3. 500 1) Depreciation Machinery = Rs. 72000 x 10% = Rs. 7200 Plant = Rs. 50000 x 5% = Rs. 2500 2) Reserve for bad debts = Rs. 14570 x 4% = Rs. 583 3) Prepaid Insurance Since Insurance is for 2 years and only 6 months are covered in this year, we need to calculate the expense for the year. Insurance expense =Rs. 7500 x 1/4 = Rs. 1875 Prepaid insurance = Rs. 7500 - Rs. 1875 = Rs. 5625 4) Accrued interest on bank loan = Rs. 125000 x 12% = Rs. 15000 5) Distribution of Net Profit 295 Ramesh = Rs. 77652 X 3/5 = Rs. 46591 Suresh = Rs. 77652 x 2/5 = Rs. 31061 Ram and Shyam share profits and losses in the ratio 1:2 of a partnership firm. From the given Trial balance you are required to prepare a Trading and Profit & Loss A/c for the year ended 31st March, 2012 and a Balance Sheet as on that date, after taking into consideration the additional information provided. Trial Balance as on 31st March, 2012 Particulars Debit Amt. Rs. Credit Amt. Rs Sundry Debtors 45,000 Postage Machinery 30,000 Opening Stock 15,000 Furniture 8,000 Purchases 57,000 Wages 11,000 Salaries 17,000 Rent Paid 7,000 Bad debts 1,000 Cash in hand 3,000 Motor Car 26,000 Capital A/C Ram 25,000 Shyam 25,000 Bills Payable 3,000 Creditors 9,000 Sales 1,50,000 Bank loan 8,000 Outstanding wages 500 2,20,500 2,20,500 Adjustments: 1) Closing stock had a cost of Rs. 45,000 whereas the market price was Rs. 60,000 2) Outstanding expenses - Salaries Rs. 1,500, Wages Rs. 2,000, Rent 1,200. 3) Repairs to Machinery of Rs. 2,000 were wrongly debited to Purchases. 4) Depreciation on Machinery and Furniture at 10% each. 5) Interest on bank loan payable was Rs. 1,800