The following information is available from Ram’s records:

2. The following information is available from Ram’s records:

Particulars
1.4.13
31.3.14
Creditors
5000
8000
Bank Overdraft
-
15000
Bank Balance
10000
-
Plant and Machinery
10000
20000
Furniture
4000
4000
Debtors
30000
52000
Stock
34000
28000

Ram had withdrawn Rs.5000 for personal expenses and Rs. 4000 for son’s marriage. Out of business funds, he had also purchased a residential building costing Rs.20000, which is not shown in the above balance. Dep. at 10 %p.a. should be provided on plant and machinery. Find out Ram’s net profit for the year ended 31st march 14.


Solution: In the books of Ram
Statement of Affairs as on 01.04.2013 and 31.03.2014
Liability
01.04.2013
31.3.2014
Assets
01.04.2013
31.03.2014
Capital
[Bal. Fig.]
83000
81000
Bank Balance
10000
-



Plant and Machinery
10000
20000
Creditors
5000
8000
Furniture
4000
4000
Bank Overdraft
-
15000
Debtors
30000
52000



Stock
34000
28000

88000
104000

88000
104000

Statement of Profit or Loss for the year ended 31.03.2014

Particulars
Rs.
Rs.
Capital at the end of the year

81000
Add: Drawings:


Amount withdrawn for Personal Expenses
5000

Son's Marriage
4000

Purchased Residential Building
20000
29000


110000



Less: Capital at the beginning of the year

83000
Trading Profit

27000
Less: Depreciation:


On Plant and Machinery
20000 × 10% = 2000

-2000
Net Profit

25000


ANSWER

83000
81000
27000
25000
OPENING CAPITAL
CLOSING CAPITAL
TRADING PROFIT
NET PROFIT