Illustrations - Accounts from Incomplete Records (Single Entry System) Notes | Study Crash Course of Accountancy - Class 11 - Commerce

 Page 1


          
                                                       
 
 
 
 
FORMAT OF STATEMENT OF PROFIT & LOSS  
STATEMENT OF PROFIT & LOSS for the year ending on ------ 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings / withdrawls 
Less additional / fresh capital 
 
Profit or loss made during the year ####### 
 
FORMAT OF STATEMENT OF AFFAIRS ( SIMILAR TO THE BALANCE SHEET)  
STATEMENT OF AFFAIRS as on …. 
Liabilties  Amount Assets  Amount 
Bank overdraft 
Bills payables 
Credtiors 
Outstanding expenses 
Unearned incomes  
Capital ( total assets – total liabilties ) 
 
 
 
 
 
########## 
Cash in hand 
Cash at bank 
Debtors 
Bills receivables 
Stock 
Prepaid expenses 
Accrued incomes 
Fixed assets 
 
 
 
 Total liabilties  Total assets 
 
Theory 
ILLUS 1 
From the following information, calculate capital at the beginning of bani- 
Capital at the end of the year        Rs.24,00,000 
Drawing Made during the year : Rs. 10,000 per month  
Fresh Capital introduced during the year     Rs. 4,00,000  
Profit of the current year       Rs.6,60,000 
SOLUTION – 
Profit = Closing capital - opening capital +drawings / withdrawls - additional / fresh capital 
Rs.6,60,000 = Rs.24,00,000 - opening capital + 1,20,000 - Rs. 4,40,000  
opening capital = Rs.24,00,000+ 1,20,000 - Rs. 4,00,000 - Rs.6,60,000 
  = Rs. 14,60,000 
 
 
QUES 1. A Calculate Closing Capital :  
Opening Capital Rs.70,000; 
 Profit for the year Rs.20,000;  
Drawings Rs.7,000.  
During the year proprietor sold ornaments of his wife for Rs. 20,000 and invested the same in business?  
SOLUTION – 
 
 
 
 
 
 
 
Ques 1.  B  From the following information, calculate capital at the beginning 
Capital at the end of the year        Rs.6,00,000 
  Drawings made during the year         Rs.75,000 
Fresh Capital introduced during the year       Rs.2,10,000 
Profit of the current year        Rs.1,40,000 
Page 2


          
                                                       
 
 
 
 
FORMAT OF STATEMENT OF PROFIT & LOSS  
STATEMENT OF PROFIT & LOSS for the year ending on ------ 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings / withdrawls 
Less additional / fresh capital 
 
Profit or loss made during the year ####### 
 
FORMAT OF STATEMENT OF AFFAIRS ( SIMILAR TO THE BALANCE SHEET)  
STATEMENT OF AFFAIRS as on …. 
Liabilties  Amount Assets  Amount 
Bank overdraft 
Bills payables 
Credtiors 
Outstanding expenses 
Unearned incomes  
Capital ( total assets – total liabilties ) 
 
 
 
 
 
########## 
Cash in hand 
Cash at bank 
Debtors 
Bills receivables 
Stock 
Prepaid expenses 
Accrued incomes 
Fixed assets 
 
 
 
 Total liabilties  Total assets 
 
Theory 
ILLUS 1 
From the following information, calculate capital at the beginning of bani- 
Capital at the end of the year        Rs.24,00,000 
Drawing Made during the year : Rs. 10,000 per month  
Fresh Capital introduced during the year     Rs. 4,00,000  
Profit of the current year       Rs.6,60,000 
SOLUTION – 
Profit = Closing capital - opening capital +drawings / withdrawls - additional / fresh capital 
Rs.6,60,000 = Rs.24,00,000 - opening capital + 1,20,000 - Rs. 4,40,000  
opening capital = Rs.24,00,000+ 1,20,000 - Rs. 4,00,000 - Rs.6,60,000 
  = Rs. 14,60,000 
 
 
QUES 1. A Calculate Closing Capital :  
Opening Capital Rs.70,000; 
 Profit for the year Rs.20,000;  
Drawings Rs.7,000.  
During the year proprietor sold ornaments of his wife for Rs. 20,000 and invested the same in business?  
SOLUTION – 
 
 
 
 
 
 
 
