1
Question
On April 1st, 2016, X started a business with ₹ 40,000 as his capital. On March 31st, 2017, his position was as follows:
(₹)
Creditors
30,000
Bills Payable
10,000
Bank
10,000
Debtors
50,000
Stock
40,000
Plant
68,000
Furniture
12,000
During the year 2016-17 X drew ₹ 24,000. On 1st October 2016, he introduced further capital amounting to ₹ 30,000. You are required to ascertain profit or loss made by him during the year 2016-17.
Adjustments:
(a) Plant is to be depreciated at 10%.
(b) A Provision of 5% is to be made against debtors.
Also prepare the Statement of Affairs as on March 31st 2017.
| (₹) | |||
| Creditors | 30,000 | ||
| Bills Payable | 10,000 | ||
| Bank | 10,000 | ||
| Debtors | 50,000 | ||
| Stock | 40,000 | ||
| Plant | 68,000 | ||
| Furniture | 12,000 | ||
During the year 2016-17 X drew ₹ 24,000. On 1st October 2016, he introduced further capital amounting to ₹ 30,000. You are required to ascertain profit or loss made by him during the year 2016-17.
Adjustments:
(a) Plant is to be depreciated at 10%.
(b) A Provision of 5% is to be made against debtors.
Also prepare the Statement of Affairs as on March 31st 2017.
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Solution
Statement of Affairs
as on March 31, 2017
Liabilities
Amount (Rs)
Assets
Amount (Rs)
Bills Payable
10,000
Bank
10,000
Creditors
30,000
Plant
68,000
Capital (Balancing Figure)
1,40,000
Stock
40,000
Debtors
50,000
Furniture
12,000
1,80,000
1,80,000
Statement of Profit or Loss
for the year ended March 31, 2017
Particulars
Amount
(Rs)
Capital at the end of the year
1,40,000
Add: Drawings made during the year
24,000
Less: Additional capital introduced during the year
30,000
Adjusted capital at the end of the year
1,34,000
Less: Capital in the beginning of the year
40,000
Profit Before Adjustment
94,000
Less: Depreciation on Plant
6,800
Less: Provision for Doubtful Debts
2,500
Profit made during the year
84,700
Final Statement of Affairs
as on March 31, 2017
Liabilities
Amount (Rs)
Assets
Amount (Rs)
Creditors
30,000
Bank
10,000
Opening Capital
40,000
Furniture
12,000
Add: Additional Capital
30,000
Stock
40,000
Add: Net Profit
84,700
Debtors
50,000
Less: Drawings
24,000
1,30,700
Less: Provision for Bad Debts
2,500
47,500
Bills Payable
10,000
Plant
68,000
Less: Depreciation
6,800
61,200
1,70,700
1,70,700
|
Statement of Affairs
as on March 31, 2017
|
|||
| Liabilities | Amount (Rs) | Assets | Amount (Rs) |
| Bills Payable | 10,000 | Bank | 10,000 |
| Creditors | 30,000 | Plant | 68,000 |
| Capital (Balancing Figure) | 1,40,000 | Stock | 40,000 |
| Debtors | 50,000 | ||
| Furniture | 12,000 | ||
| 1,80,000 | 1,80,000 | ||
|
Statement of Profit or Loss
for the year ended March 31, 2017
|
||
| Particulars | Amount (Rs) |
|
| Capital at the end of the year | 1,40,000 | |
| Add: Drawings made during the year | 24,000 | |
| Less: Additional capital introduced during the year | 30,000 | |
| Adjusted capital at the end of the year | 1,34,000 | |
| Less: Capital in the beginning of the year | 40,000 | |
| Profit Before Adjustment | 94,000 | |
| Less: Depreciation on Plant | 6,800 | |
| Less: Provision for Doubtful Debts | 2,500 | |
| Profit made during the year | 84,700 | |
|
Final Statement of Affairs
as on March 31, 2017
|
||||||
| Liabilities | Amount (Rs) | Assets | Amount (Rs) | |||
| Creditors | 30,000 | Bank | 10,000 | |||
| Opening Capital | 40,000 | Furniture | 12,000 | |||
|
Add: Additional Capital
|
30,000 | Stock | 40,000 | |||
|
Add: Net Profit
|
84,700 | Debtors | 50,000 | |||
|
Less: Drawings
|
24,000 | 1,30,700 |
Less: Provision for Bad Debts
|
2,500 | 47,500 | |
| Bills Payable | 10,000 | Plant | 68,000 | |||
|
Less: Depreciation
|
6,800 | 61,200 | ||||
| 1,70,700 | 1,70,700 | |||||
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