Question

M/s Saniya Sports Equipment does not keep proper records. From the following information find out profit or loss and also prepare balance sheet for the year ended March 31, 2017

	April. 31, 2016		March. 31, 2017
		Rs		Rs
Cash in hand		6,000		24,000
Bank overdraft		30,000		–
Stock		50,000		80,000
Sundry creditors		26,000		40,000
Sundry debtors		60,000		1,40,000
Bills payable		6,000		12,000
Furniture		40,000		60,000
Bills receivable		8,000		28,000
Machinery		50,000		1,00,000
Investment		30,000		80,000

Drawing Rs 10,000 p.m. for personal use, fresh capital introduce during the year Rs 2,00,000. A bad debts of Rs 2,000 and a provision of 5% is to be made on debtors outstanding salary Rs 2,400, prepaid insurance Rs 700, depreciation charged on furniture and machine @ 10% p.a.

Answer 1

Statement of Affairs as on April 31, 2016
Liabilities	Amount Rs	Assets	Amount Rs
Bank Overdraft	30,000	Cash in Hand	6,000
Sundry Creditors	26,000	Stock	50,000
Bills Payable	6,000	Sundry Debtors	60,000
		Furniture	40,000
		Bills Receivable	8,000
		Machinery	50,000
Capital (Balancing figure)	1,82,000	Investment	30,000
	2,44,000		2,44,000

Statement of Affairs as on March. 31, 2017
Liabilities			Amount Rs	Assets					Amount Rs
Sundry Creditors			40,000	Cash in Hand					24,000
Bills Payable			12,000	Stock					80,000
Outstanding Salary			2,400	Sundry Debtors			1,40,000
					Less: Bad-debt		2,000
							1,38,000
						Less: 5% Provision	(6,900)		1,31,100
				Furniture			60,000
Capital (Balancing figure)			4,33,400			Less: Depreciation	(6,000)		54,000
				Bills Receivable					28,000
				Machinery				1,00,000
						Less: Depreciation		(10,000)	90,000
				Investment					80,000
				Prepaid Insurance					700
			4,87,800						4,87,800

Statement of Profit and Loss
Particulars	Amount Rs
Capital on March 31, 2017	4,33,400
Add: Drawings made during the year (Rs 10,000 × 12)	1,20,000
Less: Capital on April 31, 2016	(1,82,000)
Less: Fresh capital introduced during the year	(2,00,000)
Profit earned during the year 2017	1,71,400

Note: As per the solution, the profit earned during the year is Rs 1,71,400; while, according to the book, the answer is Rs 1,41,200.