Ques 1.  B  From the following information, calculate capital at the beginning 
Capital at the end of the year        Rs.6,00,000 
  Drawings made during the year         Rs.75,000 
Fresh Capital introduced during the year       Rs.2,10,000 
Profit of the current year        Rs.1,40,000 
          
                                                       
 
SOLUTION – 
 
 
 
 
 
ILLUS  2. 
Sumitra started a business on 1st April, 2013 with a Capital of Rs.50,00,000.  
On 31st March, 2014 her total Assets were Rs.60,00,000 and Creditors were Rs.3,00,000. She withdrew during the 
year for her personal expenses Rs.10,000 per month upto 30th June, 2013 and thereafter Rs. 5,000 per month upto 
31st March, 2014. During the year she sold her personal investments of Rs.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 31 st March, 2014. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2014 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings                  Rs. 10000 X 3 = Rs. 30,000 
                                           Rs. 5000 X 9 = Rs. 45,000 
Less additional capital   Rs.80000- Rs.4,000( 5 % of Rs.80,000) 
57,00,000 
(50,00,000) 
 
75,000 
(76,000) 
Profit or loss made during the year 7,89,000 
STATEMENT OF AFFAIRS as on 31/03/2014 
Liabilties  Amount Assets  Amount 
Creditors 
Capital ( 60,00,000 – 3,00,000) 
3,00,000 
57,00,000 
total Assets 60,00,000 
 60,00,000  60,00,000 
 
Ques . 2  Hukam started a business with a capital of Rs.4,00,000. At the end of the year his total assets were  
Rs.10,00,000 and extemalliabilities were for Rs.4,50,000. He further informs you that during the year he 
withdrew Rs.50,000 for household use. During the year he sold his personal investments of Rs. 50,000 at 20% 
profit and brought that money into the business as additional capital. 
You are required to prepare a Statement of Profit or Loss for the year. 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
  
 
Profit or loss made during the year  
STATEMENT OF AFFAIRS as on  
Liabilties  Amount Assets  Amount 
 
 
   
    
Illus 3 
On 1st April 2015, Mr. Gabar started business with a capital of Rs.5,00,000. He kept his books on single entry 
basis. Soon after he purchased furniture for 40,000 and purchased goods for Rs.3,00,000. During the year he 
borrowed Rs. 1,00,000 from his brother and introduced further capital of his own amounting to Rs.80,000 . 
On 31st March, 2016, there were sundry debtors amounting to Rs.2,20,000 and creditors amounted to Rs. 
1,40,000. Stock was valued at Rs.4,50,000. Cash in hand Rs.15400 and Bank Overdraft Rs.40,000.  
During the year Mr. Gabar withdrew Rs.2,000 per week for his family expenses.  
You are informed that included in sundry debtors is an irrecoverable amount of Rs.5,000. He also took goods 
from the business for his personal use amounting to Rs.4,000.  
You are required to calculate his profit or loss during the year. 
Page 3


          
                                                       
 
 
 
 
FORMAT OF STATEMENT OF PROFIT & LOSS  
STATEMENT OF PROFIT & LOSS for the year ending on ------ 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings / withdrawls 
Less additional / fresh capital 
 
Profit or loss made during the year ####### 
 
FORMAT OF STATEMENT OF AFFAIRS ( SIMILAR TO THE BALANCE SHEET)  
STATEMENT OF AFFAIRS as on …. 
Liabilties  Amount Assets  Amount 
Bank overdraft 
Bills payables 
Credtiors 
Outstanding expenses 
Unearned incomes  
Capital ( total assets – total liabilties ) 
 
 
 
 
 
########## 
Cash in hand 
Cash at bank 
Debtors 
Bills receivables 
Stock 
Prepaid expenses 
Accrued incomes 
Fixed assets 
 
 
 
 Total liabilties  Total assets 
 
Theory 
ILLUS 1 
From the following information, calculate capital at the beginning of bani- 
Capital at the end of the year        Rs.24,00,000 
Drawing Made during the year : Rs. 10,000 per month  
Fresh Capital introduced during the year     Rs. 4,00,000  
Profit of the current year       Rs.6,60,000 
SOLUTION – 
Profit = Closing capital - opening capital +drawings / withdrawls - additional / fresh capital 
Rs.6,60,000 = Rs.24,00,000 - opening capital + 1,20,000 - Rs. 4,40,000  
opening capital = Rs.24,00,000+ 1,20,000 - Rs. 4,00,000 - Rs.6,60,000 
  = Rs. 14,60,000 
 
