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

HSC Accounts Board Paper Solution March 2014
Name Page No. 2
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

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