Question

Aditya a retailer, has not maintained proper books of account but it has been possible to obtain the following details:

		Last Year (₹)	This Year (₹)
Trade Creditors		6,270	5,890
Loan from Naresh		5,000	5,000
Stock		12,350	11,980
Cash in Hand		570	650
Shop Fittings		7,250	7,800
Trade Debtors		5,280	4,560
Bank Balance		3,990	4,130

Calculate the net profit for this year and draft the Statement of Affairs at the end of the year after noting that:
(a) Shop Fittings are to be depreciated by ₹ 780.
(b) Aditya has drawn ₹ 100 per week for his own use.
(c) Included in the Trade Debtors is an irrecoverable balance of ₹ 270.
(d) Interest at 5% p.a. is due on the loan from Naresh but has not been paid for the year.

Answer 1

In the books of Aditya Statement of Affairs (Previous Year)
Liabilities	Amount (₹)	Assets	Amount (₹)
Trade Creditors	6,270	Stock	12,350
Loan from Naresh	5,000	Cash in Hand	570
Capital (Balancing Figure)	18,170	Shop Fittings	7,250
		Trade Debtors	5,280
		Bank Balance	3,990
	29,440		29,440

Statement of Affairs (Current Year)
Liabilities		Amount (₹)	Assets		Amount (₹)
Trade Creditors		5,890	Stock		11,980
Loan from Naresh	5,000		Cash in Hand		650
Add: Outstanding Interest
(5,000 × 5%)	250	5,250	Shop Fittings	7,800
Capital (Balancing Figure)		16,930	Less: Depreciation	(780)	7,020
			Trade Debtors	4,560
			Less: Bad Debts	(270)	4,290
			Bank Balance		4,130
		28,070			28,070

Statement of Profit or Loss (Current Year)
Particulars	Amount (Rs)
Capital of the Current Year	16,930
Add: Drawings (Rs 100 × 52)	5,200
	22,130
Less: Capital of the Previous Year	(18,170)
Profit made during the Current Year	3,960