 
QUES 1. A Calculate Closing Capital :  
Opening Capital Rs.70,000; 
 Profit for the year Rs.20,000;  
Drawings Rs.7,000.  
During the year proprietor sold ornaments of his wife for Rs. 20,000 and invested the same in business?  
SOLUTION – 
 
 
 
 
 
 
 
Ques 1.  B  From the following information, calculate capital at the beginning 
Capital at the end of the year        Rs.6,00,000 
  Drawings made during the year         Rs.75,000 
Fresh Capital introduced during the year       Rs.2,10,000 
Profit of the current year        Rs.1,40,000 
          
                                                       
 
SOLUTION – 
 
 
 
 
 
ILLUS  2. 
Sumitra started a business on 1st April, 2013 with a Capital of Rs.50,00,000.  
On 31st March, 2014 her total Assets were Rs.60,00,000 and Creditors were Rs.3,00,000. She withdrew during the 
year for her personal expenses Rs.10,000 per month upto 30th June, 2013 and thereafter Rs. 5,000 per month upto 
31st March, 2014. During the year she sold her personal investments of Rs.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 31 st March, 2014. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2014 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings                  Rs. 10000 X 3 = Rs. 30,000 
                                           Rs. 5000 X 9 = Rs. 45,000 
Less additional capital   Rs.80000- Rs.4,000( 5 % of Rs.80,000) 
57,00,000 
(50,00,000) 
 
75,000 
(76,000) 
Profit or loss made during the year 7,89,000 
STATEMENT OF AFFAIRS as on 31/03/2014 
Liabilties  Amount Assets  Amount 
Creditors 
Capital ( 60,00,000 – 3,00,000) 
3,00,000 
57,00,000 
total Assets 60,00,000 
 60,00,000  60,00,000 
 
Ques . 2  Hukam started a business with a capital of Rs.4,00,000. At the end of the year his total assets were  
Rs.10,00,000 and extemalliabilities were for Rs.4,50,000. He further informs you that during the year he 
withdrew Rs.50,000 for household use. During the year he sold his personal investments of Rs. 50,000 at 20% 
profit and brought that money into the business as additional capital. 
You are required to prepare a Statement of Profit or Loss for the year. 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
  
 
Profit or loss made during the year  
STATEMENT OF AFFAIRS as on  
Liabilties  Amount Assets  Amount 
 
 
   
    
Illus 3 
On 1st April 2015, Mr. Gabar started business with a capital of Rs.5,00,000. He kept his books on single entry 
basis. Soon after he purchased furniture for 40,000 and purchased goods for Rs.3,00,000. During the year he 
borrowed Rs. 1,00,000 from his brother and introduced further capital of his own amounting to Rs.80,000 . 
On 31st March, 2016, there were sundry debtors amounting to Rs.2,20,000 and creditors amounted to Rs. 
1,40,000. Stock was valued at Rs.4,50,000. Cash in hand Rs.15400 and Bank Overdraft Rs.40,000.  
During the year Mr. Gabar withdrew Rs.2,000 per week for his family expenses.  
You are informed that included in sundry debtors is an irrecoverable amount of Rs.5,000. He also took goods 
from the business for his personal use amounting to Rs.4,000.  
You are required to calculate his profit or loss during the year. 
          
                                                       
 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2016 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings     cash 2000 x 52 = 1,04,000 
                              Goods              =  4,000 
Less additional capital    
4,40,400 
5,00,000 
1,08,000 
 
80,000 
loss made during the year (31,600) 
STATEMENT OF AFFAIRS as on 31/03/2016 
Liabilties  Amount Assets  Amount 
Loan from brother  1,00,000 furniture 40,000 
Bank Overdraft 40,000 Stock 4,50,000 
creditors 1,40,000 Cash in hand 15400 
Closing capital  4,40,400 sundry debtors                     Rs.2,20,000 
-  bad debts                               Rs.5,000 
2,15,000 
 
7,20,400 
 7,20,400 
Note - Goods for Rs.3,00,000 will not be recorded as these are purchased at the time of commencement of the 
business and capital at that is also given so we do not need this value. 
 
