Question

Miss Priyanka runs a small bakery business. On 1st April, 2015 she had started the business with a capital of Rs. 78,000. On 31st March, 2016 her incomplete records provide the following data

(i) Amount due to suppliers of raw materials Rs. 17,500.

(ii) Stock of raw materials Rs. 2,000 and finished products Rs. 2,500.

(iii) Fixed assets Rs. 34,000.

(iv) Amount due from customers Rs. 42,000.

(v) She had withdrawn Rs. 2,500 per month for meeting her personal expenses.

(vi) She had introduced Rs. 7,000 as capital during the year.

(vii) She has cash at bank Rs. 21,000 and cash in hand Rs. 1,800.

(viii) Outstanding electricity bill Rs. 2,250

Calculate the profit / loss of her business during the year using statement of affairs method.

Answer 1

$\text{Statement of Affairs}\text{as at 31st March, 2016}\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Creditors (Suppliers)}& 17,500& \text{Stock}& \\ \text{Outstanding Electricity Bill}& 2,250& \text{Raw Materials}2,000& \\ \text{Capital(Balancing Figure )}& 83,550& \text{Finished Products}\underset{–}{2,500}& 4,500\\ & & \text{Fixed Assets}& 34,000\\ & & \text{Debtors (Customers)}& 42,000\\ & & \text{Cash at Bank}& 21,000\\ & & \text{Cash in Hand}& 1,800\\ & \overline{\underset{–}{\underset{–}{1,03,300}}}& & \overline{\underset{–}{\underset{–}{1,03,300}}}\end{array}$

$\text{Statement Showing Profit or Loss}\text{for year ended 31st March, 2016}\begin{array}{cc}\text{Particulars}& \text{Amt. (Rs.)}\\ \text{Capital at the End of the Year}& 83,550\\ \text{(+)Drawings(Rs}2,500\times 12)& 30,000\\ & \overline{1,13,550}\\ \text{(-)Fresh Capital Introduced}& 7,000\\ \text{Adjusted Capital at the End}& \overline{1,06,550}\\ \text{(-) Capital in the Beginning}& 78,000\\ \text{Profit for the Period}& \overline{\underset{–}{\underset{–}{28,550}}}\end{array}$