Question

A commenced business on 1st April, 2017 with a capital of ₹ 10,000. He immediately bought Furniture and Fixtures for ₹ 2,000. On 1st October, 2017, he borrowed ₹ 5,000 from his wife @ 9% p.a. (interest not yet paid) and introduced a further capital of his own amounting to ₹ 1,500. A drew @ ₹ 300 per month at the end of each month for household expenses. On 31st March, 2018 his position was as follows:
Cash in Hand ₹ 2,800; Sundry Debtors ₹ 4,800; Stock ₹ 6,800; Bills Receivable ₹ 1,600; Sundry Creditors ₹ 500 and owing for Rent ₹ 150. Furniture and Fixtures to be depreciated by 10%. Ascertain the profit or loss made by A during 2017–18.

Answer 1

Statement of Affairs as on March 31, 2018
Liabilities		Amount ₹	Assets		Amount ₹
Wife’s Loan	5,000		Furniture and Fixture	2,000
Add: Outstanding Interest			Less: 10% Depreciation	(200)	1,800
(5,000 × 9% × 6/12)	225	5,225	Cash in Hand		2,800
Sundry Creditors		500	Sundry Debtors		4,800
Rent Outstanding		150	Stock		6,800
Capital (Balancing Figure)		11,925	Bills Receivable		1,600
		17,800			17,800

Statement of Profit or Loss for the year ended March 31, 2018
Particulars	Amount ₹
Capital as on March 31, 2017	11,925
Add: Drawings (Rs 1,200 × 3)	3,600
	15,525
Less: Additional Capital Introduced	(1,500)
Adjusted Capital as on March 31, 2017	14,025
Less: Capital as on April 01, 2016	(10,000)
Profit made during the year 2016-17	4,025