Mr. Prabhakar is a retail trader. He had no proper methods of accounting. But the following information is made available to you. [March 2012]

Particulars	Rs. 1.04.09	Rs. 31.03.10
Sundry Debtors Sundry Creditors Bank Overdraft Stock Cash in hand Bills Receivable Furniture Motor van Computer 10% Govt. Bonds	45000 60000 80000 65000 2000 60000 10000 80000 60000	50000 70000 40000 80000 8000 80000 10000 80000 120000 10000

On 1^st October, 2009, Mr. Prabhakar had withdrawn Rs. 40000 for his personal use. He had also withdrawn Rs. 30000 for his daughter’s marriage. 10% Government Bonds were purchased of Rs. 10,000 on 1^st October, 2009.  Depreciate furniture by 10% and write off Rs. 2000 from motor van.  Rs. 2000 is written off as bad debts and provide 5% R.D.D. on debtors. Allow interest on capital at 10% p.a. Charge interest on drawings Rs. 2,000. Prepare Opening statement of affairs of 1.4.2009.  Closing statement of affairs of 31.3.2010.  Statement showing Profit or Loss for the year ended on 31.3.2010.

Solution: In the books of Mr. Prabhakar

Statement of Affairs as on 1-4-09 and 31.03.10

Liability	1 – 4 – 09	31 – 3 – 10	Assets	1 – 4 – 09	31 – 3 – 10
Capital (Bal. Fig.)	182000	328000	Sundry Debtors	45000	50000
			Stock	65000	80000
			Cash in hand	2000	8000
			Bills Receivable	60000	80000
			Furniture	10000	10000
			Motor van	80000	80000
Sundry Creditors	60000	70000	Computer	60000	120000
Bank Overdraft	80000	40000	10% Govt. Bonds	-	10000
	322000	438000		322000	438000

Statement of Profit or Loss for the year ended 31.03.2010

Particulars	Rs.	Rs.
Capital at the end of the year		328000
Add: Drawings:
Personal use Prabhakar's Daughter Marriage	40000 30000	70000
		398000
Less: Capital at the beginning of the year		-182000
Trading Profit		216000
Less: Depreciation
On Furniture 10000 × 10%	1000
On Motor van	2000	3000
		213000
Less: Bad debts		-2000
		211000
Less: RDD @ 5% on Debtors
(50000 – 2000) × 5%		-2400
		208600
Add: Interest on 10% Govt. Bonds
10000 × 10% × 6 months		500
		209100
Less: Interest on Capital
On opening capital 182000 × 10%		-18200
		190900
Add: Interest on drawings		2000
Net Profit		192900