Radheshyam a retail trader had no proper methods accounting but
the following but the following information is made available to you, you are
required to prepare opening and closing statement of Affairs and Statement
showing Profit or Loss for the year ended 31st March, 2007
after taking into consideration the adjustments.
Particulars
|
Amount
(`.)
01.04.2006
|
Amount
(`.)
31.03.2007
|
Sundry Debtors
|
22,500
|
25,000
|
Sundry Creditors
|
30,000
|
35,000
|
Bank overdraft
|
40,000
|
20,000
|
Stock
|
32,500
|
40,000
|
Cash in Hand
|
1,000
|
4,000
|
Bill Receivable
|
30,000
|
40,000
|
Furniture
|
5,000
|
5,000
|
Motor Van
|
40,000
|
40,000
|
Computer
|
30,000
|
60,000
|
Adjustments:-
(1) On 1st October,
2006 Mr. Radheshyam had withdrawn `.25,000 for personal use out of
which he invested `. 5,000 at par on the same
day in 10% Municipal Bonds which is treated as business assets.
(2) He had also withdrawn `. 15,000 for his daughter’s marriage.
(3) Depreciate Furniture by 10% p.a.
and write off `.1,000 from motor van.
(4) As regards debtors `.1,000 is irrecoverable and further reserve of 5% is to be made
on debtors.
(5) Allow interest on Capital at 10%
p.a.
(6) Charge interest on Drawing `. 1,000.
(10)
In the books of Radheshyam
Opening Statement of Affairs as on 1.4.2006
Liabilities
|
Rs.
|
Assets
|
Rs.
|
Capital
Sundry Creditors
Bank Overdraft
|
91,000
30,000
40,000
|
Sundry Debtors
Stock
Cash in hand
Bills Receivable
Furniture
Motor Van
Computers
|
22,500
32,500
1,000
30,000
5,000
40,000
30,000
|
1,61,000
|
1,61,000
|
Closing Statement of Affairs as on 31.3.2007
Liabilities
|
Rs.
|
Rs.
|
Assets
|
Rs.
|
Rs.
|
Capital
Sundry Creditors
Bank Overdrafts
|
1,60,550
35,000
20,000
|
Sundry Debtors
Less: New Bad debts
Less: New R.D.D.
Stock
Cash in hand
Bills Receivable
Furniture
Less: Depreciation
Motor Van
Less: Written off
Computers
10% Municipal Bonds
Add: Interest
|
25,000
1,000
24,000
1,200
5,000
500
40,000
1,000
5,000
250
|
22,800
40,000
4,000
40,000
4,500
39,000
60,000
5,250
|
|
2,15,550
|
2,15,550
|
Statement of profit or loss as on 31.3.2007
Particulars
|
Rs.
|
Rs.
|
Capital at the end
of the year
Add: (1) Drawings
(20,000 + 15,000)
(2) Interest on Drawings
|
35,000
1,000
|
160550
36,000
|
Less: (1) Further
capital introduced
(2) Interest on capital
|
-
9,100
|
1,96,550
9,100
|
Less: Capital at
the beginning of the year
|
1,87,450
91,000
|
|
Net Profit
|
96,450
|
Working Note: Interest on Drawings is directly given in the problem, so there
is no need to consider average interest.