Krishna Kulkarni has not kept proper books of accounts. Prepare the statement of profit or loss for the year ending March 31, 2017 from the following information:
| Particulars | April 01, 2016 (₹) | March 31, 2017 (₹) |
|---|---|---|
| Cash in hand | 10,000 | 36,000 |
| Debtors | 20,000 | 80,000 |
| Creditors | 10,000 | 46,000 |
| Bills receivable | 20,000 | 24,000 |
| Bills payable | 4,000 | 42,000 |
| Car | — | 80,000 |
| Stock | 40,000 | 30,000 |
| Furniture | 8,000 | 48,000 |
| Investment | 40,000 | 50,000 |
| Bank balance | 1,00,000 | 90,000 |
The following adjustments were made:
- Krishna withdrew cash ₹5,000 per month for private use.
- Depreciation @ 5% on car and furniture @ 10%.
- Outstanding Rent ₹6,000.
- Fresh Capital introduced during the year ₹30,000.
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Start your 14-day free trial to unlock the full solution →Opening capital ₹2,24,000. After depreciation (car ₹4,000, furniture ₹4,800) and outstanding rent ₹6,000, the adjusted statement of affairs totals ₹4,29,200 and adjusted closing capital is ₹3,35,200. Adding drawings ₹60,000 and deducting fresh capital ₹30,000 gives a profit of ₹1,41,200.
Opening Statement of Affairs as at April 01, 2016
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Creditors | 10,000 | Cash in hand | 10,000 |
| Bills payable | 4,000 | Debtors | 20,000 |
| Capital (balancing figure) | 2,24,000 | Bills receivable | 20,000 |
| Stock | 40,000 | ||
| Furniture | 8,000 | ||
| Investment | 40,000 | ||
| Bank balance | 1,00,000 | ||
| Total | 2,38,000 | Total | 2,38,000 |
Closing Statement of Affairs as at March 31, 2017 (before adjustments)
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Creditors | 46,000 | Cash in hand | 36,000 |
| Bills payable | 42,000 | Debtors | 80,000 |
| Capital (balancing figure) | 3,50,000 | Bills receivable | 24,000 |
| Car | 80,000 | ||
| Stock | 30,000 | ||
| Furniture | 48,000 | ||
| Investment | 50,000 | ||
| Bank balance | 90,000 | ||
| Total | 4,38,000 | Total | 4,38,000 |
Adjustments: depreciation on car @ 5% = ₹4,000 (car → ₹76,000); depreciation on furniture @ 10% = ₹4,800 (furniture → ₹43,200); outstanding rent ₹6,000 (a liability).
Adjusted Closing Statement of Affairs as at March 31, 2017
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Creditors | 46,000 | Cash in hand | 36,000 |
| Bills payable | 42,000 | Debtors | 80,000 |
| Outstanding rent | 6,000 | Bills receivable | 24,000 |
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