Maharashtra State BoardHSC Arts 12th Board Exam
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Miss Kalpana Started Her Business with a Capital of 1,30,000 on 1st April, 2015. Her Financial Position on 31st March 2016 Was as Follows : - Book Keeping and Accountancy

Ledger

Miss Kalpana started her business with a capital of 1,30,000 on 1st April, 2015. Her financial position on 31st March 2016 was as follows:

  Amount ( Rs)
Cash 9,120
Stock 10,250
Bills payable 12,880
Creditors 17,180
Debtors 31,000
Prepaid insurance 550
Bills receivable 29,120
Premises 85,800
Vehicles 40,200

Additional information :
1. Miss Kalpana brought additional capital of 20,000 on 30th September, 2015

2. Interest on capital is to be allowed at 5% p.a.

3. She withdrew 10, 000 for personal use.

4. Reserve for doubtful debts is to be provided at 2½ % after writing off bad debts of 1,000.

5. Depreciate vehicles at 10% p.a. and premises at 5 % p.a.

6. Creditors were overvalued by 2,180.

Prepare :
(1) Closing Statement of Affairs as on 31.03.2016.
(2) Statement of Profit or Loss for the year ended 31.03.2016.

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Solution

In the books of Miss kalpana
Closing Statement of Affairs as on 31st March, 2016
Liabilities
Amount
Assets
Amount
Bills payable
12,880
Cash
9,120
Creditors
17,180
Stock
10,250
Capital (Balancing Figure)
1,75,980
Debtors
31,000
   
Prepaid Insurance
550
   
Bills Receivable
29,120
   
Premises
85,800
   
Vehicles
40,200
 
2,06,040
 
206040
 
Statement of Profit or Loss
for the year ended 31st March,2016
Particulars
Amount (Rs.)
Amount
(Rs.)
Capital at the end of the year.
 
1,75,980
Add: Drawings during the year
 
10,000
   
1,85,980
Less: Additional Capital Introduced
 
(-20000)
Adjusted Closing capital
 
1,65,980
Less: Capital at the beginning of the year.
 
(-1,30,000)
Profit Before Adjustments
 
35,980
Less: Depreciation on vehicle 4020 8310
depreciation on-premises 4290
 
 
27670
Less: Interest on capital 6500 8250
Less: Bad debts 1000
Less: RDD 750
    19420
Add: Creditors overruled Net Profit for the year   2180
NET PROFIT
 
21,600
 
Liabilities Amount Assets Amount
Bills Payable 12880 Cash 9120
Creditors 17180 15060 Stock 10250
El overvalued 2180 Debtors 31000 29250
Capital 130000 168100 (-) Bad debts 1000
Add: Capital Intratued 20000 (-) RDD 750
  150000 Prepaid insurance 550
Add: Net Profit 21600 Bills receivable 29120
Add: interest capital 6500 Premises 85800 81510
  178100 (-) Depreciation 4290
Less: Drawing 10000 Vehicle 40200 36180
      (-) Depreciation 4020
  195980   195980
 
Working Notes :
1) Interest on Capital :
Opening Capital = 130,000 x `5/100` = 6,500
 
Additional capital [ 30.9.2015 ] = 20,000 x `5/100 xx 6/12`  = 500
 
Total Interest on Capital = 7,000
 
2) Reserve for doubtful debts :
    Debtors                                              = 31,000
    (-) Bad debts                                      =   1,000   
                                                               = 30,000 
    (-) R.D.D.[ 2`1/2`% on 30,000]            =      750    
 
3) Depreciation on Premises = 85,800 x `5/100` = 4,290
Depreciation on Vehicles = 40,200 x `10/100` = 4,020.
  Is there an error in this question or solution?
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