|
Particulars
|
1.04.06
|
31.03.07
|
|
Cash in hand
Bank balance
Stock in trade
Debtors
Creditors
Machinery
Furniture
|
1,500
1,200(Dr.)
4,000
3,400
2,400
6,000
1,200
|
1,600
1,800(Cr.)
4,650
3,800
3,600
8,000
1,600
|
During the year, Prem had withdrawn Rs.75 per month
for his household use. From the above information ascertain his profit or loss
for the year ended and also give his statement of affairs as on 31.03.07 after
taking into account the following further information:
1.
Depreciate
plant and machinery by 15% and furniture by 12 ½ % p.a (assume the addition on
30th September,2006)
2.
Of the
debtors Rs100 are bad and to be written off.
3.
Create a
reserve for Discount on Debtors at 2% and a reserve for Doubtful debts at 5%.
4.
Allow
interest on capital at 5% and charge interest on Drawing at 6%p.a
Solution:
In the books of Mr. Prem
Statement
of Affairs as on 1-4-06 and 31.03.07
|
Liability
|
1-4-06
|
31-3-07
|
Assets
|
1-4-06
|
31-3-07
|
|
Capital
(Bal. Fig.)
|
14900
|
14250
|
Cash in hand
|
1500
|
1600
|
|
Bank Overdraft
|
-
|
1800
|
Cash in bank
|
1200
|
-
|
|
Creditors
|
2400
|
3600
|
Stock in trade
|
4000
|
4650
|
|
|
|
|
Debtors
|
3400
|
3800
|
|
|
|
|
Machinery
|
6000
|
8000
|
|
|
|
|
Furniture
|
1200
|
1600
|
|
|
17300
|
19650
|
|
17300
|
19650
|
Statement
of Profit or Loss for the year ended 31.03.2007
|
Particulars
|
Rs.
|
Rs.
|
|
Capital at the end of the
year
|
|
14250
|
|
Add: Drawings:
|
|
|
|
Amount withdrawn for Household
use
Rs. 75 × 12 months
|
|
900
|
|
|
|
15150
|
|
Less: Capital at the
beginning of the year
|
|
-14900
|
|
Trading Profit
|
|
250
|
|
Less: Depreciation:
|
|
|
|
On Plant and Machinery
On Opening Machinery:
6000 × 15%
|
900
|
|
|
On Additional Machinery
2000 × 15% × 6 months
|
150
|
|
|
On Furniture
On opening Furniture
1200 × 12.5%
|
150
|
|
|
On Additional Machinery
400 × 12.5% × 6 months
|
25
|
-1225
|
|
|
|
-975
|
|
Less: Bad debts
|
|
-100
|
|
|
|
-1075
|
|
Less: R.D.D. @ 5% on Debtors
(3800 – 100) × 5%
|
|
-185
|
|
|
|
-1260
|
|
Less: Discount on Debtors @
2%
(3800 – 100 – 185) × 2%
|
70.30
|
-70
|
|
|
|
-1330
|
|
Less: Interest on Capital
On opening Capital
14900 × 5%
|
|
-745
|
|
|
|
-2075
|
|
Add: Interest on drawings
900 × 6% × 6 months
|
|
27
|
|
Net Loss
|
|
-2048
|
