Question

Manveer started his business on January 01, 2005 with a capital of Rs. 4,50,000. On December 31, 2005, his position was as under

$\begin{array}{cc}\text{Items}& (Rs.)\\ \text{Cash}& 99,000\\ \text{Bills Receivable}& 75,000\\ \text{Plant}& 48,000\\ \text{Land and Building}& 1,80,000\\ \text{Furniture}& 50,000\end{array}$

He owed Rs. 45,000 from his friend Susheel on that date. He withdrew Rs. 8,000 per month for his household purposes. Ascertain his profit or loss for this year ended December 31, 2005.

Answer 1

Statement of Affairs

as on 31st December, 2005

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Loan from Susheel}& 45,000& \text{Cash}& 99,000\\ \text{Capital}& & \text{Bills Receivable}& 75,000\\ \text{(Balancing Figure)}& 4,07,000& \text{Plant}& 48,000\\ & & \text{Land and Furniture}& 1,80,000\\ & & \text{Furniture}& 50,000\\ & \underset{–}{\underset{–}{\overline{4,52,000}}}& & \underset{–}{\underset{–}{\overline{4,52,000}}}\end{array}$

Statement of Profit and Loss

for the year ended on 31st December, 2005

$\begin{array}{cc}\text{Particulars}& \text{Amt.(Rs.)}\\ \text{Capital at the end of the year 31st December, 2005}& 4,07,000\\ (+)\text{Drawings during the year}(8,000\times 12)& \underset{–}{96,000}\\ & 5,03,000\\ (-)\text{Capital at the Beginning of the year 1st Jan, 2005}& \underset{–}{4,50,000}\\ \text{Profit made during the year}& \underset{–}{\underset{–}{53,000}}\end{array}$