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

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

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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
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
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
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 =
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
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

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