Mr. Gopal maintained his books on single entry. The following statement of affairs had been Prepared as on 31.03.06

Liabilities	Amt	Asset	Amt
Capital account Sundry creditors Bill payable	28,000 3,170 2,150	Leasehold land Plant and Machinery Stock in trade Book debts Cash in hand	2,075 4,940 9,673 15,550 1,082
	33,320		33,320

On 31.03.07 it was learnt that he had introduced further capital of Rs1,000 on 1^st july,06 and he drawn Rs1,580 on various dates during the year. It was also ascertained that the proprietor had taken Rs.75 worth of goods for his own use.

Statement prepared on the same date disclosed that book debts were Rs.14,640, Creditors were Rs.2,309 and Bills payable were Rs.1,775. The stock was valued at Rs.11,417 and cash in hand amounted Rs.917 on the same date.

Prepare: 1. Statement of profit for the year 06-07. 2. Statement of affairs as on 31.03.07 taking in to consideration the following: 5% Reserve to be created on Book debts. 5% Depreciation to be written off on plant and machinery. Rs.125 to be written off the lease. Interest at 5% p.a. to be provided on the capital. 

Solution: In the books of Mr. Gopal Statement of Affairs as on 31.3.07

Liability	Rs.	Assets	Rs.
Capital (Bal. Fig.)	29905	Book Debts	14640
Creditors	2309	Stock	11417
Bills Payable	1775	Cash in hand	917
		Leasehold land	2075
		Plant and Machinery	4940
	33989		33989

Statement of Profit or Loss for the year ended 31.03.2007

Particulars	Rs.	Rs.
Capital at the end of the year		29905
Add: Drawings:
Cash Withdrawn Goods Withdrawn	1580 75	1655
		31560
Less: Additional Capital introduced		-1000
		30560
Less: Capital at the beginning of the year		-28000
Trading Profit		2560
Less: Depreciation On Plant and Machinery 4940 × 5%	247
On Leasehold Land	125	-372
		2188
Less: RDD @ 5 % on Book Debts 14640 × 5%		-732
		1456
Less: Interest on Capital On Opening Capital 28000 × 5%	1400
On Additional Capital 1000 × 5% × 9 months	38	-1438
NET PROFIT		18