Question

Mr. Arnav does not keep proper records of his business. He provided following information.You are required to prepare a statement showing the profit or loss for the year.

$\begin{array}{cc}\text{Items}& \text{(Rs.)}\\ \text{Capital at the beginning of the year}& 15,00,000\\ \text{Bills receivable}& 60,000\\ \text{Cash in hand}& 80,000\\ \text{Furniture}& 9,00,000\\ \text{Building}& 10,00,000\\ \text{Creditors}& 6,00,000\\ \text{Stock in trade}& 2,00,000\\ \text{Further capital introduced}& 3,20,000\\ \text{Drawings made during the period}& 80,000\end{array}$

Ascertainment of statement of affairs at the end of the year and calculation of profit and loss.

Answer 1

Statements of Affairs
at the end of the year

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Creditors}& 6,00,000& \text{Bills Receivables}& 60,000\\ \text{Capital (Balancing Figure)}& 16,40,000& \text{Cash in Hand}& 80,000\\ & & \text{Furniture}& 9,00,000\\ & & \text{Buidings}& 10,00,000\\ & & \text{Stock in Trade}& 2,00,000\\ & \overline{\underset{–}{\underset{–}{22,40,000}}}& & \overline{\underset{–}{\underset{–}{22,40,000}}}\end{array}$

Statement Showing Profit or Loss for the Year

$\begin{array}{cc}\text{Particulars}& \text{Amt. (Rs.)}\\ \text{Capital at the end of the year}& 16,40,000\\ (+)\text{Drawings during the year}& \underset{–}{80,000}\\ & 17,20,000\\ (-)\text{Capital introduced during the year}& \underset{–}{(3,20,000)}\\ & 14,00,000\\ (-)\text{Capital at the Beginning of the year}& \underset{–}{(15,00,000)}\\ \text{Loss during the year}& \underset{–}{\underset{–}{1,00,000}}\end{array}$