Mr. John has acquired a floor of a building having 3 halls for Rs 1,500 per month. He uses two halls for his business and one for personal purpose. According to the business entity concept how much rent shall be recorded in the books?

Rs 1000

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Rs 1500

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Rs 500

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Nil

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Solution

The correct option is A Rs 1000
According to the business entity concept, rent of two halls used for his business i.e. Rs 1000 shall be recorded in the books.

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He withdrew from the business ₹ 1,500 per month for his personal use and ₹ 8,000 for giving a personal loan to his brother. He also used a house for his personal purposes, the rent of which at the rate of ₹ 900 per month and electricity charges at an average rate of ₹ 250 per month were paid from the business account.
He had received a lottery prize of ₹ 25,000, out of which he invested half the amount in business.
He has not paid two months' salary to his clerk @ ₹ 1,200 per month, but insurance premium @ ₹ 600 per annum was paid on 1st October, 2016 to run for one year.
Loan from X was taken on 1st July, 2016 on which interest was unpaid @ 18% p.a.
Fixed assets are to be depreciated @ 10% p.a.

X tells you that his capital on 31st December 2016 is Rs 1,87,000 and his capital on 1st January 2016 was Rs 1,92,000. He further informs you that during the year, he gave a loan of Rs 35,000 to his brother on private account and withdrew Rs 3,000 per month for personal purposes, he also used a flat for his personal purposes, the rent of which at the rate of Rs 1,000 per month and electricity charges at an average rate of Rs 100 per month were paid from the business acount. During the year , he sold his $7 %$ government bonds of Rs 20,000 at $2 %$ premium and brought that money into the business. Besides this , there is no other information.

You are required to prepare a statement of profit.

Mr. Ram has a business of selling shoes. He bought goods worth Rs 50,000 on credit from Mr. Ajay. Also, he borrowed a sum of Rs 1,00,000 from his friend Mr.Shyam. What would be the amount of creditors which wil be recorded in his books?

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Mr. John has acquired a floor of a building having 3 halls for Rs 1,500 per month. He uses two halls for his business and one for personal purpose. According to the business entity concept how much rent shall be recorded in the books?

The correct option is A Rs 1000According to the business entity concept, rent of two halls used for his business i.e. Rs 1000 shall be recorded in the books.

The correct option is A Rs 1000
According to the business entity concept, rent of two halls used for his business i.e. Rs 1000 shall be recorded in the books.