Question

Question : Mrs Bhavana keeps his books by Single Entry System. You're required to prepare final accounts of her business for the year ended December 31, 2005. Her records relating to cash receipts and cash payments for the above period showed the following particulars.
Summary of Cash

Receipts	Amt. (Rs)	Payments	Amt. (Rs)
Opening balance of cash	$12,000$	Paid to creditors	$53,000$
Further capital	$20,000$	Business expenses	$12,000$
Received from debtors	$1,20,000$	Wage paid	$30,000$
		Bhavana's drawings	$15,000$
		Balance at bank on Dec 31 2005	$35,000$
		Cash in hand	$7,000$
	$1,52,000$		$1,52,000$

The following information is also available

Items	Jan 1, 2005 (Rs)	Dec 31, 2005 (Rs)
Debtors	$55,000$	$85,000$
Creditors	$22,000$	$29,000$
Stock	$35,000$	$70,000$
Plant	$1,00,000$	$1,00,000$
Machinery	$50,000$	$50,000$
Land and Building	$2,50,000$	$2,50,000$
Investment	$20,000$	$20,000$

All her sales and purchases were on credit. Provide depreciation on plant and building by $10\%$ and machinery by $5\%$. Make a provision for bad debts by $5\%$.

Answer 1

Answer : In the above question three things are missing i.e., Total sales (credit), Total purchase and Capital employed Hence, first of all we have to get these figure than only financial statements will be prepared.
Dr Debtor's Account Cr

Date	Particulars	JF	Amt.(Rs)	Date	Particulars	JF	Amt.(Rs)
2005 Jan 1	To Balance b/d		$55,000$	2005 Dec 31	By Cash A/c		$1,20,000$
	To Sales (Credit) (Balancing Figure)		$1,50,000$		By Balance b.d		$85,000$
			$2,05,000$				$2,05,000$

Dr Creditor's Account Cr

Date	Particulars	JF	Amt.(Rs)	Date	Particulars	JF	Amt. (Rs)
2005	To Cash A/c		$53,000$	2005 Jan 1	By Balance b/d		$22,000$
	To Balance c/d		$29,000$		By Purchase (credit)		$60,000$
			$82,000$				$82,000$

Statements of Affairs
as on 31st December, 2005

Liabilities	Amt. (Rs)	Assets	Amt. (Rs)
Creditors	$22,000$	Debtors	$55,000$
Capitals at the Beginning (Balancing figure)	$5,00,000$	Stock	$35,000$
		Plant	$1,00,000$
		Machinery	$50,000$
		Land and Building	$2,50,000$
		Investment	$20,000$
		Cash	$12,000$
	$5,22,000$		$5,22,000$

Trading and Profit and Loss Account
as on 31st December, 2005

Particulars	Amt. (Rs)	Particulars	Amt. (Rs)
To Opening Stock	$35,000$	By Sales	$1,50,000$
To Purchase	$60,000$	By Closing Stock	$70,000$
To Wages	$30,000$
To Gross Profit c/d (Balancing Figure)	$95,000$
	$2,20,000$		$2,20,000$
To Business Expenses	$12,000$	By Gross Profit b/d	$95,000$
To Provision for Doubtful Debts	$4,250$

Particulars	Amt.(Rs)	Particulars	Amt.(Rs)
To Depreciation On Plant $10,000$ On Building $25,000$ On Machinery $2,500$	$37,500$
To Net Profit (Balancing Figure)	$41,250$
	$95,000$		$95,000$

Balance Sheet
as on 31st December, 2005

Liabilities	Amt.(Rs)	Assets	Amt.(Rs)
Capital $5,00,000$ (+) Net Profit $41,250$ $5,41,250 (+) Further Capital $20,000$ $5,61,250$ (-) Drawings $15,000$	$5,46,250$	Cash in Hand	$7,000$
Creditors	$29,000$	Cash at Bank	$35,000$
		Investment	$20,000$
		Debtors $85,000$ (-) Provision @ $5\%$ $4,250	$80,750$
		Plant $1,00,000$ (-) Depreciation @ $10\%$ $10,000$	$90,000$
		Machinery $50,000$ (-) Depreciation @ $5\%$ $2,500$	$47,500$
		Land and Building $2,50,000$ (-) Depreciation @ $10\%$ $25,000$	$2,25,000$
		Stock (Closing)	$70,000$
	$5,75,250$		$5,75,250$