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Ram had withdrawn Rs.5000 for personal expenses and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Amount withdrawn for Personal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
|
