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 December 31, 2005.

$\begin{array}{ccc}\text{Items}& \text{Jan 1, 2005 (Rs.)}& \text{Dec 31, 2005 (Rs.)}\\ \text{Cash in hand}& 6,000& 24,000\\ \text{Bank Overdraft}& 30,000& \underset{–}{}\\ \text{Stock}& 50,000& 80,000\\ \text{Sundry Creditors}& 26,000& 40,000\\ \text{Sundry Debitors}& 60,000& 1,40,000\\ \text{Bills Payable}& 6,000& 12,000\\ \text{Furniture}& 40,000& 60,000\\ \text{Bills Receivable}& 8,000& 28,000\\ \text{Machinery}& 50,000& 1,00,000\\ \text{Investment}& 30,000& 80,000\end{array}$

Drawing Rs. 10,000 p.m. for personal use, fresh capital introduced during the year Rs. 2,00,000. Outstanding salary Rs. 2,400, prepaid insurance Rs. 700, depreciation charged on furniture and machinery @ 10% pa.

Answer 1

Statement of Affairs

as on 1st January, 2005

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Bank Overdraft}& 30,000& \text{Cash in Hand}& 6,000\\ \text{Sundry Creditors}& 26,000& \text{Stock}& 50,000\\ \text{Bills Payable}& 6,000& \text{Sundry Debtors}& 60,000\\ \text{Capital (Balancing Figure)}& 1,82,000& \text{Furniture}& 40,000\\ & & \text{Bills Receivables}& 8,000\\ & & \text{Machinery}& 50,000\\ & & \text{Investment}& 30,000\\ & \overline{\underset{–}{\underset{–}{2,44,000}}}& & \overline{\underset{–}{\underset{–}{2,44,000}}}\end{array}$

Statement of Affairs

as on 31st December, 2005

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Sundry Creditors}& 40,000& \text{Cash in Hand}& 24,000\\ \text{Bills Payable}& 12,000& \text{Stock}& 80,000\\ \text{Outstanding Salary}& 2,400& \text{Debtors}1,40,000& \\ \text{Capital (Balancing Figure)}& 4,33,400& (-)\text{Bad debts}2,000& \\ & & \overline{1,38,000}& \\ & & (-)\text{Provision}@5\%6,900& 1,31,100\\ & & \text{Furniture}\overline{60,000}& \\ & & (-)\text{Depreciation}\underset{–}{6,000}& 54,000\\ & & \text{Bills Receivables}& 28,000\\ & & \text{Machinery}1,00,000& \\ & & (-)\text{Depreciation @ 10\%}\underset{–}{10,000}& 90,000\\ & & \text{Investment}& 80,000\\ & & \text{Prepaid Insurance}& 700\\ & \overline{\underset{–}{\underset{–}{4,87,800}}}& & \overline{\underset{–}{\underset{–}{4,87,800}}}\end{array}$

Statement Showing Profit or Loss for the Year 2005

$\begin{array}{cc}\text{Particulars}& \text{Amt(Rs.)}\\ \text{Capital at the end of the year as on 31st December 2005}& 4,33,400\\ (+)\text{Drawings during the year}(10,000\times 12)& 1,20,000\\ & \overline{5,53,400}\\ (-)\text{Fresh capital introduced during the year}& (2,00,000)\\ & \overline{3,53,400}\\ (-)\text{Capital at the beginning of the year on 1st Jan 2005}& (1,82,000)\\ \text{Loss during the year 2005}& \overline{\underset{–}{\underset{–}{1,71,400}}}\end{array}$