Question

X who keeps incomplete records, gives you the following information:

ASSETS AND LIABILITIES

			1st April, 2016	31st March, 2017
			₹	₹
Stock in hand			18,700	20,400
Debtors			12,000	14,000
Creditors			9,000	1,500
Bills Receivable			4,000	5,000
Bills Payable			1,000	200
Furniture			600	600
Building			12,000	12,000
Bank Balance			4,350	3,350
				(Overdraft)

You are also given the following information:
(i) A provision of ₹ 1,450 is required for bad and doubtful debts.
(ii) Depreciation @ 5% is to be written off on Building and furniture.
(iii) Wages outstanding ₹ 3,000; salaries outstanding ₹ 1,200.
(iv) Insurance has been prepaid to the extent of ₹ 250.
(v) Legal Expenses outstanding ₹ 700.
(vi) Drawings of Mr. X during the year were ₹ 7,520.
Prepare a statement of Profit as on 31st March, 2017, and a final statement of affairs as at that date.

Answer 1

Statement of Affairs as on March 31, 2016
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Bills Payable	1,000	Cash at Bank	4,350
Creditors	9,000	Stock	18,700
Capital (Balancing Figure)	41,650	Debtors	12,000
		Bills Receivable	4,000
		Furniture	600
		Building	12,000
	51,650		51,650

Statement of Affairs as on March 31, 2017
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Bills Payable	200	Stock	20,400
Creditors	1,500	Debtors	14,000
Bank Overdraft	3,350	Bills Receivable	5,000
Capital (Balancing Figure)	46,950	Furniture	600
		Building	12,000
	52,000		52,000

Statement of Profit or Loss for the year ended March 31, 2017
Particulars		Amount (Rs)
Capital at the end of the year		46,950
	Add: Drawings made during the year	7,520
	Less: Additional capital introduced during the year
Adjusted capital at the end of the year		54,470
	Less: Capital in the beginning of the year	41,650
Profit Before Adjustment		12,820
	Less: Depreciation on Furniture	30
	Less: Depreciation on Building	600
	Less: Provision for Doubtful Debts	1,450
	Less: Outstanding Wages	3,000
	Less: Outstanding Salaries	1,200
	Less: Outstanding Legal Expenses	00
	Add: Prepaid Insurance	250
Profit made during the year		6,090

Final Statement of Affairs as on March 31, 2017
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Creditors		1,500	Prepaid Insurance		250
Opening Capital	41,650		Bills Receivable		5,000
Add: Net Profit	6,090		Stock		20,400
Less: Drawings	7,520	40,220	Furniture	600
Outstanding Wages		3,000	Less: Depreciation	30	570
Outstanding Salaries		1,200	Debtors	14,000
Bills Payable		200	Less: Provision for Bad Debts	1,450	12,550
Bank Overdraft		3,350	Building	12,000
Outstanding Legal Expenses		700	Less: Depreciation	600	11,400
		50,170			50,170