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:

$\begin{array}{ccc}\text{Items}& \text{Jan 1, 2005 (Rs.)}& \text{Dec 31, 2005 (Rs.)}\\ \text{Cash in hand}& 10,000& 36,000\\ \text{Debtors}& 20,000& 80,000\\ \text{Creditors}& 10,000& 46,000\\ \text{Bills receivable}& 20,000& 24,000\\ \text{Bills payable}& 4,000& 42,000\\ \text{Car}& \underset{–}{}& 80,000\\ \text{Stock}& 40,000& 30,000\\ \text{Furniture}& 8,000& 48,000\\ \text{Investment}& 40,000& 50,000\\ \text{Bank Balance}& 1,00,000& 90,000\end{array}$

The following adjustements 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 Rs.6,000.

(d) Fresh capital introduced during the yaer Rs.30,000.

Answer 1

Statement of Affairs

as on 1st January, 2005

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Creditors}& 10,000& \text{Cash in Hand}& 10,000\\ \text{Bills Payable}& 4,000& \text{Debtors}& 20,000\\ \text{Capital (Balancing Figure)}& 2,24,000& \text{Bills Receivable}& 20,000\\ & & \text{Car}& \text{-}\\ & & \text{Stock}& 40,000\\ & & \text{Furniture}& 8,000\\ & & \text{Investment}& 40,000\\ & & \text{Cash at Bank}& 1,00,000\\ & \overline{\underset{–}{\underset{–}{2,38,000}}}& & \overline{\underset{–}{\underset{–}{2,38,000}}}\end{array}$

Statement of Affairs

as on 31st December, 2005

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Creditors}& 46,000& \text{Cash in Hand}& 36,000\\ \text{Bills Payable}& 42,000& \text{Debtors}& 80,000\\ \text{Outstanding Expenses}& 6,000& \text{Bills Receivable}& 24,000\\ \text{Capital (Balancing Figure)}& 3,35,200& \text{Car}80,000& \\ & & (-)\text{Depreciation @ 5\%}\underset{–}{(4,000)}& 76,000\\ & & \text{Furniture}\text{48,000}& \\ & & (-)\text{Depreciation @ 10\%}\underset{–}{(4,800)}& 43,200\\ & & \text{Investment}& 50,000\\ & & \text{Cash at Bank}& 90,000\\ & & \text{Stock}& 30,000\\ & \overline{\underset{–}{\underset{–}{4,29,200}}}& & \overline{\underset{–}{\underset{–}{4,29,200}}}\end{array}$

Statement of Showing Profit or Loss for the year 2005
$\begin{array}{cc}\text{Particulars}& \text{Amt (Rs.)}\\ \text{Capital at the end of the year as on 31st December 2005}& 3,35,200\\ (+)\text{Drawings during the year}(5000\times 12)& 60,000\\ & \overline{3,95,200}\\ (-)\text{Fresh capital introduced during the year}& (30,000)\\ & \overline{3,65,200}\\ (-)\text{Capital at the beginning of the year on 1st Jan 2005}& (2,24,000)\\ \text{Loss during the year 2005}& \overline{\underset{–}{\underset{–}{1,41,200}}}\end{array}$