Question

Ajay started business with a capital of Rs 2,25,000 on 1st April, 2011.During the year, he withdrew Rs 40,000 for his personal use and introduced Rs 7,000 as fresh capital. On 31st March 2012,his position of assets and liabilities stood as follows:

Cash in hand 18,500 Rs

Stock 20,000 Rs

Bills receivable 25,000 Rs

Debtors 4,00,000 Rs

Creditors 1,50,000 Rs

Bills Payable 3,000 Rs

You are required to prepare Statement of Profit or Loss for the year ended 31st March, 2012.

Answer 1

Statement of Profit and Loss $\begin{array}{cc}\text{Particulars}& \text{Amount (Rs)}\\ \text{Capital at the end of the year}& 4,63,500\\ \text{Add: Drawings made during the year}& 40,000\\ & \overline{5,03,500}\\ \text{Less: Additional capital introduced}& \underset{–}{7,000}\\ \text{Adjusted Capital}& 5,10,500\\ \text{Less: Additional capital introduced}& \underset{–}{3,10,500}\\ \overline{\text{Profit earned during the year}}& 2,00,000\end{array}$ Working Notes : Balance Sheet as on 31.03.2012 $\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{Creditors}& 1,50,000& \text{Cash in hand}& 18,500\\ \text{Bills Payable}& 3,000& \text{Stock}& 20,000\\ & 3,10,500& \text{Bills receivable}& 25,000\\ & & \text{Debtors}& \text{4,00,000}\\ & \overline{\underset{–}{4,63,500}}& & \overline{\underset{–}{4,63,500}}\end{array}$