X and Y are in partnership practicing as chartered accountants under the name EXY & Co. sharing profits and losses. They close their accounts on Mar 31 every year. The following was their Balance Sheet as on Mar 31, 2007.
Balance Sheet as on Mar 31, 2007
|
Liabilities |
Rs |
Assets |
Rs |
||
|
Partner Capital |
Furniture |
25,000 |
|||
|
X: |
80,000 |
Office Machinery |
20,000 |
||
|
Y: |
60.000 |
1,40,000 |
Library Books |
10,000 |
|
|
Audit Fees Collected in Advance |
Car |
80,000 |
|||
|
(X’s Client) |
15,000 |
Outstanding Audit fees |
|||
|
Liability for Salary |
7,000 |
X’S Client |
40,000 |
||
|
Provision against Outstanding |
70,000 |
Y’S Client: |
30.000 |
70,000 |
|
|
Audit Fees |
Cash as Bank |
25,000 |
|||
|
Cash In Hand |
2,000 |
||||
|
2,32,000 |
2,32,000 |
The following is the summary of their cash bank transactions for the year ending Mar 31, 2008:
|
Dr. |
Cr. |
|||
|
Receipts |
Rs |
Payments |
Rs |
|
|
Opening |
Salary to Staff |
2,60,000 |
||
|
Bank Balance |
25,000 |
Car Expenses |
30,000 |
|
|
Cash Balance |
2,000 |
Traveling Expenses |
20,000 |
|
|
Audit Fees |
Printing and Stationery |
21,000 |
||
|
X’s Client’s: |
3,90,000 |
Postage Expenses |
4,000 |
|
|
Y’s Client’s: |
2,12,1200 |
6,55,000 |
Telephone |
17,000 |
|
Fees for Other Services: |
Subscription for Journals |
10,000 |
||
|
X’s Client’s: |
55,000 |
Library Books |
15,000 |
|
|
Y’s Client’s: |
35,900 |
90,000 |
Computer System |
15,000 |
|
Miscellaneous Income |
5,000 |
Membership Fees |
4,000 |
|
|
Drawings |
||||
|
X:1,80,000 |
||||
|
Y: 1,60,000 |
3,40,000 |
|||
|
Cash at Bank |
40,000 |
|||
|
Cash in Hand |
1,000 |
|||
|
7,77,000 |
7,77,000 |
|
Further Information |
Rs |
|
|
1. |
Audit fees Receivable |
|
|
X’s Clients |
35,000 |
|
|
Y’s Clients |
45,000 |
|
|
2. |
Audit fees collected in Advance |
|
|
Y’s Clients |
15,000 |
|
|
3. |
Outstanding Liability for Salary on Mar 31, 2008 |
17,000 |
|
4. |
Depreciation to be provided on |
10% |
|
Furniture |
10% |
|
|
Office Machinery |
10% |
|
|
Library Books |
20% |
|
|
Car |
||
|
5. |
It has been agreed that 60% of audit fees and 50% of fees for other services should be transferred to Income and Expenditure Account in respect of each partner’s account, the balance being credited directly to the capital accounts, you are required to prepare Income and Expenditure Account for the year ended Mar 31, 2008 and a Balance Sheet as on Mar 31, 2008. |