Capital Mr.X(3/5) 27,960 Mr.Y(2/5)18640 14,640 46,600 56,500 56,500
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57 Balance Sheet as on 31-3-2010 Liabilities Rs. Rs. Assets Rs. Rs. MrX s Capital 30,000 57,360 Goodwill 25,000 6,500 Balance b/d Land & Building (+)Net Profit 27,960 (-)Depreciation 1,875 23,125 (-)Drawings 51,960 Furniture Loose Tools 20,000 6,000 600 3,000 Mr.Y ’s Capital 20,000 18,640 Patents 4,000 Balance b/d Investments 10,000 (+)Net Profit 38,640 Bills Receivable 4,000 Creditors 10,000 Debtors 19,775 Bank Overdraft 5,000 (-)Bad debts 225 Outstanding Closing Stock 30,000 Salaries & Wages 400 Cash in Hand 5,000 1,11,400 1,11,400 4.4 REVISION POINT 1. Asset: Costs which represent expected future economic benefits to the business enterprise. 2. Liabilities: Represent obligations which require settlement in the future. 3. Current Assets: Assets which are reasonably expected to be realised in cash or sold or consumed during the normal operating cycle of the business enterprise or within one year, whichever is longer. 4. Operating cycle: The average period of time between the purchase of goods or raw materials and the realisation of cash from the sale of goods 5. Fixed Assets: Tangible assets used in the business that are of a permanent or relatively fixed nature. 6. Intangible Assets: Those assets which have no physical existence. 7. Fictitious Assets: Not assets but appear in the asset side simply because of a debit balance in a particular account not yet written off.
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