Ques 3.  Pawan commenced business on 1 st April, 2015 with a capital of Rs. 10,000, which he paid into bank 
account opened for that purpose. On the same date he bought furniture which cost Rs.2,000 and made purchases of 
goods worth Rs.6,500. He kept his books on single entry basis.  
On 31st March, 2016 stock was valued at Rs.8,300. There were book-debts amounting to Rs.3,400 of which Rs.200 
represented debts which were irrecoverable. Creditors amounted to Rs.3,600 and bank pass book showed a balance 
of Rs.1,450.  
Pawan withdrew three times from business for his private expenses, eachtime he withdrew Rs.600 and in addition he 
used Rs.500 worth of goods from his shop. He took Rs. 1,000  as loan from his wife during the year. He gave Rs.200 
to his son from business, which he omitted to enter.  
You are required to prepare a statement showing profit or loss in the business for the year ending 31st March, 2016 
from the above. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
 
 
 
 
  
STATEMENT OF AFFAIRS as on  
Liabilties  Amount Assets  Amount 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Page 4


          
                                                       
 
 
 
 
FORMAT OF STATEMENT OF PROFIT & LOSS  
STATEMENT OF PROFIT & LOSS for the year ending on ------ 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings / withdrawls 
Less additional / fresh capital 
 
Profit or loss made during the year ####### 
 
FORMAT OF STATEMENT OF AFFAIRS ( SIMILAR TO THE BALANCE SHEET)  
STATEMENT OF AFFAIRS as on …. 
Liabilties  Amount Assets  Amount 
Bank overdraft 
Bills payables 
Credtiors 
Outstanding expenses 
Unearned incomes  
Capital ( total assets – total liabilties ) 
 
 
 
 
 
########## 
Cash in hand 
Cash at bank 
Debtors 
Bills receivables 
Stock 
Prepaid expenses 
Accrued incomes 
Fixed assets 
 
 
 
 Total liabilties  Total assets 
 
Theory 
ILLUS 1 
From the following information, calculate capital at the beginning of bani- 
Capital at the end of the year        Rs.24,00,000 
Drawing Made during the year : Rs. 10,000 per month  
Fresh Capital introduced during the year     Rs. 4,00,000  
Profit of the current year       Rs.6,60,000 
SOLUTION – 
Profit = Closing capital - opening capital +drawings / withdrawls - additional / fresh capital 
Rs.6,60,000 = Rs.24,00,000 - opening capital + 1,20,000 - Rs. 4,40,000  
opening capital = Rs.24,00,000+ 1,20,000 - Rs. 4,00,000 - Rs.6,60,000 
  = Rs. 14,60,000 
 
 
QUES 1. A Calculate Closing Capital :  
Opening Capital Rs.70,000; 
 Profit for the year Rs.20,000;  
Drawings Rs.7,000.  
During the year proprietor sold ornaments of his wife for Rs. 20,000 and invested the same in business?  
SOLUTION – 
 
 
 
 
 
 
 
Ques 1.  B  From the following information, calculate capital at the beginning 
Capital at the end of the year        Rs.6,00,000 
  Drawings made during the year         Rs.75,000 
Fresh Capital introduced during the year       Rs.2,10,000 
Profit of the current year        Rs.1,40,000 
          
                                                       
 
SOLUTION – 
 
 
 
 
 
ILLUS  2. 
Sumitra started a business on 1st April, 2013 with a Capital of Rs.50,00,000.  
On 31st March, 2014 her total Assets were Rs.60,00,000 and Creditors were Rs.3,00,000. She withdrew during the 
year for her personal expenses Rs.10,000 per month upto 30th June, 2013 and thereafter Rs. 5,000 per month upto 
31st March, 2014. During the year she sold her personal investments of Rs.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 31 st March, 2014. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2014 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings                  Rs. 10000 X 3 = Rs. 30,000 
                                           Rs. 5000 X 9 = Rs. 45,000 
Less additional capital   Rs.80000- Rs.4,000( 5 % of Rs.80,000) 
57,00,000 
(50,00,000) 
 
75,000 
(76,000) 
Profit or loss made during the year 7,89,000 
STATEMENT OF AFFAIRS as on 31/03/2014 
Liabilties  Amount Assets  Amount 
Creditors 
Capital ( 60,00,000 – 3,00,000) 
3,00,000 
57,00,000 
total Assets 60,00,000 
 60,00,000  60,00,000 
 
