Question

Mr. Govind keeps his books on single entry system and disclosed the following information of his business.

Particulars	01-04-2010	31-03-2011
Investments	-	30,000
Bills Payable	-	18,000
Creditors	52,500	69,000
Furniture	15,000	15,000
Debtors	60,000	90,000
Stock in Trade	30,000	37,500
Cash at Bank	36,000	54,000

Additional Information
1) Mr. Govind transferred Rs 300 per month during first half year and Rs 200 each month for the remaining period from his business to his personal account. He also took goods of Rs 700 for private use.
2) Mr. Govind sold his personal asset for Rs 7,000 and brought the proceeds into his business.
3) Furniture to be depreciated by 10%
4) Provide R.D.D.5% on Debtors.
Prepare: Opening and closing statement of affairs and statement of profit or loss for the year ended 31^st March 2011.

Answer 1

Statement of Affairs

as on Apr. 01,2010

Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	52,500	Cash in Bank	36,000
Capital (Balancing Figure)	88,500	Furniture	15,000
		Debtors	60,000
		Stock in Trade	30,000
	141,000		141,000

Statement of Affairs

as on March 31,2011

Liabilities	Amount (Rs)	Assets	Amount (Rs)
Bills Payable	18,000	Cash in Bank	54,000
Creditors	69,000	Investments	30,000
Capital (Balancing Figure)	139,500	Furniture	15,000
		Debtors	90,000
		Stock in Trade	37,500
	226,500		226,500

Statement of Profit or Loss

for the year ended ….

Particulars	Amount (Rs)
Capital at the end of the year	139,500
Add: Drawings made during the year	3,700
Less: Additional capital introduced during the year	(7,000)
Adjusted capital at the end of the year	136,200
Less: Capital in the beginning of the year	(88,500)
	47,700
Less: Depreciation on Furniture	(1,500)
Reserve for Doubtful Debts	(4,500)
Profit for the year	41,700

Working Notes:

Total Drawings of Mr. Govind = 1,800 ( 300 x 6 ) + 1,200 ( 200 x 6 ) + 700

Depreciation on Furniture = 15,000 x `10/100` = Rs. 1500

 

Reserve for Doubtful Debts = 90,000 x `5/100` = Rs. 4500.