|
Particulars
|
1.4.13
|
31.3.14
|
|
Cash
Bank
Stock
Debtors
Creditors
Plant and machinery
Furniture and fitting
|
10,000
20,000
16,000
24,000
15,000
60,000
18,000
|
16,000
36,000
24,000
30,000
18,000
90,000
18,000
|
During the year Mr. Ganesh withdrew Rs.8,000 for his
private purpose and he had used 2,000 worth of stock also for his private
purpose. On 1.10.13 he sold some of his house hold furniture for Rs.2,000 and
paid this amount into his Bank A/c of business. Prepare a statement of profit
& loss for the year ended 31.3.14 and a statement of affairs after taking
into consideration the following:
1. Provide interest on
capital @ 5% p.a on opening
balance and Interest on drawing ( only on cash drawings) @10% p.a. (on an
average of 6 months)
2. Depreciate plant and machinery @10 %( assuming
addition were made on 1.10.13) and furniture at 5%.
3.
stock on
31.12.04 was overvalued by Rs.2,000.
4.
Write off
bad debts Rs.2,000 and provide Reserve for Doubtful debts at 10 % on debtors.
Solution:
In the books of Mr. Ganesh
Statement
of Affairs as on 1-4-16 and 31.03.14
|
Liability
|
1-4-13
|
31.3.14
|
Assets
|
1.4.13
|
31.3.14
|
|
Capital
(Bal. Fig.)
|
133000
|
196000
|
Cash
|
10000
|
16000
|
|
Creditors
|
15000
|
18000
|
Bank
|
20000
|
36000
|
|
|
|
|
Stock
|
16000
|
24000
|
|
|
|
|
Debtors
|
24000
|
30000
|
|
|
|
|
Plant and Machinery
|
60000
|
90000
|
|
|
|
|
Furniture and Fittings
|
18000
|
18000
|
|
|
148000
|
214000
|
|
148000
|
214000
|
Statement
of Profit or Loss for the year ended 31.03.2014
|
Particulars
|
Rs.
|
Rs.
|
|
Capital at the end of the
year
|
|
196000
|
|
Add: Drawings:
|
|
|
|
Cash Withdrawn
Stock
|
8000
2000
|
10000
|
|
|
|
206000
|
|
Less: Additional Capital Introduced
|
|
|
|
Household furniture sold and
proceeds utilized for business
|
|
-2000
|
|
|
|
204000
|
|
Less: Capital at the beginning
of the year
|
|
-133000
|
|
Trading Profit
|
|
71000
|
|
Less: Depreciation
|
|
|
|
On Plant and Machinery
On Opening Machinery
60000 × 10%× 12 months
|
6000
|
|
|
On Additional Machinery
30000 × 10% × 6 months
|
1500
|
|
|
On Furniture
18000 × 5%
|
900
|
-8400
|
|
|
|
62600
|
|
Less: Bad debts
|
|
-2000
|
|
|
|
60600
|
|
Less: R.D.D. @ 10% on debtors
(30000 – 2000) × 10%
|
|
-2800
|
|
|
|
57800
|
|
Less: Stock overvalued
|
|
-2000
|
|
|
|
55800
|
|
Less: Interest on Capital
|
|
|
|
On Opening Capital
133000 × 5%
|
|
-6650
|
|
|
|
49150
|
|
Add: Interest on Drawings
On Cash drawings
8000 × 10% × 6 months
|
|
400
|
|
Net Profit
|
|
49550
|
