(a) Ambiga does not keep her books under double entry system. Find the Profit or Loss made by her for the year ending 31st March, 2018.
| Particulars | 31.3.2017 (₹) | 31.3.2018 (₹) |
|---|---|---|
| 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 Buildings | 1,40,000 | 1,40,000 |
| Sundry Creditors | 1,70,000 | 1,30,000 |
Ambiga had withdrawn ₹ 60,000 for her personal use. She had introduced ₹ 17,000 as capital for expansion of her business. Create a provision of 5% on debtors. Plant and Machinery is to be depreciated at 10%.
OR
(b) What is meant by accounting reports ? What are the steps involved in designing accounting reports ?
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Start your 14-day free trial to unlock the full solution →(a) Profit = closing capital ₹1,57,000 + drawings ₹60,000 − additional capital ₹17,000 − opening capital ₹1,93,000 = ₹7,000. (b) Accounting report = summarised accounting info; designed in four steps.
(a) Profit by capital comparison (net worth) method — TN HSC Class-12 Accountancy, Accounts from Incomplete Records
Step 1 — Opening capital (Statement of Affairs as on 31.3.2017):
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Sundry creditors | 1,70,000 | Land and buildings | 1,40,000 |
| Capital (bal. fig.) | 1,93,000 | Plant and machinery | 80,000 |
| Sundry debtors | 1,00,000 | ||
| Stock of goods | 35,000 | ||
| Cash at bank | 5,000 | ||
| Cash in hand | 3,000 | ||
| Total | 3,63,000 | Total | 3,63,000 |
Opening capital = ₹1,93,000.
Step 2 — Closing capital (Statement of Affairs as on 31.3.2018, with adjustments):
Note: Cash at bank ₹60,000 (Cr) is a bank overdraft = liability. Provision @ 5% on debtors = 90,000 × 5% = ₹4,500. Depreciation @ 10% on plant = 80,000 × 10% = ₹8,000.
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Sundry creditors | 1,30,000 | Land and buildings | 1,40,000 |
| Bank overdraft | 60,000 | Plant and machinery 80,000 − 8,000 dep. | 72,000 |
| Capital (bal. fig.) | 1,57,000 | Sundry debtors 90,000 − 4,500 provision | 85,500 |
| Stock of goods | 45,000 | ||
| Cash in hand | 4,500 | ||
| Total | 3,47,000 | Total | 3,47,000 |
Adjusted closing capital = ₹1,57,000.
Step 3 — Statement of Profit or Loss:
| Particulars | ₹ |
|---|---|
| Closing capital (adjusted) | 1,57,000 |
| Add: Drawings | 60,000 |
| 2,17,000 | |
| Less: Additional capital introduced | 17,000 |
| 2,00,000 | |
| Less: Opening capital | 1,93,000 |
| Profit for the year | 7,000 |
(b) Accounting reports (TN HSC Class-12 Accountancy — Computerised Accounting)
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