Mr. Keshav keeps his books on single entry system and disclosed the following information of his business. [8 MARKS]

Particular	1 st April, 12 (Rs.)	31 st March, 13 (Rs.)
Investments		30000
Bills payable		18000
Creditors	52500	69000
Furniture	15000	45000
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 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 31^st March, 2013.

Solution:

Opening statement of affairs as on 1^st April, 2012

Liabilities	Rs.	Assets	Rs.
Capital at the Beginning of the Year.	88,500	Furniture	15,000
Creditors	52500	Debtors	60,000
		Stock in trade	30,000
		Cash at bank	36,000
	1,41,000		1,41,000

Closing Statement of affairs as on 31^st March, 2013

Liabilities	Rs.	Assets	Rs.
Capital at the End of the year.	169500	Investments	30,000
Bills Payable	18000	Furniture	45,000
Creditors	69,000	Debtors	90,000
		Stock in Trade	37,500
		Cash at bank	54,000
	256500		256500

Statement of Profit and Loss for the year ended 31^st March, 2013

Particulars	Rs.	Rs.
Capital at the end of the year		169500
Add: Drawings
First 6 months = 6 Months × Rs. 3000	18,000
Next 6 months = 6 months × Rs. 2,000	12,000
Goods	7000	+ 37,000
		2,06,500
Less: Additional Capital Introduced
Sale Proceeds of private asset utilized in the business		- 27,000
		1,79,500
Less: Capital at the beginning of the year.		-88,500
Trading Profit		91,000
Less: Depreciation
On Furniture
45,000 × 10%		- 4500
		86500
Less: R.D.D.
On Debtors
90,000 × 5%		- 4500
Net Profit		82,000