1. A andB are partners of a firm sharing profit & loss in the ratio 1: 1. From thefollowing trial balance dated 31-3-2017 and adjustments, prepare annual accountsof firm.Trial balance of partnership firm of A & B as on 31-3.2017Credit BalanceDebit Balance10.0006,00030,000 Creditors40,000 Purchase Return1,500 Bank Overdraft25,000 Sales75,000 Bad debis reserve70,00050,00020,000DebtorsStock (1-4-2016)Sales ReturnCash BalancePurchaseDiscount AllowedBad-debtsMachinesDepreciation on machinesFumitureSundry ExpensesLeasehold Buildin(for 5 years)GoodwillTrading ExpenseRent &TaxesCarriage InwardBank InterestInsurance PremiumSalary1,65,5001,5002,00020,000900 Outstanding Wages600 | 10% C's Loan23,000 (from 1-10-2016)40,002,000Bls payable1,00020,0001,5008,0005001,00020,000Prepaid Insurance3,37.0003.37,000Adjustment:(1) Closing stock value Rs25,000, its market value is 5% more.(2) 10% interest on capital is chargeble and on drawings 5% inter stis recoverable.(3) Provide 10% depreciation on machine and 20% on furniture.(4) Provide 5% bad-debts reserve on debtors.Outstanding expense: Salary Rs.2,000,Sundry expense Rs. 500 and rent Rs. 1,000As per partnership agreement interest on capital payable even in loss.(6)