Following incomplete information is available from records maintained by Mr. X:

1-4-2016 31-3-2017

₹ ₹

Cash 1,000 1,500

Bank 8,000 10,000

Debtors 10,000 12,000

Stock 7,000 6,000

Machinery 20,000 20,000

Creditors 11,000 10,000

Bank Loan 12,000 12,000

During the year Mr. X introduced in the business the amount realised on sale of ₹ 10,000 investments at the premium of 5%. Personal expenses of Mr. X paid from business account amounted to ₹ 1,250 per month. Prepare a statement to calculate Profit (or Loss) during the year.

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Solution

Statement of Affairs

as on April 01, 2016

Liabilities Amount (Rs) Assets Amount (Rs)

Creditors 11,000 Cash 1,000

Bank Loan 12,000 Bank 8,000

Capital (Balancing Figure) 23,000 Debtors 10,000

Stock 7,000

Machinery 20,000

46,000 46,000

Statement of Affairs

as on March 31, 2017

Liabilities Amount (Rs) Assets Amount (Rs)

Creditors 10,000 Cash 1,500

Bank Loan 12,000 Bank 10,000

Capital (Balancing Figure) 27,500 Debtors 12,000

Stock 6,000

Machinery 20,000

49,500 49,500

Statement of Profit or Loss

for the year ended March 31, 2017

Particulars Amount
(Rs)

Capital at the end of the year 27,500

Add: Drawings made during the year (1,250 × 12) 15,000

Less: Additional capital introduced during the year (WN) 10,500

Adjusted capital at the end of the year 32,000

Less: Capital in the beginning of the year 23,000

Profit made during the year 9,000

Working Note: Calculation of additional capital introduced during the year

$\begin{array}{l} Value of Investments = 10,000 \\ Premium = \underset{}{500} (10,000 \times 5 %) \\ Sale Value of Investments = Rs 10,500 (Aditional Capital) \end{array}$

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Similar questions

Q. From the following information relating to the business of Mr. X who keeps books by single entry ascertain the profit or loss for the year ended 31st March, 2017:

	1-4-2016	31-3-2017
	₹	₹
Machinery	16,000	16,000
Furniture	4,000	4,000
Stock	14,000	10,000
Sundry Debtors	8,000	9,000
Bank Balance	400	3,600
Sundry Creditors	10,000	7,000

Mr. X withdrew ₹ 4,100 during the year to meet his household expenses. He introduced ₹ 600 as fresh capital. Machinery and furniture to be depreciated by 10% and 5% per annum respectively.

Q. From the following records kept on single entry basis, prepare final accounts assuming that ratio of gross profit to sales is 25%:

	1-1-2007 ₹	31-12-2007 ₹
Cash at Bank	1,400	1,800
Debtors	?	2,400
Stock	?	1,700
Fixed Assets	10,000	10,000
Creditors	1,600	?
Loan	1,000	800

Transactions during the year 2007:

	₹
Collections from debtors	9,300
Cash Sales	1,000
Credit Sales	9,000
Payment to Creditors	6,100
Cash Purchases	1,600
Credit Purchase	6,400
Drawings	1,000
Business Expenses	1,000
Discount Received	200
Discount Allowed	100

Q. Question : Gopal does not keep proper records in the books of account. Following information is given below.

Items	Jan 1, 2005	Dec 31, 2005
Cash in hand	$18, 000$	$12, 000$
Cash at bank	$1, 500$	$2, 000$
Stock in trade	$80, 000$	$90, 000$
Sundry Debtors	$36, 000$	$60, 000$
Sundry Creditors	$60, 000$	$40, 000$
Loan	$10, 000$	$8, 000$
Office equipments	$25, 000$	$30, 000$
Land and Buildings	$30, 000$	$20, 000$
Furniture	$10, 000$	$10, 000$

During the year he introduced Rs

20, 000

and withdrew Rs

12, 000

from the business. Prepare the statement of profit or loss on the basis of given information.

Q. From the following balances, as on 31st March, 2018, prepare Trading and Profit and Loss Account and Balance Sheet:

	₹		₹
Capital Account	1,00,000	Returns Outward	5,000
Plant and Machinery	40,000	Rent	4,000
Sundry Debtors	24,000	Sales	1,64,000
Sundry Creditors	12,000	Manufacturing Expenses	8,000
Life Insurance Premium	12,000	Trade Expenses	7,000
Purchases	1,05,000	Bad Debts	2,000
Wages	50,000	Carriage	1,500
Bank	10,000	Bills Payable	7,000
Repairs	500	Returns Inward	4,000
Stock (1st April, 2017)	20,000

Closing Stock on 31st March, 2018 was valued at ₹ 14,500.

PRACTICAL PROBLEMS

Mr. Mangesh is dealing in business. He maintains his accounting with Single Entry. The following are details of his business.

Particulars	01-04-2012	31-03-2013
Land and Building	40,000	50,000
Machinery	30,000	40,000
Furniture	10,000	10,000
Debtors	20,000	40,000
Stock	10,000	25,000
Cash Balance	5,000	15,000
Bills Receivable	5,000	5,000
Creditors	25,000	25,000
Bank Overdraft	5,000	——
Bank Balance	——	10,000

Mr. Mangesh introduced Rs 10,000 as additional Capital. He spent Rs 45,000 for personal use Depreciate Land and Building by Rs 5,000. Provide 5% R.D.D. on Debtors.

Prepare: Opening Statement of affairs, Closing Statement of affairs and the statement of profit or loss.

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	1-4-2016	31-3-2017
	₹	₹
Cash	1,000	1,500
Bank	8,000	10,000
Debtors	10,000	12,000
Stock	7,000	6,000
Machinery	20,000	20,000
Creditors	11,000	10,000
Bank Loan	12,000	12,000

Statement of Affairs as on April 01, 2016
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	11,000	Cash	1,000
Bank Loan	12,000	Bank	8,000
Capital (Balancing Figure)	23,000	Debtors	10,000
		Stock	7,000
		Machinery	20,000
	46,000		46,000

Statement of Affairs as on March 31, 2017
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	10,000	Cash	1,500
Bank Loan	12,000	Bank	10,000
Capital (Balancing Figure)	27,500	Debtors	12,000
		Stock	6,000
		Machinery	20,000
	49,500		49,500

Statement of Profit or Loss for the year ended March 31, 2017
Particulars		Amount (Rs)
Capital at the end of the year		27,500
	Add: Drawings made during the year (1,250 × 12)	15,000
	Less: Additional capital introduced during the year (WN)	10,500
Adjusted capital at the end of the year		32,000
	Less: Capital in the beginning of the year	23,000
Profit made during the year		9,000