Question

Ashok keeps incomplete records. The position of his business on 1st April, 2016 was as follows:
Cash in Hand ₹ 2,200; Cash at Bank ₹ 5,400; Stock ₹ 25,100; Sundry Debtors ₹ 18,700; Furniture ₹ 6,000; Sundry Creditors ₹ 13,500.
His position on 31st March, 2017 was as follows:
Cash in Hand ₹ 1,500; Cash at Bank ₹ 8,400; B/R ₹ 3,300; Stock ₹ 26,000; Sundry Debtors ₹ 24,600; Furniture ₹ 8,000; Sundry Creditors ₹ 14,200.
During the year he had withdrawn from the business ₹ 18,000, of which ₹ 9,200 were spent in purchasing a Typewriter for the business.
(a) Depreciate furniture and typewriter by 10%.
(b) Write off ₹ 600 as Bad-Debts.
(c) Make a provision of 5% on Debtors for doubtful debts.
Calculate the profit or loss of his business for the year ended 31st March, 2017 and prepare a final statement of affairs, after the above adjustments.

Answer 1

Statement of Affairs as on March 31, 2016
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Sundry Creditors	13,500	Cash in Hand	2,200
Capital (Balancing Figure)	43,900	Cash at Bank	5,400
		Stock	25,100
		Sundry Debtors	18,700
		Furniture	6,000
	57,400		57,400

Statement of Affairs as on March 31, 2017
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Sundry Creditors	14,200	Cash in Hand	1,500
Capital (Balancing Figure)	66,800	Cash at Bank	8,400
		Stock	26,000
		Sundry Debtors	24,600
		Bills Receivable	3,300
		Furniture	8,000
		Typewriter	9,200
	81,000		81,000

Statement of Profit or Loss for the year ended March 31, 2017
Particulars		Amount (Rs)
Capital at the end of the year		66,800
	Add: Drawings made during the year (18,000 – 9,200)	8,800
	Less: Additional capital introduced during the year
Adjusted capital at the end of the year		75,600
	Less: Capital in the beginning of the year	43,900
Profit Before Adjustment		31,700
	Less: Depreciation on Furniture	800
	Less: Depreciation on Typewriter	920
	Less: Bad Debts	600
	Less: Provision for Doubtful Debts	1,200
Profit made during the year		28,180

Final Statement of Affairs as on March 31, 2017
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Creditors		14,200	Cash in Hand		1,500
Opening Capital	43,900		Cash at Bank		8,400
Add: Net Profit	28,180		Stock		26,000
Less: Drawings	8,800	63,280	Bills Receivable		3,300
			Sundry Debtors	24,600
			Less: Bad Debts	600
			Less: Provision for Bad Debts	1,200	22,800
			Furniture	8,000
			Less: Depreciation	800	7,200
			Typewriter	9,200
			Less: Depreciation	920	8,280
		77,480			77,480