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Question

Krishna Kulkarni has not kept proper books of accounts prepare the statement of profit or loss for the year ending December 31, 2005 from the following information.
ItemsJan 1, 2005Dec 31, 2005
Cash in hand10,00036,000
Debtors20,00080,000
Creditors10,00046,000
Bills receivable20,00024,000
Bills payable4,00042,000
Car ------80,000
Stock40,00030,000
Furniture8,00048,000
Investment40,00050,000
Bank Balance1,00,00090,000
The following adjustments were made
(a) Krishna withdrew cash Rs 5,000 per month for private use.
(b) Depreciation @ 5% on car and furniture @ 10%.
(c) Outstanding rent Rs6,000.
(d) Fresh capital introduced during the year Rs 30,000.

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Solution

Answer :
Statement of Affairs
as on 1st January, 2005
LiabilitiesAmt.(Rs)AssetsAmt.(Rs)
Creditors10,000Cash in hand10,000
Bills Payable4,000Debtors20,000
Capital (Balancing Figure)2,24,000Bills Receivable20,000
Car ---
Stock40,000
Furniture8,000
Investment$40,000

Cash at Bank1,00,000
2,38,0002,38,000

Statement of Affairs
as on 31st December, 2005
LiabilitiesAmt. (Rs)AssetsAmt. (Rs)
Creditors46,000Cash in Hand36,000
Bills Payable42,000Debtors80,000
Outstanding Expenses6,000Bills Receivable24,000
Capital (Balancing Figure)3,35,200Car 80,000
(-) Depreciation
@ 5% 4,0000
76,000
Furniture
(-)Depreciation
@ 10% 48,000
43,200
Investment50,000

Cash at Bank90,000
Stock30,000
4,29,2004,29,200

Statement Showing Profit or Loss for the Year 2005
ParticularsAmt. (Rs)
Capital at the end of the year on 31st December 20053,35,200
(+) Drawings during the year (5000×12)60,000
(-) Fresh Capital Introduced during the year3,95,200
30,000
(-) Capital at the Beginning as on 1st Jan 20053,65,200
2,24,200
Profit earned during the year 20051,41,200


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