Ques . 2  Hukam started a business with a capital of Rs.4,00,000. At the end of the year his total assets were  
Rs.10,00,000 and extemalliabilities were for Rs.4,50,000. He further informs you that during the year he 
withdrew Rs.50,000 for household use. During the year he sold his personal investments of Rs. 50,000 at 20% 
profit and brought that money into the business as additional capital. 
You are required to prepare a Statement of Profit or Loss for the year. 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
  
 
Profit or loss made during the year  
STATEMENT OF AFFAIRS as on  
Liabilties  Amount Assets  Amount 
 
 
   
    
Illus 3 
On 1st April 2015, Mr. Gabar started business with a capital of Rs.5,00,000. He kept his books on single entry 
basis. Soon after he purchased furniture for 40,000 and purchased goods for Rs.3,00,000. During the year he 
borrowed Rs. 1,00,000 from his brother and introduced further capital of his own amounting to Rs.80,000 . 
On 31st March, 2016, there were sundry debtors amounting to Rs.2,20,000 and creditors amounted to Rs. 
1,40,000. Stock was valued at Rs.4,50,000. Cash in hand Rs.15400 and Bank Overdraft Rs.40,000.  
During the year Mr. Gabar withdrew Rs.2,000 per week for his family expenses.  
You are informed that included in sundry debtors is an irrecoverable amount of Rs.5,000. He also took goods 
from the business for his personal use amounting to Rs.4,000.  
You are required to calculate his profit or loss during the year. 
          
                                                       
 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2016 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings     cash 2000 x 52 = 1,04,000 
                              Goods              =  4,000 
Less additional capital    
4,40,400 
5,00,000 
1,08,000 
 
80,000 
loss made during the year (31,600) 
STATEMENT OF AFFAIRS as on 31/03/2016 
Liabilties  Amount Assets  Amount 
Loan from brother  1,00,000 furniture 40,000 
Bank Overdraft 40,000 Stock 4,50,000 
creditors 1,40,000 Cash in hand 15400 
Closing capital  4,40,400 sundry debtors                     Rs.2,20,000 
-  bad debts                               Rs.5,000 
2,15,000 
 
7,20,400 
 7,20,400 
Note - Goods for Rs.3,00,000 will not be recorded as these are purchased at the time of commencement of the 
business and capital at that is also given so we do not need this value. 
 
Ques 3.  Pawan commenced business on 1 st April, 2015 with a capital of Rs. 10,000, which he paid into bank 
account opened for that purpose. On the same date he bought furniture which cost Rs.2,000 and made purchases of 
goods worth Rs.6,500. He kept his books on single entry basis.  
On 31st March, 2016 stock was valued at Rs.8,300. There were book-debts amounting to Rs.3,400 of which Rs.200 
represented debts which were irrecoverable. Creditors amounted to Rs.3,600 and bank pass book showed a balance 
of Rs.1,450.  
Pawan withdrew three times from business for his private expenses, eachtime he withdrew Rs.600 and in addition he 
used Rs.500 worth of goods from his shop. He took Rs. 1,000  as loan from his wife during the year. He gave Rs.200 
to his son from business, which he omitted to enter.  
You are required to prepare a statement showing profit or loss in the business for the year ending 31st March, 2016 
from the above. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
 
 
 
 
  
STATEMENT OF AFFAIRS as on  
Liabilties  Amount Assets  Amount 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
          
                                                       
 
 
 
Illus 4 
The Capital of Sh. Manu gujjar on 1st April, 2007 was Rs.5,00,000 and on 31st March, 2008 was Rs.4,80,000. He has 
informed you that he withdrew from the business Rs.8,000 per month for his private use. He paid Rs.20,000 for his 
income-tax and the instalment of the loan of his personal house at the rate of Rs.15000 per month from the business. 
He had also sold his shares of Reliance Company costing Rs. 1,00,000 at a profit of 20% and invested half of this amount 
in the business. Calculate the profit or loss of the business. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2008 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings     cash 8000 x 12 = 96,000 
                              Income tax = 20,000 
                              Instalment = 15000 x 12 = 1,80,000 
Less additional capital   ( 10000 + 20 % of 1,00,000 = 1,20,000 / 2) 
4,80,000 
5,00,000 
2,96,000 
 
