Maharashtra State BoardHSC Commerce 12th Board Exam
Advertisement Remove all ads

Following Incomplete Information is Available from the Records Maintained by Mr. Premnath. - Book Keeping and Accountancy

Following incomplete information is available from the records maintained by Mr. Premnath.

Particulars

1.4.2009
Rs.

31.3.2010
Rs.

Cash Balance

Bank Balance

Sundry Debtors

Stock

Furniture

Creditors

10% Bank Loan

12,000

26,000

20,000

24,000

24,000

20,000

20,000

13,000

30,000

26,000

26,000

24,000

20,000

20,000

Additional Information :

(1) Mr. Premnath introduced additional capital in the business amounted to Rs 15,000 on 1st January, 2010.

(2) He has paid life insurance premium Rs 10,000 from the business account and withdrawn goods worth Rs 5,000 for his personal use.

(3) Write off Rs 1,000 as bad debts and maintain reserve for doubtful debts at 5% on remaining debtors.

(4) Provide depreciation at 5% p.a. on furniture.

(5) The closing balance of sundry creditors has been overvalued by Rs 2,000 in the books of account.

(6) Provide Interest on Capital and Bank Loan @ 10% p.a.

Prepare :

(i) Statement of Affairs as on 1.4.2009.

(ii) Statement of Affairs as on 31.3.2010.

(iii) Statement of Profit or Loss for the year ended 31st March, 2010. 

Advertisement Remove all ads

Solution

In the books of Mr. Premnath

Statement of Affairs

as on March 31, 2009

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Creditors

20,000

Cash in Hand

12,000

10% Bank Loan

20,000

Cash at Bank

26,000

Capital (Balancing Figure)

66,000

Debtors

20,000

 

 

Stock

24,000

 

 

Furniture

24,000

 

 

 

 

 

1,06,000

 

1,06,000

 

Statement of Affairs

as on March 31, 2010

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Creditors

20,000

 

Cash in Hand

13,000

Less: wrongly taken
(over valuation)

2,000

18,000

 

 

10% Bank Loan

20,000

Cash at Bank

30,000

O/s Interest on Loan

2,000

Stock

26,000

Capital (B. Fig.)

75,550

Debtors

26,000

 

 

 

Less: Bad Debts

1,000

 

 

 

Less: P.D.D.

1,250

23,750

 

 

Furniture

24,000

 

 

 

Less: Depreciation @5%

1,200

22,800

 

1,15,550

 

1,15,550

 

Statement of Profit or Loss

for the year ended March 31, 2010

Particulars

Amount

(Rs)

Capital at the end of the year 31.03.10

75,550

 

Add: Drawings made during the year

15,000

 

Less: Additional capital introduced during the year (01.01.10)

15,000

Adjusted capital at the end of the year 31.03.10

75,550

 

Less: Capital in the beginning of the year 31.03.09

66,000

 

Less: Interest on Capital

6,975

Profit for the year

2,575

Working Notes:
WN1 Calculation of Reserve for Doubtful Debts
\[\text{Reserve for Doubtful Debt} = 25,000 \times\frac{5}{100}= Rs 1,250\]
WN2 Calculation of Depreciation
\[\text{Depreciation on Furniture} = 24,000 \times\frac{5}{100}= Rs 1,200\]
WN3 Calculation of Outstanding Interest on Loan
\[\text{Outstanding Interest on Loan} = 20,000 \times\frac{10}{100}= Rs2, 000\]
WN4 Calculation of Interest on Capital
\[\begin{array}{l}\text{Interest on Capital} = 66,000 \times\frac{10}{100}= Rs 6,600 \\ \text{Additional Capital} = 15,000 \times\frac{10}{100}\times\frac{3}{12}= Rs 375 \\ \\ \text{Total Interest on Capital} = 6,600 + 375 = Rs 6,975\end{array}\]
WN5 Calculation of Total Drawings
\[\begin{array}{lr}\text{LIC} & 10,000 \\ \text{Goods Withdrawn} & 5,000 \\ \text{Total Drawings} & 15,000\end{array}\]
  Is there an error in this question or solution?
Advertisement Remove all ads

APPEARS IN

Advertisement Remove all ads

Video TutorialsVIEW ALL [1]

Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×