Q.Following Information given below prepare this statement of profit or loss.
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Start your 14-day free trial to unlock the full solution →Under the net worth method, profit = Closing capital + Drawings - Additional capital introduced - Opening capital. Here that is 30,000 + 4,800 - 7,500 - 14,000 = 13,300, a net profit for the year.
This is an accounts-from-incomplete-records (single entry) question from the AP Inter 2nd-year (Class 12) Accountancy previous-year paper; the AP commerce syllabus follows the same NCERT/CBSE net worth method.
The closing capital is the excess of assets over liabilities on 31-12-2017. Drawings are added back because they reduced capital but are not a loss; additional capital is deducted because it increased capital without being a profit.
Statement of Profit or Loss (Net Worth Method) for the year ended 31-12-2017
| Particulars | Amount (Rs) |
|---|---|
| Capital at the end (excess of assets over liabilities, 31-12-2017) | 30,000 |
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