Question

PRACTICAL PROBLEMS

Mr. Mangesh is dealing in business. He maintains his accounting with Single Entry. The following are details of his business.

Particulars	01-04-2012	31-03-2013
Land and Building	40,000	50,000
Machinery	30,000	40,000
Furniture	10,000	10,000
Debtors	20,000	40,000
Stock	10,000	25,000
Cash Balance	5,000	15,000
Bills Receivable	5,000	5,000
Creditors	25,000	25,000
Bank Overdraft	5,000	——
Bank Balance	——	10,000

Mr. Mangesh introduced Rs 10,000 as additional Capital. He spent Rs 45,000 for personal use Depreciate Land and Building by Rs 5,000. Provide 5% R.D.D. on Debtors.

Prepare: Opening Statement of affairs, Closing Statement of affairs and the statement of profit or loss.

Answer 1

Statement of Affairs as on April 01,2012
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	25,000	Cash in Hand	5,000
Bank Overdraft	5,000	Machinery	30,000
Capital (Balancing Figure)	90,000	Land and Building	40,000
		Furniture	10,000
		Debtors	20,000
		Stock	10,000
		Bills Receivable	5,000
		Prepaid Expenses
	1,20,000		1,20,000

Statement of Affairs as on March 31,2013
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	25,000	Cash Balance	15,000
Capital (Balancing Figure)	1,70,000	Bank Balance	10,000
		Machinery	40,000
		Land and Building	50,000
		Furniture	10,000
		Debtors	40,000
		Stock	25,000
		Bills Receivable	5,000
		Prepaid Expenses
	1,95,000		1,95,000

Statement of Profit or Loss for the year ended March 31,2013
Particulars	Amount (Rs)
Capital at the end of the year	1,70,000
Add: Drawings made during the year	45,000
Less: Additional capital introduced during the year	(10,000)
Adjusted capital at the end of the year	2,05,000
Less: Capital in the beginning of the year	(90,000)
	1,15,000
Less: Depreciation on Land and Building	(5,000)
Reserve for Doubtful Debts	(2,000)
Profit for the year	1,08,000

Working Notes: