Question

Mrs. Ankita keeps her books under Single Entry System and gives the following information.

Particulars	01-04-2011	31-03-2012
Investments	-	12,000
Bank Overdraft	-	10,000
Bills Payable	5,000	8,000
Creditors	26,500	31,500
Furniture	9,000	19,000
Debtors	35,000	50,000
Stock in Trade	15,000	19,000
Bank Balance	18,000	28,000

Mrs. Ankita withdrew Rs 4,000 for her personal use. She received Rs 15,000 from her father as gift, which she brought into the business.
Additional furniture was purchased on 1^st October 2011. Depreciate furniture by 10% p.a.Write off Rs 1,000 as bad and provide 5% R.D.D. on debtors.
Find the profit or loss of her business for the year ended 31^st March, 2012.

Answer 1

Statement of Affairs

as on April 01,2011

Liabilities	Amount (Rs)	Assets	Amount (Rs)
Bills Payable	5,000	Bank Balance	18,000
Creditors	26,500	Furniture	9,000
Capital (Balancing Figure)	45,500	Debtors	35,000
		Stock	15,000
	77,000		77,000

Statement of Affairs

as on March 31,2012

Liabilities	Amount (Rs)	Assets	Amount (Rs)
Bills Payable	8,000	Bank Balance	28,000
Creditors	31,500	Furniture	19,000
Bank Overdraft	10,000	Debtors	50,000
Capital (Balancing Figure)	78,500	Stock	19,000
		Investments	12,000
	128,000		128,000

Statement of Profit or Loss

 

for the year ended March 31,2012

Particulars	Amount (Rs)
Capital at the end of the year	78,500
Add: Drawings made during the year	4,000
Less: Additional capital introduced during the year	(15,000)
Adjusted capital at the end of the year	67,500
Less: Capital in the beginning of the year	(45,500)
	22,000
Less: Depreciation on Furniture	(1,400)
Bad-Debts	(1,000)
Reserve for Doubtful Debts	(2,450)
Profit for the year	17,150

Working Notes:

WN1: Calculation of Depreciation on Furniture:
Depreciation  on Furniture for 6 months ( Apr. 01,2011 - Oct.01,2011) = 9,000 x `10/100` x `6/12` = Rs. 450

Depreciation  on Furniture for 6 months ( Oct.01,2011 - Mar.31,2012) = 19,000 x `10/100` x `6/12` = Rs.950

Total Depreciation on charged on Furniture = 450 + 950 = Rs. 1,400.

WN2: Calculation of Reserve for Doubtful Debts:

Reserve for Doubtful Debts = 49,000 x `5/100` = Rs. 2,450.