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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.


Solution

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
   

Accountancy
DK Goel (2019)
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