 
60,000 
profit made during the year 2,16,000 
 
Ques . 4  Z tells you that his capital on 31st March, 2016 is Rs.1,87,000 and his capital on 1st  
April, 2015 was Rs.1,92,000. He further informs you that during the year he gave a loan of Rs.35,000 to his brother on 
private account and withdrew Rs.3,000 p.m. for personal purposes. He also used a flat for his personal purposes, the rent 
of which at the rate of 1,000 p.m. and electricity charges at an average rate of 100 p.m. were paid from the business 
account. During the year he sold his 7% Government Bonds of Rs.20,000 at 2% premium and brought that money into 
the business. Besides this, there is no other information.  
You are required to prepare a statement of profit. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
 
 
 
 
  
Illus 5 
Chandu does not keep proper books of accounts. Prepare the statement of profit or loss for the year ending  
31-3-2009 from the following information: 
 1-04-2008 31-03-2009 
Cash 10,000 36,000 
Debtors 20,000 80,000 
Creditors 10,000 46,000 
b/r 20,000 24,000 
b/p 4,000 42,000 
Car - 80,000 
Stock 40,000 30,000 
Furniture 8,000 48,000 
Investment 40,000 50,000 
Bank 1,00,000 90,000 
The following adjustments are to be made :  
(a) Proprietor withdrew cash Rs.5,000 per month for private use.  
(b) Depreciation @ 5% on Car and @ 10% on furniture.  
(c) Outstanding Rent Rs.6,000.  
(d) Fresh Capital introduced during the year Rs. 30,000. 
Page 5


          
                                                       
 
 
 
 
FORMAT OF STATEMENT OF PROFIT & LOSS  
STATEMENT OF PROFIT & LOSS for the year ending on ------ 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings / withdrawls 
Less additional / fresh capital 
 
Profit or loss made during the year ####### 
 
FORMAT OF STATEMENT OF AFFAIRS ( SIMILAR TO THE BALANCE SHEET)  
STATEMENT OF AFFAIRS as on …. 
Liabilties  Amount Assets  Amount 
Bank overdraft 
Bills payables 
Credtiors 
Outstanding expenses 
Unearned incomes  
Capital ( total assets – total liabilties ) 
 
 
 
 
 
########## 
Cash in hand 
Cash at bank 
Debtors 
Bills receivables 
Stock 
Prepaid expenses 
Accrued incomes 
Fixed assets 
 
 
 
 Total liabilties  Total assets 
 
Theory 
ILLUS 1 
From the following information, calculate capital at the beginning of bani- 
Capital at the end of the year        Rs.24,00,000 
Drawing Made during the year : Rs. 10,000 per month  
Fresh Capital introduced during the year     Rs. 4,00,000  
Profit of the current year       Rs.6,60,000 
SOLUTION – 
Profit = Closing capital - opening capital +drawings / withdrawls - additional / fresh capital 
Rs.6,60,000 = Rs.24,00,000 - opening capital + 1,20,000 - Rs. 4,40,000  
opening capital = Rs.24,00,000+ 1,20,000 - Rs. 4,00,000 - Rs.6,60,000 
  = Rs. 14,60,000 
 
 
QUES 1. A Calculate Closing Capital :  
Opening Capital Rs.70,000; 
 Profit for the year Rs.20,000;  
Drawings Rs.7,000.  
During the year proprietor sold ornaments of his wife for Rs. 20,000 and invested the same in business?  
SOLUTION – 
 
 
 
 
 
 
 
Ques 1.  B  From the following information, calculate capital at the beginning 
Capital at the end of the year        Rs.6,00,000 
  Drawings made during the year         Rs.75,000 
Fresh Capital introduced during the year       Rs.2,10,000 
Profit of the current year        Rs.1,40,000 
          
                                                       
 
SOLUTION – 
 
 
 
 
 
ILLUS  2. 
Sumitra started a business on 1st April, 2013 with a Capital of Rs.50,00,000.  
On 31st March, 2014 her total Assets were Rs.60,00,000 and Creditors were Rs.3,00,000. She withdrew during the 
year for her personal expenses Rs.10,000 per month upto 30th June, 2013 and thereafter Rs. 5,000 per month upto 
31st March, 2014. During the year she sold her personal investments of Rs.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 31 st March, 2014. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2014 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings                  Rs. 10000 X 3 = Rs. 30,000 
                                           Rs. 5000 X 9 = Rs. 45,000 
Less additional capital   Rs.80000- Rs.4,000( 5 % of Rs.80,000) 
57,00,000 
(50,00,000) 
 
