(a) Ananth does not keep his books under double entry system. Find the profit or loss made by him for the year ending 31st March 2019.
| Particulars | 31.3.2018 (₹) | 31.3.2019 (₹) |
|---|---|---|
| Cash at Bank | 5,000 (Dr) | 60,000 (Cr) |
| Cash in Hand | 3,000 | 4,500 |
| Stock of Goods | 35,000 | 45,000 |
| Sundry Debtors | 1,00,000 | 90,000 |
| Plant and Machinery | 80,000 | 80,000 |
| Land and Building | 1,40,000 | 1,40,000 |
| Sundry Creditors | 1,70,000 | 1,30,000 |
Ananth had withdrawn ₹ 60,000 for his personal use. He had introduced ₹ 17,000 as capital for expansion of his business. Create a provision of 5% on Debtors. Plant and Machinery is to be depreciated at 10%.
OR
(b) From the following particulars of Chennai Sports Club, prepare Receipts and Payments account for the year ended 31st March 2018.
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| Opening cash balance as on 1.4.2017 | 10,000 | Subscriptions received: 2016-17 — 4,500; 2017-18 — 65,000; 2018-19 — 5,000 | 74,500 |
| Opening bank balance as on 1.4.2017 | 15,000 | Tournament expenses | 12,500 |
| Interest paid | 5,000 | Tournament fund receipts | 15,000 |
| Telephone expenses | 7,000 | Closing balance of cash (31.3.2018) | 5,000 |
| Upkeep of grounds | 22,500 | ||
| Life membership fees received | 5,500 | ||
| Bats and balls purchased | 13,000 |
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →(a) Using the net-worth (statement of affairs) method the profit is Rs. 7,000. (b) The Receipts and Payments A/c totals Rs. 1,20,000 with a balancing closing bank balance of Rs. 55,000.
PART (a) - Ananth: Profit or Loss (Net Worth / Statement of Affairs Method)
Under single entry, profit = (Closing adjusted capital + Drawings) - (Opening capital + Additional capital). Note that Cash at Bank of 60,000 (Cr) on 31.3.2019 is a bank overdraft and is treated as a liability.
Statement of Affairs as on 31.3.2018 (to find opening capital)
| Liabilities | Rs. | Assets | Rs. |
|---|---|---|---|
| Sundry creditors | 1,70,000 | Cash at bank | 5,000 |
| Capital (bal. fig.) | 1,93,000 | Cash in hand | 3,000 |
| Stock of goods | 35,000 | ||
| Sundry debtors | 1,00,000 | ||
| Plant and machinery | 80,000 | ||
| Land and building | 1,40,000 | ||
| 3,63,000 | 3,63,000 |
Opening capital = 3,63,000 - 1,70,000 = 1,93,000.
Statement of Affairs as on 31.3.2019 (to find closing capital, with adjustments)
| Liabilities | Rs. | Assets | Rs. |
|---|---|---|---|
| Sundry creditors | 1,30,000 | Cash in hand | 4,500 |
| Bank overdraft (Cash at bank Cr) | 60,000 | Stock of goods | 45,000 |
| Capital (bal. fig.) | 1,57,000 | Sundry debtors 90,000 - Provision 4,500 | 85,500 |
| Plant & machinery 80,000 - Depreciation 8,000 | 72,000 | ||
| Land and building | 1,40,000 | ||
| 3,47,000 | 3,47,000 |
Closing adjusted capital = 3,47,000 - 1,90,000 = 1,57,000.
Statement of Profit or Loss
| Particulars | Rs. |
|---|---|
| Closing capital (adjusted) | 1,57,000 |
| Add: Drawings | 60,000 |
| 2,17,000 | |
| Less: Additional capital | 17,000 |
| Less: Opening capital | 1,93,000 |
| Profit for the year | 7,000 |
PART (b) - Chennai Sports Club: Receipts and Payments Account
The Receipts and Payments A/c is a summary of the cash book - all receipts (of every year) on the debit side, all payments on the credit side, opening balances b/d and closing balances c/d.
Receipts and Payments Account for the year ended 31.3.2018
| Receipts | Rs. | Payments | Rs. | …
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.