Question

Suchitra started a business on 1st April, 2013 with a Capital of ₹ 50,00,000. On 31st March, 2014 her total Assets were ₹ 60,00,000 and Creditors were 3,00,000. She withdrew during the year for her personal expenses ₹ 10,000 per month upto 30th June, 2013 and thereafter ₹ 15,000 per month upto 31st March, 2014. During the year she sold her personal investments of ₹ 80,000 at 5% loss and introduced that amount in the business.
You are required to prepare a Statement of Profit or Loss for the year ending 31st March, 2014.

Answer 1

Statement of Profit or Loss for the year ended March 31, 2014
Particulars		Amount (Rs)
Capital at the end of the year (60,00,000 – 3,00,000)		57,00,000
	Add: Drawings made during the year (10,000 × 3 + 15,000 × 9)	1,65,000
	Less: Additional capital introduced during the year (WN)	76,000
Adjusted capital at the end of the year		57,89,000
	Less: Capital in the beginning of the year	50,00,000
Profit made during the year		7,89,000

Working Note: Calculation of additional capital introduced during the year

$\begin{array}{l}\text{Value of Investments = 80,000}\\ \text{Loss = 80,000}\times 5\text{\% =}\underset{\_}{\text{4,000}}\\ \text{Sale Value of Investments = Rs 76,000}\left(\text{Aditional Capital}\right)\end{array}$