On 01/04/13, Mr. Bannerjee commenced business with a
capital of Rs.25,000.
During the year 20013-14, he withdrew for his personal
use goods worth Rs.2, 000 and cash Rs.3,000. He also gave a donation of Rs. 500
to Shri Ramakrishna mission. He paid Life Insurance premium of Rs.1000. During
the year, he received a gift of Rs.5000 from his father by cheque which was
deposited in the bank account of the business. On 31/3/14; his position was as
under:
|
Particulars
|
Rs.
|
|
Machinery
|
20000
|
|
Furniture
|
2000
|
|
Stock
|
5000
|
|
Debtors
|
8000
|
|
Balance at bank
|
1500
|
|
Prepaid insurance
|
200
|
|
Payable to creditors
|
3000
|
|
Liabilities for expenses
|
700
|
Find out the profit earned by him after providing for depreciation at 10%
on plant & Machinery and furniture and Rs.400 as reserve for Doubtful Debt.
Also prepare statement of affair as on 31.03.014.
Solution:
In the books of Mr. Bannerjee
Statement
of Affairs as on 31.03.2014
|
Liability
|
31.3.2014
|
Assets
|
31.03.2014
|
|
Capital
[Bal. Fig.]
|
33000
|
Machinery
|
20000
|
|
|
|
Furniture
|
2000
|
|
Payable to
Creditors
|
3000
|
Stock
|
5000
|
|
Liabilities for
expenses
|
700
|
Debtors
|
8000
|
|
|
|
Balance at
Bank
|
1500
|
|
|
|
Prepaid Indurance
|
200
|
|
|
36700
|
|
36700
|
Statement
of Profit or Loss for the year ended 31.03.2014
|
Particulars
|
Rs.
|
Rs.
|
|
Capital at the end of the
year
|
|
33000
|
|
Add: Drawings:
|
|
|
|
Personal use [Goods]
|
2000
|
|
|
Personal use [Cash]
|
3000
|
|
|
Donation to Shri
Ramakrishna Mission
|
500
|
|
|
Premium for Life Insurance
|
1000
|
6500
|
|
|
|
39500
|
|
Less: Additional Capital
Introduced
|
|
|
|
Gift Received from Father
Used for Business
|
|
-5000
|
|
|
|
34500
|
|
Less: Capital at the
beginning of the year
|
|
25000
|
|
Trading Profit
|
|
9500
|
|
Less: Depreciation:
|
|
|
|
On Plant and Machinery
20000 × 10% = 2000
|
-2000
|
|
|
On Furniture
2000× 10%
|
-200
|
-2200
|
|
|
|
7300
|
|
Less: R.D.D.
|
|
-400
|
|
Net Profit
|
|
6900
|
25000
|
33000
|
9500
|
6900
|
OPENING
CAPITAL
|
CLOSING CAPITAL
|
TRADING PROFIT
|
NET PROFIT
|
