Q. 2. Mrs. Meena of Bilaspur has not kept proper books of accounts, following information is provided to you. (8)

Particulars	31.3.2012	31.3.2013
	Amount (Rs. )	Amount (Rs.)
Machinery	50000	50000
Furniture	50000	30000
Debtors	18000	25000
Creditors	18000	20000
Stock	30000	42000
Outstanding Expenses	1500	-
Prepaid Expenses	-	500
Cash at bank	28000	40000

Further information:

(1) Mrs. Meena introduced additional capital as on 1st October, 2012 by selling her personal car is Rs. 10,000.

(2) She paid her daughter's college fees from business bank account Rs. 3,000.

(3) Depreciate machinery by 5% p.a.

(4) Provide 2% on debtors for Bad and Doubtful debts.

(5) Interest on capital is to be provided @ 5% p.a. and on drawings @ 5% p.a.

Prepare: Opening and closing statement of affairs and statement of profit or loss for the year ended 31st March, 2013.

Solution:

In the books of Mrs. Meena

Opening Statement of Affairs as on 31. 03. 2012

Liabilities	Amount (Rs)	Assets	Amount (Rs.)
Creditors	18, 000	Machinery	50, 000
Outstanding Expenses	1, 500	Furniture	50, 000
Capital (Balancing Figure)	1, 56, 500	Debtors	18, 000
		Stock	30, 000
		Cash at Bank	28, 000
	1, 76, 000		1, 76, 000

Closing Statement of Affairs as on 31. 03. 2013

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Creditors	20,000	Machinery	50, 000
Capital (Balancing Figure)	1, 67, 500	Furniture	30, 000
		Debtors	25, 000
		Stock	42, 000
		Prepaid Expenses	500
		Cash at Bank	40, 000
	1, 87, 500		1, 87, 500

Statement of Profit or Loss or Mrs. Meena for the year ended 31. 03. 2013

Particulars	Amount (Rs.)	Amount (Rs.)
Capital at the end of the year.		1, 67, 500
Add: Drawings during the year		+  3000
		1, 70, 500
Less: Capital at the beginning of the year		- 1, 56, 500
		14, 000
Additional capital introduced		- 10, 000
Profit Before Adjustments		4000
Add: Income and Gains during the year.
Interest on Drawings (3000 x 5% x 6 months)		75
Profit before adjustments.		4075
Less: Expenses and Losses During the year.
Depreciation: On Machinery 50,000 x 5%		- 2500
		1575
Interest on Capital: On Opening Capital : 156500 x 5%	7825
On Additional Capital : 10000 x 5% x 6 months	250	- 8075
		-6500
Reserve for Doubtful Debts On debtors : 25, 000 x 2%		- 500
Net Loss for the year.		- 7000