Question

On 1st April 2014, Mr, Ghosh started business with a capital of ₹ 5,00,000. He kept his books on single entry basis. Soon after he purchased furniture for ₹ 40,000 and purchased goods for ₹ 3,00,000. During the year he borrowed ₹ 1,00,000 from his brother and introduced further capital of his own amounting to ₹ 80,000.

On 31st March, 2015, there were sundry debtors amounting to ₹ 2,20,000 and creditors amounted to ₹ 1,40,000. Stock was valued at ₹ 4,50,000. Cash in hand ₹ 15,400 and Bank Overdraft ₹ 40,000

During the year Mr. Ghosh withdrew ₹ 2,000 per week for his family expenses. You are informed that included in sundry debtors is an irrecoverable amount of ₹ 5,000. He also took goods from the business for his personal use amounting to ₹ 4,000.
You are required to calculate his profit or loss during the year.

Answer 1

Statement of Affairs as on March …
Liabilities	Amount (Rs)	Assets		Amount (Rs)
Loan from Brother	1,00,000	Cash in Hand		15,400
Creditors	1,40,000	Furniture		40,000
Bank Overdraft	40,000	Sundry Debtors	2,20,000
Capital (Balancing Figure)	4,40,400	Less: Bad Debts	5,000	2,15,000
		Stock		4,50,000
	7,20,400			7,20,400

Statement of Profit or Loss for the year ended March 31, 2015
Particulars		Amount (Rs)
Capital at the end of the year		4,40,400
	Add: Drawings made during the year (2,000 × 52) + (4,000)	1,08,000
	Less: Additional capital introduced during the year	80,000
Adjusted capital at the end of the year		4,68,400
	Less: Capital in the beginning of the year	5,00,000
Loss incurred during the year		31,600