Question

Mr. Muneesh maintains his books of accounts from incomplete records.
His books provides the information

$\begin{array}{ccc}\text{Items}& \text{Jan 1, 2005}& \text{Dec 31, 2005}\\ \text{Cash}& 1,200& 1,600\\ \text{Bills Receivable}& \underset{–}{}& 2,400\\ \text{Debtors}& 16,800& 27,200\\ \text{Stock}& 22,400& 24,400\\ \text{Investment}& \underset{–}{}& 8,000\\ \text{Furniture}& 7,500& 8,000\\ \text{Creditors}& 14,000& 15,200\end{array}$

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

Statement of Affairs

as on 1st January, 2005

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Creditors}& 14,000& \text{Cash}& 1,200\\ \text{Capital (Balancing Figure)}& 33,900& \text{Debtors}& 16,800\\ & & \text{Stock}& 22,400\\ & & \text{Furniture}& 7,500\\ & \underset{–}{\underset{–}{\overline{47,900}}}& & \underset{–}{\underset{–}{\overline{47,900}}}\end{array}$

Statement of Affairs

as on 31st December, 2005

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Creditors}& 15,200& \text{Cash}& 1,600\\ \text{Capital (Balancing Figure)}& 56,400& \text{Bills Receivable}& 2,400\\ & & \text{Debtors}& 27,200\\ & & \text{Stock}& 24,400\\ & & \text{Investment}& 8,000\\ & & \text{Furniture}& 8,000\\ & \overline{\underset{–}{\underset{–}{71,600}}}& & \overline{\underset{–}{\underset{–}{71,600}}}\end{array}$

Statement Showing Profit or Loss for the Year $\begin{array}{cc}\text{Particulars}& \text{Amt. (Rs.)}\\ \text{Capital at the end of the year on 31st December 2005}& 56,400\\ (+)\text{Drawings during the year}(300\times 12)& \underset{–}{3,600}\\ & 60,000\\ (-)\text{Additional Capital introduced during the year}& \underset{–}{(16,320)}\\ & 43,680\\ (-)\text{Capital at the Beginning of the year 1st January,2005}& \underset{–}{(33,900)}\\ \text{Profit during the year 2005}& \underset{–}{\underset{–}{9,780}}\end{array}$

Note:
Additional Capital Introduced during the year

= Rs. $16,000+2\%=Rs.16,320$

Because Investment were sold at 2% profit and then introduced.