Q.5. Radheshyam a retail trader had no
proper methods accounting but the following but the following information is
made available to you, you are required to prepare opening and closing
statement of Affairs and Statement showing Profit or Loss for the year ended 31st
March, 2007 after taking into consideration the adjustments.
|
Particulars
|
Amount (`.) 01.04.2006
|
Amount (`.) 31.03.2007
|
|
Sundry
Debtors
|
22,500
|
25,000
|
|
Sundry
Creditors
|
30,000
|
35,000
|
|
Bank
overdraft
|
40,000
|
20,000
|
|
Stock
|
32,500
|
40,000
|
|
Cash in Hand
|
1,000
|
4,000
|
|
Bill
Receivable
|
30,000
|
40,000
|
|
Furniture
|
5,000
|
5,000
|
|
Motor Van
|
40,000
|
40,000
|
|
Computer
|
30,000
|
60,000
|
Adjustments:-
(1)
On
1st October, 2006 Mr. Radheshyam had withdrawn `.25,000 for personal use out of which he invested `. 5,000 at par on the same day in 10% Municipal
Bonds which is treated as business assets.
(2)
He
had also withdrawn `. 15,000 for
his daughter’s marriage.
(3)
Depreciate
Furniture by 10% p.a. and write off `.1,000
from motor van.
(4)
As
regards debtors `.1,000 is
irrecoverable and further reserve of 5% is to be made on debtors.
(5)
Allow
interest on Capital at 10% p.a.
(6)
Charge
interest on Drawing `. 1,000. (10)
In the books of Radheshyam
Opening Statement of Affairs as on 1.4.2006
|
Liabilities
|
Rs.
|
Assets
|
Rs.
|
|
Capital
Sundry Creditors
Bank Overdraft
|
91,000
30,000
40,000
|
Sundry Debtors
Stock
Cash in hand
Bills Receivable
Furniture
Motor Van
Computers
|
22,500
32,500
1,000
30,000
5,000
40,000
30,000
|
|
|
1,61,000
|
|
1,61,000
|
Closing Statement of Affairs as on 31.3.2007
|
Liabilities
|
Rs.
|
Rs.
|
Assets
|
Rs.
|
Rs.
|
|
Capital
Sundry Creditors
Bank Overdrafts
|
|
1,60,550
35,000
20,000
|
Sundry Debtors
Less: New Bad debts
Less: New R.D.D.
Stock
Cash in hand
Bills Receivable
Furniture
Less: Depreciation
Motor Van
Less: Written off
Computers
10% Municipal Bonds
Add: Interest
|
25,000
1,000
24,000
1,200
5,000
500
40,000
1,000
5,000
250
|
22,800
40,000
4,000
40,000
4,500
39,000
60,000
5,250
|
|
|
|
2,15,550
|
|
|
2,15,550
|
Statement of profit or loss as on 31.3.2007
|
Particulars
|
Rs.
|
Rs.
|
|
Capital at the end of the year
Add: (1) Drawings (20,000 + 15,000)
(2) Interest on Drawings
|
35,000
1,000
|
160550
36,000
|
|
Less: (1) Further capital introduced
(2) Interest on capital
|
-
9,100
|
1,96,550
9,100
|
|
Less: Capital at the beginning of
the year
|
|
1,87,450
91,000
|
|
Net Profit
|
|
96,450
|
Working Note: Interest on Drawings is
directly given in the problem, so there is no need to consider average
interest.