75,000 
(76,000) 
Profit or loss made during the year 7,89,000 
STATEMENT OF AFFAIRS as on 31/03/2014 
Liabilties  Amount Assets  Amount 
Creditors 
Capital ( 60,00,000 – 3,00,000) 
3,00,000 
57,00,000 
total Assets 60,00,000 
 60,00,000  60,00,000 
 
Ques . 2  Hukam started a business with a capital of Rs.4,00,000. At the end of the year his total assets were  
Rs.10,00,000 and extemalliabilities were for Rs.4,50,000. He further informs you that during the year he 
withdrew Rs.50,000 for household use. During the year he sold his personal investments of Rs. 50,000 at 20% 
profit and brought that money into the business as additional capital. 
You are required to prepare a Statement of Profit or Loss for the year. 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
  
 
Profit or loss made during the year  
STATEMENT OF AFFAIRS as on  
Liabilties  Amount Assets  Amount 
 
 
   
    
Illus 3 
On 1st April 2015, Mr. Gabar started business with a capital of Rs.5,00,000. He kept his books on single entry 
basis. Soon after he purchased furniture for 40,000 and purchased goods for Rs.3,00,000. During the year he 
borrowed Rs. 1,00,000 from his brother and introduced further capital of his own amounting to Rs.80,000 . 
On 31st March, 2016, there were sundry debtors amounting to Rs.2,20,000 and creditors amounted to Rs. 
1,40,000. Stock was valued at Rs.4,50,000. Cash in hand Rs.15400 and Bank Overdraft Rs.40,000.  
During the year Mr. Gabar withdrew Rs.2,000 per week for his family expenses.  
You are informed that included in sundry debtors is an irrecoverable amount of Rs.5,000. He also took goods 
from the business for his personal use amounting to Rs.4,000.  
You are required to calculate his profit or loss during the year. 
          
                                                       
 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2016 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings     cash 2000 x 52 = 1,04,000 
                              Goods              =  4,000 
Less additional capital    
4,40,400 
5,00,000 
1,08,000 
 
80,000 
loss made during the year (31,600) 
STATEMENT OF AFFAIRS as on 31/03/2016 
Liabilties  Amount Assets  Amount 
Loan from brother  1,00,000 furniture 40,000 
Bank Overdraft 40,000 Stock 4,50,000 
creditors 1,40,000 Cash in hand 15400 
Closing capital  4,40,400 sundry debtors                     Rs.2,20,000 
-  bad debts                               Rs.5,000 
2,15,000 
 
7,20,400 
 7,20,400 
Note - Goods for Rs.3,00,000 will not be recorded as these are purchased at the time of commencement of the 
business and capital at that is also given so we do not need this value. 
 
Ques 3.  Pawan commenced business on 1 st April, 2015 with a capital of Rs. 10,000, which he paid into bank 
account opened for that purpose. On the same date he bought furniture which cost Rs.2,000 and made purchases of 
goods worth Rs.6,500. He kept his books on single entry basis.  
On 31st March, 2016 stock was valued at Rs.8,300. There were book-debts amounting to Rs.3,400 of which Rs.200 
represented debts which were irrecoverable. Creditors amounted to Rs.3,600 and bank pass book showed a balance 
of Rs.1,450.  
Pawan withdrew three times from business for his private expenses, eachtime he withdrew Rs.600 and in addition he 
used Rs.500 worth of goods from his shop. He took Rs. 1,000  as loan from his wife during the year. He gave Rs.200 
to his son from business, which he omitted to enter.  
You are required to prepare a statement showing profit or loss in the business for the year ending 31st March, 2016 
from the above. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
 
 
 
 
  
STATEMENT OF AFFAIRS as on  
Liabilties  Amount Assets  Amount 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
          
                                                       
 
 
 
