Question

The following information is available from Sachin, who maintains books of accounts on single entry system:

			1st April, 2016 (₹)	31st March, 2017 (₹)
Cash and Bank			20,000	21,000
Sundry Debtors			17,000	25,000
Stock			40,000	60,000
Furniture			29,000	29,000
Sundry Creditors			32,000	22,000
10% Loan from Mrs. Sachin			30,000	30,000

Sachin withdrew ₹ 5,000 from the business every month for meeting his household expenses. During the year, he sold investments held by him privately for ₹ 35,000 and invested the amount in his business.
At the end of the year 2016-17, it was found that full year's interest on loan from Mrs. Sachin had not been paid. Depreciation @ 10% per annum was to be provided on furniture for the full year. Shop assistant was to be given a share of 5% on the profits ascertained before charging such share.
Calculate profit earned during the year ended 31st March, 2017 by Sachin.

Answer 1

Statement of Affairs as on April 01, 2016
Liabilities	Amount (Rs)	Assets	Amount (Rs)
10% Loan from Mrs. Sachin	30,000	Cash and Bank	20,000
Creditors	32,000	Debtors	17,000
Capital (Balancing Figure)	44,000	Stock	40,000
		Furniture	29,000
	1,06,000		1,06,000

Statement of Affairs as on March 31, 2017
Liabilities	Amount (Rs)	Assets	Amount (Rs)
10% Loan from Mrs. Sachin	30,000	Cash at Bank	21,000
Creditors	22,000	Debtors	25,000
Capital (Balancing Figure)	83,000	Stock	60,000
		Furniture	29,000
	1,35,000		1,35,000

Statement of Profit or Loss for the year ended March 31, 2017
Particulars		Amount (Rs)
Capital at the end of the year		83,000
	Add: Drawings made during the year (5,000 × 12)	60,000
	Less: Additional capital introduced during the year	35,000
Adjusted capital at the end of the year		1,08,000
	Less: Capital in the beginning of the year	44,000
Profit Before Adjustment		64,000
	Less: Depreciation on Furniture	2,900
	Less: Outstanding Interest on Loan	3,000
		58,100
	Less: Shop Assistant’s Share (58,100 × 5/100)	2,905
Profit made during the year		55,195

Statement of Affairs as on March 31,2017
Liabilities			Amount (Rs)	Assets		Amount (Rs)
Opening Capital	44,000			Cash at Bank		21,000
Add: Net Profit	55,195			Debtors		25,000
Add: Additional Capital Introduced	35,000			Stock		60,000
Less: Drawings	60,000		74,195	Furniture	29,000
Creditors			22,000	Less: Depreciation	2,900	26,100
Shop’s Assistant Share			2,905
10% Loan from Sachin		30,000
Add: Outstanding Interest		3,000	33,000
			1,32,100			1,32,100