Question

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

Particular	1st April, 12 (Rs.)	31st March, 13 (Rs.)
Investments		30,000
Bills payable		18,000
Creditors	52,500	69,000
Furniture	15,000	45,000
Debtors	60,000	90,000
Stock in Trade	30,000	37,500
Cash at Bank	36,000	54,000

 

Additional information

(1) Mr Keshav transferred Rs. 3,000 per month during the first half-year and Rs. 2000 per month for the second half year from a business account to his personal account.

(2) He also took goods worth Rs. 7,000 for private use.

(3) He sold his private asset for Rs. 27,000 and brought the proceeds into his business.

(4) Furniture to be depreciated by 10%

(5) Provide reserve for doubtful debts at 5% on debtors.

Prepare:

(i) Opening statement of affairs.

(ii) Closing statement of affairs.

(iii) Statement of Profit and Loss for the year ended 31st March 2013.

Answer 1

In the books of Mr Keshav Statement of Affairs as on March 31, 2012
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	52,500	Cash at Bank	36,000
Capital (Balancing Figure)	88,500	Debtors	60,000
		Stock	30,000
		Furniture	15,000
	1,41,000		1,41,000

 

Statement of Affairs as on March 31, 2013
Liabilities	Amount (Rs)	Assets		Amount (Rs)
Creditors	69,000	Cash at Bank		54,000
Bills Payable	18,000	Stock		37,500
Capital (Balancing Figure)	1,69,500	Debtors		90,000
		Furniture		45,000
		Investment		30,000
	2,56,500			2,56,500

 

 

Statement of Profit or Loss for the year ended March 31, 2013
Particulars		Amount (Rs)
Capital at the end of the year March 31, 2013       Add: Drawings made during the year      Less: Additional capital introduced during the year		1,69,500 37,000 27,000
Adjusted capital at the end of the year March 31, 2013     Less: Capital at the beginning of the year March 31, 2012		1,79,500 88,500
Trading Profit Less: Depreciation On Furniture (45000 x 10%)		91000 -4500 86500
Less: R.D.D On Debtors (90,000 x 5%)		-4500
Profit for the year		82,000

 

WN1 Calculation of Drawings

Cash Withdrawn
for first 6 months = 3,000 × 6  = Rs 18,000
for next 6 months = 2,000 × 6  = Rs 12,000

Goods withdrawn  = Rs 7000

Total Drawings during the year= Rs 37000

WN2 Calculation of Depreciation on Furniture

Depreciation on Furniture = `45000 xx 10/100 = Rs 4500`

WN3 Calculation of Reserve on Doubtful Debts

Reserve for Doubtful Debts = `90000 xx 5/100 = Rs  4500`