Question

Hari maintains his books of account on single entry system. His books provide the following information.

$\begin{array}{cccc}& \text{Liabilities}& \text{Jan.1.2012}& \text{Dec.31.2012}\\ & & \left(Rs\right)& \left(Rs\right)\\ & \text{Furniture}& 200& 200\\ & \text{Stock}& 2,800& 3,050\\ & \text{Sundry Debtors}& 2,100& 3,400\\ & \text{Cash}& 150& 200\\ & \text{Sundry Creditors}& 1,750& 1,900\\ & \text{Bills Receivable}& -& 300\\ & \text{Loan}& -& 500\\ & \text{Investments}& -& 1,000\end{array}$

His drawing during the year was 500. Depreciate furniture by 10% and provide a reserve for bad debts at 10% on sudry debtors. calculate profit.

Answer 1

Balance Sheet
As on Jan 1,2012

$\begin{array}{cccc}\text{Liabilities}& \text{Amount(Rs)}& \text{Assets}& \text{Amount(Rs)}\\ \text{Sundrg Creditors}& 1,750& \text{Furniture}& 200\\ \text{Capital (Balancing figure)}& 3,500& \text{Stock}& 2,800\\ & & \text{Sudrg Debtors}& 2,100\\ & & \text{Cash}& 150\\ & \underset{–}{\overline{5,250}}& & \underset{–}{\overline{5,250}}\end{array}$

Balance Sheet
As on Dec. 31,2012

$\begin{array}{cccc}\text{Liabilities}& \text{Amount(Rs)}& \text{Assets}& \text{Amount(Rs)}\\ \text{Sundrg Creditors}& 1,900& \text{Furniture}200& \\ \text{Loan}& 500& \text{Less:Depreciation}\underset{–}{20}& 180\\ & & \text{Stock}& 3,050\\ \text{Capital (balnacing figure)}& 5,390& \text{Sundrg Debtors}3,400& \\ & & \text{Less:Prov.}\underset{–}{340}& 3,060\\ & & \text{Cash}& 200\\ & & \text{Bills Receivable}& 500\\ & & \text{Investment}& 1,000\\ & \underset{–}{\overline{7,790}}& & \underset{–}{\overline{7,790}}\end{array}$

Statement of Profit

$\begin{array}{ccc}& \text{Particulars}& \text{Amount(Rs)}\\ & \text{Cap. on 31.12.2012}& 5,390\\ \text{Add:}& \text{Drawings}& \underset{–}{500}\\ & & 5,890\\ \text{Less:}& \text{Opening Capital}& 3,500\\ & \text{Profits earned durings the year}& \underset{–}{\overline{2,390}}\end{array}$