Question

Question : Mr Akshat keep his books on incomplete records following information is given below

Items	April 1, 2004	March 31, 2005
Cash in hand	$1,000$	$1,500$
Cash at bank	$15,000$	$10,000$
Stock	$1,00,000$	$95,000$
Debtors	$42,500$	$70,000$
Business premises	$75,000$	$1,35,000$
Furniture	$9,000$	$7,500$
Creditors	$66,000$	$87,000$
Bills payable	$44,000$	$58,000$

During the year he withdrew Rs $45,000$ and introduced Rs $25,000$ as further capital in the business compute the profit or loss of the business.

Answer 1

Answer :
Note : In the above case opening and closing balance of capital is not given. Hence we have to prepare statement of affair, at the beginning and end of the year
Statement of Affairs
as on 1st April, 2004

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$66,000$	Cash in Hand	$1,000$
Bills Payable	$44,000$	Cash at Bank	$15,000$
Capital (b/f)	$1,32,500$	Stock	$1,00,000$
		Debtors	$42,500$
		Business Premises
		Furniture	$9,000$
	$2,42,500$		$2,42,500$

Statement of Affairs
as on 31st March, 2005

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$87,000$	Cash in Hand	$1,500$
Bills Payable	$58,000$	Cash at Bank	$10,000$
Capital (b/f)	$1,74,000$	Stock	$95,000$
		Debtors	$70,000$
		Business Premises	$1,35,000$
		Furniture	$7,500$
	$3,19,000$		$3,19,000$

Statement Showing Profit or Loss for the Year 2005

Particulars	Amt. (Rs)
Capital at the end of the year as on 31st March 2005	$1,74,000$
(+) Drawings during the year	$45,000$
(-) Additional Capital Introduced	$2,19,000$ $25,000$ = $1,94,000$
(-) Capital at the beginning of the year as on 1st April 2004	$1,32,500$

Profit earned during the year $61,500$