Question

PRACTICAL PROBLEMS

Mahendra Keeps his books by Single Entry System. His position on 1^st April 2012, was as follows : Cash in Hand Rs 7,900, Cash at Bank Rs 20,000, Debtors Rs 18,000. Stock Rs 29,000, Motor Car Rs 5,000, Bank Loan Rs 18,000 and Outstanding Expenses Rs 2,700.
On 1^st October, 2012 Mahendra introduced Rs 10,000 as further capital in the business and withdrew on the same date Rs 7,000 out of which he spent Rs 5,000 on the purchase of a Machinery for the business.
On 31^st March 2013 his position was as follows: Cash in Hand Rs 7,600, Cash at Bank Rs 22,000, Stock Rs 30,000 Debtors Rs 25,700, Furniture Rs 6,000, Creditors Rs 25,200, and prepaid expenses Rs 200.
Prepare a Statement showing the Profit or Loss made by him during the year ended 31^st March, 2013 and Opening and Closing Statement of affairs. Considered the following adjustments also.
1) Depreciate Motor Car and Furniture @ 10% p.a. Furniture was purchased on 1^st Oct., 2012.
2) Provide Rs 1,200 for Bad debts and provide 5% R.D.D.
3) Goods taken for personal use by Mahendra amounting to Rs 1,500
4) Provide interest on capital @ 10% p.a.

Answer 1

Statement of Affairs as on Apr.01,2012
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Bank Loan	18,000	Cash in Hand	7,900
Outstanding Expenses	2,700	Cash at Bank	20,000
Capital (Balancing Figure)	59,200	Debtors	18,000
		Stock	29,000
		Motor Car	5,000
	79,900		79,900

Statement of Affairs as on March 31,2013
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	25,200	Cash in Hand	7,600
Capital (Balancing Figure)	71,300	Cash at Bank	22,000
		Stock	30,000
		Debtors	25,700
		Furniture	6,000
		Prepaid Expenses	200
		Machinery	5,000
	96,500		96,500

Statement of Profit or Loss for the year ended March 31,2013
Particulars	Amount (Rs)
Capital at the end of the year	71,300
Add: Drawings made during the year	3,500
Less: Additional capital introduced during the year	(10,000)
Adjusted capital at the end of the year	64,800
Less: Capital in the beginning of the year	(59,200)
	5,600
Less: Depreciation on( Rs 500 on Motor Car+Rs 300 on Furniture)	(800)
Bad-Debts	(1,200)
	(1,225)
Interest on Capital	(6,420)
Loss for the year	(4,045)

Working Notes:

Calculation of Interest on Capital: