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2) Profit aujustment due to Guarantee etc. are not specially covered in syllabus & hence not considered. 7.10 LIMITED LIABILITY PARTNERSHIP ACT (L.L.P.) The Act called Limited Liability Partnership Act (L.L.P.) extended scope and working of Partnership. A present partnership firm can also be converted into L.L.P. It has number of advantages over Partnership Firm or Private Ltd. Company. Number of partners limits not applicable to L.L.P. Here are number of advantages over Partnership Firm mainly liabilities of partners rusticated to capital contribution by partners. L.L.P. enjoys more or less advantages like in private limited company. 7.11 ILLUSTRATIONS Illustrations 1: From the following trial balance of Neela and Sheela. You are required to prepare Trading and Profit & Loss Account for the year ended 31 March 2007 and Balance sheet as on that date after considering the following adjustments. Trial Balance as on 31st March 2007 Rs. 2,65,000 Particulars Opening Stock Salaries and Wages Cash in hand Purchase and Sales Office Expenses Productive Wages Bills Receivable Legal Expenses Bad debts Works Managers Salary Commission Investments Debtors Creditors Bank overdraft Patents Loose Tools Furniture Goodwill Interest Land & Building Capital Accounts: Neela Sheela Drawings : Rs. 17,500 4,600 6,000 1.12.600 4,300 7,000 4,000 3,300 1,900 5,600 1,800 42,000 67,500 2,500 92,000 88,000 38,000 28.000 65,000 80,000 1,600 1.25.000 1,10,000 1,05,000 Neela 20,000 Sheela 30,000 6,64,100 6,64,100 Adjustments : 1) Partners shares Profit and losses equally. 2) The Closing Stock cost Rs.25,000/- market value Rs.19,000/- 3) Neela has withdrawn goods worth Rs.800/- for personal use. 4) Depreciate Land and Building at 10% p.a, and Loose Tools 15% p.a