Question

Ram and Arman are good friends and are interested in sports. However they could not do
much in sports because sports goods were not available to them at reasonable rates. Hence
both of them decided to form a partnership to sell goods at rates giving reasonable profits. They
started the business on 1st April 2018 and their capital contributions were Ram Rs. 50,000 and
Arman Rs. 60,000. On 1st January 2019 Ram gave a loan of Rs. 10,000 and Arman introduced
Rs. 20,000 as additional capital. Profit before and interest for the year ending 31st March 2019
amounted to Rs. 15,200. There is no partnership deed. Both Ram and Arman expected interest
at the rate of 10% per annum on the loan and additional capital advanced by them. You are
required to suggest and help them resolve issues and prepare profit and loss appropriation
account.

Answer 1

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A trial balance is a bookkeeping worksheet in which the balance of all ledgers are compiled into debit and credit account column totals that are equal.The general purpose of producing a trial balance is to ensure the entries in a company's bookkeeping system are mathematically correct.