Question

Following information is given below. Calculate the closing capital

$\begin{array}{ccc}\text{Items}& \text{Jan 1, 2011}(Rs.)& \text{Dec 31, 2011}(Rs.)\\ \text{Creditors}& 5,000& 30,000\\ \text{Bills Payable}& 10,000& \underset{–}{}\\ \text{Loan}& \underset{–}{}& 50,000\\ \text{Bills receivable}& 30,000& 50,000\\ \text{Stock}& 5,000& 30,000\\ \text{Cash}& 2,000& 20,000\end{array}$

Calculation of profit or loss and ascertainment of statement of affairs at the end of the year (Opening balance is given)

Answer 1

Note:
In the above question, opening and closing balances of capital are not given, so first of all we have to prepare statement of affairs at the beginning and at the end of the year. Then only we will be able to get the profit figure of the year.

Statement of Affairs

as on 1st January, 2011

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Creditors}& 5,000& \text{Bills Receivable}& 30,000\\ \text{Bills Payable}& 10,000& \text{Stock}& 5,000\\ \text{Capital (Balancing Figure)}& 22,000& \text{Cash}& 2,000\\ & \underset{–}{\underset{–}{\overline{37,000}}}& & \underset{–}{\underset{–}{\overline{37,000}}}\end{array}$

Statement of Affairs

as on 31st December, 2011

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Creditors}& 30,000& \text{Bills Receivable}& 50,000\\ \text{Loan}& 50,000& \text{Stock}& 30,000\\ \text{Capital (Balancing Figure)}& 20,000& \text{Cash}& 20,000\\ & \underset{–}{\underset{–}{\overline{1,00,000}}}& & \underset{–}{\underset{–}{\overline{1,00,000}}}\end{array}$

Statement of Profit or Loss

for the year ended as on 31st December, 2011

$\begin{array}{cc}\text{Particulars}& \text{Amt.(Rs.)}\\ \text{Capital at the end of the year i.e., December 2011}& 20,000\\ (-)\text{Capital at the beginning of the year i.e., January 2011}& \underset{–}{(22,000)}\\ \text{Loss during the year 2011}& \underset{–}{\underset{–}{2,000}}\end{array}$