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Realisation of Assets (Dissolution)

Kuldeep, a ge...

Question

Kuldeep, a general merchant, keeps his accounts on Single Entry System. He wants to know the results, of his business on 31st March, 2018 and for that following information is available:

Particulars
1st April, 2017
(₹)
31st March, 2018
(₹)

Cash in Hand ................................................................................
1,50,000
1,75,000

Bank Balance ................................................................................
7,50,000

8,00,000

Furniture ................................................................................
1,00,000

1,00,000

Stock ................................................................................
5,00,000

6,50,000

Creditors ................................................................................
3,50,000

4,00,000

Debtors ................................................................................
2,50,000

3,00,000

During the year, he had withdrawn ₹ 5,00,000 for his personal use and invested ₹ 2,50,000 as additional cpaital. Calculate his profits on 31st March, 2018 and prepare the Statement of Affairs as on that date.

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Solution

Statement of Affairs

as on April 01, 2017

Liabilities

Amount

₹

Assets

Amount

₹

Creditors

3,50,000

Cash in Hand

1,50,000

Capital (Balancing Figure)

14,00,000

Bank Balance

7,50,000

Furniture

1,00,000

Stock

5,00,000

Debtors

2,50,000

17,50,000

17,50,000

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

₹

Assets

Amount

₹

Creditors

4,00,000

Cash in Hand

1,75,000

Capital (Balancing Figure)

16,25,000

Bank Balance

8,00,000

Furniture

1,00,000

Stock

6,50,000

Debtors

3,00,000

20,25,000

20,25,000

Statement of Profit or Loss

for the year ended March 31, 2018

Particulars

Amount

₹

Capital as on March 31, 2017

16,25,000

Add: Drawings

5,00,000

21,25,000

Less: Additional Capital Introduced

(2,50,000)

Adjusted Capital as on March 31, 2017

18,75,000

Less: Capital as on April 01, 2016

(14,00,000)

Profit made during the year 2016-17

4,75,000

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Similar questions

Q. Kuldeep, a general merchant, keeps his accounts on Single Entry System. He wants to know the results of his business on 31st March, 2019 and for that following information is available:

		1st April, 2018 (₹)	31st March, 2019 (₹)
Cash in Hand		1,50,000	1,75,000
Bank Balance		7,50,000	8,00,000
Furniture		1,00,000	1,00,000
Stock		5,00,000	6,50,000
Creditors		3,50,000	4,00,000
Debtors		2,50,000	3,00,000

During the year, he had withdrawn ₹ 5,00,000 for his personal use and invested ₹ 2,50,000 as additional capital. Calculate his profits on 31st March, 2019 and prepare the Statement of Affairs as on that date.

Q. Ravi, who keeps his books on Single Entry System, had his capital on 31st March, 2016 ₹ 20,000 and on 1st April, 2015 was ₹ 16,700. He further informs that during the year, he withdrew for his personal expenses ₹ 9,400. He also sold his personal investment of ₹ 10,000 at 15% premium and brought that money into the business.
Prepare a statement of Profit or Loss.

Q. Mr. A commenced business with a capital of ₹ 2,50,000 on 1st April, 2013. During the five years ended 31st March, 2018, the following profits and losses were made:
31st March, 2014−Loss ₹ 5,000
31st March, 2015−Profit ₹ 13,000
31st March, 2016−Profit ₹ 17,000
31st March, 2017−Profit ₹ 20,000
31st March, 2018−Profit ₹ 25,000
During this period he had drawn ₹ 40,000 for his personal use. On 1st April, 2018, he admitted B into partnership on the following terms:
B to bring for his half share in the business, capital equal to A's Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount B should invest to become a partner and pass entries to record the transactions relating to admission.

A

commenced business with a capital

R s . 2, 50, 000

1^{s t}

April,2013. During the five years ended

31^{s t}

March,2018, the following profits and losses were made:

31^{s t}

=

R s . 5, 000

31^{s t}

=

R s . 13, 000

31^{s t}

=

R s . 17, 000

31^{s t}

=

R s . 20, 000

31^{s t}

=

R s . 25, 000

During this period he had drawn

R s . 40, 000

for his personal use. On

1^{s t}

April,2018, he admitted

B

into partnership on the following terms:

B

to bring for his half share in the business, capital equal to

A^{'} s

31^{s t}

March,2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount

B

should invest to become a partner and pass entries to record the transaction relating to admission.

Q. Mr. John keeps his books according to single entry system. Following are the details of his business:

Particulars	01.04.2012 Amount (Rs.)	31.03.2013 Amount (Rs.)
Machinery	70,000	70,000
Furniture	10,000	20,000
Stock	36,000	42,000
Sundry debtors	72,200	88,400
Cash in hand	3,000	4,100
Cash at bank	42,000	52,300
Sundry creditors	54,500	60,400

Addition information:
(1) Mr. John had introduced Rs. 20,000 as additional capital on

1^{s t}

October, 2012.
(2) Mr. John had withdrawn Rs. 15,000 for his personal use during the year.
(3) Additions to furniture were made on

1^{s t}

October, 2012.
(4) Deprecate machinery at 10% p.a. and further at 20% p.a.
Prepare:
(1) Opening and closing Statement of Affairs.
(2) Statement of Profit or Loss for the year ending on

31^{s t}

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