Question

Question : Mr Muneesh maintains his books of accounts from incomplete records. His books provide the information.

Items	Jan 1, 2005	Dec 31, 2005
Cash	$1,200$	$1,600$
Bills receivable	-------	$2,400$
Debtors	$16,800$	$27,200$
Stock	$22,400$	$24,400$
Investment	-----	$8,000$
Furniture	$7,500$	$8,000$
Creditors	$14,000$	$15,200$

He withdrew Rs$300$ per month for personal expenses. He sold his investment of Rs $16,000$ at $2\%$ premium and introduced that amount into business.

Answer 1

Answer :
Statement of Affairs
as on 1st January, 2005

Liabilities	Amt.(Rs)	Assets	Amt.(Rs)
Creditors	$14,000$	Cash	$1,200$
Capital (Balancing Figure)	$33,900$	Debtors	$16,800$
		Stock	$22,400$
		Furniture	$7,500$
	$47,900$		$47,900$

Statement of Affairs
as on 31st December, 2005

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$15,200$	Cash	$1,600$
Capital (Balancing Figure)	$56,400$	Bills Receivable	$2,400$
		Debtors	$27,200$
		Stock	$24,400$
		Investment	$8,000$
		Furniture	$8,000$
	$71,600$		$71,600$

Statement Showing Profit or Loss during the Year

Particulars	Amt. (Rs)
Capital at the end of the year as on 31st December 2005	$56,400$
(+) Drawings during the year (300 x12)	$3,600$
(-) Additional Capital Introduced during the yeat	$60,000$ $16,320$
(-) Capital at the Beginning of the year on 1st January 2005	$43,680$ $33,900$
Profit during the year 2005	$9780$

Working Note : Additional Capital Introduced during the year
$16,000+2\%=Rs.16,320$
Because Investment were sold at $2\%$ Profit and then Introduced.