OMTEX CLASSES: Mr. Keshav keeps his books on single entry system and disclosed the following information of his business. [8 MARKS]

Mr. Keshav keeps his books on single entry system and disclosed the following information of his business. [8 MARKS]



Particular
1 st April, 12 (Rs.)
31 st March, 13
(Rs.)
Investments

30000
Bills payable

18000
Creditors
52500
69000
Furniture
15000
45000
Debtors
60,000
90,000
Stock in Trade
30,000
37,500
Cash at Bank
36,000
54,000

Additional information

(1) Mr. Keshav transferred Rs. 3,000 per month during the first half year and Rs. 2000 per month for the second half year from business account to his personal account.

(2) he also took goods worth Rs. 7,000 for private use.

(3) He sold his private asset for Rs. 27,000 and brought the proceeds into his business.

(4) Furniture to be depreciated by 10%.

(5) Provide reserve for doubtful debts at 5% on debtors.

Prepare: (i) Opening statement of affairs.

(ii) Closing statement of affairs.

(iii) Statement of Profit and Loss for the year ended 31st March, 2013.


Solution:


Opening statement of affairs as on 1st April, 2012
Liabilities
Rs.
Assets
Rs.
Capital at the Beginning of the Year.
88,500
Furniture
15,000
Creditors
52500
Debtors
60,000


Stock in trade
30,000


Cash at bank
36,000

1,41,000

1,41,000

Closing Statement of affairs as on 31st March, 2013

Liabilities
Rs.
Assets
Rs.
Capital at the End of the year.
169500
Investments
30,000
Bills Payable
18000
Furniture
45,000
Creditors
69,000
Debtors
90,000


Stock in Trade
37,500


Cash at bank
54,000

256500

256500

Statement of Profit and Loss for the year ended 31st March, 2013


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

169500
Add: Drawings


First 6 months = 6 Months × Rs. 3000
18,000

Next 6 months = 6 months × Rs. 2,000
12,000

Goods
7000
+ 37,000


2,06,500
Less: Additional Capital Introduced


Sale Proceeds of private asset utilized in the business

- 27,000


1,79,500
Less: Capital at the beginning of the year.

-88,500
Trading Profit

91,000
Less: Depreciation


On Furniture


45,000 × 10%

- 4500


86500
Less: R.D.D.


On Debtors


90,000 × 5%

- 4500
Net Profit

82,000