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 AmountRead More
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