Illus 4 
The Capital of Sh. Manu gujjar on 1st April, 2007 was Rs.5,00,000 and on 31st March, 2008 was Rs.4,80,000. He has 
informed you that he withdrew from the business Rs.8,000 per month for his private use. He paid Rs.20,000 for his 
income-tax and the instalment of the loan of his personal house at the rate of Rs.15000 per month from the business. 
He had also sold his shares of Reliance Company costing Rs. 1,00,000 at a profit of 20% and invested half of this amount 
in the business. Calculate the profit or loss of the business. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2008 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings     cash 8000 x 12 = 96,000 
                              Income tax = 20,000 
                              Instalment = 15000 x 12 = 1,80,000 
Less additional capital   ( 10000 + 20 % of 1,00,000 = 1,20,000 / 2) 
4,80,000 
5,00,000 
2,96,000 
 
 
60,000 
profit made during the year 2,16,000 
 
Ques . 4  Z tells you that his capital on 31st March, 2016 is Rs.1,87,000 and his capital on 1st  
April, 2015 was Rs.1,92,000. He further informs you that during the year he gave a loan of Rs.35,000 to his brother on 
private account and withdrew Rs.3,000 p.m. for personal purposes. He also used a flat for his personal purposes, the rent 
of which at the rate of 1,000 p.m. and electricity charges at an average rate of 100 p.m. were paid from the business 
account. During the year he sold his 7% Government Bonds of Rs.20,000 at 2% premium and brought that money into 
the business. Besides this, there is no other information.  
You are required to prepare a statement of profit. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount  
 
 
 
 
 
 
 
 
  
Illus 5 
Chandu does not keep proper books of accounts. Prepare the statement of profit or loss for the year ending  
31-3-2009 from the following information: 
 1-04-2008 31-03-2009 
Cash 10,000 36,000 
Debtors 20,000 80,000 
Creditors 10,000 46,000 
b/r 20,000 24,000 
b/p 4,000 42,000 
Car - 80,000 
Stock 40,000 30,000 
Furniture 8,000 48,000 
Investment 40,000 50,000 
Bank 1,00,000 90,000 
The following adjustments are to be made :  
(a) Proprietor withdrew cash Rs.5,000 per month for private use.  
(b) Depreciation @ 5% on Car and @ 10% on furniture.  
(c) Outstanding Rent Rs.6,000.  
(d) Fresh Capital introduced during the year Rs. 30,000. 
          
                                                       
 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on 31/3/2009 
Particulars  Amount  
Closing capital  
Less opening capital 
Add drawings     5000 x 12 = 
Less additional capital    
3,35,200 
2,24,000 
60,000 
30,000 
profit made during the year 1,41,200 
STATEMENT OF AFFAIRS as on 1-04-2008 
Liabilties  Amount Assets  Amount 
b/p 4,000 Cash 10,000 
Creditors 10,000 b/r 20,000 
capital 2,24,000 Stock 40,000 
  Furniture 8,000 
 
 
Bank 1,00,000 
 
 
Investment 40,000 
 
 
Debtors 20,000 
 
2,38,000 
 
2,38,000 
 
STATEMENT OF AFFAIRS as on 31-03-2009 
Liabilties  Amount Assets  Amount 
b/p 42,000 Cash 6,000 
Creditors 46,000 b/r 24,000 
Outstanding Rent 6,000 Car            80,000 
- dep         (4,000) 
 
76,000 
capital 3,35,200 Stock  30,000 
 
 
Furniture  48,000 
- dep        (4800) 
43,200 
 
 
Bank 90,000 
 
 
Investment 50,000 
 
 
Debtors 80,000 
 
4,29,200 
 
4,29,200 
Ques 5. Sharma Electronics does not keep proper records. From the following information find out profit for the year 
ended 31st December 2006 and also prepare a final statement of affairs as at that date- 
 1-01-2006 31-02-2006 
Cash 6,000 24,000 
Bank overdraft 30,000 - 
Stock 50,000 80,000 
Creditors 26,000 40,000 
Debtors 60,000 1,40,000 
b/p 6,000 12,000 
Furniture 40,000 60,000 
b/r 8,000 28,000 
Machinery 50,000 1,00,000 
Investments 30,000 80,000 
Additional info – 
Drawing Rs. 10,000  p.m. for personal use; Fresh Capital introduced during the year Rs. 2,00,000. A Bad debts of Rs.2000 
and a provision of 5% is to be made on debtors. O/s Salary Rs.2,400, Prepaid Insurance Rs.700, Depreciation Charged on 
furniture and Machine @ 10% p.a. 
Solution- 
STATEMENT OF PROFIT & LOSS for the year ending on  
Particulars  Amount